Second Budget Reaction at Market closing a few Hours later….Pranab’s Budget has shorted the Market

Pranab’s Union Budget has shorted the Market !

Ironically It’s Reliance Group Founder’s Dhirubhai Ambani’s Death Anniversary today… Arguably the Father of Indian Equity… He was the King in Capital Formation through Equity….. we probably need him to resurrect… to resurrect our Markets !… he build his flagship on scaling up a Domestic Consumption Story… we need to stimulate the same today… his vision, experience, inspiration, motivation, ideas and leadership would have helped…. You can corelate our huge Fiscal Deficit with Dependency on Oil Imports and being victimised by the huge surge in Oil last year to US $ 145/barrel…. Reliance continues to lead the way in the Private Hydrocarbons Sector in building World Class Refineries and Exploration of Oil and Gas…. Clearly it was Dhirubhai’s Vision to help make India a World Class Country and less Dependent on Oil Imports… His guidance in aiding the Government in Capital Formation through Equity would have been invaluable… He would have had the crucial retail Investors support too.

And how in the Hell did Planning Commission’s Montek Singh Ahluwalia keep stating, in the past few days, on the media to millions that the Union Budget will be Popular !

Was he deliberately misleading, like many of our market operators do, or is he as inarticulate as Finance Minister, Pranab Mukherjee !?…. ‘Popular’ Indeed !… Market has Popped !… Sensex has closed down 870 points at 14043, having breached 14000 earlier… It’s down over 1000 points from Intra day Highs of over 15000 just before Pranab began his ‘to be popular’ Budget Speech… Nifty closed at 4166, down 259 points

And come to think of it even our Finance Minister had told us to Wait for the Budget !… and so we waited… and now we’re worried and those who bet long are even wailing !

It’s not just a coincidence I’m wearing ‘Red’ today !… my past blogs would support this T-Shirt colour code for today !… you thought I was wearing a Red Shirt, did you !?

I do hope to wear ‘Green’ soon though !

USSR broke up physically in 1991…USA is breaking up economically now

It’s Uncanny really !

Two super Powers,USSR and USA being brought to their knees….the former suffering,both, physical and economic disintegration and the latter in the midst of it’s worst economic crisis…self inflicted,I daresay.

Breaking up of USSR in 1991

Vladimir Lenin founded the Union of Soviet Socialist Republics or USSR for short in 1918.It was born to die ! It collapsed into the Commonwealth of Independent States in 1991…The Soviet Communist Regime Lifespan lasted less than 75 years and died in the same Twentieth Century…The breakup was aggravated,provoked and prompted by the fast plunging economy and several area disputes between many republics that were leading to armed conflicts

Breaking up of USA in 2009

It’s July 4,2009 today and  USA celebrates it’s Independence Day…..Nothing really much to celebrate though,as  It’s first Afro American President has inherited a disastrous Economy…it’s States are fast disintegrating fiscally…..will each Independently fall !?….California is bankrupt.It is USA’s most populous state with 38 million people and a GDP of US $ 1.8 Trillion,twice that of India alone…as it’s celebrity Governor,Arnold Schwarzenegger pleads Our Wallet is empty.Our Bank is closed.And our Credit is dried up “

Expect California State Bonds to be downgraded to junk status…..It’s going to send Stocks crashing in USA ….Danger of other States and Counties living this Californian Nightmare too is very real

Unemployment figures in USA ,that were just released, show a further 467000 rendered jobless in June 2009 ….taking the Unemployment rate to 9.5%,the worst in over 26 years..the figures shoots over 15% if you consider the part time and discouraged workers

We have had 52 US Banks failing this year more than twice in number already from the 25 that collapsed in 2008 and we had three sinking in 2007.As of last quarter end the Federal Deposit Insurance Corp (FDIC) had 305 Banks on it’s troubled List with US $ 220 Billion in assets

Increasing Unemployment is leading to acceleration in Defaults to Banks…this compounded with Banks exposure to high risk Investments like CDOs is a double whammy…Banks have lend and they have invested and both Assets are in default mode with severe recovery problems

It is feared that Employment statistics will only improve and stabilise by 2012…only then will we begin to see a revival in the Real Estate market in USA as Citizens will have monies to invest in Houses…The Asset Bubble that developed in Real Estate is largely to blame for the near collapse of USA’s Financial System….High Unemployment is a hurdle to any Revival in the Real Estate Sector…It is estimated that in USA, the earliest that we’ll get to see Real Estate at prices of 2007 again,will be in 2017…five years after Employment is expected to stabilise  read more

A Weekend sandwiched between two Bong Budgets

No Disrespect,but we find ourselves sandwiched on this weekend between two Bong ‘JEE’ Budgets

From Friday’s Narrow and Metre Track Railway Budget by Mamta Baner’JEE’ , we move to Monday’s Broad Gauge Union Budget by Pranab Mukher’JEE’….gauge reference is  in context of scale and content both.

Yesterday, i.e. Friday,we had Trinamool Congress’ Mamta Banerjee,Railway Minister in this UPA Government, presenting her Railway Budget….Don’t see her as a Visionary…more aggressive and acerbic and whose acoustics and antics display asperity…all alliteration intended…I do concede she was pleasantly more mature in her delivery in the Lok Sabha yesterday…less of a Firebrand and a Firecracker that can erupt any moment…a reputation she has cultivated for herself. 

All that I can say on her Railway Budget Pronouncements yesterday is that she too, like her predecessor,succumbed to playing State Politics…from one ‘B’ to another…from Bihar to Bengal…fine print reveals the the largesse to Bengal,her Home State

All I can further opine is to quote Benjamin Franklin ” Well Done is better than Well Said “

Now we await Monday and the Union Budget… exceptional Hope and Hype precedes this day as Pranab Mukherjee will enjoy a clear mandate this time and the reforms process should be put on a fast track…However,I don’t see him too as a Visionary…more a legendary Party and Family loyalist and lackey and therefore his Latitude being lassoed by this constraint…all alliteration again intended…..Well Respected veteran columnist ,Kuldip Nayyar highlighted this in his column last week when he commented on Pranab Mukherjee’s loyalty to Prime Minister,Indira Gandhi during the 1975 Emergency imposed in India…one of the darkest periods in our Democracy.

So Pranab Mukherjee may announce some very forward looking pronouncements on the three ‘D’s…Disinvestment,Decontrol and Deficit Controls

Yet,all of you can expect me to repeat Franklin’s Quote

Oh Yes ! Sensex may zoom towards 16000 instantly in immediate reaction to such pronouncements…Sensitive Indices are designed to do this !

Just don’t get too carried away by all the Generous and Flattering Comments that you will inevitably hear on the Media Channels from Anchors,Experts,Business Heads,Politicians from the UPA,Bankers,Economists etc…Many have already drafted some cliche ‘phrases and quotes’ read more