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The Grand Illusion

Discussion in 'Snippets of Life (Non-Fiction)' started by Kamalji, Jan 6, 2009.

  1. Kamalji

    Kamalji IL Hall of Fame

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    The Grand Illusion

    <?XML:NAMESPACE PREFIX = O />
    (This is a dry blog, so if u dont comment, its fine with me.So dont feel guilty about not commenting)

    Financial Meltdown – For the life of me I cant understand what has happened that the whole world’s finances have collapsed.I was more than surprised today afternoon, when eating lunch, NDTV flashed that Obama thinks the American economy is worse and getting bad by the day.Coming from the President of America, this is something !!!


    <?XML:NAMESPACE PREFIX = ST1 /><ST1:STOCKTICKER>DNA</ST1:STOCKTICKER> was being given out free at the Airport a few days back, and being a Sindhi ,anything free is damn good for me.Front page caught my attention.It was reported that Reliance Industries, had booked forward contracts of oil at Dollors 80, 100, and 120, when the oil today is close to 40 dollors.And Reliance stands to lose 8000 crores bcs of this.


    Tata – HT reported, that most of the troubles of Ratan Tata are of his overambition.He bought Bentley and Land Rover for 2.3 Billion Dollors, their 6 months results have a 600 million losses.And he has to pay the money fast.The rights issue flopped, and they are asking the public for deposits at 11%, to which some of my friends have subscribed.When Govt banks are giving u 10.75% ,safe and secure, what is the use of taking a risk at 0.25%, god knows.Greed again


    And look at this strange anomaly.On one hand u want to give the Indians the worlds most expensive Cars,and then make a cheap Car called Nano.I cant understand the logic.


    And Corus Steel is bleeding too.


    Laxmi Mittal – He has lost 21 billion pounds of his wealth and is left with 11 from 32, that is a third. He bought Arcelon, or what ever they call it, at a very high price, and he is paying a price all right these days.


    DLF , Satyam, and all the high and mighty are licking their wounds right now, and who knows the wounds may turn grevious and bleed them to death.


    And what about our geniusius, the IIM guys, who were lapped up at ugly salaries, by the now defunct Leeman brothers,Goldman,JP Morgan and the likes.They were hired as investment bankers.They were the ones who traded , rather gambled aggressively , on the future prices of Oil, metals and every damn thing possible, even rice and other things.


    And their bonuses were dependent on the profits they made for the company.The newspapers reported that they would place a 5 dollor against a deal of 100 dollars, so they could spread the gambling to 20 times the money they put in.


    Everything went up and up, greed drove everyone to gamble more and more.The more u gambled, the more u got the bonuses .And all this by the highly educated IIM guys, did they not know that our forefathers, used to gamble on Cotton ( Kalbadevi, in Mumbai, is still called Cotton exchange) , and they were uneducated in literate terms, and u guys being so educated, did the same as them, and brought ruin to yourselves and to the World. Is this what yr parents spent money on teaching you, to gamble.Shameful to say the least.


    Rice – Today’s papers said, Rice exporters are in Trouble.Rice prices have fallen to 25% since July this year.And they are holding expensive Basmati Rice, for which they paid a very heavy price, and Indian cant pay even half their purchase price.They paid the Punjab and Haryana Farmers a fortune to buy the Rice, and those guys aer laughing their way to the Bank.


    Failed predictions – All predictions by the so called experts have failed miserably.In June Goldman Sachs said Oil will go to $ 200 (now 40), dollor 35 (today 49), metals have crashed , rice was not served in the restaurants of UK, and today there is surplus of rice and that too damn cheap.


    Greed has brought about this downfall and ruin on this world.And I have no sympathies for anyone.Everyone deserves what they have got.Some of my rich cousins all over the world, are in very bad financial states, as one was telling me, his $ 4 million house, is now worth just half, but he is paying the monthly installments on the 4, and he has no cash, all invested in stocks, which are like 25%, and property which is less than half, and everything under mortgage.


    Serves them right.what they have made over the last say 20 years, they could just stand to lose that in the next couple of months.


    And just wait, look at India.Till the elections, due in March, the Govt will prop up everything, the stock markets,they may bring it up to levels of 12000/14000 with the help of the cash rich LIC, UTI, and other institutions, layoffs are deferred as a deal with the industries, like the Jet Airways fiasco, in return they were given more time to pay the oil bills, and landing charges, in return for not laying off staff.Indians are being kept under false illusions that things are better here than abroad.


