Here are a lot of our common beliefs with reasons that they are wrong.
Wrong Assumption 1 : Price is about quality of the product.
Take this fundamental law, price is always about supply and demand and has nothing to do with the quality of a product. Price (Salary) of a man does not depends on his intelligence. Price of a product not on its quality.
In 1800-1900's, Elephants were used as a mode to travel. Then came the Car, it was a luxury, it had speed, it had the power, it carried a high price tag also. Today, in 2000's Elephant is expensive than a car. The elephant is slow, has less power, smells bad, does not have an air-conditioner in it, still it is more expensive than a car. This is just because there are more cars and less elephants. Rare coin, however ugly will have more value than a not-so-rare coin.
Always keep rare things with you, don't keep what is ample.
In 1900s, big landlords and farmers, were rich guys. Then came the period where industrialists were rich. Then rock-n-roll guys were in the hall-of-fame. Then again industrialists. Then the technology champs. Then the Oil Barron's. Then the Wall-Street guys. Then ...
Wrong Assumption 2 : Equities cannot rally without a rally in corporate bonds.
A wrong argument is, if the price of corporate bond is falling, it indicates debt-holders do not trust corporate, so equities cannot rally until the trust is back.
However, if there is high inflation, corporate bonds will continue to loose value, however equities will be rallying. The trust has nothing to do with it.
Wrong Assumption 3 : Price of an underlying asset has nothing to do with money supply.
Price is more about money supply rather than supply-demand of the asset itself. If governments increases money supply, the price of the asset has to rise.
Wrong Assumption 5 : I am safe to keep my money in a 8% FD/bond/ NSC certificates.
The inflation that our government reports is never close to reality. The inflation number reported is the inflation for labor class. The average inflation for the Indian middle class in last 5 years, was well above 15%. The average inflation for a Indian upper-middle class in last 5 years was above 20%. Price of everything doubled in last 5 years. Whether it was a pair of jeans, the rice-wheat you eat, shampoo, doctors fee, medicines, condoms, edible oil, a car, a bike. Take anything you wanted to buy from your money and look at the price change between 2003 and now. So effective if you invested in NSC certificates, you made a overall purchasing-power terms loss. This was because, money supply was increased, so everything increased in price, except for your bonds.
Wrong Assumption 4 : People always burn hands in equities, commodities but they are still in it.
Take any five year horizon, assets will outperform cash or bonds. Even if you take peak and trough points in a 10 year period, assets will outperform cash or bonds. Don't worry about the daily euphoria, about everyday price changes, about market crashes, in a longer time period it will always be better to be in well-diversified equities/commodities/realestate rather than cash or bonds.
People live with their wrong assumptions, until they realize they are severly wrong. I want you to think rationally, and change your wrong assumption before you go severly wrong.
Sunday, February 22, 2009
Monday, February 9, 2009
Brutal Markets
Disclaimer : All the data and facts are taken from random websites and might be wrong.
The worst economic crash in human history, is not the Great Depression. But, the crash of 1340. The crash after which Black Death followed. Here are some interpretations of what happened.
1200-1340 was like a golden age for man. The economic boom which existed during those times was big. Silk, Cotton clothing were discovered. Shipping industry boomed and trade around the world started. That was the time, when the principles of free trade and free markets flourished. The world got globalized, Silk Route became famous. Civilizations interacted. Trade flourished.
Venice was like the trading hub of those times, the equivalent of New York or London. Fortunes were made at Rialto in Venice, the Wall Street equivalent of history. Whole bullion trade was globalized from Venice.
Gold was the currency primarily in India and China. Silver was the currency in most of Europe.
The inherent behavior of currency is, since it is the sole thing to keep, it is always overvalued.
Although, taking positions against overvaluation of a currency is a stupid thing to do, but it is always overvalued. Since, Silver bought everything in Europe, it was overvalued in Europe.
Gold bought everything in India and China, gold was overvalued in those countries.
Venetians discovered this great trade, and brought gold to Europe and sent Silver to India.
Mongols also looted Gold from India and China, and sent it to Venice. Venice, changed the currency standards in some European dynasties from Silver to Gold.
This led to oversupply of Gold in Europe. This oversupply lead to loss in value of Gold in Europe. But, how do you define Gold lost value, since it was their currency. Gold loosing value means, everything else increased in price including all important food items. Prices continuously rose from 1290-1340 relative to Gold and Silver in all of Europe, India and China. High inflation period started, because Europeans took too much Gold in their system, without increasing the productive output. This looted wealth, did not created prosperity in Europe but caused high inflation.
People started dying from Hunger. Rodents obviously spread on dead bodies, leading to a plaque called Black Death. Horrifying Black Death spread all over, killing 33% of the European population.
This thirst for Gold, eventually led to destruction of whole Europe. Remember that Wealth should never be accumulated, it should be distributed. But Mongols, wanted the Gold from everywhere. If you accumulate, all the gold in the world, you will not end rich, because gold will loose its value.
The worst economic crash in human history, is not the Great Depression. But, the crash of 1340. The crash after which Black Death followed. Here are some interpretations of what happened.
1200-1340 was like a golden age for man. The economic boom which existed during those times was big. Silk, Cotton clothing were discovered. Shipping industry boomed and trade around the world started. That was the time, when the principles of free trade and free markets flourished. The world got globalized, Silk Route became famous. Civilizations interacted. Trade flourished.
Venice was like the trading hub of those times, the equivalent of New York or London. Fortunes were made at Rialto in Venice, the Wall Street equivalent of history. Whole bullion trade was globalized from Venice.
Gold was the currency primarily in India and China. Silver was the currency in most of Europe.
The inherent behavior of currency is, since it is the sole thing to keep, it is always overvalued.
Although, taking positions against overvaluation of a currency is a stupid thing to do, but it is always overvalued. Since, Silver bought everything in Europe, it was overvalued in Europe.
Gold bought everything in India and China, gold was overvalued in those countries.
Venetians discovered this great trade, and brought gold to Europe and sent Silver to India.
Mongols also looted Gold from India and China, and sent it to Venice. Venice, changed the currency standards in some European dynasties from Silver to Gold.
This led to oversupply of Gold in Europe. This oversupply lead to loss in value of Gold in Europe. But, how do you define Gold lost value, since it was their currency. Gold loosing value means, everything else increased in price including all important food items. Prices continuously rose from 1290-1340 relative to Gold and Silver in all of Europe, India and China. High inflation period started, because Europeans took too much Gold in their system, without increasing the productive output. This looted wealth, did not created prosperity in Europe but caused high inflation.
