Thursday, September 16, 2010

RBI hikes interest rates to tame inflation

Article Link

MUMBAI: The Reserve Bank today raised its key short-term lending rate by 25 basis points and borrowing rate by 50 basis points to check rising prices.

" Inflation remains the dominant concern in macroeconomic management", RBI said while raising the repo (lending) and reverse repo (borrowing) rates to 6 per cent and 5 per cent, respectively.

The new rates, which comes into effect immediately, were announced as part of the first scheduled mid-quarterly review of the monetary policy.

The hike in rates will lead to a rise in cost of funds for the banks and eventually makes loans expensive, which will reduce consumption.

62 comments:

shailesh said...

Realty Bubble

Rising property prices in past one year have raised fears an asset bubble may be forming in real estate sector.

Reliable data on housing prices is limited. According to Makaan.com, a website on real estate, property prices in Mumbai and Pune rose 10-14% in the year to July 31. In Delhi’s National Capital Region, prices were up 30%. An official indicator of housing prices is the consumer price index for urban non-manual employees (CPI-UNME). This puts housing inflation at 33% from a year ago in June.

The escalation in property prices “is somewhat out of sync from fundamental viewpoint”, said Abheek Barua, chief economist at HDFC Bank. In the past, RBI has increased risk-weights on banks’ loans to real estate to limit lending to the sector. RBI hiked risk-weight on advances to commercial real estate sector to 1% from 0.4% in October 9. Rating agency Crisil’s economist dismissed ideas the banking regulator would impose stricter sanctions on real estate loans in Thursday’s policy.

“Real estate prices have been on RBI’s radar for some time,” acknowledged Dharmakirti Joshi, chief economist of Crisil. But “I don’t think there will be any major changes (in real estate lending norms) on September 16,” he said, noting, “There are still downside risks to the economy.” For some, spike in home prices mirrors growth in economy, and therefore there is no need for RBI to up the ante on housing.

“I don’t think there is any bubble in property prices at this point of time,” said Madan Sabnavis, the chief economist of Credit Analysis & Research, also a credit rating agency.

Desi Batman said...

RBI can raise interest rates to heaven, Indians will survive. They are very creative and know how to save, adjust, compromise and live frugal in the worst situations (also in the best).

For tips on frugality, look to India

India always had inflation year over year, but people are OK with price rising. We always find creative ways to cut back, sometimes by cheating, tricking and sometimes by compromise.

I love India.

Anonymous said...

nobody is buying flats dont be fool to buy now

Anonymous said...

Anon 10:29 AM
'nobody is buying flats dont be fool to buy now'

Do share your source of this info. I'm waiting for price to go up by 50% by next year.

DhImAn said...

See the bad decision process in action?

Inflation has to be tamed, so increase rates by a quarter point or half point.

I don't know what the RBI officials are smoking, but when inflation is ravaging the land at 15-20%, that quarter or half point rise is like a drop in the proverbial bucket. Besides, prices are sticky - meaning they go up easily, but tend to act stickily when coming down.

So while this rise will do little to control (price) inflation, it will screw those with adjustable loans, who have to make a larger payment each month.

Great, the common man will now have even less to spend.

Anonymous said...

i work with standard chartered home finance and i can tell you condition are very very bad. Flats are not selling at all. I use to sell few housing loans every month but i haven't been able to sell single loan to any customer in last 2 months. don't judge my ability to sell loans, i sold 6 loans last year during same period.

also, if you negotiate prices with builders you will easily get 10% discounts.

Vik

Desi Batman said...

Vik 12:44 PM

Flats are not selling at all. I use to sell few housing loans every month but i haven't been able to sell single loan to any customer in last 2 months. don't judge my ability to sell loans, i sold 6 loans last year during same period.


Are flats not selling because loans are not getting approved?
or
not selling because people are not applying for loan?
or
People cannot afford the selling price?

also, if you negotiate prices with builders you will easily get 10% discounts.
10% discount is BS, first increase the listed price by 40% to 50% then to make you happy give 10% discount - effectively it is still hyped by 26% to 30%.

