Category Archives: Capital Markets

5 Questions, Capital Markets, Finance, People

How to Create Economic Growth in America- 10Aug2010

1 Comment

Michael Pento, senior economist at Euro Pacific Capital, and Dan Greenhaus, chief economic strategist with Miller Tabak, debate the issues in this clip.

I strongly disagree with Michael Pento, who says a depression should be encouraged in America. His view that the govt. should be as impotent as possible, is one of the most funny statements in the recent months. The need is to increase the money supply, not decrease it. The asset prices (home prices) will automatically fall down gradually in the coming years, based on demand-supply, but it will avoid a crash. Today is not the time to trim the role of the Govt.

If anything can prevent America from depression with deflation, it is the US Govt taking the lead with offering new economic stimulus packages – for infrastructure, for education, for vocational training, etc. Fiscal policy levers/incentives must be used to spur private sector growth, where in the govt. either becomes a buyer or actively sources buyers through export opportunities.

The need is for the govt. to take charge and play a major role. US businesses alone can’t do much. In addition, taxes on the rich must be renewed, not removed. Unless job growth happens, no real economic recovery is possible.
-Shankar

Artificial Intelligence, Capital Markets, Finance, MyOrbit Blogs, Risk Management, Software

Thoughts On 1000 Point Fall in Dow Jones

http://graphics8.nytimes.com/images/2010/05/07/business/07trade_graphic/07trade_graphic-popup.jpg

Create a massive fall in the market large enough to trigger stop-losses typically set up at 5% drop, and then buy blue chip stocks at 30% less price before they recover, sell Put Options at 1000% gain, blame it all on computers and trading algorithms. Some person or some company somewhere has walked away with billions in profits after this event. It looks very well planned. This event was most probably an example of higest form of market manipulation, a bold master stroke, though illegal and unethical.

To find answers, we need to check the money-trail. Continue reading →

Capital Markets, Finance, People

Expect A U-shaped Economic Recovery – Economist C Rangarajan

In an exclusive interview to NDTV, C Rangarajan, former Governor of the Reserve Bank of India (RBI) and currently the chairman of India’s Prime Minister’s Economic Advisory Council, says it is going to be a U-shaped economic recovery where we will see periods of economic stagnation. He further said in 2010 there could be some stimulus withdrawal.

In the short term, the conflict between inflation and growth always exists. As of now, there is no case for raising interest rates, at least till inflation is below 5%. The food price pressure will remain for the next 2-3 months.

Rangarajan sees price pressures due to inflation from growth, and oil prices will play a key role. 9% GDP growth for India is possible after the world economy has come out of recession in FY 2011-2012 by when the global trade will pick up.

Business Services, Capital Markets, Consumer Goods, Energy, Healthcare, Insurance, Outsourcing, Retail, Technology

Alpha Neuron – Business & Investment Advisors

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Business Strategy, Capital Markets, Industrial, Market News

Indian Cement Industry: Proposed Demerger of Grasim Cement Business

For those are who have been following it, the Indian Cement Industry is rocking. It has been one of the best performers in fundamentals and also in the stock markets.

Vallabh Bhansali of Enam Securities comments on the proposed demerger of Grasim’s cement business and formation of a wholly owned subsidiary called Samruddhi Cements, which will ultimately get merged with Ultratech Cement, which is also part of AV Birla Group like Grasim.

Ultratech has shareholding in it by rival Larsen & Toubro, so that could be a reason why a direct transfer into Ultratech is not being done.