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International Market: Where World Economy Going On ?

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International Market: Where World Economy Going On ?

Last updated: May 23 2012
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  • #91

    #91

    Re : International Market: Where World Economy Going On ?

    Wise is an extremist, so is Nat.

    Wise wants the property market to crash so he will use any example to his argument (like decline in exports of Congo or volatility in share market in Iceland etc)

    Nat wants the RE price to hit the moon (So strong is his conviction - he doesn't bother looking for supporting verbiage)

    THE TRUTH IS IN THE MIDDLE OF THE TWO EXTREMIST.

    The Losers will be :
    • Any one believing Wisemans prophesy and holding a property purchase for 2-4 years awaiting a crash to pick up bargains.
    • Any one believing Nat and buying a property (with debts) today to sell it in 2 -3 years time assuming to make 200% profit.
    Even in today’s global village India is different – it has its own advantages & disadvantages.

    Historically both advantage and disadvantage of India has favored property owners (ie. disadvantages such as Inflation, uncontrolled population explosion, lack of decentralized town planning, Rural to Urban mass migration etc).

    India is not immune to crisis but the question is what will be the impact. One can run hundreds of economic models or simply refer to the biggest financial crisis India ever faced “1991 Indian Financial Crisis” Did the RE Market Crash? The answer is NO.

    The bottom line is “Don’t try to time the market” - it will result in pain, disappointment and lost opportunities.

    My experience has taught me diversification, cash flow and investment horizon is the key. You cannot and you should not time the market (making decision based on current market condition is not timing the market but making decisions based on predicting a future event is)

    Be aware of current market situation and look for affordable property that meets your needs in good location with potential and go for it.

    The exponential population growth, Inflation, supply constraint and INR devaluation will ensure you and your family will thank you making that wise decision.


    Time in the market is what matters not timing the market.


    Only speculators, property traders and brokers need to bother about what Wise & Nat has to say.

    If you don’t indent to buy and sell 5-10 properties a year you don’t have to worry about extreme views.

    Remember REAL ESTATE IS NOT SHARE TRADEING & PROPERTY BUYERS ARE NOT DAY TRADERS.


    Wise will wait for his dooms crash for another 20 years.


    Nat will keep hoping his 1 crorer will become multiplies 100s of crores.


    In the meantime all the sensible people will keep buying, selling, upgrading and investing in properties.

    Comment

    • #92

      #92

      Re : International Market: Where World Economy Going On ?

      Slowly you are getting some things right ...

      Response in blue ...

      Originally posted by Economist View Post
      Wise is an extremist, so is Nat.

      Wise wants the property market to crash so he will use any example to his argument (like decline in exports of Congo or volatility in share market in Iceland etc)

      These are completely new indicators that only you seem to be conversant with! Btw, Iceland stock market has been closed since June 2009 and volatility has since been ZERO! Before exhibiting your ignorance, you should check these things ...

      Nat wants the RE price to hit the moon (So strong is his conviction - he doesn't bother looking for supporting verbiage)

      THE TRUTH IS IN THE MIDDLE OF THE TWO EXTREMIST.

      The Losers will be :
      • Any one believing Wisemans prophesy and holding a property purchase for 2-4 years awaiting a crash to pick up bargains.
      • Any one believing Nat and buying a property (with debts) today to sell it in 2 -3 years time assuming to make 200% profit.
      Can we wait for the 2-4 years to decide? Why are you in such a hurry to confirm the coming RE boom before it happens? Do you have a vested interest or are you stuck with a high priced purchase? Glad to say that my RE purchases have always been at very affordable levels when most people were selling rather than buying.

      Even in today’s global village India is different – it has its own advantages & disadvantages.

      Historically both advantage and disadvantage of India has favored property owners (ie. disadvantages such as Inflation, uncontrolled population explosion, lack of decentralized town planning, Rural to Urban mass migration etc).

      India is not immune to crisis but the question is what will be the impact. One can run hundreds of economic models or simply refer to the biggest financial crisis India ever faced “1991 Indian Financial Crisis” Did the RE Market Crash? The answer is NO.