People started dying from Hunger. Rodents obviously spread on dead bodies, leading to a plaque called Black Death. Horrifying Black Death spread all over, killing 33% of the European population.
This thirst for Gold, eventually led to destruction of whole Europe. Remember that Wealth should never be accumulated, it should be distributed. But Mongols, wanted the Gold from everywhere. If you accumulate, all the gold in the world, you will not end rich, because gold will loose its value.
Saturday, January 31, 2009
To Sid, With Love
This post will explain you that, why this period will not be of subdued economic activities. This will be worse, besides good economic activity.
I liked the golden words from Sid, "The monetary supply, to maintain balance, must grow at a rate which approximates the growth in productive output, otherwise the money system will eventually starve itself of liquidity". This is perfectly right.
But my question is, What happens if the money supply increases without productive output.
People have gone crazy these days, they are hoarding on to cash as the best investment. If people keep the cash with them, the system will starve from liquidity. So government will have to inject more cash in the system. But, people will hoard all that cash again. Government print more and injects more.
Its sort of government is trying to unclog the credit system, by throwing cash. But people with all their belief that this is the end of 50 year long Kondratiev_wave, keep on hoarding cash. This creates a oversupply of cash in the system. Though, it will not look like it, because people are hoarding cash. But what happens when all this cash comes out to buy something.
My golden words are : "If majority understands the system and take action against it, the system changes itself".
Banks, whose primary duty in the system is to lend, are refraining from lending. People are so sure that this is great depression, they are keeping their cash at home. Everybody is cutting on those new purchases, because they think, they will be able to buy cheaper later on. Governments to stop the world from severe problem, are printing money, cutting rates, providing liquidity.
My view is also the same, that it will be very long slump in global economy, it terms of productivity. But, governments printing money at an insane rate to keep the system intact, are doing wrong. In dollar terms, it will be period of growth. People around will have a more terrible life, but Dow Jones Industrial Average will make new highs. Wages will be less, but not in money terms, but only in terms of things they can buy with it.
Kondratiev Wave, wiki page says this, "The business cycle is supposedly more visible in international production data than in individual national economies. It affects all the sectors of an economy, and concerns output rather than prices (although Kondratieff had made observations about the prices only)."
This is precisely my argument, the real economic output will be far less, but prices will be far more. When the cash which is being hoarded upon, comes out to buy something, things will appreciate in price. If prices of essential commodities doubles from here, the money system will ask for more money to buy essential things. This will lead to governments printing more, essential commodities rising more, money system starves again from liquidity and so governments print even more. Positive feedback loop of price rise begins.
I hope i made some of your questions clear, and planted new questions.
I liked the golden words from Sid, "The monetary supply, to maintain balance, must grow at a rate which approximates the growth in productive output, otherwise the money system will eventually starve itself of liquidity". This is perfectly right.
But my question is, What happens if the money supply increases without productive output.
People have gone crazy these days, they are hoarding on to cash as the best investment. If people keep the cash with them, the system will starve from liquidity. So government will have to inject more cash in the system. But, people will hoard all that cash again. Government print more and injects more.
Its sort of government is trying to unclog the credit system, by throwing cash. But people with all their belief that this is the end of 50 year long Kondratiev_wave, keep on hoarding cash. This creates a oversupply of cash in the system. Though, it will not look like it, because people are hoarding cash. But what happens when all this cash comes out to buy something.
My golden words are : "If majority understands the system and take action against it, the system changes itself".
Banks, whose primary duty in the system is to lend, are refraining from lending. People are so sure that this is great depression, they are keeping their cash at home. Everybody is cutting on those new purchases, because they think, they will be able to buy cheaper later on. Governments to stop the world from severe problem, are printing money, cutting rates, providing liquidity.
My view is also the same, that it will be very long slump in global economy, it terms of productivity. But, governments printing money at an insane rate to keep the system intact, are doing wrong. In dollar terms, it will be period of growth. People around will have a more terrible life, but Dow Jones Industrial Average will make new highs. Wages will be less, but not in money terms, but only in terms of things they can buy with it.
Kondratiev Wave, wiki page says this, "The business cycle is supposedly more visible in international production data than in individual national economies. It affects all the sectors of an economy, and concerns output rather than prices (although Kondratieff had made observations about the prices only)."
This is precisely my argument, the real economic output will be far less, but prices will be far more. When the cash which is being hoarded upon, comes out to buy something, things will appreciate in price. If prices of essential commodities doubles from here, the money system will ask for more money to buy essential things. This will lead to governments printing more, essential commodities rising more, money system starves again from liquidity and so governments print even more. Positive feedback loop of price rise begins.
I hope i made some of your questions clear, and planted new questions.
Sunday, January 25, 2009
Culture and God
Long before, India accepted that growth and economic upliftment means westernization. Westernization of our thoughts, westernization of language, westernization of lifestyle.
China and Japan, sort of proved that growth and economic prosperity can be achieved without following the western culture.
Every single human obsession to spend, creates jobs for other people. If you have too many gods, and different ways to worship them, too many festivals, too many rituals, too many customs, all these create jobs. A festival increases the velocity with which money changes hands. A marriage season increases economic activities across all sectors.
If you think about it, Diwali became a big festivals, why not Janmastmi. It was not because Ram was more important than Krishna. The primary reason was because it was coupled with the Kharif crop harvest, at that time of Diwali our ancient agrarian economy had more to earn and more to spend. The velocity of money ( the rate at which money changes hands) increased during those times. That lead to people spending more for Diwali and lesser for Janmasthmi, and Diwali became a bigger festival. Same is the reason for Holi becoming a big festival because of the Rabi crop harvest.
The outsourcing boom and investment inflows, together increased economic activities independent of our festivals. Money was coming not just through our economy, but from outside. So, the importance of these festivals and the monsoon on economic activity was diminished. Now, in this economic downturn the importance is back. If you run a factory in India, you could see a clear change in orders, even from a small festival like Sankranti on your sales.
For Christmas, Santa Claus was created because Jesus was not able to increase much economic activities. People needed a red-dressed gift-delivering symbol of god, for Christmas shopping.
World will learn some day, that it is not possible to run economy with just one god, you need a whole family of gods. Also, you need to celebrate all your Gods birthdays, marriage anniversaries and other godly achievements. All this is nicely binded into our culture, we have 1066 festivals, 330 million gods. We celebrate, Mahashivratri, Ganesh Chaturthi, Janmashtmi, Ram Navmi, Diwali, Tulsi Vivah, Holi, Gurunanak Jayanti, Id, Christmas, Raksha Bandhan, Onam, Pongal, Lohri, Navratri, Mahavir Jayanti, Bhuddha Purnima, and a hell lot many more.
