iCharts Discussions

[vinay28]

there is news that ECB may not give third tranche

[ajayhkaul]

[phoneix]

[ajayhkaul]

PHONEIX is right about the stealth supplies of fiat currency.

Even India is doing it as are many nations across the world ...... no one wants a strong currency!

[phoneix]

[ajayhkaul]

A tsunami of easy cash the likes of which we rarely see!

WHERE IS IT GOING ? Follow the money , make hay while the sun shines ,,,,

The chart shows the rate of expansion in the European Central Bank's balance sheet over the past couple of years. You can see it has more than DOUBLED to 2.67 trillion euros from 1.3 trillion. And this is from a central bank that claims it's not printing money

Anyone expecting a change of course will likely be disappointed too. Just this week alone, the ECB doled out ANOTHER record 529.5 billion euros for three years as part of its second Long-Term Refinance Operation (LTRO). A whopping 800 piggy banks lined up at the ECB trough for the virtually free cash, up from the 523 that borrowed 489 billion euros at the December LTRO.

The Bank of Japan and The Bank of England are also flooding their markets with newly printed cash. And this week, in comments before Congress, Federal Reserve Chairman Ben Bernanke also signaled he has no intention of stemming the flood of easy money coming from his central bank. Specifically, he said ...

"With the unemployment rate elevated and the inflation outlook subdued, the committee judges that sustaining a highly accommodative stance for monetary policy is consistent with promoting both objectives."

That pretty much ensures the 218 percent explosion in the Fed's balance sheet that we've seen already is just a start!

Bottom line: If you thought the Alan Greenspan-era, interest rate-cutting campaign that helped fuel the tech bubble was crazy ... if you thought the massive dose of stimulus that fueled the housing bubble was insane ... or if you thought the cheap money that helped propel crude oil to $147 a barrel a few years ago was completely nuts, you ain't seen nothing yet!


This time, it's not just the U.S. Fed that has lost its marbles ...

It's practically every central banker on the planet who is printing money like mad. that money has to go somewhere. If you're wondering why virtually every asset class is being reinflated right now — or why the core Consumer Price Index just surged at the fastest rate in 40 months — there's your answer!

[ajayhkaul]

The global central banking mafia sticks together and their openly admitted goal are higher stock prices in order to boost “confidence,” which will hopefully improve the overall economies.

'...The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.

The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.

A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.


Market getting weak? Call the Swiss national bank for a little help.

A few consecutive economic reports causing nervousness on the Street? No problem, call a few more foreign central banksters for their buying power in order to “keep the market up.”

What happens not if, but when, there is another 1987, or 2000, or 2008 market crash? Whose going to bail out the foreign central banks? The U.S. Fed will, which means the Citizens.

So , how can you get LIC into buying ONGC without crashing the market ?
Easy--- get the ECB while LIC cashes out. Far fetched ? Dont think so .

And remember LIC is paying with public money , of course.

[rk_a2003]

What an easy way out?. It's so simple! till the world citizen knows whom they are looting? with whose money they are playing?.

Already people started crying foul with the LIC infusing huge money in to ONGC auction in the last minute virtual bail out that too after the closing time.What a farce!

Another UTI is in the making! All this is with the people money.

Indian Government is perhaps the richest government in the present world.
It is also a poorest manager of the affairs.

[rk_a2003]

War planes humming sounds are about to erupt over Iran. A high level meeting of Israeli P.M with president Obama confirms possible outcome. Usually most of the people are against war and don’t like to believe that war will be induced. But unfortunately no government honors people aspirations.

In case of war on Iran US is going to get two birds at one shot. Controlling Iran and mitigating the challenge thrown by Iran to dethrone petro dollar.

It is going to be a double whammy for India It loses its major supplier in the form of Iran. Spiraling Crude prices hits its economy badly. It may have to procure crude at high prices from the open market again paying dollars. Sensing this scenario US $ started rising against Indian Rupee.

This could be the reason for recent Indian equity outperformance in going down. A lot depends on Iran war now. When you are in doubt! What to do!! Shall any one has to tell you?!.

