Hereby I will prove how the realty boomers arguments are false.

What are the boomers arguments?

1.) Buy today, houses always increase in value in the long run.
WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

2.) Renting is just wastage of money.
WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

* Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
* Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

* Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
* Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
* Owners must insure a house, but not most other investments.
* Owners must pay to repair a house, but not a stock or a bond.
* Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

4.) There are great tax advantages to owning a house.
WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

6.) A rental house provides good income. So, you can rent if you have purchased as investment.
WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

9.) House prices never fall atleast in Pune.
WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

11.) Prices will soften gradually, won't crash immediately.
WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

12.) The bubble prices were driven by supply and demand alone.
WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

13.) There is lack of land.
WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

14.) If you don't own, you'll live in a cheap neighborhood later.
WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

15.) There's always someone predicting a real estate crash.
TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

16.) Local incomes justify the high prices.
WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

17.) You have to live somewhere.
CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

18.) It's not a house, it's a home.
WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

19.) If you don't buy now, you'll never get another chance.
WRONG. History proves otherwise.
Here's a beautiful quote from a analyst:-
"The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

contd....
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  • Originally Posted by sam2008
    Dear VK,
    you souldnt say this atleast for gadkari who has made substancial development as is called a flyover man. if not convinced then do visit nagpur some day and will realise. to add to it, pune - mumbai express way came into existence with his support only. i wud kindly request member to be polite and if i m wrong saying this then i m sorry.

    sam...


    I understand Sam... i believe you addressed the message to me and I have nothing to say on the political matter. :D:D he he he

    VK
    CommentQuote
  • Originally Posted by veeemkay
    I understand Sam... i believe you addressed the message to me and I have nothing to say on the political matter. :D:D he he he

    VK

    Dear VK,
    i do belive tht it was a good decision for advani to step down and gadkari to resume servives. infat i m of the belief tht there shall b drascatic positive changes in the governance of gadkari.

    sam...
    CommentQuote
  • Guys. Let us keep it a real estate discussion forum than offshooting to a political one.
    CommentQuote
  • Flyovers are Real Estate?

    Originally Posted by compuwalah
    Guys. Let us keep it a real estate discussion forum than offshooting to a political one.


    Just joking.

    But since Flyovers are related to Real Estate, one can say Sam was discussing Real Estate implications of building all those flyovers in Nagpur? :D

    But Sam, one point always being discussed here is, how much money did the builders and other fraudsters make in building all those flyovers. In fact many of them are very suspect and probably not necessary (like the one to Electronic City in Bangalore) and are being built at a huge cost to us taxpayers for very suspect benefits (or, only benefits to cerrtain interest groups). And I believe that a significant part of this money is being stolen by many interested parties!

    This is the real issue that impact RE and keeps the whole industry opaque and so risky to ordinary people like us.

    cheers
    CommentQuote
  • Originally Posted by wiseman
    Just joking.

    But since Flyovers are related to Real Estate, one can say Sam was discussing Real Estate implications of building all those flyovers in Nagpur? :D

    But Sam, one point always being discussed here is, how much money did the builders and other fraudsters make in building all those flyovers. In fact many of them are very suspect and probably not necessary (like the one to Electronic City in Bangalore) and are being built at a huge cost to us taxpayers for very suspect benefits (or, only benefits to cerrtain interest groups). And I believe that a significant part of this money is being stolen by many interested parties!

    This is the real issue that impact RE and keeps the whole industry opaque and so risky to ordinary people like us.

    cheers


    But What Sam intent to say here, that Gadkari is one of the guy due to him you will see at least something has built (who is making money or who is not that is different matter)...But Most of the politician in India are that they will spend money, still you dont see anything built (you know what I mean...Road Flyover built on PAPER!!!)...This used the happen in india in 70s & 80s....

    Mumbai-Pune expressway was the first of that kind project in India...And now see what this current govt did in last 10 yrs...I dont see anything being build in Pune since I moved from Gurgon....Even these ppls are not able to make a 5 kms Baner road even in oct'09 (which was planned for youth Commonwealth games oct'08) for that they got money from central govt under JNUDF (something like that)...After staying in Pune for last year & half (specially Baner area) I am sure Pune has one of the most corrupt politicians (even these NCP goons can beat Mayawati's goon )...