      Up until 1992-95 boom in RE, RE had never acted like the stock market with a BOOM! Therefore, where there is slow, normal growth, there can never be a crash. Since then RE has had one crash (95-98) and with this bigger boom in the 00s there should be a bigger crash coming - naturally. Indian RE has entered a typical boom-crash cycle and it will continue ...
      In 1990 there was no boom in RE. So why should there have been a crash? Besides it was the licence, shortage raj. Supply was FAR, FAR less than demand. Today, supply is FAR, FAR more than demand. Demand is weak. Builders are LOADED with DEBT. Ripe situation for a crash if builders are unable to rob investors with high-price IPOs!!! Two situations completely different and NOT comparable!

      The bottom line is “Don’t try to time the market” - it will result in pain, disappointment and lost opportunities.

      My experience has taught me diversification, cash flow and investment horizon is the key. You cannot and you should not time the market (making decision based on current market condition is not timing the market but making decisions based on predicting a future event is)

      Be aware of current market situation and look for affordable property that meets your needs in good location with potential and go for it.

      Can you show me some affordable property that also happens to be in certain areas like Pune, Chennai, Bangalore, Gurgaon, etc near my place of work?

      I agree! Do not time the market. Wait for price to come down to YOUR PERSONAL affordable levels (or buildup enough cash to put high down payment). Another acceptable way to time the market
      is to wait for the right time when prices are at your comfortable levels. Always worked for me ...


      The exponential population growth, Inflation, supply constraint and INR devaluation will ensure you and your family will thank you making that wise decision.


      Time in the market is what matters not timing the market.


      Only speculators, property traders and brokers need to bother about what Wise & Nat has to say.

      If you don’t indent to buy and sell 5-10 properties a year you don’t have to worry about extreme views.

      Remember REAL ESTATE IS NOT SHARE TRADEING & PROPERTY BUYERS ARE NOT DAY TRADERS.

      Economist, exactly why my advice is sound. Traders can afford to make mistake and buy at wrong price. They will sell tomorrow and correct the mistake. Long-term buyers (like me! ) rather wait for the right price. After all, it never hurts to see your RE 1000 times its purchase price (full cash purchase) in 25 years time, right? Rather than buy high and see it not gain in real terms (after adjusting inflation AND interest) for 10-15 years from now? Which would you prefer. And who is the tarder and who, the longterm buyer!!!


      Wise will wait for his dooms crash for another 20 years.

      Not necessary. Next 5 years MAX will do for me to get the "affordable" levels you were talking about. And I will get it, I'm sure (after studying the growth rate of Congolese Pythons during monsoon time in Central Africa!)

      Nat will keep hoping his 1 crorer will become multiplies 100s of crores.


      In the meantime all the sensible people will keep buying, selling, upgrading and investing in properties.

      You mean people will keep on buying property at these insane inflated rates set to profit builders and see their value stagnate for the next few years and keep getting heart-attacks everytime their EMI goes up due to inflation and their salaries do not keep pace? Are you a builder or some kind of interested party?
      cheers
      Last edited October 17 2010, 08:43 PM.

      Comment

      • #93

        #93

        Re : International Market: Where World Economy Going On ?

        Interesting Speech about world economy

        http://video.google.com/videoplay?do...23537541&hl=en#

        Comment

        • #94

          #94

          Re : International Market: Where World Economy Going On ?

          Dollar is leading all currencies to zero ...


          Srinidhi,

          Check out the attached chart. Would you believe that the Dollar was 160 back in 1985 on the Dollar Index and its now 76?

          For the hundred years from 1813 to 1913, the dollar stayed within 20 cents of its original value.

          Between 1913 (when the FED was created to DEBASE the $ and permit politicians to wage war, etc) and today the dollar has lost around 96% of its value.

          The Dollar will eventually head to zero (of 1913 value) sometime in our lifetime.

          cheers
          Attached Files

          Comment

          • #95

            #95

            Re : International Market: Where World Economy Going On ?

            Hello all....
            Could not manage to read the entire thread...managed to read a few.
            As posted housing prices have plunged in manya places but notvin chennai....

            India has a huge parallel economy....black market,benami....unless this parallel economy stops it would be difficult to see the prices falling much...
            Also chennaites are very conservative....atleast when compared to other metro'ites...
            Its a dream to own a house...and people at any cost want to own a house...may be this analogy might not be 100% correct.

