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Times have really Changed / A blow to Sarkozy !

October 20, 2008

Analysis of:Caisse d’Epargne admits €600m derivatives loss | business.timesonline.co.uk

Amazing , this would have been unheard of two years ago. A rock solid "pure" savings bank ( similar to a post office SB in other countries) which until recently had the sole monopoly to issue interest free savings accounts for upto 25 K $ , making a significant trading loss !!! . Part of the risk that the Caisse undertook while attempting to transition to a normal institution ! , wouldn't be surprised if its trading operations is closed down as a result. Embarrassing  for the French President , to say the least , while he is globe trotting trying to convince other countries to beef up Banking/FI regulations that this occurs in his own back yard and in the midst of a financial melt down , where even the average Pierre or Jacques is trying to reduce his risks. Am sure he wont take it lightly !! 

India.......... invest for long term and in service equities , if you must !!

July 24, 2008

Analysis of:Templeton's Mobius Sees `Good Bargains' After China, India Stocks Decline | www.bloomberg.com

India.......... invest for long term , and in service equities  unless you are a day trader.  Currently Indian stocks are on the high side and one can expect considerably volatility short term.  National elections are due in nine months and there will be considerable pressure to throw out the current regime due to high food prices and lack of sufficient trickle down to the lower and agrarian rungs. On the other hand , wealth is certainly being generated which will mean 15 to 20 million will join the middle class every year , ergo growth and continued demand for quality services be they  health , utilities or (hospitality ) food/tourism . Growth of the latter will be be also fueled by continued demand from outside of India , as India's tourism share is still relatively very low.

ECB discovers raising rates is not enough....

July 8, 2008

Analysis of:Euro Falls as Trichet Signals One Rate Increase May Be Enough | www.bloomberg.com

ECB's oft trumpeted policy of using interest rates to offset inflation is simply not working. Finally Trichet has realised that. Real inflation has been galloping ahead in the first half ECB rate hiking moves regardless. Nor does it show any sign of slowing down and all one has to do is to ask 10 people in any street in any capital to perceive the real hit on their pocketbooks. A new category of Poor with " Jacket and Tie " has been created in Italy. Increasing interest rates damps spending and borrowing but people still have to absorb the costs of spending on essentials, whatever the cost.  Whatever little is left over goes to low yoeld low risk liquidity type savings with a further negative knock on effect on stocks. Not great for building morale either !

All very fine but.....

July 3, 2008

Analysis of:Citigroup to Raise $400 Million for Indian Roads | www.bloomberg.com

As is well recognised , India is behind in infrastructure in almost all aspects . Unlike China where an efficient road system has been put in place over the past decade , work has just started in India. The Citigroup injection of 400 M$ is part of the 15 to 25 Billion required . Whilst India is incorporating siginficant private participation , politics and to some extent , corruption will be the key factors that will have to be overcome to achive execution. As an example a private toll road in South India has been delayed for almost three years due to local and State government interference. As a democracy , India has to figure out a way to overcome these hurdles. On the positive side , the urgent need has become obvious to almost everyone and the intent is certainly there with strong representation and funding from the Central Goverment  

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