As the news flow on further asset purchases and money printing by the US Fed leads to a further rally in risky assets this policy now runs the risk of promoting a significant misallocation of capital by its own citizens who, given their severe indebtedness can ill afford to make more losses after a lost […]
Read MoreAs the news of the Bank of Japan cutting short term rates to zero (again) trickled in yesterday it created lot of headlines. Along with it was a pledge to buy some billions of dollars of bonds. This is very similar to what the US Fed has been trying to do over the last two […]
Read MoreTotal inflows into Indian Equities by foreign investors in calendar year 2010 = USD 18 billionTotal outflow from domestic mutual funds in the same time = Approx USD 4-5 billion As a follow up of my article on the rising current account deficit, the recent spike of FII inflows into the Indian equity markets creates […]
Read MoreMost people have consistently blamed me for being excessively bullish. As things turn out I guess I was not wrong. However after the steep and virtually straight line rally of the last one month I have now started becoming wary of the markets, specially the Index and large cap stocks where the move has been […]
Read MoreThe inflation data released today as per the new WPI series has given an inflation figure for the month of August at 8.5% as against inflation as per the old series at 9.5%. Although the full one percentage point figure is disconcerting to look at I would like to believe that the new series is […]
Read MoreWhen people ask me what is the biggest macroeconomic risk to the India markets and the economy my answer today is the rising Trade Deficit which has been growing month on month and year on year over the last several years. The Trade deficit for the month of July 2010 was USD 13 billion and […]
Read MoreAs we start off on the month of September it is quite interesting that a majority of investors are negative on the markets and are looking at a 5-10% correction. The general consensus also seems to be for a Fourth quarter rally in the markets. The current month started off on a positive note with […]
Read MoreThe last one year has been a time where the inflation in India has surprised on the upside on a consistent basis. The initial push for the inflation came from food prices as we had a poor monsoon season which resulted in runaway inflation in a large number of key commodities like pulses, sugar, milk […]
Read MoreFinally we see the markets breaking out of the tight range that it was trapped over the last three months. Although the underlying trend was clearly bullish the markets have taken their own sweet time to move up mainly due to global uncertainties, wide skepticism in the markets as well as significant selling pressure from […]
Read MoreOver the last several months the fear of deflation has again picked up and has resulted in the yields on German Bunds falling to all time lows and yield just around 2% for a 10 year paper. Similarly despite the Fiscal deficits in the US and the huge borrowings by the US Government the 10 […]
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