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Builders & Real Estate Bulls Theory Proved Wrong

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Builders & Real Estate Bulls Theory Proved Wrong

Last updated: November 1 2016
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  • Re : Builders & Real Estate Bulls Theory Proved Wrong

    STORY OF PUNE REAL ESTATE
    Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only two pieces of 1 dollar coins circulating around.
    1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.
    2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.
    * The net asset of the country now = 3 dollars.
    3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1 dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.
    *A has a loan to C of 1 dollar, so his net asset is 1 dollar.
    * B sold his land and got 2 dollars, so his net asset is 2 dollars.
    * C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
    * Thus, the net asset of the country = 4 dollars.
    4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a result, A now owned a piece of land that is worth 3 dollars. But since he owed B 2 dollars, his net asset is 1 dollar.
    * B loaned 2 dollars to A. So his net asset is 2 dollars.
    * C now has the 2 coins. His net asset is also 2 dollars.
    * The net asset of the country = 5 dollars. A bubble is building up.
    (5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2 dollars from C, and cancellation of his 2 dollars loan to A.
    * As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
    * B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars.
    * C loaned 2 dollars to B, so his net asset is 2 dollars.
    * The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation.
    (6) Everybody has made money and everybody felt happy and prosperous.
    (7) One day an evil wind blew, and an evil thought came to C’s mind. “Hey, what if the land price stop going up, how could B repay my loan. There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more.”
    (8) A also thought the same way.
    (9) Nobody wanted to buy land anymore.
    * So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
    * B owed C 2 dollars and the land he owned which he thought worth 4 dollars is now 1 dollar. So his net asset is only 1 dollar.
    * C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
    * The net asset of the country = 3 dollars again.
    (10) So, who has stolen the 3 dollars from the country ? Of course, before the bubble burst B thought his land was worth 4 dollars. Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B’s net asset is still 2 dollars, his heart is palpitating.
    (11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1 dollar now.
    * A owns the 2 coins, his net asset is 2 dollars.
    * B is bankrupt, his net asset is 0 dollar. ( he lost everything )
    * C got no choice but end up with a land worth only 1 dollar
    * The net asset of the country = 3 dollars.
    ************ **End of the story; BUT ************ ********* ******
    There is however a redistribution of wealth.
    A is the winner, B is the loser, C is lucky that he is spared.
    A few points worth noting –
    (1) When a bubble is building up, the debt of individuals to one another in a country is also building up.
    (2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated using the island’s own currency. Hence, there is no net loss.
    (3) An over-damped system is assumed when the bubble burst, meaning the land’s value did not go down to below 1 dollar.
    (4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could shrink or in worst case, they go bankrupt.
    (5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose. But he will see the value of his money or land go up and down like a see saw.
    (6) When the bubble was in the growing phase, everybody made money.
    (7) If you are smart and know that you are living in a growing bubble, it is worthwhile to borrow money (like A ) and take part in the game. But you must know when you should change everything back to cash.
    (8) As in the case of land, the above phenomenon applies to stocks as well.
    (9) The actual worth of land or stocks depend largely on psychology

    Comment


    • Re : Builders & Real Estate Bulls Theory Proved Wrong

      Letter to PM about Maino's corruption

      Originally posted by punerebuyer View Post
      i think we need to start a new thread named 'Realeaks'
      just kidding and eagerly waiting for the insiders...
      Realeaks.

      Anyways, to start with, here is the letter written by Dr Subramanian Swamy, President of Janata Party and former Union Law and Commerce Minister, in his letter addressed to the Prime Minister last month. It shows how corrupt Sonia err Antonia Maino is.

      November 24, 2010.

      Dr. Manmohan Singh,

      Prime Minister of India,

      South Block,

      New Delhi.


      Dear Prime Minister:


      You may by now have realized that the 2G Spectrum scandal is not only bad for the country in the dimension of corruption, but now it emerges that there is a national security dimension too. The RAW, IB, CBI, ED all have enough material which they may have placed before you regarding the dubious aspects of the principal player in this scam.

