I was just going through this headline in economictimes website "Stocks fall on US, China economic news" and I was wondering what is really happening in the world economy?

We see China posting slow growth (taunted to be the driver of world economy) USA still crawls, UK's debt mounting all the time and whatever our politicians say India is no better. Because I myself and my friends experience the difference of the present time and time we are flooded with offers in 2007. I can tell you one of my friend who has an experience of 5 years and working as a relationship manager is finding it very hard to even schedule a prospective interview for himself. And the hikes that are announced by most of the companies are only in paper's or in peanuts.

On the basis of current situation I'm actually wondering about two things about India.

1. The stock market keeps on rising - This increase is may be due to the fact that FII's are pouring in money. But china being a FII's darling has seen their stock market value coming down. But that does not seems to be the case with India. Is Indian stock market rising just because of FII's or Indian public is investing in stocks? Or Is India really immune?

2. Real Estate - I have heard and seen in most of Tamil Nadu that land prices have stagnated or have come down in a very few areas, but in most of the cities and towns the sellers are quoting those absurd prices with no takers, but still the sellers or hanging on to the price. Where it is all going to end? Will RE as whole (flats, land) survive this period or the imminent depression predicted by economists like Paul Krugman will sweep the world and India.

I would like to know your thoughts on it. I know there are people in this forum who say the RE is going to rise all the time and there people who say the RE will go down in short term. Let's see what we can get out of this thread?
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  • We are sliding towards a larger repeat of 2008 ...

    Originally Posted by Venkytalks
    People do get carried away.

    I got carried away in 2009 March lows of the stock exchange and failed to reinvest - at the bottom - because I was scared of the market falling more.

    Thanks to CNN Money, Marketwatch, Business Insider etc on which doomsday predictions proliferated. And the Indian media whgich did not predict Congress victory

    Somehow, I misjudged the risks and gave too much weight to adverse outcome - after it had already happened!!!!!!! Missed a chance to double my money in 6 months. Stopped reading American right wing and fox network related nonsense economics sites after that


    Still, I would be wary of too much BOOM talk - they are no different from DOOM talk.

    All this "India shining" crap and "we will be a superpower" crap is the kind of talk which scares me. I currently give this upmove max till March 2011. Sometime between now and then, some adverse move is bound to happen - from some global imbalance related effect.

    Even wars (when I last talked of wars about 6 months ago in the Chennai RE forum, people got wild. The risk weightage for wars has gone up and not down in the last 6 months)

    Still, every bull market climbs a wall of worries and lots of worried people is good news for the bull moves of today

    One can only wait and watch nervously



    If you notice, the world's economies are rapidly sliding towards early-2008 situation. EU countries are coming increasingly rapidly for frequent bailouts with money created out of nothing. This creates unbelievable risks.

    The risk is of Sovereign (read Country-level) Default on debt, re-rating of countries and very severe economic pain!!! Please read up the case of Ireland. They were in deep sh*t till yesterday with their housing boom and banking overeating and their fiscal deficit went to 12% of GDP. They promised to cut spending and reduce deficits next few years. But the pain of cutting is felt to be so severe only months into cutting (not real cutting yet) that the PM felt it was necessary to DOUBLE borrowings and raise deficit to 32%. This straightaway puts ALL of their debt at serious risk of default and practically forces the country into actual default!!!:o

    Secondly, since most bailouts result in even more debt loaded on already unmanageable debt, expect most bailout funds to quickly run out of money. This is SURELY going to spiral into endless money printing with ZERO marginal impact of the new money on the economy - another term for HYPERINFLATION!

    2011 is already the most probably timeframe for global economy to slip into a much worse recession (I'd say a depression) than the 2008 one. Even since our own stimulus program is ending, our so-called growth is tapering off and showing signs of returning to zero again. Very serious beginning of a trend.

    When you take a new credit card and go on a wild spending binge, life looks ROSY! Till you max out the card and the bills start coming in. When you realise that the ends will not meet, things look GREY. When you then lose your job and your possessions get taken away roughly, things look BLACK!

    This is increasingly happening to MILLIONS of formerly rich (by our standards) people in rich, developed countries - who, incidentally were making you rich buying all your goods and services.

    Now that they are starting to collapse, things are starting to look bleak again!

    cheers
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  • Would like to caution about one more aspect.With the excess liquidity thats flooding our system, there is a good possibility that there is a general increase in price in everything around us before the economy's effect sinks in.That includes RE too, which I think will keep in pace with inflation.

    This rally is aiming to suck the last remaining savings of our Indian families to feed greedy capitalists.I am sure, with the way governments are behaving irresponsibly all over the world.They all seem to be prepared and do not want to come to power next term.They just want to protect their skin and push the inevitable farther, so that they can blame the mess they have created on someone else.

    The RBI's move to increase interest rate and cap loans above 75 lakhs is a clear indication and acknowledgement that the NPA's are increasing and the RE bubble can get even bigger.RBI wants to curb that.I fear it will fail this time too.The main reason being no government will to implement the policy.Today news has it that due to the low IIP numbers, RBI will not rise interest rates any further.Its gonna be wait and watch.The strength of RBI is they have been very proactive in the past.Any reactive action by RBI will be too late.

