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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  • Something is happening in Europe right now!

    I checked CAC (France) and DAX (Germany) as usual every evening and I was seriously taken aback the way both have "crashed" today!

    Both opened UP with a large GAP. Then they have come down nearly 3%! DAX in particular - being one of the strongest economy in the world came down 300 points down which is nearly 4% down!!!

    At least CAC is excused since France is being readied for a soft bailout now that their Finance Minister is going to be head of IMF! :D

    Also the US market is not too happy with the Debt Ceiling deal since their markets are also down a little!

    Lets see whats up tomorrow!

    Markets will keep meandering aimlessly as long as the EU Crisis and US crisis keep taking turns getting heated up.

    Also, the chances of QE3 may now vane ...

    cheers
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  • Originally Posted by gayuraj
    Well it's time for reality check then.. It's better to get back to our age old strategy (i.e. Save then buy which had worked well). As we don't want to end up like US.

    I didnt mind the silly part :). Enjoy.,,


    I think it's too late for the save strategy for youngsters. As far as I see in my friends circle. 90% of people who have 5 years of experience have booked a flats and have a loan amount of 35 to 40 lacs. They are paying the EMI for that, not sure our youngsters can even think of save now and buy later strategy.

    Regards,
    Sridhar
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  • This is why everyone must enter the stock market ...

    Originally Posted by sridharchennai
    I think it's too late for the save strategy for youngsters. As far as I see in my friends circle. 90% of people who have 5 years of experience have booked a flats and have a loan amount of 35 to 40 lacs. They are paying the EMI for that, not sure our youngsters can even think of save now and buy later strategy.

    Regards,
    Sridhar



    Sridhar,

    Whether one makes money in stocks or not there is a reason for everyone to play the market for some time at least.

    It teaches people how to take practical decisions regarding what to do when a bad investment is made, what to do when the entry point is too high, etc.

    People become very practical about stopping loss and waiting for a more opportune time, and learn various strategies on how to protect themselves as well as make their savings grow.

    There is one strategy for the situation you see today - since most people have homes on loans, they may not be able to play the save now and buy later.

    If they see a decent profit on their purchase, they could sell now, save next and then buy later. But most won't do it.

    cheers
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  • I agree however life is a cycle. People will be forced to save as it has started happening in US. It only takes one bank to pull the plug. Hope those 90% of the folks realize.
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  • As per today's Economic Times recession is going to happen in US and will have severe effects on world economy

    Do not buy flats on huge loans
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  • Watching wiseman and Peter schiff

    Both of them are so true, that's what's going to happen as predicted by wiseman and Peter schiff , big collapse of dollar, eventually leading higher interest rates, now S&P has credited US as AA , what else we need , hold on everyone it's not going to be easy, thanks for your views wiseman
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  • Wisey, I have a question for you. How this second round of recession is going to affect India? Last time when the recession hit us we were in a decent position to tackle recession. We were growing at 9%, inflation was it's on it's way down from 13% and the banks were in much better position.

    Whereas, this time the growth is already slowing down, exports already reeling under pressure, inflation is not on it's way down even after frequent interest rate hikes by RBI and our banks much more exposed than in 2008.

    On the employment and business, is the job market is just going to be stagnant or there is going to be unannounced retrenchment like before and salary cut. Both are not good for the economy and if the retrenchment happens it's going to be a huge blow.

    How are the businesses that are related to export gonna survive this time? There are also some small firms that provide very specialized IT and ITES services. How will these firms get affected?

    Generally, what is your opinion on the above facts? I know it's a lot of questions :) and hope you get the time to give us your views.
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  • Yes...great prediction by wiseman, sridarchennai etc.,
    I was casually reading all these posts and not serious about this crash.
    But everything is becoming true.
    So, what's ur advise for ppl. looking to buy a home now??


    Originally Posted by Dollar$
    Both of them are so true, that's what's going to happen as predicted by wiseman and Peter schiff , big collapse of dollar, eventually leading higher interest rates, now S&P has credited US as AA , what else we need , hold on everyone it's not going to be easy, thanks for your views wiseman
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  • Outcome of Debt Downgrade

    I believe the only thing which can stop this free fall is QE3 .Otherwise seems like countries are getting ready for some big scale war for a new world order .By looking at London Riots , Afgan helicopter crash , it looks like this is well engineered crisis .Not like 09/11(2001 , though some people argue it is insider job) , the shocks like Lehaman collapse , S&P downgrade are all came from US only .If US wants, they would have stopped these events before it happenned , because these are all american companies .I am not sure whether US is threaning the rest of the World for QE3 by shaking the world market .I also believe this fall would help inflation to come down very quickly , so that US can go for QE3 without any major opposition.I also doubt lehman was allowed to fail just to give Stimulus , QE1 and QE2 .
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  • Originally Posted by Srinidhi
    I believe the only thing which can stop this free fall is QE3 .Otherwise seems like countries are getting ready for some big scale war for a new world order .By looking at London Riots , Afgan helicopter crash , it looks like this is well engineered crisis .Not like 09/11(2001 , though some people argue it is insider job) , the shocks like Lehaman collapse , S&P downgrade are all came from US only .If US wants, they would have stopped these events before it happenned , because these are all american companies .I am not sure whether US is threaning the rest of the World for QE3 by shaking the world market .I also believe this fall would help inflation to come down very quickly , so that US can go for QE3 without any major opposition.I also doubt lehman was allowed to fail just to give Stimulus , QE1 and QE2 .


