Keynes Baba - What to do now?

John Maynard Keynes professed something 80 years ago that made government justification of spending hell to stave of the recession. This is exactly what the governments across the world did after 2009. 

But wait a minutes, these spending increased the government debt and then we had Greece, potugals.....PIGS.

Solution - Again give a shot -> Again increase spending -> Again defeat the recessionary forces

No, thats an idiotic solution as the world is at the highest leverage where it is too difficult for the government to increase it further.

One of the solution can be to increase the innovation and remove barriers in economy to increase the velocity of money instead of real money itself. But governments are bad at this. 

Exciting time for a derivatives trader in Indian market

"Ha!, this is the time, we had been waiting for long" - said one of my friend, who is a trader, trying to do a STRADDLE.

Lot of monkeys were jumping in the Indian stock market. These so called "Self proclaimed gurus" of Indian Stock market were with projections of 35k / 40k and some even 50k for census. Some of them are treated as gods or projected as gods by the media, such as Ashwani Gujaral, Jhunjunwala. All of them were proven wrong. They made lot of sound on CCD (Cafe Coffee Day) IPO, where I reiterated that the price is way higher than the inherent valuations and the assumptions are wrong. Anyway, the market is back to 25k.

This was bound to happen as the underlying health of companies have not improved. The  market pundits have again got it wrong and here is the myth v/s reality

Myth : Pundits say India withered the market storm due
Reality : India benefited from the EM flows which happened when job growth did not doomed in US as investors deemed it as confidence in "No increment scenario of US treasury rates"

Myth : Foreign Investors lost confidence in Modi Government
Reality : Investor never came due to Modi Government. They knew very well, system can not be corrected very soon. The real sell off has already started in May-June, when China showed early signals of a balloon, as things did not picked up after Chinese new year.

Myth : Indian Equities have moved into attractive state
Reality :  There is still lot of room to go down. There is still an inherent difference between the Equity and Debt market. The credit growth rate is less than 10%. Also, the debt market is showing lot of weakness, WHICH IS LOWEST IN 20 YEAR. Most of the Indian companies are highly leveraged. I have written about them in the past. "THE BIGGEST THREAT TO INDIAN ECONOMY IS THE HIGH LEVERAGE OF THE CONGLOMERATES IN INDIA." This implies that Indian companies dont have bankable projects. India seems to emulating the Indonesian model of cronyism led growth.

Myth : Lot of money is going in Startups and will increase exponentially
Reality : I would say these were the second set of the monkeys, who threw good money after bad. Just hold your breathe and you will see that investors will demand results and valuations will nose dive in some of these startups.
(Just a word of caveat/caution, some of the startups

Next Events to be watched

Myth : Fed rate decision
Reality : It will not have major impact as most of the equity will be battered down by that time. The real events to be watched are the yields on the debt of some of the conglomerates and companies, which are going to list their bonds. Airtel today announced they will raise in Pound for first time. These yields will decide fate of these big companies, who have lot of weightage on SENSEX.

The market has gone into a limbo, where it is "Party Time" for the Derivatives Traders and people who suffered the most are the

1. Retail Traders/Investors who followed the so called Gurus
2. SIP/MF Investors as most of funds flowed through these routes in past

I am personally very sorrow for the 2nd category as they were being misled into the rally by the reputed media/newspaper to invest into SIP/MF when market was on a high. 

Bunch of IAS opportunists

This is in reference to many media news articles and the letters of bunch of IAS cadre people, which has been floating in the social media.

Background
There are 10-15 odd Group A services such as IAS, IPS, IRS, IDAS, IRTS, ICLS.etc...Due to some urgency, some privileges were granted as temporary measures to IAS cadres

What is written in these letters
Some IAS people have declared that
"Privileges are our birth right and no one can part that away from us" in the same manner as Bal Gangadhar Tilak declared 100 years ago
"Freedom is my birth right and no one can part that away from me"

Words are similar but spirits are totally opposite - one is full of fear and the other is fearless declaration of the great freedom fighter.

Is everyone writing this
Personally, I have deep respect for some of bureaucrats of all cadres. Many of them are IAS also such as T N Seshan, Ashok Khemka etc. They have exemplied "True service to the nation" without looking for personal benefits like promotions etc.

These set of people writing these letters are also from IAS cadre but with a different spirit "Incentives of faster promotion and higher salaries are needed for any service to the nation". I wonder if they declared the same in their interviews.

Flawed reasoning in letters

1. Border/Naxal Areas - Armed forces/CISF/CRPF and yes, IDAS also do the same
2. Multiple Responsibilities / Negotiations with MP/MLA's - Every Civil services has the same burden of responsibilities and in similar volume and intensity. IDAS also negotiates with a Lt. General, who has 1 lack people under him ready to kill and die themselves on his one order and the Lt. General has grown up 30 years gradually in a system which promotes seniority ethos. Imagine a 35 year old negotiating with him. MP/MLA's are far easier to handle. 
3. Rank in UPSC - Come on, that is morons logic especially after 2013, in 1 optional and 4 GS scenario, UPSC has become a dart ball game. The difference between Rank 1 and 1000 is mostly luck and some rote learning. Also, there are many in IFS, IPS, IRS and even lesser known services, who dropped IAS in favor of other cadres.

