[lambuhere1]

Playing a Devil's advocate : Weekly Review

Mods : Feel freem to modify according to forum rules

India Inc gives bottomline 'threat' to UPA

• while corporates braved a negative perception about the economy and managed to hold on to growth both in net profits and total income in June quarter of 2012-13, future is uncertain

Moody's Cuts Outlook on Germany, Two Others - Business News - CNBC

• Moody's Investors Service on Monday changed its outlook for top-rated Germany, the Netherlands and Luxembourg to negative from stable

Govt puts secrecy cover on IIP data - The Times of India

• Having failed to check errors in industrial production data, the government has now decided to stop giving a detailed break-up, something that has been the norm for years

Graduating to unemployment
Graduating to unemployment

• Fresh graduates bear the brunt of the slowdown as Indian firms apply the brakes on hiring
• Teachers and placement officers plead helplessness. Private colleges and universities are particularly perturbed as they woo students promising them good placements.

Brazil's Economy May Grow Only 1% in 2012 - Mendonca de Barros - WSJ.com

• Brazil's Economy May Grow Only 1% in 2012

UK economy contracts by a shock 0.7pc - Telegraph

• The UK economy has shrunk by a shock 0.7pc in the second quarter, far more than expected
• It marks the third successive quarter of contraction, leaving Britain in its longest double-dip recession in more than 50 years

http://www.nytimes.com/2012/07/26/bu...ught.html?_r=1

• On Wednesday, the government said it expected the record-breaking weather to drive up the price for groceries next year, including milk, beef, chicken and pork.
• The drought comes along with heat. It is one extra kick in the stomach.
• Economists fear a far greater impact outside of the United States because America is a major exporter of a broad variety of agricultural products

Here it starts

Infosys may freeze new campus hiring: Morgan Stanley

• Infosys may not visit campuses to hire engineering graduates in the second half of this year according to a report by global brokerage firm Morgan Stanley. The move underlines the slowdown faced by India's second largest software services company

Quote : In science you need to understand the world; in business you need others to misunderstand it

[lambuhere1]

Let the numbers do the talking in here

Source : http://www.livemint.com/Politics/N96...ast-to-49.html

http://www.livemint.com/r/LiveMint/P.../w_gdp_pg1.jpg

If you view the numbers and do the % reduction in calculations, here is the "lost" list on projections

Org - % Reduction in Projections

IMF - 21%
ADP - 20%
S&P - 15%
CLSA - 8%
CITI - 16%
CRISIL - 15%
RBI - 11%
PLANNING COMMISION - 8%

Left wondering who is hiding/speaking the truth.

[sgiitk]

Just saw on the Box (ET) that S & P are threatening a downgrade. The only hope is a rate cut of 50 or more basis points on 30 October.

[RS_DEL]

Originally Posted by sgiitk

Just saw on the Box (ET) that S & P are threatening a downgrade. The only hope is a rate cut of 50 or more basis points on 30 October.

These rating agencies are out of their minds. They are attempting to dictate their own agenda using the ratings downgrade threat and this has serious long term implications. Looks like they are acting as extensions of the US government, which is trying to compel everyone to go an easy money stance.

People should read up on the bubble in Japan in the 80s'. We are running significant food inflation. Real estate has gone bonkers. The concept of cyclic economic activity is sought to be buried so deep that it can not rear it's head again. Now we have a FM who is trying to talk up the markets to ensure his party's re-election.

Let us hope the RBI exhibits some spine and first tames the inflation before embarking on an easy stance.

Originally Posted by lambuhere1

Let the numbers do the talking in here



Left wondering who is hiding/speaking the truth.

And I will quote my high school economics teacher here:

"In the order of magnitude there are

Lies

Damned Lies

Stastical Lies
"
So read up on all the numbers and don't put too much store by them.

[sgiitk]

@RS_DEL; I am not too surprised. What woke up MMS was a ratings risk. The rupee will go for a toss, borrowing costs will increase, etc. As it stands the politicos are just playing narrow partisan stuff, India seems to be for sale, etc. The govt is at cross purposes, PC wants to do away with UID, and MMS wants to transfer subsidies to the BPL folk using UID. I thought PC was more sensible, knowing that the National Population Register is a non-starter he will not fall into this nonsense. Do nothing, and mess up whatever good is being done.

Let us accept one fact - two of the most stable economies are D and CH. Both strictly monetarist, so maybe there is something we need to learn. 60 years of demand side economics has got us nowhere.

What worries me is that if the NAC has its way, and the food security bill becomes law then even God may not be able to save the Indian economy.

[shipnil]

Originally Posted by sgiitk

Let us accept one fact - two of the most stable economies are D and CH. Both strictly monetarist, so maybe there is something we need to learn. 60 years of demand side economics has got us nowhere.

What worries me is that if the NAC has its way, and the food security bill becomes law then even God may not be able to save the Indian economy.