    You all might have seen that movie "jaane bhi do yaaro" that was the very good satire (most ppls remember that movie as good comedy movie but it had a very strong message in it) on that system (Building "RET" ke Pul (Bridge) or building roads on paper!!!)...
    CommentQuote
  • Hey, know Gadkari well & must say that he is one of the best administrators in the state. Good to see him BJP national prez.:) Will tell you so many policies he implemented which sved crores of govt. money, one of which was BOT based infra creation.
    CommentQuote
  • No panacea for developers’ financial woes

    Anticipating the growing demand for affordable housing, real-estate developers launched a large number of housing projects in this segment after the market crashed in 2008. However, it now appears that these developers might have committed an oversight by devoting so much of their resources to the affordable housing segment. With prospective homebuyers still reluctant to spend, unsold projects are piling up in several metros within this segment.


    According to recent findings by a consultancy called PropEquity Research, the sale of affordable housing began to decline in the July-September quarter. To make matters worse, in many cities developers have hiked their prices despite demand being weak......

    Read complete story here:-

    ]http://www.indianexpress.com/news/no-panacea-for-developers-financial-woes/556267/
    CommentQuote
  • Had mentioned this in an earlier post ...

    Originally Posted by realacres
    Anticipating the growing demand for affordable housing, real-estate developers launched a large number of housing projects in this segment after the market crashed in 2008. However, it now appears that these developers might have committed an oversight by devoting so much of their resources to the affordable housing segment. With prospective homebuyers still reluctant to spend, unsold projects are piling up in several metros within this segment.


    According to recent findings by a consultancy called PropEquity Research, the sale of affordable housing began to decline in the July-September quarter. To make matters worse, in many cities developers have hiked their prices despite demand being weak......

    Read complete story here:-

    ]http://www.indianexpress.com/news/no-panacea-for-developers-financial-woes/556267/


    Folks,

    Some time ago I had argued in one post that this Affordable thing is a double-edged sword. While it might increase volume sales because of the low price tag, it would also require builders to raise additional capital to build these (and this would be tough as they are already sitting on large amount of debt) and the profitability from these projects would be sub-par, thus not being able to help them close out their debt.

    It seems this argument was right. But I didn't count on the enhanced stupidity of builders in going ahead and increasing the price of these homes, thus adding to their already large oversupply of inventory and piling on the debt burden already on them.

    If there is a bunch of people more stupid and greedy than the American Investment Bankers, it must be our builders.

    The stocks markets are in an advanced state of topping formation. If you see the charts, there is a rounding top being formed and last 2 months has seen a flat market.

    There is an interresting statistic here. When the Sensx rose from 8047 to 14950 (an 86% increase) Foreign fund flow was around 25000 crores (by May 2009). The next phase of the rally to 17500 from 14950 saw a much larger 62000 crores of foreign funds while the return was only 17%. As you can see a clear dwindling of returns. So, if this market shows signs of NOT providing returns, AND the Dollar and its intererst rates rise, further putting losses on foreign funds, you can expect a very rapid extraction of these funds from the stock market and thew will return to their originating country or some other place providing better returns (which one is that, other than India?!).

    In that context, I have noticed relationship between the Dollar Index and the Sensx. With a 1-2 month lag, the Sensx does exact opposite of the Dollar Index. When DI topped in Feb 2009, Sensx bottomed in March and before that, when the DI bottomed, the Sensx topped (check out the attached Chart!). Currently the DI seems to have bottomed (a higher bottom over the previous one, which is a bullish sign) and is jumping rather sharply. If this relationship holds (meaning foreign hot-money leaves Indian market, chasing higher returns in the $$$ as well as covering borrowings against $$$ which will turn out to be losses), and the DI rises around 20%, you can expect Sensx to decline to around 12000 over the next 3-4 months! :D Or maybe even a little more if our GDP calculation comes in below expectation - around 10000.