It will be interesting to watch how Gold and Silver behaves in case of war.

[ajayhkaul]

This is from ajayhkaul blog of a few days ago:

The United States is sure to resist the rise of a full-fledged "Asian dollar exclusion zone" which portends a future economic war and power struggle with China, which is dependent on oil from the American-dominated Gulf States.

The vacuum created by the dollar’s demise will likely be filled by gold, which is why China and India have been building up their reserves of the yellow metal in recent years.

All things considered, it would be much easier and cheaper if the United States stopped imposing its worthless currency on the world and reverted to the gold standard. This would allow the global economy to correct for the huge imbalances created by decades of fiat money expansion, force governments worldwide to cut spending and balance their budgets, promote genuine free trade, and most importantly, avert a Third World War.

Can the world afford a war ? a world war ?Do the allies also want it?

However the Americans are desperate and will do anything for the petrodollar while driving their own country also off the cliff. More fiat currency will be printed to pay for the war ?

[vinay28]

I am posting this under Market Mastermind for the purpose of looking at it as a leveller in the backdrop of all the bruhaha about about India being an economic power.

Barefoot - The other side of life

LIFE-CHANGING EXPERIENCE: Matt (left) and Tushar. Photo courtesy: RS100ADAY.COM

Can anyone really live on Rs. 26 a day, the income of the officially poor in rural India? Two youngsters try it out.

Late last year, two young men decided to live a month of their lives on the income of an average poor Indian. One of them, Tushar, the son of a police officer in Haryana, studied at the University of Pennsylvania and worked for three years as an investment banker in the US and Singapore. The other, Matt, migrated as a teenager to the States with his parents, and studied in MIT. Both decided at different points to return to India, joined the UID Project in Bengaluru, came to share a flat, and became close friends.

The idea suddenly struck them one day. Both had returned to India in the vague hope that they could be of use to their country. But they knew the people of this land so little. Tushar suggested one evening — “Let us try to understand an ‘average Indian', by living on an ‘average income'.” His friend Matt was immediately captured by the idea. They began a journey which would change them forever.

To begin with, what was the average income of an Indian? They calculated that India's Mean National Income was Rs. 4,500 a month, or Rs. 150 a day. Globally people spend about a third of their incomes on rent. Excluding rent, they decided to spend Rs. 100 each a day. They realised that this did not make them poor, only average. Seventy-five per cent Indians live on less than this average.

The young men moved into the tiny apartment of their domestic help, much to her bemusement. What changed for them was that they spent a large part of their day planning and organising their food. Eating out was out of the question; even dhabas were too expensive. Milk and yoghurt were expensive and therefore used sparingly, meat was out of bounds, as were processed food like bread. No ghee or butter, only a little refined oil. Both are passionate cooks with healthy appetites. They found soy nuggets a wonder food — affordable and high on proteins, and worked on many recipes. Parle G biscuits again were cheap: 25 paise for 27 calories! They innovated a dessert of fried banana on biscuits. It was their treat each day.

Restricted life

Living on Rs.100 made the circle of their life much smaller. They found that they could not afford to travel by bus more than five km in a day. If they needed to go further, they could only walk. They could afford electricity only five or six hours a day, therefore sparingly used lights and fans. They needed also to charge their mobiles and computers. One Lifebuoy soap cut into two. They passed by shops, gazing at things they could not buy. They could not afford the movies, and hoped they would not fall ill.

However, the bigger challenge remained. Could they live on Rs. 32, the official poverty line, which had become controversial after India's Planning Commission informed the Supreme Court that this was the poverty line for cities (for villages it was even lower, at Rs. 26 per person per day)?

Harrowing experience

For this, they decided to go to Matt's ancestral village Karucachal in Kerala, and live on Rs. 26. They ate parboiled rice, a tuber and banana and drank black tea: a balanced diet was impossible on the Rs. 18 a day which their briefly adopted ‘poverty' permitted. They found themselves thinking of food the whole day. They walked long distances, and saved money even on soap to wash their clothes. They could not afford communication, by mobile and internet. It would have been a disaster if they fell ill. For the two 26-year-olds, the experience of ‘official poverty' was harrowing.