Just think about these festivals, and imagine the economic activity each one of them create.
These festivals are very important to run our economy. So, next time you get stuck in traffic because of Ganesh Chaturthi, don't get pissed off on those people, look at the economic activity which is being created. This economic activity is helping you to earn money, in some or the other way.
Westernization is killing some of our culture, but we must preserve it. Culture preservation is not just some bullshit, which governments try to do. It makes deep economic sense to preserve it.
China and Japan, sort of proved that growth and economic prosperity can be achieved without following the western culture.
Every single human obsession to spend, creates jobs for other people. If you have too many gods, and different ways to worship them, too many festivals, too many rituals, too many customs, all these create jobs. A festival increases the velocity with which money changes hands. A marriage season increases economic activities across all sectors.
If you think about it, Diwali became a big festivals, why not Janmastmi. It was not because Ram was more important than Krishna. The primary reason was because it was coupled with the Kharif crop harvest, at that time of Diwali our ancient agrarian economy had more to earn and more to spend. The velocity of money ( the rate at which money changes hands) increased during those times. That lead to people spending more for Diwali and lesser for Janmasthmi, and Diwali became a bigger festival. Same is the reason for Holi becoming a big festival because of the Rabi crop harvest.
The outsourcing boom and investment inflows, together increased economic activities independent of our festivals. Money was coming not just through our economy, but from outside. So, the importance of these festivals and the monsoon on economic activity was diminished. Now, in this economic downturn the importance is back. If you run a factory in India, you could see a clear change in orders, even from a small festival like Sankranti on your sales.
For Christmas, Santa Claus was created because Jesus was not able to increase much economic activities. People needed a red-dressed gift-delivering symbol of god, for Christmas shopping.
World will learn some day, that it is not possible to run economy with just one god, you need a whole family of gods. Also, you need to celebrate all your Gods birthdays, marriage anniversaries and other godly achievements. All this is nicely binded into our culture, we have 1066 festivals, 330 million gods. We celebrate, Mahashivratri, Ganesh Chaturthi, Janmashtmi, Ram Navmi, Diwali, Tulsi Vivah, Holi, Gurunanak Jayanti, Id, Christmas, Raksha Bandhan, Onam, Pongal, Lohri, Navratri, Mahavir Jayanti, Bhuddha Purnima, and a hell lot many more.
Just think about these festivals, and imagine the economic activity each one of them create.
These festivals are very important to run our economy. So, next time you get stuck in traffic because of Ganesh Chaturthi, don't get pissed off on those people, look at the economic activity which is being created. This economic activity is helping you to earn money, in some or the other way.
Westernization is killing some of our culture, but we must preserve it. Culture preservation is not just some bullshit, which governments try to do. It makes deep economic sense to preserve it.
Thursday, January 15, 2009
Brutal System
One of my friend told me, that stock market is too brutal. This post shows you that every system, when it comes to teach you for the things you did in a wrong way, it teaches brutally. Systems are purely rational, they are emotionless. When system comes to teach you, of something bad, it will teach you in a wild, uncontrolled and savage manner.
Around 1985, a technology came to India that was more wonderful for people. They were very happy to see this technology work. It was admired more than TV or Radio. It was called Sex-Identification before birth. People used it terribly, to get the female child aborted and fill their obsessions about the male child. People produced 4-5 male child, after getting 3-4 female child aborted. They were pretty happy, that they will command fat dowry when their male childs grow. This lead to a shortage of female child.
God never reacted to the bad. No thunder showers or lighting happened when the female child were killed. The system was looking, it was silent.
Twenty two years later.
In year 2008, there is a terrible shortage of females, especially in small village areas. People are offering reverse-dowry to the female's family for getting their male kids married. Some people with 4-5 male child, cannot afford to pay the females family and cannot even manage to get all their male child married. This is not that brutal.
The brutality is with the villages in Rajasthan. They produced too many male child, and because of terrible sex ratio's nobody want to get their female child married in those villages.
This will lead to no new families, who will be male-child-obsessed. Some, want to try to sell their land and move to other villages, where people like to get their female-child married, to get their sons married. But, nobody wants to buy land in those villages, even at super-cheap rates. Many of the male child ran away, from their families, to get married. Most of them stole and took all family jewelery along with them. The system, will teach them brutally by wiping out the complete villages out of the landscape, they will make their sons die unmarried. This is evolution. The brutality is totally worth it.
The system, destroyed the wrong. System will always teach you for the wrong deeds, in the same lifetime. If the system is silent, don't think you are right.
Around 1985, a technology came to India that was more wonderful for people. They were very happy to see this technology work. It was admired more than TV or Radio. It was called Sex-Identification before birth. People used it terribly, to get the female child aborted and fill their obsessions about the male child. People produced 4-5 male child, after getting 3-4 female child aborted. They were pretty happy, that they will command fat dowry when their male childs grow. This lead to a shortage of female child.
God never reacted to the bad. No thunder showers or lighting happened when the female child were killed. The system was looking, it was silent.
Twenty two years later.
In year 2008, there is a terrible shortage of females, especially in small village areas. People are offering reverse-dowry to the female's family for getting their male kids married. Some people with 4-5 male child, cannot afford to pay the females family and cannot even manage to get all their male child married. This is not that brutal.
The brutality is with the villages in Rajasthan. They produced too many male child, and because of terrible sex ratio's nobody want to get their female child married in those villages.
This will lead to no new families, who will be male-child-obsessed. Some, want to try to sell their land and move to other villages, where people like to get their female-child married, to get their sons married. But, nobody wants to buy land in those villages, even at super-cheap rates. Many of the male child ran away, from their families, to get married. Most of them stole and took all family jewelery along with them. The system, will teach them brutally by wiping out the complete villages out of the landscape, they will make their sons die unmarried. This is evolution. The brutality is totally worth it.
The system, destroyed the wrong. System will always teach you for the wrong deeds, in the same lifetime. If the system is silent, don't think you are right.
Wednesday, January 14, 2009
Creative destruction
Destruction is also sometimes a creative thing to do. Creative Destruction is like a reboot, to start a hanged system again. Creative Destruction is like a war to start creation again.
