adventure62

India: Heading for the Junkpile?

You are somewhat overstating the problem in India. yes, there is drought but country has stockpile of several commodities. Fiscal deficient of 6.8% i snot a big issue in the near term. Since the govt. program will create jobs and infrastructure. Money is used for right purpose and it will generate exports and efficiency. US deficient is due to military spending and bailing out the banks. These are two different situations. Just like any company, they have to borrow to scale the operation. Pay off will happen in 2-3 years. Indian govt. has not put the money with guys who do back door dealings and make hefty bonuses.

India: The Next Subprime Crisis?

Your analysis has severe flaws. Banks have lent the money against homes that were overvalued and hyped in prices. People took the equity out to buy fancy cars and vacations. When house prices fell, they filed for foreclosure.

Micro finance loans are given to small businesses. These people work very hard to protect their investment and livelihood. Default rate on these loan is nearly zero. Small businesses manage their assets very carefully and don't buy expensive items. They manage their debt very carefully.

Comparing the very small businesses to a US home owner is not correct and completely wrong. Problem in US is the huge debt taken by people. People spend money without watching their affordability. This is not true in Asia or elsewhere. There is no bubble in micro finance.

India: The Bear Case

Author claims to have a crystal ball about Indian stock market. No one has crystal ball !. No one had idea of OIL going this high and creating global inflation. Author seems to be an expert on world economy that is redicules. If author had so much clarity on India and China, he would not be working as chip designer. As a matter of fact, author will not be here. Investors with faint of heart leaves the stock market. Especially foreign investors, except some short tem hedge funds, stay in market since they know foreign markets are volatile. Claim of foreign investors leaving India is too far fetched. Author may have shorted the Indian market !

India: The Bear Case

I don't like the very first statement of " 10% of India's GDP would be spent on fuel subsidies, fertilizer subsidies and stupid farmer loan-waiver programs. That's a recipe for inflation".

"stupid farmer loan program"- is essential since India is having atleast 2000 farmer's commiting suicide every year due to crop failure. 70% of India's population lives in villages and govt. has done very little to help the rural India. Agro sector is essential to feed 1 B people. Govt. spends all the money on technology parks but has done very little to open food procesing parks. Blaming on poor farmer is redicules for failure due to other policies. 70-80% of farmers in India have less than 1 Acre of land. People do not undersatnd teh amount of work needed in agriculture. Farmer's in India don't want to make their children as farmer as they see only misery and very little support from Indian Govt. China supports their agro business in very big wany in terms of subsidies. If India looses these farmers, who will feed India?

Battle of the BRICs: India vs. Brazil, Russia and China

You are making hand waving arguments and saying I have to get hard numbers. you should write an article with hard numbers or data that supports your statements. You are making open ended statements and everyone knows the impact of oil. Oil prices imapact the whole world and not just India.

No one has commented on the savings of middle class and how capital inflows from these people will impact the economy.

Invest Globally, Not Just Locally

I agree with Mr. Sethia but let me point out few things about US corporations. Everyone has seen the failure of several companies
TYCO, WCOM,.....A good number of US corporate management is only interested getting their stock options and inflating the short term stock values. Very few companies have management that is not looking at personal financial greed. There is a severe corporate governance and ethics issue in corporate America. Until these isues are fixed, American companies will loose out to better managed foreign companies. Subprime issue shows the fickle and corporate greed of American financial institutions. If one takes all these variables of corporate America and compares the foreign markets, US market is equally risky. Manufacturing has gone from America and that means loss of R&D and other work. US companies will not be able to survive very long if they continue to focus on short term stock manupulation. Just look at the pay package of CEOs. It says a lot about companies !