well the article is good..and it seems true also...and might be it is true.... but we all know these are theories aNd risk and starategy analysis.....US IS NOT DUMNB AT ALL.....everyone wud aGree on this....US has minds and companies and think tank who are watching all these things...and keeping a check on it....americans or any other person in world will do good for themselves...no one plays to loose......so if some have dollar pools other might have something to give on return...its GIVE AND TAKE EVERYWHERE....wat i wanna say personally is that at the end of day...world becpmes a better place to live.....but this thought seems very poetic...
RE:we are missing a point.....
by Gagan on Dec 18, 2007 09:45 PM Permalink
You seem to be sold to American ideology and supremacy without even thinking if their supremacy deserve to be idolized by likes of you. If, as you say, they are so smart and not dumb at all, and have a think-tank full of intelligence, how can you explain the current housing problems and credit issues related to over-the-top lending by credit institutes? Where as the think tank when all this was started off two years ago? Noe one could see foresee what was coming as a result of the credit policy put into practice then? The fact is that even a high-school drop out layman had the sense of knowing what was brewing behind the relaxed credit policies.
The scenario painted by the author is not a "theory": it is a reality. USA's strategic silence on everything Chinese speaks volumes about it. The US policy makers are wrongly focusing on war on terrorism - completely ignoring what is coming to them in the financial market in near future. Time is not far when every American would be cursing nixon for opening up relations with China - because that's where the roots of all the financial war lie.
RE:we are missing a point.....
by Jalaluddin on Dec 18, 2007 08:16 PM Permalink
36 CRORE INDIANS SLEEP HUNGRY EVERY DAY AND WE WORRY ABOUT USA ALL THE TIME. SUCH APATHY.
RE:we are missing a point.....
by qween on Dec 18, 2007 09:22 PM Permalink
jalaluddin ,why u came to this page? it must have attracted u...it might bother othrs so let them do what they want
RE:we are missing a point.....
by Seenu Subbu on Dec 18, 2007 11:54 PM Permalink
Bhidu, 90% of Indian IT/BPO market relies on the US markets. India has to worry about American economy, as do most other parts of the world. 36 crore Indians need to move their butt and make it happen, like the other 65 crore have been busy doing it! There is no magic wand that will solve their problem.
RE:we are missing a point.....
by Ravi Shah on Dec 18, 2007 11:46 PM Permalink
Jalaluddin, dont worry about those huge no. of foolish Indian beggars. They want free money without work. I wish they are dead before long ! This is the law of Nature dude. Only the fittest can survive ! Work hard and you get money.... Giving birth to 5-6 children does not increase your family income ;)
The situation highlighted is alarming in case of India. Our economy is opened to everyone and our rise in sensex is unpredictable. And we are unaware who is investing in all these overvalued stocks. In this situation, the thing that was told to happen for US can happen one day to us as well. My question here is, anyone have any idea whether India also has such funds created and invested in other countries.
RE:Is there a SWF created by India
by Indian on Dec 19, 2007 03:51 AM Permalink
Most of the money invested in our stock market is unacocuntred and unauthorized money through PNote Outside India
Just look at US deficit and spending on iraq and Afghan war budget as such ..close to 1.7 Trillion USD...almost double to Indian economy...as a result each American currently at 29 to 32,000 USD debit...still US govt have no clue how to come out of the war and still need to spend around 1 trillion...so each American will have another 6K USD burden total to 37,000 Debit on each and every American...more ever US can never ever compete with China any more...china is beyond control in all aspects and if china stops toilet paper export to US ...Imagine US situation...this is the kind of dependency USS is having currently and Bush made Americans life bit negative trend and this will continue as oil prices and other economies raising... USD will come down further...the only factor currently saving USD right now is Gulf currencies pegged with USD...this year it self NRI lost more than 20% of their income ....just imagine how much impact globally...if at all Gulf gets out of USD peg to local currencies means dead end for USD...so whatever the valuation of US assets in US and other places will be 30 to 40% less....this year Indian companies generated much higher wealth than US big giants all together....what about China...even right now china can strip US anywhere.
US can't strengthen Army muscle anymore and can't go for any war in future....
Since I do not understand the stock and financial markets too well, will somebody kindly explain to me, why are the stock/financial markets so volatile? For example, if there is a slight slump in Reliance petro or whatever company for one quarter, the sensex goes into a dive. Does the same thing happen in US /EU when some component of Dow JOnes or whatever underperforms? Are the stocks really sensitive to long term and true performances by a company or nation or just indulge in knee jerk reaction because the CEO of some company/country pur his/her foot in the mouth?
RE:Beware this could wreck etc.
by Gautam Sinha on Dec 18, 2007 07:15 PM Permalink
Just study the concept of weighted average and try to listen to the gibberish of market sentiments and you will have it figured out most of it. Stock prices are mostly speculations based on market sentiments to which one parameter is company performance.
RE:Beware this could wreck etc.
by Ketan Jog on Dec 18, 2007 10:11 PM Permalink
Well Raghu... I ll try to put it the same way as Gautam has... but w a few different set of words.