    After the elections, I think the markets will crash to around 5000 levels, in the coming one year, or earlier, there will be massive layoffs by Reality groups, Airways, and Hotels.

    Nobody used their brains to figure out , how the hell could all the shares rise to such ridiculous levels, the land prices skyrocketing, did they not think the bubble will burst someday?


    As the holy book Geeta says, beware of Kaam Krodh Lobh Moh Ahankar.Here it was the case of Lobh, which is Greed.


    And all this hoopla about India Shining, and that we are insulated from the World, our Fundamentals are Strong, where are those Sw####s now, I want to shoot them u know where.


    Serves right to all those who have lost money, including me, I too dabbled something and lost.This was all a Maya Jaal, an illusion, that had to burst one day, and it did.


    And as for the next few years, all I can say is AMEN


    KAMAL MAHTANI
     
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  2. Shanvy

    Shanvy IL Hall of Fame

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    Kamalji,

    Happy new year.

    Well the predictions are really terrifying. I also have been thinking that things are going to take a long time. as long as sbi, lic are relief boats for the government to survive.

    Even thinking about the election is real scary, as what is in store for the common man after that is real pathetic.

    Recent news is most of the automobile industries have closed productions for days , it is more like 4 days off.. ashok leyland, FORD all of them...

    You are right, i was looking at the placements by lehman last year of a fresher for 14lacs when many experienced persons were not getting that kind...now what happens to these people...

    Well lehman, and other really lured people with the illusive web and played with the greed in the human nature...

    Today dabur which had a huge pipeline for big stores, around 1500 to 2000sq.ft is now reduced to 900sq.ft.

    You are right about the sensex, there is a lesson..veda told me to sell when i doubled, i said i will wait, because of the greed, so have some losses..

    I am more worried about the people who went in booked flats at whopping 70lacs and 1crores..how are they going to pay the EMI's if they are not able to retain their jobs..and most of the housing loan agreements have very definitive defaulters clause...

    India Inc is very shrewd kamalji, you will not see any fiasco's like jet airways, people don't talk about job cuts and pink slips, it is happening...

    I only pray to God that we tide over the situation with a lot more resilience...

    What a mess....
     
  3. vase

    vase Senior IL'ite

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    Dear Kamalji

    I think this is one of best pieces of yours that I have read till now. My :hatsoff:hatsoff to you!

    The way you have linked the economic slowdown to the Gita is truly wonderful!!

    Yes... the growth in the 3-4 years (2004 - 2007) was really really very fast and looked very very "unreal". The year 2008 proved it finally ! and the way, it did, is indeed a great lesson for future.

    Even though I havent dabbled much into raw stocks, I have burnt myself in MF's - some of the investmenst that I had made in late '07 are reeling under huge losses bonkDrowning I look at it as a great "lesson"... I liked your word too ... 'Illusion'!!

    Great piece, once again!

    Regards

    P.S. Couldn't resist myself from nominating this for the FP of this month!
     
    Last edited: Jan 6, 2009
  4. Kamla

    Kamla IL Hall of Fame

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    Dear Kamalji,

    I agree with Vase ! This is a real good post from you and very timely coming at these troubled times.

    The US scene is looking gloomy too. Everyone is expecting wonders from Obama and already his starting days at the White House looks bleak as he is stepping into very shaky conditions. Now that action in the Gaza border has stepped up, his cup is more than full. Will he get all the support he needs and will he deliver ? Weighty questions indeed.

    At times, I feel may be those in the know how may play all the cards just to exploit certain situations. Let's hope the same guys can also fix it. My heart does go out to all those who jumped into the arena and bit the bait, mainly the ambitious middle class. Would hate to see disappointed young people being driven to unthinkable acts driven by desperation, as in California.

    Well, I do not write here as the mod of FP where your post has been nominated! I read half of it this morning and by the time I got back to it again, you were nominated and fbs are rushing in! You always click Kamalji, you do:)

    Congrats btw!!

    L, Kamla
     
    Last edited: Jan 7, 2009
  5. Anandchitra

    Anandchitra IL Hall of Fame

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    Kamalji
    Happy New Year 2009!!!

    Atleast once I should have read the bold lettered disclaimer at the start, and listened to it as well.