    The immediate impact of this is, builders hoping to shaft the retail investor by asking for ridiculous premia for their IPOs will vanish. In fact, they may not even have successful IPOs. This, coupled with increased amount of inventory, increased debt, fast rising interest rates on this debt and dwindling sales will result in ...?

    cheers!). Currently the DI seems to have bottomed (a higher bottom over the previous one, which is a bullish sign) and is jumping rather sharply. If this relationship holds (meaning foreign hot-money leaves Indian market, chasing higher returns in the $$$ as well as covering borrowings against $$$ which will turn out to be losses), and the DI rises around 20%, you can expect Sensx to decline to around 12000 over the next 3-4 months! :D Or maybe even a little more if our GDP calculation comes in below expectation - around 10000.

    The immediate impact of this is, builders hoping to shaft the retail investor by asking for ridiculous premia for their IPOs will vanish. In fact, they may not even have successful IPOs. This, coupled with increased amount of inventory, increased debt, fast rising interest rates on this debt and dwindling sales will result in ...?

    cheers!). Currently the DI seems to have bottomed (a higher bottom over the previous one, which is a bullish sign) and is jumping rather sharply. If this relationship holds (meaning foreign hot-money leaves Indian market, chasing higher returns in the $$$ as well as covering borrowings against $$$ which will turn out to be losses), and the DI rises around 20%, you can expect Sensx to decline to around 12000 over the next 3-4 months! :D Or maybe even a little more if our GDP calculation comes in below expectation - around 10000.

    The immediate impact of this is, builders hoping to shaft the retail investor by asking for ridiculous premia for their IPOs will vanish. In fact, they may not even have successful IPOs. This, coupled with increased amount of inventory, increased debt, fast rising interest rates on this debt and dwindling sales will result in ...?

    cheers!). Currently the DI seems to have bottomed (a higher bottom over the previous one, which is a bullish sign) and is jumping rather sharply. If this relationship holds (meaning foreign hot-money leaves Indian market, chasing higher returns in the $$$ as well as covering borrowings against $$$ which will turn out to be losses), and the DI rises around 20%, you can expect Sensx to decline to around 12000 over the next 3-4 months! :D Or maybe even a little more if our GDP calculation comes in below expectation - around 10000.

    The immediate impact of this is, builders hoping to shaft the retail investor by asking for ridiculous premia for their IPOs will vanish. In fact, they may not even have successful IPOs. This, coupled with increased amount of inventory, increased debt, fast rising interest rates on this debt and dwindling sales will result in ...?

    cheers
    Attachments:
    CommentQuote
  • wiseman ; really interesting!!!this would make me look more into DI and sen!!Thanks man..
    CommentQuote
  • very nicely concluded and well done with your resarch ,i was waiting to this

    I was waiting to see ths article from nearly a year ,i have done this calculation few years before was not sure if i was wrong .
    even though i am looking for a investment in future ,i will make this quote reflect me every time i make calculations .
    keep up your good work ....
    Originally Posted by realacres
    Hereby I will prove how the realty boomers arguments are false.

    What are the boomers arguments?

    1.) Buy today, houses always increase in value in the long run.
    WRONG. House prices cannot increase more than incomes in the long run. This is obvious if you think about it. If house prices go up more than people can afford to pay, buying stops, like it has stopped now.
    Even Warren Buffett have pointed out that houses don't increase in intrinsic value. Unless there's a bubble or a crash, house prices simply reflect current salaries and interest rates. If a house is 100 years old, it's value in sheltering you is exactly the same as it was 100 years ago. Then came the maintenance as the house didn't renovate itself. It also has taxes, and insurance - costs that always increase and never go away. The price of the house went up about as much as salaries went up.
    To put this is simple perspective, vegetable were costing Rs.5-6/kg when 5 digit salary was a rarity.
    Today, the prices have gone up by about 4 times but so have the salaries. So, sounds very much like the reasoning people use now when they talk about how much their father's house appreciated "in the long run" without considering that salaries rose a proportional amount.

    2.) Renting is just wastage of money.
    WRONG. As said before renting is now much cheaper per month than owning. If you don't rent, you either:

    * Have a mortgage, in which case you are throwing away money on interest, tax, insurance, maintenance, costs that increase forever.
    * Own outright, in which case you are throwing away the extra income you could get by converting your house to cash, investing in bonds, and renting a similar place to live for much less money. This extra income is sufficient for emergency expenses,retirement etc.

