iCharts Discussions

[ajayhkaul]

Meanwhile: ET reports ....

Given the lack of any trigger for a trend reversal despite the recent market bounce-back, FIIs have been rolling over their bearish positions to the June series.

According to Bhamre, bank Nifty has witnessed a 48.43% rollover ahead of Thursday's derivatives expiry, implying that FIIs are rolling over their shorts in the index. Loan restructuring is expected to touch a high of Rs 2 lakh crore by the current financial year-end (FY13), according to Crisil. The large quantum of restructuring reflects the prevailing stress on corporate India's credit quality because of lower profitability, weak demand and tight liquidity, the rating agency said.

A weaker currency also affects banks' outlook as risk of imported inflation added to the already high inflation rate makes the central bank loathe to cut interest rates, which affects their profitability.

There you have it...interest rates are not cut , its affecting industry/manufacturing ...... a vicious circle

[vishvesh2001]

After a long haul of interest rate cut why did they stop cutting rates in the last two quarters. RBI being the architect of monetary policy did not anticipate things would change globally. Quite surprising.!! Or the rates cuts stopped due to the pressure of business houses where profitability of their business were eroding due to lower demand and which in turn was having an effect on the market value of their individual holdings.

Ya it is just a messing up and you could see more rates cuts starting now. What kind of game is this????

[ajayhkaul]

[ajayhkaul]

I thought I must share this comment related to eurozone crisis(applies everywhere) from the press:

"...The one thing you have to understand about the current crisis overseas is that even though intelligent men and honest lawmakers frantically put together budgets and austerity measures that may guarantee that the crisis could be contained and reversed to the point where it is fool-proof, the fact remains is that nothing is foolproof to a sufficiently talented fool.

Human beings' sense of expediency, to do the easy thing that benefits them over others, will tend to shine through at the absolute worst time. In this case, self-serving politicians can be counted on to do nothing in the face of catastrophe in order to secure the reelections even if the short-term pain to fix the problem would achieve a long-term solution.

For the average investor, the best trade may be to just sit on the sideline and wait for this to play out. Many times investors feel like they have to stay invested at all costs. The mantra of “money never sleeps” causes the average investor to take unnecessary risks while not having the proper tools to trade what feels like a rigged game to many. This game is not rigged. It just is not as simple as going long the index and expecting that you are not going to have to stomach some ups and downs. As for the active trader, the trades are limitless..."

[vishvesh2001]

Absolutely true Ajay Ji. Sometimes you cannot afford to be on the side line in the market and wait for the play out due to the opportunity loss of growing this money elsewhere. A guy with limited exposure would be able to sustain shocks but one with more and more exposure would be on the verge of suicide. That is where the diversification of risk and investment portfolio comes into effect.

Secondly who would want to undergo pain whether it is short term or long term when greed for money at the cost of others is the norm

When will this end?? Probably on the doomsday.!!!

[ajayhkaul]

Spain implosion ?

Spain’s third largest bank, Bankia,required government bailout of €23 billion (source: Telegraph, May 28, 2012).


Spain’s Orderly Bank is the country’s government bailout arm to manage all of the banks in Spain. It has only €5.3 billion allocated for government bailouts.

Spain is also experiencing a housing crash, on a larger scale. Property prices are estimated to drop at least another 20% due to staggering unemployment and the continued recession, further exacerbating the credit crisis, which is why a government bailout is a certainty.

The Centre for European Policy Studies in Brussels estimates that the Spanish banks would have to write off at least €270 billion in mortgage debt. There is no government bailout large enough to make up for this loss should it come to be!

Spain’s two largest banks hold assets (debt and the country’s other loans on top of who knows what else) that are larger than Spain’s gross domestic product (source: Egan-Jones)!

What does this mean? It means the government of Spain has no money to provide a government bailout for the banks!

With the Spanish economy shrinking, unemployment at 24.4% and the housing market collapsing, the credit crisis worsens, because the banks’ “assets” are worth less and less with each passing day.


The people of Spain understand they are in a credit crisis and are moving their money out of Spanish banks and sending it to Germany or other northern European banks in order to protect themselves. What can be referred to as a “bank run” is occurring today, but on a small scale, at least for now.

Germany, Finland and the Netherlands are opposed to direct government bailouts. So the stalemate continues, as Spain implodes.

For the European Commission to suggest something like this means they know how dire the credit crisis has gotten in Spain. Something will have to be done soon, because if they allow even one bank to go bankrupt, the consequences will have global implications...'

[ajayhkaul]

When you see the world’s reserve currency getting cut out as the middleman in the currency markets, you know the time has come. The time when the world no longer wants to do business with that middleman, and instead, deal directly with each other.

That’s precisely what’s happening with the dollar. Over the past year we have seen Iran, Taiwan, and Russia — to name just a few countries — cut the buck out of the middle in currency dealings, and instead traded directly with each other and without using the dollar as a reserve currency.

Now we find that just yesterday, China and Japan inked a deal to cut the U.S. dollar out of all trades between the two countries, and instead, trade directly in yuan and yen, without ever touching the U.S dollar.

This will see the U.S. dollar lose its role as the world’s reserve currency.

Leaders in Washington also know it’s going to happen. In fact, they WANT it to happen. They WANT the dollar devalued ---- and default on Washington’s domestic and international obligations, but on the sly, through inflation.

And Beijing knows about it too.

[ajayhkaul]

The contrarian's song :

“The selfish they’re all standing in line

Faithing and hoping to buy themselves time

Me, I figure as each breath goes by

I only own my mind.”

~ Pearl Jam, I Am Mine ~
GOLD AND SILVER update

[vishvesh2001]

DOES THIS MEAN IT IS A REPRIEVE FOR SPAIN????

Spain, the latest combat zone in Europe's long-running debt wars, urged the euro zone to set up a new fiscal authority to manage the bloc's finances and send a clear signal to markets that the single currency project is irreversible.

Prime Minister Mariano Rajoy said the authority would also go a long way to alleviating Spain's woes which, along with the prospect of a Greek euro exit, have threatened to derail the single currency project.


Establishing a new authority could require a change in the EU treaties, a usually lengthy and politically painful process which requires ratification in all 27 member states of the bloc.


Germany has said further integration in Europe was required, including additional controls on national public finances, and was ready to consider revising the treaties if needed.

A day after Berlin supported giving Spain an extra year to cut its deficit down to the 3 percent of GDP threshold, Chancellor Angela Merkel said it should be possible for countries that violate fiscal rules to be sued in the European Court of Justice.

With the debt crisis now centered on Spain's teetering banking sector, talks are also under way on creating a banking union in the euro zone based on centralized supervision, a European deposit scheme and a central fund that would cope with failed lenders

Germany's finance ministry said on Friday it was willing to consider this option in a mid-term perspective

Spain has picked the "Big Four" accounting firms KPMG, PwC, Deloitte and Ernst & Young to carry out a full, individual audit of its ailing banks, a source with knowledge of the decision told Reuters on Saturday.