    Finally I think its time for everyone who are waiting to buy to re-introspect their financial position and stay prepared.

    One important thing in any market is -Unless you have stake in someother equivalent or better performing market, it doesnt help being an outsider and then waiting to enter.You should be first participating to know the trend and then take positions appropriately.Its useless to crib about any opportunity loss or profit thats never realized.

    Most in this forum have been advocating to buy if you can afford, but to never overleverage.Take well informed and prudent decision that suits you personally and financially.It stands true even today.
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  • Overdose: The Next Financial Crisis

    Above video in youtube will answer all questions I suppose, it gave more clarity to me. Hope it will do so for others..
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  • 2G scam and TN real estate
    Any chance of TN real estate falling?
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  • Second that!!!

    Originally Posted by nabishek
    Would like to caution about one more aspect.With the excess liquidity thats flooding our system, there is a good possibility that there is a general increase in price in everything around us before the economy's effect sinks in.That includes RE too, which I think will keep in pace with inflation.

    This rally is aiming to suck the last remaining savings of our Indian families to feed greedy capitalists.

    The RBI's move to increase interest rate and cap loans above 75 lakhs is a clear indication and acknowledgement that the NPA's are increasing and the RE bubble can get even bigger.RBI wants to curb that.I fear it will fail this time too.The main reason being no government will to implement the policy.Today news has it that due to the low IIP numbers, RBI will not rise interest rates any further.Its gonna be wait and watch.The strength of RBI is they have been very proactive in the past.Any reactive action by RBI will be too late.

    Finally I think its time for everyone who are waiting to buy to re-introspect their financial position and stay prepared.

    One important thing in any market is -Unless you have stake in someother equivalent or better performing market, it doesnt help being an outsider and then waiting to enter.You should be first participating to know the trend and then take positions appropriately.Its useless to crib about any opportunity loss or profit thats never realized.

    Most in this forum have been advocating to buy if you can afford, but to never overleverage.Take well informed and prudent decision that suits you personally and financially.It stands true even today.



    Abishek,

    Where have you been? :D

    I have highlighted the points in RED in your post above which needs to be revisited by all those who DO NOT want to wait any longer to buy before its too late.

    Buying into RE at this specific point (if you are going to depend heavily on DEBT as well as put in a major part of your income into EMI) is FRAUGHT WITH HEAVY RISK!!!

    The last week has been a pointer to the precarious position that the world has now gotten itself into. While the next 6 months may see higher prices especially in Emerging markets (India mainly), this is the final LEAP that prices may make before an EPIC crash in 2011-12. Of this I'm almost certain because the latest round of bailouts seem to be failing in their basic objective of returning the world to a more normal state.

    Instead, people are showing signs of DEBT EXHAUSTION, implying they are turning away from borrowing and spending beyond their means. The latest IIP figure is worse than it looks because the largest contribution to this anemic growth (4.4%) is consumer durables - a sign of people being misled into believing that the worst is over!!!

    The worst is yet to come. It is now inevitable that to get away from the pressures of huge debt, countries will take on even more debt (to avoid immediate collapse) which will seal their fates in terms of their eventual collapse.

    Nothing can save this world from de-leveraging, deflation and maybe another decade of painfully slow/no real growth to repair the 2-3 decades of binge-ing and overeating.

    Take preventive action. Save cash, tighten belts, completely avoid taking on new/more debt, pay down debt. BUY GOLD/SILVER.

    cheers
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  • RE in chennai will come down ? doesn't look like

    It was a pathetic experience for my friend who was looking for a groun in porur. When he went to Mowliwakkam villagae which is aroun 4 km from Porur junction. Some builder was holding agreement for 2 grounds and quoting each 70L and not even 1 Rs less (Is it worth so much ?). Second condition two adjacent grounds will be sold together. Third stupid condion, no loan immediate cash, I don't know how on earth he expects some one t have 1.4Cr in hand and search in this area. Last he was saying if you want buy now or else by Jan I will quote 80L and the way he talks is as if my friend has taken a loan from him. Government has to abolish this Power agreement one pathetic thing which spoils RE. Untill ths power is their unethical people like his agreement holder will not allow the RE to come down.
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  • Originally Posted by balab1405
    It was a pathetic experience for my friend who was looking for a groun in porur. When he went to Mowliwakkam villagae which is aroun 4 km from Porur junction. Some builder was holding agreement for 2 grounds and quoting each 70L and not even 1 Rs less (Is it worth so much ?). Second condition two adjacent grounds will be sold together. Third stupid condion, no loan immediate cash, I don't know how on earth he expects some one t have 1.4Cr in hand and search in this area. Last he was saying if you want buy now or else by Jan I will quote 80L and the way he talks is as if my friend has taken a loan from him. Government has to abolish this Power agreement one pathetic thing which spoils RE. Untill ths power is their unethical people like his agreement holder will not allow the RE to come down.


