Friday, October 24, 2008

Revision

I think my earlier post today was written in a bit of anger at the RBI's (in)actions. Later events have caused me to revise that opinion.

As we speak, trading in the Dow Jones and S&P futures has been halted since they have fallen to the maximum permittable limit. European markets are down by 9-10% (only). Asian markets have closed down 9-12%. The Indian Nifty 50 index has closed down 14%. Why? Because everywhere, everyone thinks the world economy is going into recession. Not so the esteemed RBI.

So now, in more measured tones, I can blandly state the following - the Indian Finance Minister and the Reserve Bank of India are crazy lunatics (I wish to use stronger words but propriety prevents me from saying f***ing idiots since this is, after all, a family blog :-)).
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1 comment:

Bland Spice said...

give it a little time.

I think that daily sentiments are hardly an indicator to the sagacity oflong term calls.

We can give the RBI credit to not to consider the "expert" opinion after the big fiasco the bull that they talked about has led us into. Alan Greenspan - the bigest thing since Jesus Christ - has now become the third anti-christ. full-throttled friedman had given into strident calls for back to keynesian basics.

I personally think it's better to be cautious right now (look how much Reddy's cautious raising of repo rate a couple of years back has gone to ensure that our real estate market did not collapse like a house of cards) than to artificially stimulate and negate a genuine fear and uncertainity.

i personally think that some assets (real estate, quality of manpower vs. their salary) in india are still over priced and more corrections will come.

i think that the four interventions needed at this moment are (lots of genuine investment in public infrastructure, less red tape on private enterprise, increasing FDI in retail (the industry is really suffering), and reduction of ATF chargesfor airlines). It is action like these that are going to help the economy inthe long term than pump money in a system that has built in a lo of flab over the andhaa-dhund run-up the past few years where even a company like DLF (does it even deserve the epithet of a corporate) can land in the top 10 of market capitilization.

10:55 PM

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