If value, cannot be created by the economy, destroy the current value, so that the economic engine runs again. Keynes, in his theories clearly pointed out, that wars act as a great economic stimulus. Now, if you read Classical or Neoclassical economics you will feel like laughing at it. But Classical and Neoclassical theories were proven as terrible failure only after we saw Great Depression. Now, everybody believes in Keynes. Deficit spending is done by every government as a counter-cyclical measure to beat the economic boom-bust cycle. Don't you think Keynes will also fail some day.
So, if a theory fails so easily, after perfectly working for some years . Then, the theories which are written in our oldest Veda's must be right. For they would have seen all the conditions and must have been modified for all scenarios, they would have evolved above failures.
Its written in RigVeda. Fear Debt, for it will land you to biggest problems later on.
U.S. has engaged in many wars, precisely when its economy was in problem. World War II was the basis of taking the world out of the Great Depression. The solution to systematic problems will be found by the system itself.
World War I caused German Hyperinflation. The German Hyperinflation led to rise of Hitler. Hitler in search of food, attacked France. The World War II started, the economic engine started running again. The world was out of the Great Depression. This cycle took in all ten years. The thing to note is that the system, finds out a solution for its problems automatically.
If you have severely, faced bad-luck for most of your life. Then your prosperous time will be starting soon. However, if you have been a lucky all your life, good-luck will say you goodbye. This is theory of Luck. Luck never stays with one person for a life-time. The feedback loop has to do something with it. If you have been too lucky, you start behaving like an asshole, and luck goes away. This can be called feedback loop of assholism.
These systematic forces will always be working. The feedback loop will be always at work. However, big the problems human being landed into, the solution will automatically be found by the system itself. The system may take time, but at the end things will become better.
Be patient with the system, for justice will be done by the system itself, for wrong ideas of the human being. Probably, these systematic forces at work, would have made the human being to believe that there is something out there which sets everything right, which the human beings called God.
If you do positive things, positive feedback loop will be formed. If you do negative things, negative feedback loop will be formed. What is positive and negative, can be taken from the principles of Dharma.
If value, cannot be created by the economy, destroy the current value, so that the economic engine runs again. Keynes, in his theories clearly pointed out, that wars act as a great economic stimulus. Now, if you read Classical or Neoclassical economics you will feel like laughing at it. But Classical and Neoclassical theories were proven as terrible failure only after we saw Great Depression. Now, everybody believes in Keynes. Deficit spending is done by every government as a counter-cyclical measure to beat the economic boom-bust cycle. Don't you think Keynes will also fail some day.
So, if a theory fails so easily, after perfectly working for some years . Then, the theories which are written in our oldest Veda's must be right. For they would have seen all the conditions and must have been modified for all scenarios, they would have evolved above failures.
Its written in RigVeda. Fear Debt, for it will land you to biggest problems later on.
U.S. has engaged in many wars, precisely when its economy was in problem. World War II was the basis of taking the world out of the Great Depression. The solution to systematic problems will be found by the system itself.
World War I caused German Hyperinflation. The German Hyperinflation led to rise of Hitler. Hitler in search of food, attacked France. The World War II started, the economic engine started running again. The world was out of the Great Depression. This cycle took in all ten years. The thing to note is that the system, finds out a solution for its problems automatically.
If you have severely, faced bad-luck for most of your life. Then your prosperous time will be starting soon. However, if you have been a lucky all your life, good-luck will say you goodbye. This is theory of Luck. Luck never stays with one person for a life-time. The feedback loop has to do something with it. If you have been too lucky, you start behaving like an asshole, and luck goes away. This can be called feedback loop of assholism.
These systematic forces will always be working. The feedback loop will be always at work. However, big the problems human being landed into, the solution will automatically be found by the system itself. The system may take time, but at the end things will become better.
Be patient with the system, for justice will be done by the system itself, for wrong ideas of the human being. Probably, these systematic forces at work, would have made the human being to believe that there is something out there which sets everything right, which the human beings called God.
If you do positive things, positive feedback loop will be formed. If you do negative things, negative feedback loop will be formed. What is positive and negative, can be taken from the principles of Dharma.
Sunday, December 28, 2008
India 2025
I know, all the factors i listed down in my earlier post, were already existing forever for India. But the good new factor is, the whole world is going into a recession for a pretty long time. Only one thing that can revive the world back is domestic demand of India and China.
We will get super-cheap commodities for a long time. Super-cheap oil. Super-cheap metals. Super-cheap machines. Super-cheap anything we want from the rest of the world.
Japan, never exported to grow. It started exporting after the crash, because there was no domestic demand left. Crash of US will happen within a year. Millions of NRIs with billions of dollars are going to comeback to India. They are going to add to the domestic demand.
I don't claim that great American companies will not remain after the crash. Some American companies have made world class products. Those companies are the only hope for America.
But lot of companies which just exist because US is booming will downsize or go bankrupt. Subways, PizzaHuts and Starbucks will find it difficult to make bucks. Lot of crappy books written by great American businessman's will never be read again.
People will now be reading stories of India. Great Indian leaders will be born.
If you become a CEO of some Indian company and take it to great heights, you must remember that it is not just your efforts which are working here. You must admire everyone, you must remember the positive feedback loop.
Everybody was running this race. Race for economic growth. Everybody was running like a hare. We were the tortoise. At the end of it tortoise always wins.
India is decoupled. We don't need FII investments. If Crude prices are at 30$ compared to 70$ over last year. That is equivalent to savings of 40$ per barrel of crude. Our daily crude consumption is 2.4 million barrel per day. That make an annual savings for @(70$-30$) equal to 35 billion$. This is just crude. Rest of the savings will come to be much higher than the FII investments over the complete year.
We will continue to grow. Grow at the speed of tortoise and we are going to beat all those hares.
Our domestic savings and investments will lead to our growth.
Only way Gulf can manage to get crude prices up are not production cuts, but they should learn that instead of spending their money on their useless infrastructure projects and havoc sized malls in Dubai. They should start investing in India's infrastructure. They should probably gift a car to every poor Indian families. Crude is going down below 25$ according to my new prediction.
India 2025 will be much bigger than what people would have ever thought.
It will be much easier to do business in India. Every business in India will grow. India will have a big consumption boom. We will be exporting lifestyle and food to the rest of the world.
When somebody gets rich, people start to listen to them. We were listening to US. We suddenly out of nowhere started liking their junk food and their life style. When India goes rich, people will start to become obsessed about yoga, about our classical music, about our life style.
I don't know what we have to teach to the rest of the world. But when we grow rich, we will definitely find a lot of things.
Ofcourse, be intelligent and become the part of the boom. Don't be part of a busting economy.
