India's growth was fueled by the abundant global cash liquidity.

A corporate bank could borrow for 2% in Japan and invest in India's Debt market for 7% - 8%.Profit for nothing - Untill recently.

Any Indian PE firm,Venture capitalist or large builder could walk in to global market with a project and money was thrown at them.

Now the global cash flow has come to a grinding halt.

Banks are not lending (Short term reserve) to another bank fearing the Bank would collapse.

25 global banks have collapsed in 10 days (US,Europe and Asia).

1 European country is Bankarupt (Iceland)

18 major countries have entered recession (Includeing US,UK,Australia,Germany,Japan,NZ,South Korea etc)

Leaman Brothers was 168 years old,It had survived the great Depression in 1930's but dead now.

India Real estate will starve for cash.
Builders will not buy new lands for future projects.
Builders will sell most of their land bank for liquid cash.

I am an Economist - I havent seen (Or heard) of fall currency and Index this fast.

This is worst than 1930's Great depression.

The fuel (Liquidity and cash flow) for the Real estate fire is over.

Bank will not lend without large security to small and medium builders.

No cheap money and easy finance - Lot of projects (all kind of industries) will come to a halt or will not eventuate.

Please Turn on real TV,Surf the real media world wide or talk your friends Overseas.

It is all interconnected - FII are not risking there money in Indian Money Market (Look at the fall in INR)

The Real estate boom Is well and truly dead.

Need to wait for another 8-10 years for the next up cycle.
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  • Every High has a Low. After all, we has everyone been heading? There had to be some stop or a slowdown. There needs to be a balance and with this global recession, people will also slow down. There is more to life than money and monetary growth. The Rat Race will only get Slower. Nasty remark, I know Cheers!
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  • Now, will you guys believe me?!

    Ricky,

    People like Natraj thought I was Nuts (pun not intended :D) when I wrote my other replies about the 50% to 80% declines in RE.

    I have been stating this about the Greater Depression (even worse than 1930s) for nearly 2 years now.

    Hope you guys will listen now. HOLD OFF ALL PURCHASES. HOARD CASH.

    This time around, job losses will be significant. There will be an AVALANCHE of distress sales.

    cheers,


    Originally Posted by rickyofsnow
    India's growth was fueled by the abundant global cash liquidity.

    A corporate bank could borrow for 2% in Japan and invest in India's Debt market for 7% - 8%.Profit for nothing - Untill recently.

    Any Indian PE firm,Venture capitalist or large builder could walk in to global market with a project and money was thrown at them.

    Now the global cash flow has come to a grinding halt.

    Banks are not lending (Short term reserve) to another bank fearing the Bank would collapse.

    25 global banks have collapsed in 10 days (US,Europe and Asia).

    1 European country is Bankarupt (Iceland)

    18 major countries have entered recession (Includeing US,UK,Australia,Germany,Japan,NZ,South Korea etc)

    Leaman Brothers was 168 years old,It had survived the great Depression in 1930's but dead now.

    India Real estate will starve for cash.
    Builders will not buy new lands for future projects.
    Builders will sell most of their land bank for liquid cash.

    I am an Economist - I havent seen (Or heard) of fall currency and Index this fast.

    This is worst than 1930's Great depression.

    The fuel (Liquidity and cash flow) for the Real estate fire is over.

    Bank will not lend without large security to small and medium builders.

    No cheap money and easy finance - Lot of projects (all kind of industries) will come to a halt or will not eventuate.

    Please Turn on real TV,Surf the real media world wide or talk your friends Overseas.

    It is all interconnected - FII are not risking there money in Indian Money Market (Look at the fall in INR)

    The Real estate boom Is well and truly dead.

    Need to wait for another 8-10 years for the next up cycle.
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  • I agree with the author, the real state boom was empowered by too many +ve factors

    1. Cash Inflow from foreign Investers
    2. Home loan interest rates were quite low
    3. Boom in IT
    4. People buying more than one house on loan just for investment purpose
    5. Many NRI's buying houses in india for investment.
    6. Black money from politicians and other sources going in to reality

    now all of the above conditions have been reversed

    1. Foreign investers taking out money
    2. Interest rates too high
    3. IT Boom some what burst
    4. People who brought more than one home are desperate to sell their 2nd home
    5. NRI's selling their invested houses as they need the money there.
    6. Black money some what already invested and not giving that result. Some more can flow in but it can not change the fate of this industry.