    That is how a market works....either to negotiate or have to go somewhere else.

    Even the broker I spoke too recently told me this person from Qatar is buying that plot for 55 Lacs and last month purchased another plot for 40 Lacs. Interestingly that person from Qatar had come to that location in a 2 wheeler in doubles sitting behind same broker and I had driven there in a SUV. I did not seem like a good prospect to that broker (looking at his attitude) inspite of driving in a SUV ( may be he thinks I borrowed friend's or brother's SUV). Also I had similar concerns :D Why should this person from Qatar having purchased 2 plots within a month's time with total value of 95 Lacs still sit behind in 2 wheeler doubles hanging his ass out and come there as brand ambassador for that broker. Who is to be believed...whom are they trying to convince.

    Never be ashamed to negotiate...rule is in any market is if someone is making it difficult that's because there is something wrong he is doing.
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  • Picturing that made me laugh ...

    Originally Posted by roop78


    ... having purchased 2 plots within a month's time with total value of 95 Lacs still sit behind in 2 wheeler doubles hanging his ass out and come there as brand ambassador for that broker. Who is to be believed...whom are they trying to convince.


    Nicely worded, makes one laugh trying to picture that!

    MAybe he overspent so much on the plots, he had no money left for the SUV ride and was forced to hang his ass-ets out ? :D

    cheers
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  • Originally Posted by REUser
    2G scam and TN real estate
    Any chance of TN real estate falling?


    Few points to consider. The global economic crises of 2008 was a bigger challenge to real estate in India and other fast growth countries, then 2G scam.

    During 2008-09 slowdown period when other cities like Bangalore, Hyderabad were having correction in land prices by 20%-40%. In Hyderabad and Bangalore suddenly there was slowdown and big stagnancy in sales. Even during that slowdown period Chennai real estate stakeholders were charging same prices without any interest in negotiating as if Chennai was different from rest of country. Now we know why Chennai was different, 2G spectrum had to go somewhere:D.
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  • You may be right, but what if ...

    Originally Posted by roop78
    Few points to consider. The global economic crises of 2008 was a bigger challenge to real estate in India and other fast growth countries, then 2G scam.

    During 2008-09 slowdown period when other cities like Bangalore, Hyderabad were having correction in land prices by 20%-40%. In Hyderabad and Bangalore suddenly there was slowdown and big stagnancy in sales. Even during that slowdown period Chennai real estate stakeholders were charging same prices without any interest in negotiating as if Chennai was different from rest of country. Now we know why Chennai was different, 2G spectrum had to go somewhere:D.



    Consider this.

    What if, in the unlikely event this money is pulled back somehow (we can always hope for eutopia, right?) and a lot of this money has to return to the Govt (to be looted/squandered in a different way by other politicians at the Center)?

    Will it collapse Chennai RE prices (and maybe other places like Madurai, etc where Alagiri runs a parallel Govt.)? Asking because I have a vested interest in Chennai RE and trying to sell out a major chunk!:D

    cheers
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  • CBI raids Banks, LIC Housing

    Finally, the Bank Builder Broker cartel is getting to limelight.
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  • Originally Posted by REUser
    2G scam and TN real estate
    Any chance of TN real estate falling?


    Dear friend, 1.76 lakh crores of rupees is only the assumed/predicted loss to GOI and not the scam amount which has been pocketted by so many involved. The amout got into the pockets of so many or few, by this scam, may be into a few hundres or thousands of crores would not have come to Tamilnadu only and to Chennai only that too to Chennai RE only. The loot would have gone world over including Swiss Banks. The RE in Chennai may not have any impact due to this scam.
    But the RE in Chennai is up again and the builders have started increasing the prices any where to the tune of 25 to 30 % over those prevalent 1.5 years ago. They always will put the blame on input costs. For example, in East Tambaram within a radius of 500 to 1000 metres of Sanatorium Railway Station, a flat which was going for Rs. 3000 to Rs. 3500 per sq. ft about 1.5 years ago is going for Rs. 4200 now and there are takers at this rate also. The recent rain has again shown that this area is flood free, as also water scarcity free almost the whole eyar and the rates may go up further.

    ks2071746
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  • Just read that BSNL is in a position that it can't even honor a cheque of Rs392. BSNL fails to honour Rs 392 cheque - The Times of India

    Hope our govt has some money at least or we will soon see this kind of things with govt too?
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  • Is finally things are getting unsettled like 2008, I see the similarities now. Cisco the networking giant has announced that it will cut jobs, HSBC has also announced that it will cut 10000 jobs, US is struggling to rise it's debt limit.

    To confirm further, my friends in textile industry say the orders from europe has completely dried up and now they are even struggling to run to their full capacity and most of the companies depend on bank loans for even paying monthly salary. This is not exaggeration, but this is what happening in manchester of south india. Textile industry is generally the pulse of the future as they book orders for the future.

    Moreover, the same happened in 2008 and we know what happened next.
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