We will get super-cheap commodities for a long time. Super-cheap oil. Super-cheap metals. Super-cheap machines. Super-cheap anything we want from the rest of the world.
Japan, never exported to grow. It started exporting after the crash, because there was no domestic demand left. Crash of US will happen within a year. Millions of NRIs with billions of dollars are going to comeback to India. They are going to add to the domestic demand.
I don't claim that great American companies will not remain after the crash. Some American companies have made world class products. Those companies are the only hope for America.
But lot of companies which just exist because US is booming will downsize or go bankrupt. Subways, PizzaHuts and Starbucks will find it difficult to make bucks. Lot of crappy books written by great American businessman's will never be read again.
People will now be reading stories of India. Great Indian leaders will be born.
If you become a CEO of some Indian company and take it to great heights, you must remember that it is not just your efforts which are working here. You must admire everyone, you must remember the positive feedback loop.
Everybody was running this race. Race for economic growth. Everybody was running like a hare. We were the tortoise. At the end of it tortoise always wins.
India is decoupled. We don't need FII investments. If Crude prices are at 30$ compared to 70$ over last year. That is equivalent to savings of 40$ per barrel of crude. Our daily crude consumption is 2.4 million barrel per day. That make an annual savings for @(70$-30$) equal to 35 billion$. This is just crude. Rest of the savings will come to be much higher than the FII investments over the complete year.
We will continue to grow. Grow at the speed of tortoise and we are going to beat all those hares.
Our domestic savings and investments will lead to our growth.
Only way Gulf can manage to get crude prices up are not production cuts, but they should learn that instead of spending their money on their useless infrastructure projects and havoc sized malls in Dubai. They should start investing in India's infrastructure. They should probably gift a car to every poor Indian families. Crude is going down below 25$ according to my new prediction.
India 2025 will be much bigger than what people would have ever thought.
It will be much easier to do business in India. Every business in India will grow. India will have a big consumption boom. We will be exporting lifestyle and food to the rest of the world.
When somebody gets rich, people start to listen to them. We were listening to US. We suddenly out of nowhere started liking their junk food and their life style. When India goes rich, people will start to become obsessed about yoga, about our classical music, about our life style.
I don't know what we have to teach to the rest of the world. But when we grow rich, we will definitely find a lot of things.
Ofcourse, be intelligent and become the part of the boom. Don't be part of a busting economy.
Friday, December 26, 2008
Incredible India !!
For quite a long time, i was looking at signs, whether its India or China or Brazil or Russia.
I was clear it cannot be any developed countries.
Now, looking at these final changes in the world economy. I am clear now, its not China, Japan, Korea, Taiwan, Russia, Brazil or the rest of Europe. Ofcourse, its not America.
I am talking about the next biggest consumer of the world.
The next biggest economy of the world.
Celebrate resilient, redoubtable, incredible India !!
We have the the Youth to work.
We have the population to consume.
We have the best possible climatic conditions to grow food.
We have the sunlight for energy.
We have a resilient financial system.
We are least dependent on the rest of the world.
We have the savings.
We are the next !!
1950-1987 : It was Japan, Japan Economic Miracle
1980-2008: It was America.
2003-2025 : It is India. The next Economic Miracle.
I will write about what are the changes that will happen to India, when we become the next.
I will write about 'India 2025', in my next post.
I was clear it cannot be any developed countries.
Now, looking at these final changes in the world economy. I am clear now, its not China, Japan, Korea, Taiwan, Russia, Brazil or the rest of Europe. Ofcourse, its not America.
I am talking about the next biggest consumer of the world.
The next biggest economy of the world.
Celebrate resilient, redoubtable, incredible India !!
We have the the Youth to work.
We have the population to consume.
We have the best possible climatic conditions to grow food.
We have the sunlight for energy.
We have a resilient financial system.
We are least dependent on the rest of the world.
We have the savings.
We are the next !!
1950-1987 : It was Japan, Japan Economic Miracle
1980-2008: It was America.
2003-2025 : It is India. The next Economic Miracle.
I will write about what are the changes that will happen to India, when we become the next.
I will write about 'India 2025', in my next post.
Friday, December 5, 2008
Getting a MBA ?
With just 7 years of prosperity you have lived in from IT crash to subprime crisis, you are also a believer in the boom. You also believe that your salary is going to rise at 10-20% per annum for next 30 years.
Such assumptions at the times of boom has always landed human beings to worst financial crisis, especially when they leveraged and bought a house, under such assumptions. World is not so flat. You just cannot predict next 30 years of your life. You have seen too less. Life at the end of it, will teach you a lot, and most of it will be taught to you by supply and demand equation of the world.
Every boom has been followed by a bust, but nobody believes this one will bust ever.
Money has always changed hands, much faster than anybody imagined.
It never changes for people, just their price changes. We saw a technology boom, so price of technocrats was high. Every middle class parent was beating his child, to become an engineer.
This remained high, until the world produced so many technocrats, that they were not required anymore. Then people were required to manage those technocrats so the price of manager was high. Then people started to believe that managers will always remain in demand, they ran to get an MBA, for a high flying career. This belief produced so many manager, that they were not in demand anymore, their price goes low. Now, even a cashier at a bank is an MBA, people who pain you with those telemarketing calls are also MBAs, people sitting at Airtel counters are also MBAs. MBA became a worthless degree after all.
Then people believed Investment bankers will remain in demand. They ran to get CFAs, MS in Financial engineering until they realized they are not required anymore. People realized that artists are getting payed high. They ran to Arts school to learn Dance and Music, at that time every middle class parent was beating their child for reading about maths and physics, and were forcing them to become Artists. Big corporations were made, which hired artists, made them sit in a cubicle and draw paintings all day. Until that boom again busts. Then people realized that Farmers are getting paid high, they were beating their child for studying, and not doing physical exercise, so that he can become a good farmer.
Whenever you choose a career, which has existed for less than five years, then think again whether it is a boom or is it a sustainable long term career. Look at at least 10-15 years of performance across market cycles, then only you can choose a company/sector both for career or buying its stock.
Such assumptions at the times of boom has always landed human beings to worst financial crisis, especially when they leveraged and bought a house, under such assumptions. World is not so flat. You just cannot predict next 30 years of your life. You have seen too less. Life at the end of it, will teach you a lot, and most of it will be taught to you by supply and demand equation of the world.
Every boom has been followed by a bust, but nobody believes this one will bust ever.
Money has always changed hands, much faster than anybody imagined.
It never changes for people, just their price changes. We saw a technology boom, so price of technocrats was high. Every middle class parent was beating his child, to become an engineer.