I guess many people like to get scammed and are happy listening to the sound of 'discount'.

Vik said...

@ Vik 12:44

I would like to know the percentage split in the loans disbursed by you/your bank. For e.g. 20% are 50-60L , 10% 90L-1Cr.

This c

Anonymous said...

@Desi Batman,

Normally our bank gives loans in ratio of 75/25 for salaried people (75% loan, 25% down payment) and in case of self employed it is 60/40.

first of all there are 60% less inquiries for home loan. I think people are not able to afford these prices and are expecting correction in diwali. Further Deals are not happening because prices are too high. I think Sellers are not ready to sell for discount and buyers are not willing to pay high prices.

But we expect conditions to improve once rain seasons are over!!

Anonymous said...

@Desi Batman,

Normally our bank gives loans in ratio of 75/25 for salaried people (75% loan, 25% down payment) and in case of self employed it is 60/40.

first of all there are 60% less inquiries for home loan. I think people are not able to afford these prices and are expecting correction in diwali. Further Deals are not happening because prices are too high. I think Sellers are not ready to sell for discount and buyers are not willing to pay high prices.

But we expect conditions to improve once rain seasons are over!!

vik

Anonymous said...

Looks like the builder's lobby is going all out to paint a rosy picture on the demand side:

http://in.news.yahoo.com/43/20100916/836/tbs-india-may-face-shortage-of-26-mn-hou.html

Rahil said...

Sad

shailesh said...

Seems like lottery for Builders !!! I think now you will have super luxury water front condos for $5 million...

Coastal rule change to herald Mumbai boom

The notification announced on Wednesday by minister of state for environment and forests Jairam Ramesh allows for slum development and reconstruction of old chawls which occupy 38 per cent of Mumbai’s 438-km shoreline.
Over one million Mumbaikars live in these 150 slums and in over 3,000 dilapidated structures which can be broken down and rebuilt, with the environment ministry now allowing a higher floor space index (FSI) in this redevelopment project.

He said the government was allowing increased FSI on the condition that these redevelopment projects were subject to RTI, CAG audits and inspections by a monitoring body to be jointly set up by the Centre and state governments.
The move will not only create additional public space but
also provide extra residential accommodation in South Mumbai right up to Mahim and then between Gorai to Borivali.

Anonymous said...

India may face shortage of 26 mn houses by 2012

http://economictimes.indiatimes.com/markets/real-estate/news-/India-may-face-shortage-of-26-mn-houses-by-2012/articleshow/6566686.cms

DhImAn said...

India may face shortage of 26 mn houses by 2012

But of course, Nibiru will do its job by 2012.

Amrita said...

Dear Shailesh

WE have not been able to find your contact details in the blog.

Trust you are doing well. As you might be aware rupeetimes.com is a leading personal finance portal and has been a major player in the field of personal finance since its incorporation in the year 2006. We at rupeetimes are always looking out for innovative ways to bring the best information in the area of personal finance to the reader.

Amongst the various ideas of rupeetimes is CARNIVAL OF INDIAN PERSONAL FINANCE BLOGS. It is an attempt by us to bring in the works of the most eminent Indian bloggers in the personal finance domain to our readers.

After an exhaustive research on various blogs, we are happy to select your blog as one of the most promising blogs in the domain. We would thus like to feature your blog in our upcoming CARNIVAL. We would appreciate if you link us back by featuring this carnival in your blogs too.

Looking forward to your confirmation for participation.
You can contact us at amrita.purkayastha@imediablitz.com
For details visit
www.rupeetimes.com

Anonymous said...

Amrita:
This blog is run by Vik.

It would be great if your ruppetimes and other media outlets do not act as pimp for the builder and bankers lobby and rather give a true picture. Indian masses are naive and will be sucked up into this mess as soon as the bubble bursts.

Desi Batman said...

What makes Bombay so expensive and attractive? Humans always have migrated to places with work opportunities and better lifestyle.