Yet, when their experiment ended with Deepavali, they wrote to their friends: “Wish we could tell you that we are happy to have our ‘normal' lives back. Wish we could say that our sumptuous celebratory feast two nights ago was as satisfying as we had been hoping for throughout our experiment. It probably was one of the best meals we've ever had, packed with massive amounts of love from our hosts. However, each bite was a sad reminder of the harsh reality that there are 400 million people in our country for whom such a meal will remain a dream for quite some time. That we can move on to our comfortable life, but they remain in the battlefield of survival — a life of tough choices and tall constraints. A life where freedom means little and hunger is plenty...

Plenty of questions

It disturbs us to spend money on most of the things that we now consider excesses. Do we really need that hair product or that branded cologne? Is dining out at expensive restaurants necessary for a happy weekend? At a larger level, do we deserve all the riches we have around us? Is it just plain luck that we were born into circumstances that allowed us to build a life of comfort? What makes the other half any less deserving of many of these material possessions, (which many of us consider essential) or, more importantly, tools for self-development (education) or self-preservation (healthcare)?

We don't know the answers to these questions. But we do know the feeling of guilt that is with us now. Guilt that is compounded by the love and generosity we got from people who live on the other side, despite their tough lives. We may have treated them as strangers all our lives, but they surely didn't treat us as that way...”

So what did these two friends learn from their brief encounter with poverty? That hunger can make you angry. That a food law which guarantees adequate nutrition to all is essential. That poverty does not allow you to realise even modest dreams. And above all — in Matt's words — that empathy is essential for democracy.

[ajayhkaul]

Vinay ...These young guys have their hearts in the right place !

World produces countless things that cater to our many desires though non-essential. But thats what keeps billions employed with such economic activity.

A BMW is unlikely to flutter the heart of a 60 year old , but excites the higher hormone level younger crowd. New car registrations are falling in Europe but rising in most of Asia .Thats demography ! The 'old' Japanese and western population have passed their spending cycle so the economies are in recession.

So if India can distribute wealth better,bring back the black money stashed abroad, it would increase the consumption and rev up the economy.For that to happen , we need strong leadership. I dont see anyone of that calibre.

[ajayhkaul]

EU ready to Crack up? Watch Out

"....The cracks in the European Union are starting to widen.
Spain’s unemployment rate as of the end of 2011 is at a staggering 22.83%, while gross domestic product (GDP) is expected to fall by 1.7% in 2012 (source: ECB).

Amid these horrific statistics, the European Union is asking Spain why it didn’t meet the budget deficit targets set for it in 2011. Furthermore, the European Union wants Spain to implement measures to ensure they reach a budget deficit of 4.4% in 2012.
Spain has said that instead of the 4.4% budget deficit of GDP target demanded by the European Union, it will aim for a 5.8% budget deficit of GDP for 2012. With protests in the streets, attempting to cut the budget deficit to 4.4% of GDP would—in the Spanish government’s words—be political suicide.

The cuts would mean higher unemployment, which the country simply can’t tolerate.

the austerity measures are causing so much pain in these southern European countries that it was only a matter of time before they started to fight back against the European Union.


If the European Union sticks to its new laws and finds Spain in violation of the austerity measures, it could fine the nation. Yes, desperate to find money, Spain could further be fined by the European Union itself.

It is not only Spain, but Ireland as well that must alter its constitution to meet the austerity measures. This alteration has automatically triggered a referendum, which will take place sometime in the next few months. If the people vote against the austerity measures, then where does that leave Ireland within the European Union?

The unemployment rate in Ireland is 14.2% as of February. Its GDP barely moved in 2011, with projections for 2012 in the 0.6% growth range (although with the European Union recession already taking hold, this will be a challenge).

If Ireland fights back, where does the country stand in terms of the European Union?

The crazy part is that, besides the austerity measures asked for by the European Union, there is another major problem that could surface by the end of April.