This remained high, until the world produced so many technocrats, that they were not required anymore. Then people were required to manage those technocrats so the price of manager was high. Then people started to believe that managers will always remain in demand, they ran to get an MBA, for a high flying career. This belief produced so many manager, that they were not in demand anymore, their price goes low. Now, even a cashier at a bank is an MBA, people who pain you with those telemarketing calls are also MBAs, people sitting at Airtel counters are also MBAs. MBA became a worthless degree after all.
Then people believed Investment bankers will remain in demand. They ran to get CFAs, MS in Financial engineering until they realized they are not required anymore. People realized that artists are getting payed high. They ran to Arts school to learn Dance and Music, at that time every middle class parent was beating their child for reading about maths and physics, and were forcing them to become Artists. Big corporations were made, which hired artists, made them sit in a cubicle and draw paintings all day. Until that boom again busts. Then people realized that Farmers are getting paid high, they were beating their child for studying, and not doing physical exercise, so that he can become a good farmer.
Whenever you choose a career, which has existed for less than five years, then think again whether it is a boom or is it a sustainable long term career. Look at at least 10-15 years of performance across market cycles, then only you can choose a company/sector both for career or buying its stock.
Sunday, November 30, 2008
Terrorism.
Terrorist have been known to strike at the time when economy is at a brink of collapse. At the time of WTC attack, US economy was on a brink of collapse and they did strike at the financial capital heart, the world trade center. Then US started the war against terrorism and sometime later Iraq war. Both of these wars also played an important role in getting the economy running on the foot again. War activities creates jobs, creates demand for metals, commodities. Creates jobs in mining, weapon factories, army. It kind of starts running the rusted economic engine again. Once the economy starts running, it creates lot more other jobs, to run the engine even better.
Attacks in Mumbai last week were also of similar nature, attacking some of the main business hubs. Casino Royale, the 007 bond movie, talked about linkages between terrorist organizations and the financial markets, but those were mostly related to money laundering and financing such operations.
One solution, i proposed of getting out of this crisis is growth of China and India.
The other solution is a war of a massive scale. Which makes the engine run again. I cannot think of coutries which will take the opposite stances. But, a war against terrorism is a pretty good idea to run the economic engine again.
Ofcourse, i firmly believer that bailouts will not work. You need to address the problem by running the economic engine, not by bailing out one company after another.
I wish, that these terrorist attack U.S. on a massive scale. U.S starts its war against terrorism.
India also joins hand in this war. The economic engine run again. Starting with security watchman, the economy starts creating more and more jobs. These jobs further feed as lubricant to the economic engine and everything run again in the rhytm.
Attacks in Mumbai last week were also of similar nature, attacking some of the main business hubs. Casino Royale, the 007 bond movie, talked about linkages between terrorist organizations and the financial markets, but those were mostly related to money laundering and financing such operations.
One solution, i proposed of getting out of this crisis is growth of China and India.
The other solution is a war of a massive scale. Which makes the engine run again. I cannot think of coutries which will take the opposite stances. But, a war against terrorism is a pretty good idea to run the economic engine again.
Ofcourse, i firmly believer that bailouts will not work. You need to address the problem by running the economic engine, not by bailing out one company after another.
I wish, that these terrorist attack U.S. on a massive scale. U.S starts its war against terrorism.
India also joins hand in this war. The economic engine run again. Starting with security watchman, the economy starts creating more and more jobs. These jobs further feed as lubricant to the economic engine and everything run again in the rhytm.
Crude at $35
We will soon be seeing crude oil at $35 (this is slightly based on technical analysis and mostly on fundamentals). Petrol prices in India will be below Rs. 40, by July'09.
I am still not sure, how long crude will stay at such low levels, but it will definitely be below 70$ for next 3-4 years.
Have a great driving season :)
I am still not sure, how long crude will stay at such low levels, but it will definitely be below 70$ for next 3-4 years.
Have a great driving season :)
Thursday, November 20, 2008
Recession or Depression
Last two posts were slightly off the topic. Lets come back to the topic. What is happening with US and what is happening to India.
People told me that i am talking about the worst case scenario. US cannot fall into a deep recession for a long period of time. India cannot grow beyond a point.
But, I am talking about the best case scenario. Let me tell you, how will the worst case scenario look like.
Airlines companies loose money because of less travelers. They cut 5000 jobs.
Bear Stearns Fails. 5000 people loose jobs.
Freddie Mac fails. Another 5000.
Fannie Fails. Another 5000.
Lehman fails. Another 5000.
Citigroup cuts 50000 jobs.
People stop buying cars.
GM fails. Another 3,00,000 people loose jobs.
They default on house loan, credit card loans, since whole US never thought about savings.
Citigroup fails and get a government bailout. But 1,00,000 people loose jobs.
These people now stay at their home and take care of kids. So 2,00,000 nannies and baby-care companies loose jobs.
These people cut down on airlines, perfumes, going shopping, they just fullfill their bare necessities. Gucci fires people. Mercedes feels the heat in Germany. Boeing and Airbus fire people.
People travel less, so airlines companies fire some 50,000 people.
People travel even less, so crude oil falls. Some gulf nations start firing people.
Gulf nations stop spending on their useless infrastructure projects (like making 1km long buildings and 20 lane roads for a population of 50 lakhs)
Gulf fires some 5,00,000 construction workers from India, Pakistan and Bangladesh.
Construction activity slows down, steel manufactures fire people.
Steel goes down, Iron ore diggers fire people.
People start losing jobs. Since, they are losing jobs they spend less. So, companies which are dependent on those spending stop being profitable, so they also fire people. Once, this negative spiral of job-looses continues, nobody can stop it. Government will be out of money to give unemployment benefits. Ofcourse, it can print money and give but that money just leads to inflationary pressures.
Things end up with a terrible depression with assets prices losing more than 80% of their values.
Lot of people commit suicides, some burn down their houses. The black,white,Chinese, Indians, Japs, brown, yellow all communities start over each other leading to massive riots and fucking up of the whole economy.
The worst case looks like above. Ofcourse, i am talking about the best case and it looks like this.
Fed takes interest rate to zero or negative 0.5. US faces deflation for next 15-20 years, like Japan did. US changes its focus from a domestic consumption economy to export oriented economy.
Dollars adjusts itself, to make the new-born US economy function well. All sorts of useless import, including import of cheap labour on the name of outsourcing to US stops. US manufactures textile, foods and toys for itself rather than importing from China. These new sectors create new jobs for people from banking, auto and other dysfunctional, overgrown industries. All non-US citizens start flowing back to their own countries and contribute to their own economy, because they will be the first ones to get fired.