Here is the list I found on web:
List of major Mumbai based industries

From this list I have crossed out the industries that are no more active and people bask in outdated glory.
x Textile mills
x Pencils
x Tractors
Pharmaceuticals
x Biscuits
x Clothing
x Utensils
Film industry
x Film equipment
x Automotive parts

Today there are only 2 major players shelling out money - Finance and Film industry. So Why makes people think Mumbai is place to live? I do because my family is there, and I cannot speak language other than bombay slang Bhindi and English. So choice is Mumbai or out of India.

Anonymous said...

95% people who bought new homes during the past one year have done so by paying outright cash. The rest 5% have availed bank loans, some of them not lack of cash but to keep themselves our of incometax limelight. My point is that bank loan statistics have no bearing with the actual money flow and purchase of flats. Raising or lowering rates by our corrupt Reserve Bank also has zero effect on the housing market.

The main player in this game is BLACK MONEY and this of course is directly related to high level of corruption, black market, cheating and extortion. Unlike other parts of the world, living standard is no indication of ones wealth. There are too many moneyed people around us and these guys have cash and don't blink an eyelid paying 10,000 or 20,000 rs for sq,ft when need arises.
My neighborhood marwadi says that he has paid 50 cr as pagdi for a 200 sq. ft shop area in a upcoming mall and this guy lives with his family in a dilapidated building in Byculla which has a outside toilet and no elevator. I am sure this guy will not hesitate to pay 2 or 3 crores for a apartment near the mall so that he can save traveling time for business.
I don't see any light at the end of housing tunnel in Mumbai. I used to be happy reading about bubble burst but now have realised that there is none

Vik said...

@Amrita:

I am glad this blog has been selected by your website as one which provides value to your users and subscribers. Although I run the blog there are several others on this blog including Shailesh and others who provide insightful articles and comments on this blog. I will be happy to represent the blog along with them if so required.

Thanks
Vik

Desi Batman said...

@Amrita:

What are your views on current RE conditions in India?

Any insight, thoughts or you are here just to market your website/product on this blog? Anyways, you got my attention - never heard of rupeetimes.com, but will check out.

Desi Batman said...

Media is biased. They will report what they are paid to report.

No surprise if builder and Bank lobby are boiling up RE hype on all available media. With internet age, news can be published without repercussion and no authenticity.

Enjoy the poor Indian netas doing great service to Indians:
Politician's drama: Facts to be known by every Indian

Anonymous said...

New Delhi: Rank 70 <-Check this link for more Info.

New Delhi, capital of India, ranks 70th in the list of the world's most expensive cities. On the price level index -- on the basis of which cities are ranked in the list of the world's costliest cities -- Delhi scores 45.7.

In terms of wage levels, however, it scores a very low 8.6, as compared to New York which scores 100 and Zurich which scores the highest at 121.8

Mumbai: Rank 73<-Check this link for more Info.

Mumbai, the nation's financial capital, is the 73rd most expensive city in the world. It is the least expensive amongst the 73 cities surveyed by UBS in terms of price levels. It scores 37.5 on the price level index.

In terms of wages too, Mumbai ranks lowest. Its score is a poor 6.3 on the wage level index, meaning that wage levels in Zurich are almost 20 times that in Mumbai!

Anonymous said...

Rs. 3400 per sq.ft., is called an affordable housing rate in Pune(outskirts of Pune to be precise). Mark up the carpet area with 30%, and a 700 sqft carpet flat is 35lakhs before car parking and other lootings. What a joke.

Dinesh Chanchalani said...

Ironically, most ads rendered on this blog by Google are promotions of new project offerings by builders.

Just like the Communists say, the Capitalist will sell you the rope with which you will hang him.

samix said...
This comment has been removed by the author.
Bachera Indian said...

I just checked the same apartment which was costing 1.2 crore one month back now its 1.40 crore in Malad west just three bedroom asking price 13500 psf and 7 year old building!

