iCharts Discussions

[sonila]

Thnx rk for new posting, informative as usual.

[rakeshliving]

Thanks RK_a
please enlighten us on FII and DII war too....
DII selling and FII buying.... FII buying and DII selling....!!!
confusing.... Confusion...!!!

[rk_a2003]

It was suspected by some people and also by MMM that there could be large scale printing of stealth money.

Watch this news item.In this Benn Swann has argued that the US Fed needs to go through an audit .He also accused it of giving out US$ 16 trillion in secret loans during the last financial crisis to the Financial Institutes and corporations in U.S and all over the world.
Will the audit open a can of worms if approved for?



http://www.youtube.com/watch?v=mqmYRnBVmEo

[rk_a2003]

The Effect of The Stealth Money

Economies all over the world are either stagnated or going down. The growth rate of BRIC countries travelling south wards. European economies are in serious troubles, in fact their economies are retarding. The US economy is struggling hard even for maintaining status quo even after pumping in enormous amounts of fiat money in the form of QE.

Coming to India the GDP growth is revised around 5.5%, forget about 9% or 7% which we heard till recently. A bad monsoon with almost 40% deficit rain fall may trigger scarcity of agricultural products. The scope of high inflation persists and Interest rate cuts will be impossible for RBI.

When the situation is so bleak how come stock markets all over the world and in India are rallying? It should be the combined effect of official money printed in US and Europe and also of the stealth money which is said to be distributed in trillions.

Yes, money is liquid and liquidity can drive up the Equity markets irrespective of fundamentals. Right now money appears to be flowed in to stock markets, once it sniffs opportunity somewhere else; It may rush over there.

I sense new opportunities brewing up else where.The money must have started flowing in that direction. Once this process speed up and liquidity shuns Equity markets.It is anybody’s guess regarding what happens!

[chetan83]

[rk_a2003]

"As a simple layman what I can understand with the revision of Indian GDP to 5.5% is that.....next time when official announcement is made that GDP is 6% or more....then the equity rally can be much stronger....
Agencies do upgrade and downgrade....what really matters is the PRICE on screen."

Even that is not required for a rally Chetan.A mere 700 cr order confirmation can take Infy up by1.36%. Less than expected losses can take BPCL up by 3.6%.

You are talking about 6% GDP.An announcement by Met. Department saying that the rain fall deficiency is not 40%, it's just 25% is enough to trigger an equity rally. That’s the power of liquidity.

It can discount real bad news and can trigger rallies on less bad news.

The price on screen do matters but what is driving that price? Knowing that keeps you away from the mist, myths and mysteries.

[rk_a2003]

The inflation for July is 6.87 against an expectation of 7.37.There is every bit of chance for its upward revision at a later date for the reason that it has not accounted for fuel price hike. The main reason for this lower than expected number is significant drop in vegetable prices due to the onset of the monsoon.Which is a temporary phenomena.

The core inflation still remains high for which one should be concerned about.Subba Rao is not ready to scale down interest rates for the same reason and he declared his intention already. Still market went up..

This is what happens to liquidity driven markets --for a mere announcement of lower inflation figure which is going to be revised upward in future, the market zoomed up. A less bad news that too for time being is sufficient for a rally. .That's what MMM exactly said earlier.

People say market always discounts future .It’s just discounting bad news and rallying for less bad news. I never heard from any quarters saying that it discounted good news. Why not?! When it is able to discount bad news why can’t it do the same with good news.

The markets worldwide are rallying with an acute divergence of Fundamental scenario.

Market may reach new highs and can create records but clearly that can not be sustained in the given fundamental scenario.

[vinay28]

PC will force subbu to reduce rates

[rk_a2003]

[rk_a2003]

[vinay28]

sure RK, ASAP.

[vinay28]

RK, a comparison of nifty with BDI attached for 6 month and 3 year periods. I find it very interesting because nifty is gradually deviating from BDI i.e. it is rising even as BDI is falling. As I see it, India is delinking from global markets, thanks to an economy driven mostly by domestic consumption. Hope my interpretation is right.

[rk_a2003]

[vinay28]

yes rk but are other indices as divergent as nifty?

[rk_a2003]