Stock markets represent valuations of shares. Every person has hisher own perception of Value
Generally, 3 things are most important for valuing anything: The instrinsic value The relative value The contingent value.
Contigent value generally is a subject matter of speculations... being obviously contingent.
It is generally calculated as a differential value and hence, when ascertainity reins, this value is extremely volatile
This is very good article and in long run US will have severe impact...if the oil prices would above 80 USD means Gulf is packed with trillions of USD...for example: when oil price is 60 USD it self...Saudi gained almost 390 USD Billion and Kuwait gained 200 USD Billion and UAE around 170 Billion USD..means Saudi got 1B USD by overnight....this is third straight year oil prices are well above 60 USD and from last 2 years around 80USD ...now we can think how much money is existing with Gulf countries and how much more with Russia currently sitting on 480B USD reserves where as India is at 300B USD . and China 1.3 trillion almost 4 times to Indian reserves...indeed enough money to wreck US economy..more ever oil prices will be at same levels for next 3 yrs at least or until Automobile giants come up with huge fuel efficient systems....but this is enough window for many countries including China, India and altogether can build up almost 4 times to US economy and they can play with US any time.
RE:Very good Article and true facts
by Jay on Dec 18, 2007 08:04 PM Permalink
Could be just the last chance for the oil countries to make some money. What shows is you are not aware of latest automotive technologies. All electric vehicles are a reality which can run around around 208 kms with a single change costing $2. There goes value of petrol down the drain. At the same time solar energy/wind energy are real techs. Look at a company altairnano which makes batteries for these cars. Hope this helps.
RE:Very good Article and true facts
by Indian on Dec 19, 2007 03:56 AM Permalink
Automotive sector is able to touch 40 to 60 MPG with 2L motor under toyota and Honda includiing civic...but not sufficent to bring down the oild prices...tons of reasons for higher oil prices, when Automotive can touch up to 80M to 140 MPG then it can impact the oil prices to come down...it takes another 4 to 5 yrs to reach that lelevl...by the time Gulf, Russia others will be able to get 2 trillion.
I think that whether it was US or now China or ME nations, all of them look to invest their surplus funds where the risk adjusted return is highest. If 9/11 had not happened, may be so much of investment that now flows to so called emerging market would not have flown.This should always be kept in mind. These peope are not fools to mix their emotions into investment decisions. Yes they might threaten to derive a mileage to an extent, but ultimately the financial power will be used to maximise the return, be it Mr.Lakdawala, or ABC mutual fund or a financial institution or a SWF.
it is worth noting that in recent times petro-dollars were instrumental in bailing out sub-prime hit financial majors like Merrill Lynch & Citi. surely there is some strategic play going on in global finance.
The author has done a good job in making his point clear. Although my feeling is that the scenarios are too far fetched and the risks that have been highlighted can easily be addressed. 1. The London investment route of petro dollars can be easily curbed if UK and US agree on this. 2 Investments from countries like Russia and China would be harmless (as the author himself agrees) as these countries would be more interested in their own progress rather than disturbing US. 3. If anything goes wrong US can always flex its muscles...
RE:This is like flagging up the dooms day scenario
by Indian on Dec 18, 2007 07:27 PM Permalink
Your view is right.. But in past... but not anymore. just look at US deficit and spending on iraq and Afghan war budget as such ..close to 1.7 Trillion USD...almost double to Indian economy...as a result each American currently at 29 to 32,000 USD debit...still US govt have no clue how to come out of the war and still need to spend around 1 trillion...so each American will have another 6K USD burden total to 37,000 Debit on each and every American...more ever US can never ever compete with China any more...china is beyond control in all aspects and if china stops toilet paper export to US ...Imagine US situation...this is the kind of dependency USS is having currently and Bush made Americans life bit negative trend and this will continue as oil prices and other economies raising... USD will come down further...the only factor currently saving USD right now is Gulf currencies pegged with USD...this year it self NRI lost more than 20% of their income ....just imagine how much impact globally...if at all Gulf gets out of USD peg to local currencies means dead end for USD...so whatever the valuation of US assets in US and other places will be 30 to 40% less....this year Indian companies generated much higher wealth than US big giants all together....what about China...even right now china can strip US anywhere.
RE:This is like flagging up the dooms day scenario
by Ram on Dec 18, 2007 08:41 PM Permalink
I agree Mr.Indian the deficit is 1.7 trillion, but the US economy is a staggering 12 trillion (GDP). and that for any country is the lowest ratio of GDP to deficit. I do agree the US economy is very shaky at the moment but it would be easy to topple them that easily.
RE:This is like flagging up the dooms day scenario
by Jay on Dec 18, 2007 08:15 PM Permalink
This spending really fuels new technology development in US. In my view what US is doing is getting rid of 1960 to 1970 war machines at a relatively low cost and at the same time keep the pressure. Obviously the people in US are not fools as written by these articles and they know all about business. Its a nice read for us in India to feel assured about success. Hope this continues forever.