    So the mantra is don't buy and for the ones who are greedy, sell ur property for a lesser profit.

    now all the +ve
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  • Hey wiseman what you say seems logical, hold onto cash now to make purchases when the market bottoms out and there are real bargains to be had. And something that all of us would like to believe. but assuming that the economy is about to go belly up in 2010 what is the guarantee that banks, the safest place to keep yr cash in these times, wont go belly up as well? what are the best places to keep yr cash safe?
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  • Good Question! NO ONE KNOWS!

    Hello Jiya,

    Very good question. Fact is, no one knows! REALLY! The supposedly best minds on this do not have any experience of something so severe (this may be even more severe than the 1929 crash which went on till 1938 and only ended because WW II started). My father who is 76 now was only born in 1932. Apparently there is a guy who actually was a broker in 1929. He is 102 years old and is still running a brokerage. He know!!! :D

    If things go extreme, the ONLY thing that may actually go up in value will be Gold (and maybe Silver). And don't believe the foolish analysts who just a few days back talked about Gold ETFs being the best way to invest in Gold (they are still talking about the normal world we knew last year!). Only reason to buy Gold will be to have the only thing of value when things go to extreme. And at extremes, guarantees on ANY paper will be worthless - even Gold ETFs.

    Buying some physical Gold (coins are best - especially Krugerands if you can get hold of any; bars are next best bet).

    Believe me! A once in a lifetime opportunity is coming up. I have seen 5 bear markets. This one has hardly hit and I'm getting a very chilly feeling. This one is going to end quite badly :(. I'm not normally so pessimistic!!!

    Meanwhile, keep your cash in your matress when things go really bad :).

    cheers

    Originally Posted by Jiya90
    Hey wiseman what you say seems logical, hold onto cash now to make purchases when the market bottoms out and there are real bargains to be had. And something that all of us would like to believe. but assuming that the economy is about to go belly up in 2010 what is the guarantee that banks, the safest place to keep yr cash in these times, wont go belly up as well? what are the best places to keep yr cash safe?
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  • But who know the Bottom. Every day morning you are seeing a new Bottom of the Stock market. It seems that it will go till 2010.
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  • Its quite easy to mark the bottom when it happens

    Originally Posted by arin_12
    But who know the Bottom. Every day morning you are seeing a new Bottom of the Stock market. It seems that it will go till 2010.


    Hello Arin,

    Finding the bottom is not a big deal. It comes when there is a combination of

    1. complete hatred towards stocks

    2. Total CAPITULATION (meaning surrender) by investors and total sellout

    3. Total APATHY (indifference) towards anything to do with markets and business.

    Of course, this coupled with small upward movement in sales and profits along with Charting Analysis (I use Eliott Wave) can give pretty good bottom indicators.

    The problem is not with the bottom. The problem is, when bottom is reached, people are so DISBELIEVING that they miss it by rejecting it as YET ANOTHER FALSE BOTTOM !

    We are NOT in a bottom yet because none of the 3 conditions have been met yet and so it is a long way off.

    In fact, since I advice people on the markets, the following was my prediction in Dec 2007.

    1. 12000-15000 in 2008 (this was when Sensex was above 20000 )

    2. Below 10000 in 2009

    3. Bottom of 8500 - 9000 either in 2009 or 2010

    Sell everything and get back into markets below 10000 with 4-5 times quantity. This is coming through as many stocks are more than 80% down!

    t that time, people thought I was completely MAD!!! . Now I have all of them asking me, what next?

    So, everytime the TV analysts called (false) bottom, I told my guys to stay steady and keep shorting the market. You think RE makes good money? Consider this. I went short with a small 4000 Put option for Oct settlement at 4505 for Rs.60. Today its priced at 1080, which is a 1700% return in 45 days. A 5000 rupee investment gives you 90000 back!!!

    I have subsequently revised the bottom now below 8500. This one is going to be long and very hard.

    But bottoms are quite easily recognised by the person who is trained and experienced in recognising it.

    cheers
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  • hello guys. dont u think that u all are reacting too much. i accept it is not a good time for our economy but we all have to be optimistic.:)

    i knw market is runingat the speed of a turtle , but rbi and fm are taking significant and appropriate steps to overcme this barrier. and u knw vry well that who wins at the end.TURTLE.