Now I am speechless and idiots like manmohan singh or more idiot pranob mukhrjee and biggest idiot like d subbarao rbi governer claim that India has no asset bubble than can they explain this. Biggest idiots

samix said...

@Bechara Indian

With all due respect to the manu, what else can you expect from a doctor of Keynesian economics ?

An have you ever seen the smug smile on the face of pranab mukherjee as if he is some smart, smooth operator who is in control of everything ? I find it so God damn irritating!

DhImAn said...

@Samix,

Ah - the illusion of control - the Achilles heel of Keynesian economics.

P.S. I replied to you in the earlier thread.

samix said...


I'm sorry for not being who you thought I was, but I'm not sorry for being who I am.


To each their own Dhiman! that is why I just conveyed surprise.. and not a refutation! (haha)

Anonymous said...

I was amazed to know that why black money is chasing RE, by a bookie.

He said because of fake currency, nobody is accepting/keeping black money, they are buying either gold or RE.

Desi Batman said...

This is why GOI loves and loves to keep RE prices high. They will do anything to keep this floating.

Flat registration offices to be linked to curb scams

Last para of above article:
Collections from registration and stamp duty have witnessed a four-fold hike in the last decade. The government earned Rs 2,200 crore during the financial year 2000-01, while the figure shot up to Rs 9,600 crore in 2009-10.

Desi Batman said...

@ Anonymous 5:58 AM
I was amazed to know that why black money is chasing RE, by a bookie.

He said because of fake currency, nobody is accepting/keeping black money, they are buying either gold or RE.


I agree. In total and true accounting, any amount of black money would have to be accounted, audited and captured. I mean somewhere this black money was white money initially. But amount of black money in market itself shows possibility of fake currencies and/or lots of truly printed currencies that are not accounted by government.

samix said...

Anon at 5:58 is what that bookie said is true, then guys be prepared for hyperinflation as the faith in the currency crashes, and no one wants it anymore!

Anonymous said...

Samix above: "Then guys be prepared for hyperinflation as the faith in the currency crashes, and no one wants it anymore!"

Dude, this is the most asinine statement I have ever heard. You are indeed the master of extrapolation. Grow a beard, hold a doomsday sign and walk up and down on chowpati. That way, at least someone might buy you some pao-bhaji.

samix said...

Anon above, before I do that I need to give you some tuition on rhetoric and a figure of speech called hyperbole, due to which my sentence ended with a exclamation mark!

On a serious note, hyperinflation is a currency event where people loose faith in the currency and want to exchange it with something tangible.

hyperinflation is no doomsday theory and the world does not end due to it, its a pretty predictable event in the life of any paper currency and many countries have gone through it, Zimbabwe is fresh in everyone's mind and Argentina is a case in point in recent history.

samix said...
This comment has been removed by the author.
DhImAn said...

Dude, this is the most asinine statement I have ever heard. You are indeed the master of extrapolation. Grow a beard, hold a doomsday sign and walk up and down on chowpati. That way, at least someone might buy you some pao-bhaji.

No, what is asinine is for you or me to accept pieces of colorful paper as something that have value.

Scratch that. What is asinine is for you or me to save up these colorful pieces of paper to buy things in the future.

In other words, it is stupid to save in a money that loses value. Gresham's law and all.

So what happens when people dump paper en masse for tangible property such as real estate or gold?

You see a dramatic rise in "price" of these real things leading to loss of faith in the money.

Nothing new or surprising about it. It has happened several times in history already.

And as Samix says, hyperinflation is not equal to apocalypse.

Anonymous said...

Wow, Bangalore real estate prices crashed by 30%. I checked couple of properties in craigslist and notice the price difference from last year. This is a very good sign.

shailesh said...

Ignoring asset price inflation

The recent action taken by the Reserve Bank of India to hike the repo and reverse repo rates has been interpreted as a shift in focus to inflation control resulting from a combination of comfortable growth figures and disconcerting increases in the prices of goods, especially food articles.