Care to explain what do you mean by D and CH? Is it Deautschland and Switzerland or something else?

[RS_DEL]

Originally Posted by sgiitk

@RS_DEL; I am not too surprised. What woke up MMS was a ratings risk. The rupee will go for a toss, borrowing costs will becomes law then even God may not be able to save the Indian economy.

I have no complaint with a strict monetarist policy. I would say go for it the whole hog, at least the country will benefit. Reflating as the rating agencies want if not explicitly but implicitly for sure, in an inflationary situation is nothing short of a recipe for disaster. If one is a strict monetarist, then easy money would not be the stance that one would be looking at in the near term.

Since you are conversant with the subject you will remember that Volcker's first and foremost task was to tame inflation.

Also as you rightly point out we are a nation condemned with self serving nincompoops masquerading as " servants of the people". Let us not even hope they will do anything which is even remotely in the best interests of our country. PC's profound "since the coal is not mined therefore there is no loss" nonsense shows how even a Harvard education is no remedy for stupidity.

[sgiitk]

Originally Posted by shipnil

Care to explain what do you mean by D and CH? Is it Deautschland and Switzerland or something else?

Precisely. These are the country codes used at many places.

Originally Posted by RS_DEL

Reflating as the rating agencies want if not explicitly but implicitly for sure, in an inflationary situation is nothing short of a recipe for disaster. PC's profound "since the coal is not mined therefore there is no loss" nonsense shows how even a Harvard education is no remedy for stupidity.

What they want is low deficit and inflation, which reflating will not get you. See at the moment India is BBB- as is Spain (now after two step de-rating). Our bond yields are 8%+ while theirs have dropped to 6%-. Of course big brother D (and ECB) is influencing the figures. Only they are worried, we are not!

Need I say more. We are heading for a Banana Republic rating.

[volkman10]

Alcatel-Lucent to cut 1,000 jobs in India as deals dry up.

Struggling French telecom gearmaker Alcatel-Lucent will lay off nearly 1,000 employees, or 9% of its India workforce, as part of a global restructuring drive to cut costs as deals dry up and demand for network equipment plunges

http://economictimes.indiatimes.com/...w/16815647.cms


Cheers!

[sgiitk]

We seem to be stumbling from pillar to post, a new scam is surfacing every so often, so I will not be the least surprised to see the spending again go up, for example if the FSA is enforced, this is a pet of the NAC and Sonia G.

We need a long period of consolidation with a stable government and I do not see it happening. So my fear is recession, or worse stagflation, may be round the corner any time.

[lambuhere1]

Was away a bit on work. But have been following the trends.

Wanted to highlight the same and want your inputs to learn more.

At first, Our good FM has forecasted the GDP to grow at 5.5 [ Earlier, my understanding was it was said to be 8% and above, correct me if I am wrong ]. Probably, new data has been obtained.
Link for the same : http://www.thehindubusinessline.com/...cle4130348.ece

So, GDP "projection" gets reduced by 50%. Effects of the same can be seen around you already.

New projection on Indian Growth reduces the same number to 4.9% . Link attached.

http://www.livemint.com/Politics/N96...ast-to-49.html

This surprised me a lot, since I was under the presumption that we have hit the pocket. Boy, how wrong was I on the same.

Please take a look at the attached charts.

Sources for the same are given for your reference for further study.
http://en.wikipedia.org/wiki/File:Ch...1913-2008).svg

http://www.patria.cz/zpravodajstvi/1...kalhotach.html

http://econproph.com/tag/occupywallstreet/

http://cancercouple.blogspot.in/p/un...-and-gini.html

One can draw their own conclusions on the same.

Please update the thread on your understanding

Ciao

Mods: Please correct the thread if it is not according to the norms !

[sgiitk]

Now the market is again picking up - 500 on the Sensex in two days. There are quite a few interesting take-aways, the horse trading for the FDI vote. One party supporting (or at least abstaining) in one house, opposing in the other.

In many ways a positive FDI vote is the best thing which can happen. No more worries / noise of undoing the deed after a change in Govt.

I hope this kick starts the markets, economy will follow. As long as the FSA does not come in, may be the bad days are over.

[lambuhere1]

Any truth in the news published ?

http://online.wsj.com/article/SB1000...004879914.html


http://economictimes.indiatimes.com/...w/17878273.cms

[sgiitk]

I will say it will be attributed to natural attrition. The nett result will be the same. With our archaic labour laws (dating back to 18xx) you cannot hire and fire. Nett result is the problem of contract labour, and (semi) forced resignations / retirements. The absence of any decent Social Security net makes it difficult to have a more flexible policy.

You cannot fire so you do not hire when you (temporarily) need more manpower!

[devil_klm]

Infosys trimming up to 5,000 staff to scissor costs.

http://economictimes.indiatimes.com/...w/17878273.cms