some economic tid-bits!
My cousin asked me whether I could read the language of economic drivers...and i said 'i try to'...and then she asked me whether i could tell her when recession should end...i dont know whether she wants to test me or just wants to have my take...but guess what? what im game...because as long as i m crazy for a game, it don't matter whether i win or lose...here's wut i told her when she said that recession to her is just price correction:
As for recession, price-correction it is but more theoretically than practically, because we don’t exactly see much respite in retail pricing of commodities. No doubt, the current economic meltdown has arrested sky-rocketing prices of real estate. Actually, some of this correction had to happen. It is like you can predict with precision when the economy is going to nose-dive, there are symptoms that are easy to read. There’s too much money in the market and too less products. So whoever can bid high would walk away home with goodies. Last year if you remember things got so expensive out of a sudden, that it was dizzying. And the proverbial final nail in the coffin comes with real estate prices going bonkers-zonkers. Remember, the tiny most piece of land on marine lines had a cost of ‘are u kidding me?’ sorts. Whenever in any country prices of real estate goes this crazy, you know that economy is in for a correction. Moreover if you notice I haven’t even used the word ‘recession’ because we can’t be sure that it was recession. Recession is when there is negative growth in output and consequently profit for two consecutive quarters, in ALL sectors of the economy.But hey, hey, hey…Indian agriculture that was coughing for a long time actually got back on its two little pretty feet, however industrial output was pathetic….not because people weren’t working in it well, but because they were already over-loaded and yet couldn’t produce enough for all buyers. Another sorry field was IT..and banking (read private banks) that had a lot to do with foreign markets, and with foreign markets ….we mean USA…cause accept it or not uncle Sam was still the hugest economy that gave a lot of work to IT people thru outsourcing and bought a lot of Indian bonds …now started withdrawing their money after the sub-prime crises and crash of financial sector there….US economy shriveled like some old plum…and so they stopped or reduced outsourcing and liquidated their bonds ….suddenly Indian economy that depended heavily on these two sectors for looking good….started looking haggard. Anyways, with government doing everything in its capacity like modulating interest rates and not hiking taxes and announcing stimulus packages…things are bound to get back on track…the only delay that’s caused is psychological and election related. Psychological…because people’s faith in the economy has shaken…they never thought that Indian economy could tumble down this fast when we were riding on the high tide, so it will take them a while to go back to their old mode of splurging, buying and creating economies of scale. And Election…becuz until they are over…government is not actually going to start working on those stimulus packages of social and infrastructural development. I believe by sept-october ’09 things should start looking bright again. Not bright-bright but yeah…gud again!