            Comment

            • #96

              #96

              Re : International Market: Where World Economy Going On ?

              our mindset is to be blamed

              Originally posted by madhan1977 View Post
              Hello all....
              Could not manage to read the entire thread...managed to read a few.
              As posted housing prices have plunged in manya places but notvin chennai....

              India has a huge parallel economy....black market,benami....unless this parallel economy stops it would be difficult to see the prices falling much...
              Also chennaites are very conservative....atleast when compared to other metro'ites...
              Its a dream to own a house...and people at any cost want to own a house...may be this analogy might not be 100% correct.


              Dear friend Madhan,

              You are absolutely right.There is enormous social sanction in our society
              for owning property(even if it is purchased with a big loan).
              The banks are only too happy to cash in on this weakness in us by offering loans to unsuspecting individuals thus trapping them into taking on huge debts.
              In fact the banks are to blame for the current scenario,they fuelled the boom .
              Now ,they are trying to ensnare people with dreams of owning a second home or holiday home etc.
              I think we need to change our mindset if we are to emerge wealthier in the bargain.......

              regards
              unlikely

              Comment

              • #97

                #97

                Re : International Market: Where World Economy Going On ?

                How about this scenario ...

                BSE Sensx had gone up as high as 20850. It appears that the next move would be to a level of 18500, even though mood was extremely bullish.

                Now it has weakened significantly to 19950 (a 900 point drop from the peak). I expect it to weaken further by another 1000-1400 points before doing the next climb.

                This would essentially wipe out all the gains made by FIIs since they started pumping in money. Now, losing 10s of thousands of Crores will not be palatable to FIIs. How will they react? Pumping even more $$$ into the market?

                Let us see if this happens in the near future.

                cheers

                Comment

                • #98

                  #98

                  Re : International Market: Where World Economy Going On ?

                  wiseman,
                  What I see is, FIIs do not lose money. They are quite good in investments and will do only medium to long term. They wont mind the initial drop. Ultimately its we, the individuals, suffer when FIIs pull out suddenly at the peak.

                  Comment

                  • #99

                    #99

                    Re : International Market: Where World Economy Going On ?

                    Regarding the original question whether we are in deflation.My take is we sure are in a phase of slower growth.The excess liquidity infused as stimulus and drop in supply due to low productivity is causing rise in prices obscuring the reality of Indian Economy which is under as much pressure as any other economy.

                    However in India, There will be increasing pressure on prices to stay with upward bias due to the diminishing purchasing power of rupee due to inflation and devaluation of currency, and by more rich people competing among themselves to buy the limited resources whilst starving the poor.Sadly, That is how our government policy is and I am not foreseeing any shift in immediate future.

                    So current scenario - Production and growth wise it is Deflatory and prices are still Inflatory.

                    Also, We have many times debated, why predict? Following are my thoughts and ramblings which may not be useful to everyone.Excuse my digression.I am just in mood to write today.

                    There are many ways to look at things.I never overlook if someone claims to have a different point of view, there are always many aspects to things that we have to know and new new subtleties to learn.

                    For instance, if someone tells me that "We live in a universe with more than 3 dimensions".I would initially laugh at them because I have grown up learning that "We have only 3 dimensions for space(Up-Down, Left-right, and forward-backward), and one dimension for time which is unidirectional" and I am convinced 100% that it is correct.

                    But was that person wrong?When we delve into advanced science, Leading physicists who study "String Theory" and aim to create a "Grand Unification Theory" - i.e. One equation that explains all, vehemently believe we need more than 3 dimensions-actually as much as 11 dimesnsions to explain how matter and particle behave in our world.They dont stop there, they go further to say there are multiple universes like ours.It makes me ask?Well, now who is right and who is ignorant?I dont know and may never know during my lifetime.Actually does it even matter that I need to know?

                    Such kind of duality/paradoxes exists everywhere around us.

                    Predictions are generally based on the premise that history repeats itself and there are certain patterns to events in the world and are mostly cyclic in nature.

                    People form opinions strongly based on how they interpret the events around them and base it on knowledge of happenings that they think and believe are dependable and factual.The understood trend is then extrapolated over a period of time to form a pattern that aids in giving an insight on what to expect in the future.