    Either way, owners lose much more money every month than renters and that's assuming prices don't correct to very high level & everything is smooth in the economy.

    3.) As a renter, you won't have any money left as you will spend them on vacations,cars & hence won't have equity/savings etc.
    WRONG. Equity is just money. Renters are actually in a better position to build equity/savings through investing in anything but housing. Renters can get rich much faster than owners, just by investing in conservative stocks & bonds.

    * Owners are losing every month by paying much more for interest than they would pay for rent. The tax deduction does not come close to making owing competitive with renting.
    * Owners must pay taxes simply to own a house. That is not true of stocks, bonds, or any other asset that can build equity/savings. Only houses are such a guaranteed drain on cash.
    * Owners must insure a house, but not most other investments.
    * Owners must pay to repair a house, but not a stock or a bond.
    * Owners lose their money as house prices reduce. The EMI's remain constant in spite of reduction in rates. At the end of loan tenure, they would have paid almost twice than that of current renters who will buy at logical rates. Keep interest rates in mind. Most of the EMI is not principal amount but interest.

    4.) There are great tax advantages to owning a house.
    WRONG. Many people believe you can just reduce your income tax by the amount you pay in interest, but they are wrong. Buyers may not deduct interest from income tax; they deduct interest from taxable income. And even then, the tax advantage is not significant compared to the large monthly loss from owning.

    If you don't own a house but want to live in one, your choice is to rent a house or rent money to buy a house. To rent money is to take out a loan. A mortgage is a money-rental agreement. House renters take no risk at all, but money-renting owners take on the huge risk of falling house prices, as well as all the costs of repairs, insurance, property taxes, etc.

    5.) RE is based on local factors, it's not a national phenomenon. RE of Delhi-NCR,Bangalore & rest of the cities has nothing to do with Pune RE.
    WRONG. Lending rates remain the same throughout the country. ALL loans are harder to get. This will drive prices down everywhere.

    6.) A rental house provides good income. So, you can rent if you have purchased as investment.
    WRONG. Rental houses provide very poor income in hyped areas and certainly cannot cover mortgage payments. Remember there is almost 300% difference between EMIs & rent for the same house.

    It's pointless to do the work of being a landlord if you can make more money with no risk, no work, and no state income tax by investing in assured good returns bond.

    7.) If owning is a loss in monthly cash flow, but appreciation will make up for it.
    WRONG. Appreciation is negative. Prices are going down. It only adds to the injury of already high EMI's.

    8.) As soon as prices drop a little, the number of buyers on the sidelines willing to jump back in increases.
    WRONG. There are very few buyers left, and those who do want to buy will be limited by increasing difficulty of borrowing now that many house owners are near bankrupt as they don't save anything at the end of the month due to high EMI's.
    No one has to buy, but there will be more and more people who have no choice but to sell as their payments rise. That will keep driving prices downward for a long time.

    9.) House prices never fall atleast in Pune.
    WRONG. If you see the RE scenario of 1996, prices crashed by 50% & took a whole 7+ years to recover.
    Exact 1996 scenario may not be there today but strong correction is inevitable across the city.

    10.) House prices don't fall to zero like stock prices, so it's safer to invest in real estate.
    WRONG. House prices won't be zero, but the equity or the principal amount you paid can be zero or even negative. What you will pay as EMIs later in actual terms is not for the principal amount but only the interest as house prices dip. So, you will be only serving the bank.

    11.) Prices will soften gradually, won't crash immediately.
    WRONG. Prices are falling off a cliff. No one knows exactly what will happen, but it looks like prices will continue to fall for long time. These are just more manipulation of buyer emotions, to get them to buy even while prices are falling.

    12.) The bubble prices were driven by supply and demand alone.
    WRONG. Prices were driven by low interest rates and risky loans & good returns for investors in initial phases of boom in 2004-05.
    Prices went up, interest rates went up & buyers savings went down. So prices are violating the most basic assumptions about supply and demand.