    Dude, if QE3 comes, that would prove to be the ultimate disaster we need to send world into a Great Depression. QE1 and QE2 have already created more problems than they solved, and, QE3 would be no better. It would increase the debt on US, thereby making its people poorer day-by-day.

    The requirement here is a complete overhaul of entire world's monetary system to get rid of its toxicants. People have lost faith in paper currency esp. Euro and USD, since they can printed as per wish of people's darling Governments. Exchange rates can be manipulated (like China is keeping its Fx rate much lower artificially) to suit ones own interests, even if it destroys others. There are whole lot of such problems inherent in our our monetary & fiscal system. And till we don't get rid of these, no QE could solve our problems. :bab (22):
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  • I agree with you .I am not saying QE3 will resolve this problem , but I believe this is what US would like to do at this point of time.


    Originally Posted by bhuvang
    Dude, if QE3 comes, that would prove to be the ultimate disaster we need to send world into a Great Depression. QE1 and QE2 have already created more problems than they solved, and, QE3 would be no better. It would increase the debt on US, thereby making its people poorer day-by-day.

    The requirement here is a complete overhaul of entire world's monetary system to get rid of its toxicants. People have lost faith in paper currency esp. Euro and USD, since they can printed as per wish of people's darling Governments. Exchange rates can be manipulated (like China is keeping its Fx rate much lower artificially) to suit ones own interests, even if it destroys others. There are whole lot of such problems inherent in our our monetary & fiscal system. And till we don't get rid of these, no QE could solve our problems. :bab (22):
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  • Originally Posted by Srinidhi
    I agree with you .I am not saying QE3 will resolve this problem , but I believe this is what US would like to do at this point of time.


    There is only one way out and it is going to be a painful way. Growth is going to be slow after the recession as both huge organizations and countries will not have any money to stimulate growth.
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  • Originally Posted by Srinidhi
    I agree with you .I am not saying QE3 will resolve this problem , but I believe this is what US would like to do at this point of time.



    Well, personally speaking, i really don't think US is left with much bullets to fire. I hope they may now start some kind of belt tightening like slight increase in rates, curb on unnecessary govt spending (esp military expenditure that's close to half a trillion but doesn't seem to be justifying itself), some reduction on old-age pension and medicare benefits (esp the one that Obama declare after coming to power for cheap publicity). If they take such steps, it may prove harsh in short term, but gradually it'll start filling coffers of Fed and will give them some ammo to shoot down unemployment by spending on productive things then spending on those OLDIES that have lived an extra-vagant life and now a burden on working class (and Fed offcourse).

    Personal view.... :bab (38):
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  • Originally Posted by contra

    Demand has to fall drastically for everything.



      Demand for expensive Flats must fall. People must start questioning and not willing to pay whatever the builder demands. Even new rules must be floated to control price rise. Why can't government impose Price Controls on flat or plot prices in middle class India :D. They impose price controls on other stuff, why not on flats and plots.
      People must shift from cars to 2 wheelers and 2 wheelers to public transport. Why can't government provide good quality public transport or at least facilitate good private operators to operate quality buses and metros in cities.
      Stop watching every shit movie in multiplexes paying Rs.100 (plus Rs.12.5 service tax) for a cup of coke every time. Watch good movies only once in a while in cinemas.
      Stop paying Rs.25 (plus Rs.3 service tax)for a small cup of coffee. Stop paying Rs.400 (Plus Rs. 60 service tax)for a medium size pizza ( when I was a kid which is not very long back by the way, Rs 1.50 ( no service tax during those days) for a veg puff was considered a privilege to do kaka to my mother every day).

      Everything is in our control. Sharks like businessmen, entertainers and politicians will always attract ( they will become millionaires and billionaires). We people will be looted in this whole marketing maya.

      Walking out of the rat race is always better then walking out a deal isn't it?

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):

      Well said, but just one question.

      Is it practically possible. Personally, i don't think so till our economic downturn reaches a catastrophic level. :bab (34):
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  • Waiting for now ...

    Originally Posted by sridharchennai
    Wisey, I have a question for you. How this second round of recession is going to affect India? Last time when the recession hit us we were in a decent position to tackle recession. We were growing at 9%, inflation was it's on it's way down from 13% and the banks were in much better position.

    Whereas, this time the growth is already slowing down, exports already reeling under pressure, inflation is not on it's way down even after frequent interest rate hikes by RBI and our banks much more exposed than in 2008.

    On the employment and business, is the job market is just going to be stagnant or there is going to be unannounced retrenchment like before and salary cut. Both are not good for the economy and if the retrenchment happens it's going to be a huge blow.

    How are the businesses that are related to export gonna survive this time? There are also some small firms that provide very specialized IT and ITES services. How will these firms get affected?

    Generally, what is your opinion on the above facts? I know it's a lot of questions :) and hope you get the time to give us your views.



    People, don't assume that one has all the answers! :D

    After all, this is happening for the first time in our lifetime and maybe in modern history!

    That there will be a recession, its nearly certain. Whether it will be global one doesn't know. Whether it will turn into a depression and a great depression is also a little in doubt.

    All of these continue to be on my radar simply because you can expect politicians to do their best in terms of decisions bad in economic terms.

    The FED is meeting today. They have a difficult task.

    Why is QE3 required at all? The only reason for this is to increase the bailouts by EU Govts of EU Sovereign Debt. But this will NOT go very well with Americans.

    Let us wait and watch.

    cheers
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