    This is certainly dry and so unlike my bhayya:):):)
    Also I am not in the league of beautiful ladies who have replied ahead of me..
    I really could not understand much and going over to see Bingo and Tuffy. What say?!
     
  6. Kamalji

    Kamalji IL Hall of Fame

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    dear Shanti,

    thanks for doing the booni for my blog, and commenting , when i had warned u not to comment.Big Laugh

    Yes what u say is true, as also look at Big Bazar, heis in a big soup, as also Reliance Fresh, too much expansion too soon.

    this year and the next is going to be very bad.

    Yesterday after i posted this blog and went down home, saw NDTV, they said, the worst is yet to come.According to the Exporter Ferderation, about 10 million jobs will be lost in the next few months from the Garment Exports.

    that means 1 crore people jobs lost, that is besides the software firms job losses.

    Everyone was in the expansion mode, not realising that, if a slowdown comes, they will have huge debts of bank loans on their heads.

    and about the second homes, well a lot of my friends in jaipru have gone for that, and today everyoneis crying.Luckily i did not get trapped in the greed taking place, and i stayed out.For me small returns are good, like the Bank Fixed Dposits, i do nt want to soar one moment, adn then falldown with a thud the next.

    Regards.kamal
     
  7. Kamalji

    Kamalji IL Hall of Fame

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    Dear Vase,

    Thank u so much fiorst for commenting, and then for nominating.
    I posted this yesterday night, and today morning before i opened the computer, i thought of deleting this blog, as it was tood ry, and i thought , let me post another humourus one that is ready, but here i am in for a pleasant surprise eh ! Being nominated for a blog, that i was about to delete.HAHA

    In the next few days i will post a blog here, called " The Crash is coming"
    posted in another blog site, dated 13th Feb 07, two years back, wherein i had predicted the Crash coming veyr soon, and i got a lot of comments saying i did notknow finance.

    Well u will read that in a few days here itself.

    Thsi was before i joined indus,

    the growth i could not understand, everything was just going up, everyone was expanding, i could not find office help here in jaipur, everyone rushing to Big Bazar to work as salesmen,who even 8th pass, got 4500/- to standin the Air condition, and no one wanted to work with people like us.

    Now there is a flood, but my season is about to finish.

    Thanks Vase,for the nomination and the kind words.Regards.kamal
     
  8. swathi14

    swathi14 IL Hall of Fame

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    Dear Kamalji

    It is excellent post and by studying we can understand how worst the world is now.

    But you are worrying about Ambanis and Tatas who are only losing a small bit of their wealth.

    Think of a common man - who lost his job and has to manage the rising price level. It is unimaginable.

    You wrote in your post that it is the case of LOBH - greed.

    I think it is the common man who is paying the price for the greediness of the politicians / private sector entrepreneurs.


    Andal
     
  9. Balajee

    Balajee IL Hall of Fame

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    Kamalji, it is not just Lobh but Ahankar as well. Take the case of Ratan Tata, a man with spartan tastes who does not flaunt his wealth vulgarly like the Ambanis. It was his pride that sent him on the Corus, Jaguar(not Bentley) and Jaguar Hunt. As for the Ambanis, how many yachts and private jets does anybody need. With that kind of money I would rather travel 1stlass on air rather than buy my own plane. My principle is make enough money to live comfortably but not enough to give you BP worrying about your wealth.
     
  10. Shanvy

    Shanvy IL Hall of Fame

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    Kamalji,

    I am back. let me tell you my boni is good for others..
    jokes apart, i am back because this is one of my pet peeves..

    Did you check today's news.. Satyam's CEO resigns.. how long could they have kept cover on this issue..if the world back did not give a bonk
    the auditors are blamed, now let us wait and watch...how many jobs go..and how many people pay for the greed and bigger than life ambitions...

    German billionaire Adolf Merckle has committed suicide, in despair over the huge losses over his speculation on volswagon yesterday.

    The other to be watched is Future group that is on a expansion.

    last week i saw a ad of a leading promoter in bangalore, giving out mercendes benz car for every booking of a villa..we are looking at cutting short our losses..

    ultimately india inc is going to make the common man shoulder all the losses...

    we are in for big time surprises, shocks and problems for which 2 years is not going to be enough...

    the bubble burst, the ripple/dominoes effect is slowly felt, we are not still in the receiving end..
     

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