Dubai Crisis- Is it the end or the tip of the Iceberg?

Dubai Crisis- Is it the end or the tip of the Iceberg



We all know that the financial crisis in Dubai World is due to heavy exposure in Real Estate Investments and the fall of property prices, and a very little demand for the already completed projects.


Money is locked in declining assets. The same scenario was seen in 2008 in US with large Investment Banks collapsing under their weight by holding huge exposure in real estate market. The ripples of that effect was heard in Asian and European Countries also.


But at that time, the asian countries some what remained insulated from that effect. In India also, those effects can be seen by the fall of property prices and lack of demand.


Now the million dollar question is whether the worst is over or the worst is yet to come. Normally, when a financial bubble is burst, its effect can be seen for 5 to 10 years. For example, the dot com burst had it effect for another 10 years. The same is going to happen now also.


In India, large number of IPO are coming in Infra, Power and Reality sector. This indicates people are still confident of this sector. It does apply that the worst is yet to come. We are likely to see Dubai Crisis scenario in coming months in some Asian and European Countries.


What I feel is that the Dubai crisis is just a tip of the Iceberg. When the whole Iceberg is known to the world, I don’t know how it is going to affect our career and living.

How will be the crude oil prices in the months to come?

How will be the crude oil prices in the months to come?
The crude oil prices which was hovering around 12 to 15 dollars in 1998 has started the rally from that level towards 145 USD in 2008. A correction was set from that level.



Before the end of 2008, it tested USD 30 region and bounced back towards 80 USD. Since then it is trading in the region between USD60 and USD80.


Technically every Markets peaked in 2008 except Gold. Crude oil also peaked in 2008. The peak of Crude Oil was coincided with the start of recession in all global Economies. The demand for Energy was slowed by the slowing down of global economies. So the prices of crude oil stabilized around 70 USD in 2009.


Unless the Global Economies start showing growth the demand for Crude oil is more less would be the same. There would not be significant increase in the demand.


No Economic cycle shows fast decline followed by immediate growth. It will surely take to start the next cycles, which means we are likely to see some more years of downtrend.


Until then, we can be sure that oil prices would move above the 80 Dollars mark in the near future. Technically also, any which corrects itself more than one third will see a severe bear market. So, crude oil prices are likely remain in a range below USD 80 for few more years.


I may not be astonished in seeing Crude below USD30 in another 2 years.

Will the downtrend in Gold continue?

Will the downtrend in Gold continue?

After testing a high of 1226 USD Gold has reacted from that high to test a recent low of 1100. A 126 USD decline is a significant decline from the high. Such a decline in the past 6 months was not seen.
Previously I have been advocating that we are developing a ‘Gold Bubble’ and it about to burst. Will this decline foretell the end of the bull Market in Gold.
One of the famous tools used by Analyst to forecast free Markets is Elliott Wave Principle. Based on the study using that tool, it points we are in the fifth wave of a impulse, which means we are in the last leg of the bull Market.
According to the theory, If this is going to be the last leg of the bull Market, then we are going to see a big decline for another few years to come.
Ok, If 1226 is not the top, then what will be the Maximum target for Gold. Yes, based on Elliott Wave principle, we can derive a target of 1400 USD in another 6 months period.
Whenever a commodity is largely discussed in Media, then that would mark the significant turning point of that Market. Gold is being discussed in all world media and it is the only commodity which is in limelight for the past one Year.
Last when Crude oil Prices were peaking, the same story happened. Media covered Crude oil daily and their focus was on Crude oil with analysts predicting 200 to 250 USD as price Target.
Now, the same thing is happening in Gold.
Let us wait and see whether History repeats itself……………..

TRADING TIMING CHANGE , THE REASON BEHIND IT

SHARE MARKET TIMING CHANGE , THE REASON BEHIND IT

The ego battle between India’s two exchanges comes to a permanent halt.  Bombay stock exchange advanced its timing by ten minutes, reacting sharply to it National stock exchange advanced its time by 55 minutes to 9 A.M.  As there is no other option the Bombay stock exchange also announced opening at the same time.  There is so many mixed reactions in the market most of the peoples object this arbitrary move.

The original move was to check the foreign fund managers using the Singapore market to beat the Nifty by short selling the Nifty futures options over the Singapore market.  Even now also they could not resolve this problem, why because the Singapore is still open well ahead of our revised timings.

Before this revision the BSE will set bench mark prices because by that time NSE may remain closed and hence the BSE will set bench mark prices.  But now the NSE will lose this opportunity.

But there is so many operational hardships are there.  The banks will not open that much earlier hence arranging funds will be a problem other than the strain on their daily routine.

Most of the peoples related to this field oppose this arbitrary move and they feel that they should be consulted before taking this move.

Economic Growth and Social unrest.

Economic Growth and Social unrest.

The Economic growth of a Country is interrelated to the peaceful social conditions of a Country. A social harmony in a country would automatically turns into a peaceful Business atmosphere.
A peaceful and harmonial social environment of a Country would attract foreign Investors to invest in their country. Local businessmen would be doing business peacefully which in turn would put the Economy in growth path.
One best example of Social harmony is important for Economic growth is, India and Pakistan. Though India and Pakistan were in the same plain in the 1990s, India turned out to be big Economic Power by 2008.
The reason is the social unrest in the country had put the economic development into the backseat. Frequent bombings, Killing of Political figures, hate campaign against the westerners has presented a poor picture on that Country.
That has dithered away potential Foreign Investments from that Country. On contrary, India which is having a vibrant democracy and rule of the law has grew leaps and bounds.
When comparing India with China, we say the growth of China is better than India because of this Social harmony factor. Even though our environment is much more better than Pakistan, it is not better than China.
In India, we had frequent terrorist attacks, bombings and political unrest. But in China, there is no such incidents taking place. That is why the growth rate is higher for China than India.
If a country wants to grow Economically, then it surely should have a peaceful social atmosphere.