      According to my information two sisters, Anushka and Nadia, of Ms Sonia Gandhi had received sixty percent of the kickbacks in this deal i.e. Rs.18,000 crores each. The frequent travel of Sonia Gandhi and her immediate family to Malaysia, Hongkong, Dubai and parts of Europe including London requires to be probed under the law. What requires your special attention is the mode of the travel, not by commercial airliners, but by jets provided by the corporate sector which itself is illegal under the DGCA Rules. I find that often Ms. Sonia Gandhi and family have traveled to Dubai and then traveled onwards on private jets provided by dubious Arab business interests to Europe. It is not clear on what passport they have traveled. In Dubai they were felicitated by agencies of countries which are hostile to India including that of Pakistan.

      You can no more not take a stand when evil is permeating in the country in the form of terrorism, religious conversion and demographic infiltration. The ill-gotten money in billions of dollars equivalent, the money laundering and Participatory Notes have all undermined our national integrity. The time is come for you to take a stand.

      I am familiar with the information and data with our intelligent agencies. I also know that you can seek cooperation of other countries especially the United States in pooling information especially from inter Intelligence interaction that take place regularly. I hope therefore you will rise to the need of the hour and take effective steps to set right the sorry state of affairs in the country caused by overtly and covertly resident foreigners. In this connection I would like to meet you at the earliest. My Secretary will be in touch with your Secretariat to fix a time.


      Yours sincerely,


      (Sd SUBRAMANIAN SWAMY )


      ----
      Some more info about how Sonia Maino worked for Russia's KGB will follow.
      Last edited by realacres; December 25 2010, 10:50 PM.
      If you are happy, you are successful.

      Comment


      • Re : Builders & Real Estate Bulls Theory Proved Wrong

        Originally posted by compuwalah View Post
        But real, be careful not to step on tail of any kinda politico.
        Thanks for caring but don't worry man, I know how they work. And yep, I am not interested in disclosing their personal lives on public forums, I will post which I find will impact us, a nation as a whole. Btw, while interacting with politicos, always remember, no matter how much you hate them, make sure you show yourself as a part of their team. Know their weaknesses & strengths & then kick where it hurts the most using someone else's legs, mostly your foe or rival . This way not only you continue to remain innocent but also make situation bad for your rivals. Just make sure to watch your back while doing this.
        If you are happy, you are successful.

        Comment


        • Re : Builders & Real Estate Bulls Theory Proved Wrong

          if this is true... god save us all...

          Originally posted by realacres View Post
          Realeaks.

          Anyways, to start with, here is the letter written by Dr Subramanian Swamy, President of Janata Party and former Union Law and Commerce Minister, in his letter addressed to the Prime Minister last month. It shows how corrupt Sonia err Antonia Maino is.

          November 24, 2010.

          Dr. Manmohan Singh,

          Prime Minister of India,

          South Block,

          New Delhi.


          Dear Prime Minister:


          You may by now have realized that the 2G Spectrum scandal is not only bad for the country in the dimension of corruption, but now it emerges that there is a national security dimension too. The RAW, IB, CBI, ED all have enough material which they may have placed before you regarding the dubious aspects of the principal player in this scam.

          According to my information two sisters, Anushka and Nadia, of Ms Sonia Gandhi had received sixty percent of the kickbacks in this deal i.e. Rs.18,000 crores each. The frequent travel of Sonia Gandhi and her immediate family to Malaysia, Hongkong, Dubai and parts of Europe including London requires to be probed under the law. What requires your special attention is the mode of the travel, not by commercial airliners, but by jets provided by the corporate sector which itself is illegal under the DGCA Rules. I find that often Ms. Sonia Gandhi and family have traveled to Dubai and then traveled onwards on private jets provided by dubious Arab business interests to Europe. It is not clear on what passport they have traveled. In Dubai they were felicitated by agencies of countries which are hostile to India including that of Pakistan.

          You can no more not take a stand when evil is permeating in the country in the form of terrorism, religious conversion and demographic infiltration. The ill-gotten money in billions of dollars equivalent, the money laundering and Participatory Notes have all undermined our national integrity. The time is come for you to take a stand.