China allows its currency to appreciate at a faster rate, and stops exporting to the world and gets new industries to serve their own internal economy. Either one or both of India or China, replace US to become the next domestic consumption story. World does not face a depression. China and India's growth counterbalance US degrowth.
I will not talk about Europe, because they are in biggest problems. Europe has lived in too much peace, now is the time to work hard.
People told me that i am talking about the worst case scenario. US cannot fall into a deep recession for a long period of time. India cannot grow beyond a point.
But, I am talking about the best case scenario. Let me tell you, how will the worst case scenario look like.
Airlines companies loose money because of less travelers. They cut 5000 jobs.
Bear Stearns Fails. 5000 people loose jobs.
Freddie Mac fails. Another 5000.
Fannie Fails. Another 5000.
Lehman fails. Another 5000.
Citigroup cuts 50000 jobs.
People stop buying cars.
GM fails. Another 3,00,000 people loose jobs.
They default on house loan, credit card loans, since whole US never thought about savings.
Citigroup fails and get a government bailout. But 1,00,000 people loose jobs.
These people now stay at their home and take care of kids. So 2,00,000 nannies and baby-care companies loose jobs.
These people cut down on airlines, perfumes, going shopping, they just fullfill their bare necessities. Gucci fires people. Mercedes feels the heat in Germany. Boeing and Airbus fire people.
People travel less, so airlines companies fire some 50,000 people.
People travel even less, so crude oil falls. Some gulf nations start firing people.
Gulf nations stop spending on their useless infrastructure projects (like making 1km long buildings and 20 lane roads for a population of 50 lakhs)
Gulf fires some 5,00,000 construction workers from India, Pakistan and Bangladesh.
Construction activity slows down, steel manufactures fire people.
Steel goes down, Iron ore diggers fire people.
People start losing jobs. Since, they are losing jobs they spend less. So, companies which are dependent on those spending stop being profitable, so they also fire people. Once, this negative spiral of job-looses continues, nobody can stop it. Government will be out of money to give unemployment benefits. Ofcourse, it can print money and give but that money just leads to inflationary pressures.
Things end up with a terrible depression with assets prices losing more than 80% of their values.
Lot of people commit suicides, some burn down their houses. The black,white,Chinese, Indians, Japs, brown, yellow all communities start over each other leading to massive riots and fucking up of the whole economy.
The worst case looks like above. Ofcourse, i am talking about the best case and it looks like this.
Fed takes interest rate to zero or negative 0.5. US faces deflation for next 15-20 years, like Japan did. US changes its focus from a domestic consumption economy to export oriented economy.
Dollars adjusts itself, to make the new-born US economy function well. All sorts of useless import, including import of cheap labour on the name of outsourcing to US stops. US manufactures textile, foods and toys for itself rather than importing from China. These new sectors create new jobs for people from banking, auto and other dysfunctional, overgrown industries. All non-US citizens start flowing back to their own countries and contribute to their own economy, because they will be the first ones to get fired.
China allows its currency to appreciate at a faster rate, and stops exporting to the world and gets new industries to serve their own internal economy. Either one or both of India or China, replace US to become the next domestic consumption story. World does not face a depression. China and India's growth counterbalance US degrowth.
I will not talk about Europe, because they are in biggest problems. Europe has lived in too much peace, now is the time to work hard.
Saturday, November 8, 2008
Starting your own enterprise
Starting your own enterprise is also like buying stock of a company. The only difference is here you buy 100% of it. I have seen lot of IIT/IIM startups, most of them unsuccessful, which never made it to any newspaper article. I always made my point to also learn from the losers, they know better about businesses than the winners. There are thousand wrong things which you could do, but only one right thing. The winner knows only about that one right thing, losers know at least about 20 wrong things.
Here are some points for you to learn, when you think about startups.
1. Never be where majority is.
If everybody is doing something, its not a great thing to do. When you follow majority you will always loose, or you have to put too much fight to win. The competition will be intense, since you have been in a cushy job, you have least animal instincts to survive. The person you are competing with, does not have anything else to do for his survival, he will be a savage person.
Always think of the next booming thing, also make sure you are not getting into next-to-next booming thing. Timing the next boom is also important, because your company might die down before the boom comes. If the next boom is known to everybody, it is not the next boom.
2. Never think of excessive marketing ideas.
People come up with ideas like web-portals/ craig-list / social networking sites, the problem with such ideas is that people should start using your website. People will never start using your website, until it is not used by a lot many other people. You need to excessively market your site first to just get it started. Once, it is started, people will build it up.
3. Always think of ideas for corporate rather than individuals.
When you think around individual, individual will never pay for 10% efficiency. If you are targeting individuals, you should first become a big enough brand. Never think about targeting individuals when you are a startup. Corporates are ready to pay for even 1% efficiency and they don't care much even if you are a startup. Corporates are also hesitant of a startup, so don't expect advance payments.
4. Cashflow should start coming soon.
In case of product companies, it takes 1-2 years for first taste of money. These sort of ideas die down early, because of lack of our patience. Two years is a long enough period to get depressed. However tiny, cash should keep coming at specific intervals, they act as moral-boosters. Your first 10,000 in your own enterprise will give you more happiness than your first billion.
5. Never think of a labor intensive business idea.
However great you are at Human resources, dealing with labor class is the last thing you can do. Especially when you think about your business idea sitting in air-conditioned offices or sessions at a pub or a coffee joint. You will know the ground realities of labor intensive ideas only after starting it. Most of them have been failures.
People will tell you to give it a shot. But think before giving it a shot, it might not turn than hot.
Here are some points for you to learn, when you think about startups.
1. Never be where majority is.
If everybody is doing something, its not a great thing to do. When you follow majority you will always loose, or you have to put too much fight to win. The competition will be intense, since you have been in a cushy job, you have least animal instincts to survive. The person you are competing with, does not have anything else to do for his survival, he will be a savage person.
Always think of the next booming thing, also make sure you are not getting into next-to-next booming thing. Timing the next boom is also important, because your company might die down before the boom comes. If the next boom is known to everybody, it is not the next boom.
2. Never think of excessive marketing ideas.
People come up with ideas like web-portals/ craig-list / social networking sites, the problem with such ideas is that people should start using your website. People will never start using your website, until it is not used by a lot many other people. You need to excessively market your site first to just get it started. Once, it is started, people will build it up.