What is surprising is that little concern is being expressed and action being taken with regard to the sharp increase in asset prices, especially equity prices. India's stock market recovery over the last year and a half is a bit too remarkable for comfort (Charts 1 and 2).

From its March 9, 2009 level of 8,160, the Sensex at closing soared to touch 19,594 on September 17, 2010. This is not far short of the 20,870 peak the index closed at on September 1, 2008.

This steep increase the index has registered in recent months occurs when the after-effects of the global crisis are still being felt in various parts of the world where the recovery has been halting and unemployment still rampant.

This implies that the current bull-run can be explained only as being the result of a speculative surge that recreates the very conditions that led to the collapse of the Sensex from its close to 21,000 peak of around a year ago.

Anonymous said...

can you point me to the prices in bangalore. Mantri has launched their new project in bannerghaata road for 4900. deep inside harlur road Purva is pricing 3300. where is the drop ?

Anonymous said...

http://economictimes.indiatimes.com/opinion/comments--analysis/Get-the-government-out-of-land-deals/articleshow/6596604.cms

Who profits from big infrastructure projects? The infrastructure developers who are closest to the developers !

That is the case every where in India.

And this is affecting the infrastructure development in India.

~ s

Anonymous said...

As someone living in Bangalore, I can vouch for the earlier post. I have seen several properties drop their prices recently. Also, I have seen many apartments on the market for more than a year now and one established real estate agent that helped me find a rental has now gone out of business.

Go figure!

Bachera Indian said...

Finally I have called a day and paid the token amount for the same flat in Malad/Goregaon junction for 1.40 crore, as I am observing this blog for three years and price have quadrupled after that, but not declined a pence.

My sincere advice to all the reader go and jump the bandwagon ultimately all this analyses, theories and research in of zero help as we have a fool people in RBI, Govt and ministry

Bachera Indian

Anonymous said...

http://money.cnn.com/2010/09/15/real_estate/california_home_price_rebound/index.htm

Anonymous said...

There are many forums one of them is http://www.r2iclubforums.com/forums/showthread.php/20858-Mantri-pinnacle-Bannergatta-road

Please search to get what info you need about Bangalore real estate.

Desi Batman said...

@ Bachera Indian said...
Finally I have called a day and paid the token amount for the same flat in Malad/Goregaon junction for 1.40 crore, as I am observing this blog for three years and price have quadrupled after that, but not declined a pence.


I am sorry to hear that you take this blog as future prediction, No it is not meant for that. This is for creating awareness and put some economic sense into non-sense.

What is your analysis for price to quadrupled in past three years? What fundamentals have changed in India to support this RE price hikes?


My sincere advice to all the reader go and jump the bandwagon ultimately all this analyses, theories and research in of zero help as we have a fool people in RBI, Govt and ministry

Right and Wrong.
Right - we have a fool people in RBI, Govt and ministry. And as DhImAn said earlier - do you expect this to be forever?

Wrong - People are not fool on this blog, they are trying to understand the fundamentals, they are here to understand what makes crores of Rs. available for RE. They are here to address issue what most idiots don't understand.

You may be few of a stinking rich guy to afford RE of 1.4 crores, many unfortunately are not so rich and have no whatsoever means to make that money. So think where are your future buyers in 1.4+ crores range?

Preeti said...

Where the hell is Bindas Bhai. Vik can you please request BB to post. A lot of people including Shailesh is loosing focus. We need the old gang to contribute. Vulture we are really missing you.

Anonymous said...

And now the CWG village apts. are going to be sold at prices starting from 2.75 crores. Any takers?

Anonymous said...

Looks like the downward price mentioned in craigs list was just to attract prospective customers. Looks like this is a desperate act from realestate agents, will not work. The moment you call them they say sorry and jack back the price.

Desi Batman said...

Be ready to pay high price for your pao-bhaji and/or with inferior quality pao-bhaji.

Now for explanation: With this explanation you should realize that how RE price will drives up cost of other commodities and/or create more poverty.