    If u want to invest ur money then investing in gold would be one of the good option. u can invest ur maoney in real estate also.


    wat say?:)
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  • is there any one who can diffrentiate between BANK RATE n REPO RATE?
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  • Optimist. But also a realist :)

    Originally Posted by vinay kumar
    hello guys. dont u think that u all are reacting too much. i accept it is not a good time for our economy but we all have to be optimistic.:)

    i knw market is runingat the speed of a turtle , but rbi and fm are taking significant and appropriate steps to overcme this barrier. and u knw vry well that who wins at the end.TURTLE.

    If u want to invest ur money then investing in gold would be one of the good option. u can invest ur maoney in real estate also.

    wat say?:)



    Vinay,

    I'm the most optimistic guy on this discussion forum! Would you believe that? :D

    You might wonder. Is this guy perenially nutty like this? Or is this a post-Diwali syndrome ...

    Consider this. Above 20000 Sensex, I was a seller of everything I owned wrt Stocks. Today, with an average of 60% fall in bluechips and over 80% in RE stocks, I can pick up 3 times to 5 times the quantity. When stocks go back up to their highs, I will have a return of at least 300% to 400% besides dividends - which can be considerable.

    Similarly, with RE, I expect to buy a home/land at least 50% of its 2007 price in prime areas. That way, I save not just 50% but actually 100% since we will also be saving an equal amount in Bank Interest.

    Therefore, any investment must be viewed dispassionately and with knowledge of the market. This will not only help us make correct decisions regarding when we can buy and when we should sell. It also helps us maximise the size of the asset we can buy and may even help us buy in our most preferred areas instead of paying thru our nose and getting a junk flat in a remote area with absolutely no facilities.

    Which kind of person would you rather be? :D

    Regarding our PM, FM and RBI Guv, while I have maintained that we probably have the finest set of people in these areas world-wide, we must recognise that they are also only human. This crisis is created y someone else, is of such size that we will feel significant pain whatever the FM may do and this unwinding MUST happen so that the next boom comes up.

    Regarding Gold, you may be right. But for RE, the pain has not even really started - irrespective of what the builders are trying to talk everyone into. After all, what do you expect builders to say? That a tsunami of selling is coming? :D

    Such is life.

    cheers
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  • Same guys who were crying hoarse for a Crash in 2008 are still crying in 2012, I just wonder how many Bull mkt moves are u people going to miss till u finally join the party or should I say BUBBLE in your words
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  • Originally Posted by arin_12
    But who know the Bottom. Every day morning you are seeing a new Bottom of the Stock market. It seems that it will go till 2010.

    stock prices have benchmarks - p/e , book value, dividend record, cash ratios - but RE is in uncharted territory without benchmarks. When you benchmark Indian RE with western countries than also our property is extremely overpriced. Greed has made us blind, and the blind definitely stumbles.
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  • Guys,

    It's useless to fight the Indian Perma Real Estate bull mentality.
    I wish every one holding Real Estate on loans in India the very best and to the traders who are trading on margin buying call options using 10-20% down on building stock which will be delivered over the next 3-4 years - You must have a lot of guts to do what you are doing!

    I hope the Realtors stay afloat and the stock gets delivered, the Balance of payments becomes a dream, the dollar does not slide to 65 -75 (If balance of payments hits us a 30-40% slide will have to happen:)). The NRI's who invested at Rs 54 will be invested at Rs 65. I hope rentals yields don't come back to their average of 4-6% (They were averaging over 4% for the past 45 years). If they do come back, our options will expire out of money big time.
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  • Originally Posted by vinay kumar
    is there any one who can diffrentiate between BANK RATE n REPO RATE?

    Bank rate, also referred to as the discount rate, is the rate of interest which a central bank charges on the loans and advances to a commercial bank.

    Repo (Repurchase) rate is the rate at which the central bank lends short-term money to the banks against securities.

    The reverse repo rate is the rate at which the banks park surplus funds with reserve bank, while the repo rate is the rate at which the banks borrow from the central bank.

    Bank rate - Wikipedia, the free encyclopedia
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