Solution

1. These people are opportunistic and there are high correlation between opportunism and corruption. So, these people should be put on "Vigilance alert" for their future actions. 
2. System itself is flawed. Group A was designed for britishers and should be abolished
3. Common training for all cadres and then service allocation on basis on performance in training, of 2 years, which gives higher chances of correct allocation, than existing "Rote and Quote" UPSC exams..   

Axis bank share price dropped, so will the rest

Last time, I wrote about Sindicate bank

http://indiatoday.intoday.in/story/syndicate-bank-scam-cbi-pawan-bansal/1/376615.html

Again, same thing happened, Axis tried to hide some details in a clandestine manner and market punished it for this.

But about the rest, most of the Indian banks are bankcrupt and the deposits of taxpayers are at risk. I have written extensively about this NPA fraud. Recent comments of Transport Secretary, Mr. Chibber proved the same

1. Most of the Indian infra companies work on negative equity
2. All the credit have been sapped out by the infra/real estate companies and little is left for manufacturing. This pushes up the interest rates.

I found a question on UPSC mains examination on why Indian could not have a booming secondary economy and why tertiary zoomed ahead.

One of the reason was the credit squeeze, most of the banking credit was siphoned off by nexus of politicians and businessman and little was left for capital intensive secondary economy.

Wait and Watch !  - Major bankruptcies will emerge in the following sectors

1. Infra
2. Real Estate
3. Banking

It is prudent for retail investors to stay away from such companies even on stock market. Stock market has already punished the like of JP, Unitech etc for multiple reasons and debt overhang is one of these.

Next Big Scam - Bank NPA Scam

This is going to be next big scam to be unearthed. This will open the eyes of common man of how the inequality is increasing in this country and how the rich are siphoning off the money of the poor by unfair means.

This is the ugly face of crony capitalism, unleased in mainly the UPA tenure, but even NDA is not doing anything worthwhile on this.

God save this country.


https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CBwQFjAAahUKEwjGgPazrr7IAhVHao4KHaPIABc&url=http%3A%2F%2Feconomictimes.indiatimes.com%2Fnews%2Feconomy%2Finfrastructure%2Fbanks-over-financed-road-projects-now-crying-foul-vijay-chhibber-transport-and-highways-secretary%2Farticleshow%2F49310166.cms&usg=AFQjCNHCWbb1FN3pKK9_R2DEA9aAczuFpA&sig2=DN4j3I8uEdwX1zF7rE6jow&bvm=bv.104819420,d.c2E


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https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&uact=8&ved=0CEIQFjAGahUKEwjGgPazrr7IAhVHao4KHaPIABc&url=http%3A%2F%2Fmedhajnews.in%2Fnews.php%2Fmultiprongedapproachisrequiredtotackletheissueofroadsafetynitisngadkari--24975--en&usg=AFQjCNGYbj1L0esRbAtYESepOh0T8W1BGg&sig2=EoFdWWoV7BVAdPYF0EwS4Q&bvm=bv.104819420,d.c2E

Hitler (aka Aurangzeb) Road, New Delhi

An year ago, I wrote about the Aurangzeb road.

http://luckylehana.blogspot.in/2014/09/hitler-road-new-delhi-change-in-address.html

and then after 1 year, finally sanity prevails. Surely, it was not due to my comment/blog post, it was the national outpouring after the demise of the great nationalist APJ Abdul Kalam

APJ was above religion and other none-sense, whatever way the Owaisi or Swami project it. I have heard that he is treated as god by some of the hindus, that is the spirit of Hinduism and Sufism which this country has forgotten for long and has to be revived.


(I don't claim to predict future, I only reflect on the opinion of the nationalists in our nation)

Note - There is non-secular, religious bias or any other kind of malicious intention behind this step. In fact, it is only those pseudo - secularists, who are showing crocodiles tears again. That politics of appeasement has been rejected by the electorates.

A P J No More

Rare breed of politician in Inida

Abdul kalam was a great source of inspiration

NYSE suspended trading

NYSE suspended trading

Restart - Blogothon

My near and dear ones have been complaining that my blog has died, so i have decided to include atleast some blog post as frequent as possible

Trending today are

1. Shiela Dikshit might get into problem due to CNG scam
2. OROP - one rank one pension, Modi Govt. might into problem
3. Land Boundaries of WB, Meghalaya, Assam & Tripura might change on land accord with Bangladesh

what effects a common person like me the most

1. ITO station to start from Monday, i can go to sales tax and other Govt. offices by metro now, else i have to get down at Pragati and then hire an auto, which is very tiring at times, forget taking own vehicle in ITO, it's a mess especially near that passport office
2. Saudi-Yemen getting more entangled might effect Saudi in future as Iran hell bent on supporting the Houthi rebels -> might increase fuel prices in future
3. Yahoo maps used to be only working english map website in China, then its a problem for english only people in China