                    In my experience, if done by extremely skilled people who are gifted to see things differently and have access to sources of crucial knowledge that normally other people dont, then the Predictions of events is mostly accurate directionaly.

                    The huge problem of such predictions are that the factors that can hinder or alter the prediction is not known while making one.Its not really possible to put an expiry date or timeline to predictions.No one can be dead sure about the frequency and amplitude.Sometimes the event can occur later in future when we least expect thinking we have passed the phase.Sometimes the event would have occured, but it may be unnrecognizable because its impact would be miniscule and insignificant compared to what we expected.The uncertainity factor is always present.Life always doesnt fail to surprise us.

                    While there are so many people who predict what can happen, there are not many who are forthcoming to predict what cannot happen and what can wrong.It requires a great deal of conviction and straight forwardness to do so.Irrespective of whether the prediction turned out to be true or false.I feel its very wrong to hold the person who predicts responsible for anything.Even if you insist them to explain, the same method they used to predict earlier will now also give valid reasons as to why it didnt work out in the past and what to expect in the future.The reasons can be change in planetory positions for astrology to Excessive stimulus and liquidity infusion for economy.

                    Whether a prediction works for you or not.You are the best judge.Ultimately its one's own action and choice that fulfils a prophecy.

                    I will like to quote my favourite dialogue from the Matrix Trilogy uttered by the Oracle

                    "I told you before. No one can see beyond a choice they don't understand, and I mean no one."
                    Last edited October 24 2010, 02:02 AM.

                    Comment


                    • Re : International Market: Where World Economy Going On ?

                      Originally posted by nabishek View Post

                      While there are so many people who predict what can happen, there are not many who are forthcoming to predict what cannot happen and what can wrong.It requires a great deal of conviction and straight forwardness to do so.Irrespective of whether the prediction turned out to be true or false.I feel its very wrong to hold the person who predicts responsible for anything.

                      Whether a prediction works for you or not.You are the best judge.Ultimately its one's own action and choice that fulfils a prophecy.
                      "I told you before. No one can see beyond a choice they don't understand, and I mean no one."
                      I think you should replace the word "prediction" & "Prophecies" to "Opinions" and "Educated Guess" which are welcomed by everybody.

                      In my personal opinion no one can predict anything (Except the beaming obvious short term events) particularly when it comes to market.

                      Most educated people do not indulge in prediction and prophecies even if there educated views are pointing to a particular result, They would relay their views and opinions with the words with words such as "Likely/Unlikely" "Potentially/ Possibly" - This does not mean that the person is not manly enough or gutless to predict, It means the person respects the uncertainty of the market and its fundamental nature.

                      One simple fact:

                      The real market movers (i.e The mass of buyers and sellers) are mostly people who do not posses such superior global economical knowledge and may not be deterred by or encouraged by global factors that you, me or wise points out. They are people who are driven by factors that affect them directly and now.

                      Therefore far shot links and spinning of events like fall imports in Congo, Crash in Iceland stock market, fall in gas exports in Kazakhstan and hypothetical prophecies like USD crashing to zero value etc does not mean anything to the local market movers.

                      You may ask what’s wrong with predictors and prophecy Sayers rambling on with there verbiage?

                      The careless verbiage of such self proclaimed prophets wrongfully affects the lives of innocent investors/ Buyers/Sellers etc.

                      Some innocent buyers are misguided by these prophets either:

                      ·Induced to buy unaffordable properties with large debts and life savings in order to make huge quick profits (Only to find out later they have lost there money).

                      or

                      · Induced to avoid buying there desired, affordable and suitable property in order to save large sums when the phantom crash happens (only to find out that they are permanently out of the market by missing the opportunity and will never be able to buy again in that area and regret all their life)

                      The doomsayers and boomsayers do destroy lives of some innocent buyers and sellers due to there imprudent and non diligent verbiage of prophecies.

                      My request to those self declared Oracles/prophets; please respect the nature market and be diligent and provide prudent advice as it impacts some peoples lives.

                      Abisheik please note:
                      These comments are not direct at you as we all
                      know you had been prudent and considerate in providing your views and you haven’t been dishing out callous predictions.

                      The above are my personal views on market predictors in general
                      Last edited October 24 2010, 07:57 AM.

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