india inc. bleeding red

by Guest Wed Dec 14, 2011 12:07 pm

we survived the asian banking crisis without damage. we survived the 2008 sub-prime crisis without damage. prior to that we survived a couple of bop crises without much damage. now suddenly it seems that the tremors, originating from europe, have suddenly morphed into homegrown tremors with a homegrown epicentre. the skeletons are ought of the closet.

1) the rupee was propped up entirely by a bountiful inflow of dollars via fdi, f2i, nri deposits and portfolio investments. these channels have dried up in the last 6 months becaue of the european crisis and disillusionment with the india 8.5% growth story. current account deficit has also risen because we import more than we export. net impact -- our dollar reserves, $302 billion, just about matches our dollar debt, $300 billion. surplus dollars for rbi to intervene with - $2 billion paisa nil. Sad

2) india will go back to 5% growth. l&t chairman said that (as per today's edition of my daily) and he also said that he has been saying this for some time now but no one has been listening to him.

3) if india goes back to 5% growth then yes we do see a bop crisis unfolding. is it time for the govt. to issue gold bonds again?

4) local business is screwed. demand flagging steeply. imports expensive (remember, we import more than we export -- the deficit is $60 billion now). inflation has hiked manufacturing and living costs. high interest rates has made life difficult for the both demand and supply. political situation is reminiscent of the year when cpim was in power in west bengal with clear indication that it was only biding time in power.

5) Sad

i want to immigrate to usa. i need a sponsor.

by Guest Wed Dec 14, 2011 12:24 pm

Huzefa Kapasi wrote: high interest rates has made life difficult for the both demand and supply.

i suppose this is wrong. but rbi is in no way right if it keeps parroting that high interest rates have controlled the hike in inflation (from going from 9% to 90% - had it not been for the hike in interest rates).

by Another Brick Thu Dec 15, 2011 12:22 am

http://timesofindia.indiatimes.com/business/india-business/Indias-billionaires-frustrated-want-to-shift-base-overseas/articleshow/11114890.cms

by Marathadi-Saamiyaar Thu Dec 15, 2011 12:30 am

Another article today:

Of the BRIC countries India is the least liked by overseas investors today. Growth is expected to be downgraded to 5%. If that happened, watch for some market EQs.

by Guest Thu Dec 15, 2011 1:19 am

link to marathadi's article: http://www.business-standard.com/india/news/%5Cin-bric-foreign-funds-like-india-least%5C/458532/

by Guest Thu Dec 15, 2011 3:20 am

http://www.thehindu.com/business/Economy/article2716920.ece?homepage=true

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india inc. bleeding red

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