* Cost price = Labor price + material: Anything you purchase cost price consists of Labor price and material price. This is true in case of RE also. Let's say cost of RE is 75 lacs.
* Selling price = Cost + Profit: Now 75 lacs with 75 lacs profit. Selling price is 1.5 crores
* Buying price = Selling price: Selling price of RE is 1.5 crores, so somebody buys for 1.5 crores.
* Buying price = Labor price: To pay 1.5 crores someone has to earn by his labor (any means) accordingly and any increase in RE prices to afford his labor has to increase in sync. Now the buyer will not always be in RE business, this person can earn from any kind of labor let's say by making Pao-Bhaji.

Therefore now going back to start: Cost price = Labor price + material, the cost price of Pao-Bhaji (or any other commodity HAS to increase). This will push increase in selling and buying price of Pao-Bhaji.

Now to keep Pao-Bhaji buying price in control what needs to happen? Bring down cost price and/or profit. But you don't want profit to plummet, so reduce cost price. For cost price to decrease one has to find cheap labor and/or inferior quality/cheap material. To get Cheap labor, you start sqeezing labor class with every penny, pay less for increased work, basically make poorer more poor. Otherside: Your pao-bhaji will cost more or your quality of pao-bhaji is no more what you paid for.

Where does this stop? As long as the bottom layer is ready to compromise, ready to be exploited, ready to live more and more poor quality, this RE hikes will continue. We all know by history how all this will end.

Desi Batman said...

Anonymous 10:11 AM

And now the CWG village apts. are going to be sold at prices starting from 2.75 crores. Any takers?


India has huge population and has tons of rich people, Rs.2.75 crores is average price for RE for them. India has 1.2 billion people, even if we consider lowest figure of 1% that are rich people, the rich community is 12 million strong! Many have not even entered the market to buy the houses. But on other side poor people and young generation are screwed.

Desi Batman said...

@ Anonymous 10:18 AM

Looks like the downward price mentioned in craigs list was just to attract prospective customers. Looks like this is a desperate act from realestate agents, will not work. The moment you call them they say sorry and jack back the price.


This tactic is known as Bait and Switch. It's an old trick that still works. This is trick is highly used for car sales in USA.

Desi Bachera said...

Look Desi Batman, I agree with you but all in theory. Recently again king of fool Pranob Mukhrajee said Indian has only 7.5 laks people who earn more than 5 laks p.a.. now can you pls tell me in that case even you combine just buy/sell transaction over the past one month in Delhi/Mumbai/Chennai/Pune etc max. two month, you will get minimum double of 7.5 lakh people, now all this transactions I am sure is above 50 lakhs now is to so easy to believe that new projects are sold over night costing crores in distinct suburbs of Mumbai even in dahisar, miraroad and we are talking about 7.5 lakhs tax payers in 120 crore population
Also now I know that I am poorer by 40 laksh in last three months as my money in bank account gave me useless interest which is of no use. If you are so sure about your analysis just tell me where is the silver line?

DhImAn said...

Hello folks, today I want to engage in a little self examination, please play along for a bit to humor me.

We all know that in theory, practice is supposed to agree with theory, but in practice, theory doesn't always agree with practice. Right? (That's a Yogi Berra-ism BTW).

So all theories and all practice aside, please answer me -

Why is it that you are clamoring for real estate thus?

What happens if you don't own your own home?

You can always rent or you can move to where you can afford a home.

If you have money lying around, you could invest it in the BSE - it went from 9k to about 21k in less than a year. Or any number of investment vehicles.

If you don't have money, the choice is simple - don't buy, just rent.

Why is everybody so desperate to own a flat as if your life depended on it?

What would go wrong if you never owned any real estate all your life?

After all, you aren't going to take it with you when you finally go, and your wife and kids would appreciate cash more than real estate as inheritance.

I mean, would it be easier for your wife to pay for the kids school/college/wedding with money you left her or by selling the house you left her, finding another place to live, moving and disrupting everything at the precise time that you aren't there to help?