    13.) There is lack of land.
    WRONG. Ample of land is available & continue to be even in future in Pune. Sales volume are down. Even in Japan (small country with less land), prices went down. Current prices here are the same as that of 23 years ago. If we really had a housing shortage, there would not be so many vacant rentals.

    14.) If you don't own, you'll live in a cheap neighborhood later.
    WRONG. For the any given monthly payment, you can rent a much better house than you can buy. Renters live better, not worse. There are downsides to renting, such as being told to move at the end of your lease, or having your rent raised, but since there are thousands of vacant rentals, you can take your pick and be quite happy renting during the crash. There are similar but worse problems for owners anyway, such as being fired and losing your house, or having your interest rate and property taxes adjust upward. Remember, property taxes are forever.

    15.) There's always someone predicting a real estate crash.
    TRUE, yet irrelevant. There are very real crashes every decade or so. Even a broken clock is right twice a day.

    16.) Local incomes justify the high prices.
    WRONG. The mortgage should be more than your 3 years earning. It is much higher today. Most are already in danger/red zone.

    17.) You have to live somewhere.
    CORRECT. But that doesn't mean you should waste your life savings on a bad investment. You can live in a better house for much less money by renting during the down slide in RE.

    18.) It's not a house, it's a home.
    WRONG. Wherever one lives in it is home, be it apartment, condo, bungalow , mansion or house. Calling a house a "home" is a manipulation of your emotions for profit.

    19.) If you don't buy now, you'll never get another chance.
    WRONG. History proves otherwise.
    Here's a beautiful quote from a analyst:-
    "The real issue isn't whether you will be stuck being a renter all your life, she says. Its whether you'll get so scared about being shut out that you'll buy at the market's peak and be stuck in a property you can't afford or sell."

    20.) It would take major economic recession or a major earthquake that wipes out this area in order for the price to fall by over 50%.
    WRONG. Even today, if the prices fall by 50%, there will still be very few people who can buy at this levels due to uncertainty in jobs & most importantly high EMIs. Also, look at the rental rates for equivalent houses. Which loss per month is larger? EMI or rent?

    contd....
    CommentQuote
  • Thanks for this post wiseman:). Only hope that NPAs don't rise for banks, ICICI is an exception.
    CommentQuote
  • Thanks folks!

    Originally Posted by realacres
    Thanks for this post wiseman:). Only hope that NPAs don't rise for banks, ICICI is an exception.



    People,

    I didn't know there was so much interest in data and the facts represented by relevant charts. I keep doing this stuff all the time and also save interesting and important charts by various top-of-the-line analysts worldover.

    I can always post them once in a while where relevant to make the point.

    Another interesting point ... The World expects China and other BRIC countries to pull it out of the woods.

    Well, surprise! The Shanghai Composite index (which interestingly leads the DOW by 3-4 months in hitting peaks and bottoms) has risen only 40% (which is close to the 38.2% Fibonacci ratio) and has since started gradually falling, showing the inherent weakness of the Chinese Economy today. The Russian rise was based solely on Oil and since the crash in oil prices, you can effectively write them off for the time being.

    It is only Brazil (whose markets have performed even better than the Indian one) and the Indian market which is showing strength.

    And for all those who say that markets and real economy are not related, note that the markets invariably lead the real economy by 6-9 months, even on a sectoral basis. There is a fairly strong connection.

    Does one really think that this "recovery" has legs to stand on any further? I think 2010 is going to be a wild ride with a significant tilt towards the downside ... Let us see ...

    cheers
    CommentQuote
  • Just read somewhere that Chinese have hidden the real debt:NPA figs which are quite large running into several US$bns. If these companies don't perform, expect a big crash in Chinese economy once the figs are made public or leaked.
    CommentQuote
  • Sam, sorry if I hurt your feelings. Perhaps die was too unpleasant a word to be used in jest, which is what I tried to do.

    But just reflect - do you think BJP can win if it projects Gadkari as the next PM? It will have the same fate as when it projected Advani as PM. "Fatal" (forgive the word) mistake.

    BJP has always been for more open and less opaque RE. Congress is in with the builder mafia and is bad for RE (except prices!)

    (Just trying to get back to topic of RE and leave politics behind)
    CommentQuote