3. Always think of ideas for corporate rather than individuals.
When you think around individual, individual will never pay for 10% efficiency. If you are targeting individuals, you should first become a big enough brand. Never think about targeting individuals when you are a startup. Corporates are ready to pay for even 1% efficiency and they don't care much even if you are a startup. Corporates are also hesitant of a startup, so don't expect advance payments.
4. Cashflow should start coming soon.
In case of product companies, it takes 1-2 years for first taste of money. These sort of ideas die down early, because of lack of our patience. Two years is a long enough period to get depressed. However tiny, cash should keep coming at specific intervals, they act as moral-boosters. Your first 10,000 in your own enterprise will give you more happiness than your first billion.
5. Never think of a labor intensive business idea.
However great you are at Human resources, dealing with labor class is the last thing you can do. Especially when you think about your business idea sitting in air-conditioned offices or sessions at a pub or a coffee joint. You will know the ground realities of labor intensive ideas only after starting it. Most of them have been failures.
People will tell you to give it a shot. But think before giving it a shot, it might not turn than hot.
Monday, October 20, 2008
Quarter Life Crisis
I talked about financial crisis, this one is called psychological crisis which is faced by almost every individual, when he passes out of his college, enters the real world, and asks himself a question .
Will i be successful or not when i am 40 ?
Precisely this question is root of Quarter life crisis, go through the link to read more about it.
But, for some people who have been exceptional during their academic career, this question kills them. They get too much worried because the path during their academic career was pretty much straightforward. Now, in real world, there is no definite path to success. They have always proved themselves as the best, but now they don't know, how to proceed further. They get anxious about the future, some times so anxious that they forget their present. They loose patience to wait for the results of their hardwork. They try to explore every option available, to find success, to find their identity, to find themselves.
What are the solutions to Quarter life crisis ? I thought a lot about it, i came with some points which help coping with Quarter life crisis.
1. Limit your options : If we have too many options open for a career or for a life, we get anxious. We switch jobs too early to actually reap the benefits of our hardwork. Best way to limit your career options is getting married and having kids.
2. Don't be fearful about being a loser : When you win at everything, you loose the ability to cope with situations when you loose. That ability is the biggest loss a winner can have. There is no harm being a loser, losers are the best people in this world, atleast they are cool, carefree and not fretful like the winners. There is no harm, if you end up as a total loser. If you look at it, a total loser has the best life, he can just smoke pot around a beach side.
3. Physical exercise/ Yoga : Other way to cope is doing physical exercise or deep breathing exercise, meditation or yoga.
If all these do not work for you, you can also leave all consumerism and start your own Fight Club. Go on with the link, to read more about it.
Will i be successful or not when i am 40 ?
Precisely this question is root of Quarter life crisis, go through the link to read more about it.
But, for some people who have been exceptional during their academic career, this question kills them. They get too much worried because the path during their academic career was pretty much straightforward. Now, in real world, there is no definite path to success. They have always proved themselves as the best, but now they don't know, how to proceed further. They get anxious about the future, some times so anxious that they forget their present. They loose patience to wait for the results of their hardwork. They try to explore every option available, to find success, to find their identity, to find themselves.
What are the solutions to Quarter life crisis ? I thought a lot about it, i came with some points which help coping with Quarter life crisis.
1. Limit your options : If we have too many options open for a career or for a life, we get anxious. We switch jobs too early to actually reap the benefits of our hardwork. Best way to limit your career options is getting married and having kids.
2. Don't be fearful about being a loser : When you win at everything, you loose the ability to cope with situations when you loose. That ability is the biggest loss a winner can have. There is no harm being a loser, losers are the best people in this world, atleast they are cool, carefree and not fretful like the winners. There is no harm, if you end up as a total loser. If you look at it, a total loser has the best life, he can just smoke pot around a beach side.
3. Physical exercise/ Yoga : Other way to cope is doing physical exercise or deep breathing exercise, meditation or yoga.
If all these do not work for you, you can also leave all consumerism and start your own Fight Club. Go on with the link, to read more about it.
Saturday, October 4, 2008
Good news to come.
Set of good news to come in future. I have kept random dates and random number, but series of events will be like this.
29 Nov, 2008 : RBI cuts CRR by 100 bps, repo unchanged.
15 Dec, 2008 : Govt. takes back its petrol price hike, on cheaper crude.
29 Dec, 2008 : RBI cuts CRR by 100bps
29 Jan, 2009 : RBI cuts CRR by 100 bps, repo by 50 bps.
30 Jan, 2009 : Crude hits 4 year low of 50$ per barrel
28 Feb, 2009 : RBI cuts repo by 100 bps, reverse repo by 100bps and CRR by 100bps.
14 Mar, 2009 : Airlines slash rates by 40% on cheaper ATF cost.
3 Apr, 2009 : Rupee breaches 40 mark again.
12 Apr, 2009 : Oil marketing companies report their best quarterly performance ever.
15 May, 2009 : Inflation for week ending 15th May, - 1.6%.
15 July 2009 : Inflation for week ending 15th July, -5.8%
20 July, 2009 : Congress led coalition re-elected.
29 July, 2009 : RBI cuts repo by 100bps.
1 Aug, 2009 : Govt. allows Oil marketing companies to set oil prices, no oil bonds subsidies now.
3 Aug, 2009 : Petrol cost will be set every fortnight at petrol pumps. This weeks price Rs. 40.23.
29 Nov, 2008 : RBI cuts CRR by 100 bps, repo unchanged.
15 Dec, 2008 : Govt. takes back its petrol price hike, on cheaper crude.
29 Dec, 2008 : RBI cuts CRR by 100bps
29 Jan, 2009 : RBI cuts CRR by 100 bps, repo by 50 bps.
30 Jan, 2009 : Crude hits 4 year low of 50$ per barrel
28 Feb, 2009 : RBI cuts repo by 100 bps, reverse repo by 100bps and CRR by 100bps.
14 Mar, 2009 : Airlines slash rates by 40% on cheaper ATF cost.
3 Apr, 2009 : Rupee breaches 40 mark again.
12 Apr, 2009 : Oil marketing companies report their best quarterly performance ever.
15 May, 2009 : Inflation for week ending 15th May, - 1.6%.
15 July 2009 : Inflation for week ending 15th July, -5.8%
20 July, 2009 : Congress led coalition re-elected.
29 July, 2009 : RBI cuts repo by 100bps.
1 Aug, 2009 : Govt. allows Oil marketing companies to set oil prices, no oil bonds subsidies now.
3 Aug, 2009 : Petrol cost will be set every fortnight at petrol pumps. This weeks price Rs. 40.23.
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