Ignore economics, ignore politics - just examine your own self for a second. Why do you thirst so badly for a flat?

I ask these questions sincerely; i.e., not in sarcasm or rhetorically - so please answer honestly.

Laaloo Prasad yadav said...

Hi Dhiman
U must be a consultant. If not, u better change ur career.. I assure you.. u will be one of top in that field..
Coming to your Baba Dhiman Questioner,
All is Well.. When we go to a Mahatma, he says all these things.. and at that moment it looks so logical.. we all start thinking like perfect YOGI. But what happens when we come back to home..??
There is saying.. “ smasana Vairagyam” or “Samshana Vairagyam”
(Viragi, has two meanings..
no raagam ( no emotion) one meaning
visesha raagam ( specific emotion only, in this case.. emotion to GOD alone)
You get this kind of feeling when we are at ‘dahana samskara’.. the moment we come back home and wash ur feet.. all the knowledge flies away… we are back to our fight for greeds and needs .. and aspirations and ideas…
If everyone can hold that IDEA even after coming back to our regular life, this world will be heaven.

So dear, don’t tell me stories.. lets get to point..
And discuss about Indian economy and Real estate values

(One who is capable is busy with execution.. one who is not capable.. discusses the matter)
If you want.. I can also explain ..”prasuti Vairagyam”


Hope, you followed me...

DhImAn said...

Laloo, I'm not a consultant, I'm an engineer.

Everything I say or do has some practical application in focus.

Had this not been the case, I'd have been an economist :-)

Now, the question still stands. Why do you want real estate?

I'm not looking for philosophy here. I'm simply looking for a reason.

Like "I want to own a flat because I want to become rich."

I'm not making a moral judgment here - like "Having a desire is wrong, and you are a jerk for having desires."

If we analyze all the causes of owning real estate, and we find that there are better ways of objectively attaining those goals, then that is what I want to do.

jnAtumicchAmyahantava karaNAni krItasadanArjanArthasya vivAdam na icchami vairAgyavishayasya

Perhaps you can translate, Laloo? If not, I'll do it in a following post.

Anonymous said...

And now the CWG village apts. are going to be sold at prices starting from 2.75 crores. Any takers?

Dude, I wouldn't touch those CWG apartments with a flagpole if I were you, specially after the footbridge collapse yesterday. God knows who built these apartments and how much Kalmadi made after switching cement for sand.

Laaloo Prasad yadav said...

we are back to our fight for greeds and needs (real or perceived) .. and aspirations and ideas (dogmas, prejudices)…

Above statement from my previous post answers your question in a subtle way.

Coming to the translation... i feel engineers can do it better.. so i leave it to you

shailesh said...

Article Link

The surge in equity prices over the past few weeks has taken the major Indian stock indices close to their historic highs. Real estate prices have also been soaring. Inflation seems to have peaked, but is still very high by international standards. Is India overheating?

Judging whether stocks and real estate are in bubble territory is always a tough call, but a recent analysis published in this newspaper on Monday shows that the percentage of market capitalization to gross domestic product (GDP) is down from 160% in January 2008 to an estimated 104% right now, based on an assumption of 8.5% economic growth in this fiscal year. In other words, the underlying economy has grown faster than the market value of listed equities in these past 30 months or so. Similarly, real estate prices seem to be at historic highs, but the ratio of housing prices to average incomes is lower today than it was two or three years ago.

The main macroeconomic risks right now are elsewhere—the twin internal and external deficits. India ended 2006-07 with a current account deficit of 1.1% of GDP. This year the external deficit could be anything between 2.5% and 3% of GDP, one of the highest levels since the crisis of 1991. Government profligacy has eaten into national savings and led to a wider current account deficit (or the gap between domestic investment and domestic savings), which makes India heavily dependent on capital inflows at a time when the world economy continues to be fragile.

The major economic risks are not from an asset bubble, but from the growing fiscal and current account deficits.

Anonymous said...

The Whole World is a Bubble!

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