          I am familiar with the information and data with our intelligent agencies. I also know that you can seek cooperation of other countries especially the United States in pooling information especially from inter Intelligence interaction that take place regularly. I hope therefore you will rise to the need of the hour and take effective steps to set right the sorry state of affairs in the country caused by overtly and covertly resident foreigners. In this connection I would like to meet you at the earliest. My Secretary will be in touch with your Secretariat to fix a time.


          Yours sincerely,


          (Sd SUBRAMANIAN SWAMY )


          ----
          Some more info about how Sonia Maino worked for Russia's KGB will follow.

          Comment


          • Re : Builders & Real Estate Bulls Theory Proved Wrong

            Assocham has projected that there will be around 1.5 crore new jobs created in the overall Indian market in 2011. The number sounds music to the ears of many. India continues to face skilled worker problem in 2011: ASSOCHAM

            On the funny side (for some it may be serious)

            Shortage of masons, labourers hit real estate developers in Pune

            wonder if its one more excuse from builders.

            Comment


            • Re : Builders & Real Estate Bulls Theory Proved Wrong

              Originally posted by punerebuyer View Post
              if this is true... god save us all...
              It is the truth in last 60 years of independence. The myth/false is "Mera Bharat Mahan".

              Comment


              • Re : Builders & Real Estate Bulls Theory Proved Wrong

                Don't worry, we will soon be worrying about Rakhi Sawant and other BS ppl, thus quickly forgetting all the scams. Mera bharat mahaan. We get what we are.

                Comment


                • Re : Builders & Real Estate Bulls Theory Proved Wrong

                  Rates likely to go up in 2011

                  Will post more political & Pune RE stories soon, but before here is another news:-

                  New Delhi, Dec. 24: Cash crunch in the system, coupled with high inflation, will keep interest rates at higher levels in 2011, warns industry body Assocham.

                  With inflation likely to rise further, the Reserve Bank may go in for another hike in the key policy rates in its fourth quarterly review, slated to be announced on January 25.

                  Inflationary pressures are building up with commodity prices shooting up the world over as well as crude touching $90 per barrel, the chamber said.

                  High inflation would put pressure on RBI to go in for tighter monetary policy — hiking rates at which it lends to and borrows from other banks — which, in turn, helps curbing consumer spending and taming the rate of the price rise.

                  Inflation continues to be much higher than the tolerance level of 5.5 per cent per annum, as projected for the end of the current fiscal.

                  Both, food as well as overall inflation have been much higher than this level for most of this year.

                  Food inflation surged back into the double-digit territory at 12.13 per cent for the week ended December 11 as the prices of vegetables, particularly onions, rose for the third consecutive week.

                  Meanwhile, although overall inflation for November was at 7.48 per cent, down from 8.58 per cent in the previous month there are concerns that it may rise again.

                  “The days ahead are extremely dicey. The options with RBI are limited as the growth is not likely to be sacrificed for inflation. Hence, there is every likelihood of policy rates inching up in the next moneta-ry policy,” Assocham president, Mr Dilip Modi, said. The chamber also said that faster credit growth has put pressure on the liquidity and the crunch is likely to remain in 2011 because high inflation has dissuaded investors from parking funds with banks, as reflected in the low deposit growth.

                  Rates likely to go up in 2011 | The Asian Age>
                  If you are happy, you are successful.

                  Comment


                  • Re : Builders & Real Estate Bulls Theory Proved Wrong

                    Hi Frnds,

                    This thread actually presents a running commentry of the ground situation of the real estate markets and the sentiments.

                    History is good and check the following presentation out.

                    http://www.slideshare.net/me4picks/india-2035

                    thanks
                    Rohit

                    Comment


                    • Re : Builders & Real Estate Bulls Theory Proved Wrong

                      Originally posted by rohit_warren View Post
                      Hi Frnds,

                      This thread actually presents a running commentry of the ground situation of the real estate markets and the sentiments.

                      History is good and check the following presentation out.

                      http://www.slideshare.net/me4picks/india-2035

                      thanks
                      Rohit
                      Very good link man. Btw, are you the same Rohit who made this slide-show?
                      Last edited by realacres; December 28 2010, 12:10 PM. Reason: added point
                      If you are happy, you are successful.

                      Comment

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