Worth Pondering!

Something I came across and is worth pondering!!!
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Indian Economy on slow track...

India's economy grew at the slowest rate in almost six years, 5.3% in the quarter ended Dec. 31 2008, signaling the global downturn's impact even in a nation less dependent on exports than others in Asia. Gross domestic product grew 8.9% in the same period the year before and 7.6% in the previous quarter, according to the Central Statistical Organization.

Some of the key issues the economy is facing are:

• Recessions in key export markets such as the U.S. and Europe have prompted Indian exporters to cut production and lay off workers.
• Manufacturing output dropped to 0.2%.
• Capital inflows have all but dried up as risk-averse investors shun emerging markets.
• Drop in farm production.
• Indian rupee weakening on daily basis now.
• Liquidity crunch is affecting infrastructure and capital intensive projects.
• Country's debts are swelling, that might affect the investment grades of the country.
• Scheduled elections.

All these issues on a short term seems to be towering on growth meter. My view is economy will be back on track only in the year 2013. It might improve by 2010 but the boom would be witnessed only by the end of fiscal 2013.

Slumdog "Oscar" Millionaire!

Slumdog Millionaire, no doubt one of the best movies made this year. I really liked the movie - the characters, individual performances, direction, cinematography, the flow of the story and the complete package. But was it worth 8 oscars, I doubt!

"Success brings many relatives" goes apt with the movie. The movie is a British movie with how a guy from Indian slums goes on to win million rupees in a show, as a theme. It is not an Indian movie. The media has played bigger role in making movie big and making us believe that its an Indian movie.

I disagree with people criticizing that movie has shown only grey areas and it has depicted India incorrectly. I believe has shown one of the many faces of India, which very much exists. India is too diverse with lots of shades. This movie happens to reflect the negative part. And the criticism makes me believe that the movie is really well made!

If you try to look beyond the horizon, the movie might open avenues for foreign investors investing in redeveloping slums. India might get foreign help in relocating poor and less priviledged people. It opens a host of opportunities for the country.

Congratulation to the Oscar winning team!!! Mr. Rehman you have made a nation of billion people proud. It was long due for you. Though I personally believe you have done a lot better work in some of the bollywood movies (Roja, Bombay to name few) than Slumdog Millionare!!!

The Global Financial Turmoil Series

A lot has changed since I last posted on my blog. Top 5 i-banks of US are part of history now. Few months ago, there were all sorts of statements, that "the US is in the middle of bad period" or "the bad is over", etc etc... However, in my some previous articles, I maintained that US has just entered the first chapter of financial turmoil, and I maintain so. I personally believe that the present situation is worst ever faced by US and the event has just started.

The situation to me looks scary, and few more "Big Brands" would collapse. Its a vicious cycle, and only financial companies are not part of it. The auto majors would soon follow them. I can see few major auto companies would sell off...

$ 700 Billion blank cheque by Mr. Paulson is a bad plan. The US financial foundation, the model, has collapsed. Repairing it (with proposed $ 700 Bn.) would temporarily save things, but in long run, situation would worsen, and I believe that that situation would be like a Tsunami, nobody would be spared from it.

I would try to present the economic impact or condition of various countries, due to the financial turmoil happening in US.

The surf's up at Gateway !!!

Rain has just hit Mumbai, and here's what it has done to the Gateway of India.

Sources: DNA

China: The Earthquake impact.

Here's how the recent earthquakes will probably impact China.

Due to the earthquake, China has lost huge amount of human capital, fertile land, natural resources, etc. It will impact the agricultural production drastically. The production would be less and the ability to deliver products in the market will reduce. This will result in demand supply mismatch. The increased demand would put pressure on the existing prices.

The affected area will require rebuilding and redevelopment. For this huge capital and resources would be required. Demand for resources like Oil, petrol, energy which are already scarce will push the crude oil imports. With crude oil touching life time highs, this can further add woes for the government.

Also the material and different services required for the redevelopment of affected areas will have a negative impact on the prices.

And while all this happening, maintaing high growth would be difficult. Add to it difficult global markets scenario.

Controlling measure for the government could be to restrict price rise or artificially freeze prices of commodities, in order keep a check on inflation. But, this can not be the ultimate long term solution. The earthquake has caused a real increase in demand and a real decrease in supply. How can price freezes possibly eliminate the disequilibrium? It explores both the difficulty of keeping prices at current levels – shortages and an increasing fiscal subsidy – and the difficulty of letting prices rise – the inflationary impact.

Zimbabwe - The Unbeatables!

The Indian people and the government are both quaking with fear with inflation hovering at around 8%. The people can barely make two ends meet with prices soaring, and the government knows that if prices don't fall, the government will.

But India is not the only nation grappling with rising inflation. The entire world is. So which is the nations with highest inflation rates?

Zimbabwe: 355,000%!
The inflation in Zimbabwe for the month of March 2008 rose to 355,000%! Yes, 355,000 per cent! It more than doubled from the February figure of 165,000%.
Economists say that it is a miracle that the Zimbabwean economy is still surviving and prices have been rising to unprecedented proportions. Inflation surged between February and March following the sudden rise in money supply that flooded the economy to finance the 2008 elections. Apart from this food and non-alcoholic beverages continued to drive up inflation.

Almost 80% of the nation is unemployed. The Zimbabwean central bank has introduced $500 million bearer cheques (or currency notes) for the public, and $5 billion, $25 billion, $50 billion agro-cheques for farmers. Just last fortnight the nation had introduced $250 million bearer cheques.

A sausage sandwich sells for Zimbabwean $50 million. A 15-kg bag of potatoes cost Zimbabwean $260 million. But then, Zimbabwean $50 million is roughly equal to US$ 1!