France’s election will take place at the end of April. Right now, in the polls, the socialist candidate has a strong lead. If he wins, he has stated clearly he is in direct opposition to the austerity measures. Besides the austerity measures, there are other socialist laws he wants to implement that would be against the general direction of the European Union and Germany.

Where does that leave France within the European Union? And where does that leave Germany within the European Union?

Germany could say that it tried, but will not bail out the rest of Europe simply so it can remain within the Union, especially if the other countries want to play by their own rules. Germany might decide it would be better if everyone fended for themselves with their own currencies.

There are major, major cracks appearing in the foundation of the European Union. If they are not addressed soon, the European Union could disintegrate. If it does, the financial tsunami that would hit stock markets worldwide would be devastating. Be careful with this stock market rally

World economic growth is slowing. This concern is only now hitting the media and investors. The issue is not whether the bear market rally will cave in, but when....."

[ajayhkaul]

On march 3 I wrote in this thread (a follow up to my revelation of Feb 23 in another thread that while FII are buying , the DII are selling --primarily LIC). This advance info was in these posts exclusively from yours truly!

This insight ,for the believer , translated into serious money to be made with zero stress.

LIC has been stabilizing the stock market (and the indices therefore) by buying up the component stocks. An estimated 30%+ of the index was owned by LIC !

Here is what J Mulraj has written yesterday in his column :

The insurance regulator, IRDA, has expressed concerns over corporate governance in LIC for this reason. The commonly expressed concern is that the LIC is being used as a tool to bail out the Government, and has, under its instructions, bought stakes in public sector banks to recapitalise them, because the Government, with its fiscal deficit is unable to, and, more recently, bailed out the offer of 5% stake inOil and Natural Gas Corporation Ltd. (ONGC), through auction, by subscribing to 4.4% of it at the last moment.

In fact, during the past 11 months, the LIC has sold some Rs 35,000 crores worth of shares in private sector companies, (including blue chips like ITC, Bharti Airtel and Mahindra & Mahindra Ltd. (M&M)), to raise money to invest in PSU banks and in ONGC.

Guys ,Just do the math !

I am sure, dear reader, that you grasp the magnitude of this:

If LIC was to sell 35k cr without someone of equal or higher financial clout to buy , the market would have tanked to zilch. Did they know that it could be done without affecting the market too much?

So whats the deal ?

I can tell you that the FIIs are still holding fort and not pulling out almost an equivalent amount . Above this minimum level they are in the pump and dump mode at the moment.

Would they come in to hold fort for LIC unless they have a nice playing field ? Assured returns?

Figment of my imagination ?

Dont think so ... the FII holding and LIC holding /cash out data is in public domain.

Check it out and lemme know what you think ! End of trumpet! [/b]

[rk_a2003]

Good observation Ajay! Worth analyzing. You are proving the point that F.A is not just following the developments as they happen, it’s the ability to understand the dynamics and inter relations and it’s the ability to read in between the lines. It’s the ability to know the issues that are intended not to be known.

Now what are the indications we are getting…. Australia, China, India GDP’s came down .All the E.U countries registering lower GDP’s.Japan has become a classical example for a stagnated economy.

When all these countries are registering such a slowdown in growth how come U.S registering a rebound at 4.5%? Something strange.

We do not know yet how the financial meltdown affects the world economy .The Greece debts were accepted by EU banks for 70 to 75% losses. If it happened over night the world financial markets would have collapsed. It was released to the world after preparing them for the worst. Just a psychological game.

The situations are turning so hopeless that the world governments do not have any solution other than printing or generating E-money to induce capital for loss making Banks/ Institutes. This unprecedented induction of the trash paper has to generate unprecedented effects in the world economic front in a bad way. No one have an Idea how bad it could be?

Right now all the money induced is working like steroids for the equity markets. But continuous use of steroids may cause a death, in which form it is going to happen ….Let us wait and see.

I am getting a feeling that Indian Infrastructure has to get a big boost… that is the need of the hour (not only for India even for the world).Indian markets might do well in relatively long term for this simple reason.

On the other hand unfortunately War is also clinging on us. Large scale destruction is required for the economies to expand while constructing later. We can see some possibilities of that also.