Friday, October 31, 2008

Connecting the dots - Shyam P.

From the global economy to the Indian real estate scenario…



The fallout of global financial turmoil is a potential bargain hunting opportunity in Indian real estate. The patient homebuyer may be able to avail cheaper property rate as well as lower interest loan going forward.

Opening Scene, India

Take any newspaper…this Deepavali, there are more ads from real estate companies than from retail shops. “Assured 21.47 per cent Return on Investment” claims one ad. Another claims the builder will pay your full home loan EMI for the first 18 months. Yet another builder promises to buy back your apartment after two years, at an assured higher price — “just make your booking today with 15 per cent down payment”. Are these hard sell campaigns telltale signs of desperation among developers" To read more, please, visit - The Hindu

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DLF seeks lower home loan rates

Top DLF officials, including chairman Kushal Pal Singh and vice-chairman Rajiv Singh, on Thursday met finance ministry officials to press for a lowering of interest rates on housing loans to ease the liquidity squeeze in real estate.

A source told DNA Money, “The DLF executives were also pushing for declaring real estate an industry rather than just a sector.”

Indian real estate is the second-largest employer in the country and the downward spiral of the realty market would severely impact the Indian growth story.”
The Delhi-based developer wants the ministry to ask the Reserve Bank of India to ease norms for bank lending to real estate firms.

Most banks have stopped giving loans to developers as they consider the real estate market risky at moment. This has forced realtors to raise funds from private investors and other sources with interest rates as high as 30%, way above the 13-15% they are paying on their outstanding debt to banks. To read more, please, visit - DNA

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Will Rs 1100 crore home loan rates subsidy for urban poor work?

Not sure, at this point of time. We have to wait for the results of Loksabha Elections 2009!

The Ministry of Housing is crafting a scheme that would persuade banks to give home loans to the urban poor at a 5% discount on interest rates. CNBC-TV18’s Vivian Fernandes reports that the scheme is well-intended but is not the kind of lifeline that the realty sector is looking for.

S Sridhar, CMD, National Housing Bank, said, “The Ministry of Housing is considering a proposal whereby an interest subsidy will be available for the urban poor.”


The target groups that the government has in mind might not be the kind tracking the slide of the Sensex. These are households earning between Rs 3,300 and 7,300 a month, described in government-speak as falling under the economically-weaker section (EWS) — a low-income group.


Sridhar said, “The justification [behind the scheme] is that income-tax payers are entitled to deduction both on principal repayments and interest when they take home loans. Now a non income-tax payer with income up less than Rs 1 lakh [per annum] does not get access, will pay a higher interest rate and even if he does, he gets no concession. For people like us, our post-tax EMI is actually lower than that of a driver.”


The National Housing Bank has calculated that a 5% subsidy on home loans would be equal to the benefit that income-tax payers get from housing loan and interest deductions. The rebate will be limited to loans up to Rs 1 lakh but will extend to the life of the loan, which could be up to 15 years. The plan allocation has been made keeping four lakh houses in mind. This is an open-ended scheme, and the subsidy will increase with rising demand.


Officials at the Ministry of Housing and Urban Poverty Alleviation did not speak citing the model code of conduct. But we gather that the Expenditure and Finance Committee headed by the Expenditure Secretary has approved the proposal. There is a plan allocation of Rs 1100 crore and a budgetary allocation for this year has been approved by the Parliament. The scheme is being drafted and will be implemented once the Cabinet Committee on Economic Affairs gives its assent. Moneycontrol

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Thursday, October 30, 2008

Vijaya Bank moves to control home loan defaults

The delinquency rate among the loan portfolios of the banks are on rise due to the economic slowdown. Default among the healthy consumers is also becoming common in the current phase.

Recently Vijaya Bank has reported about its delinquency in home loans.

Chairman and Managing Director of Vijaya Bank, Albert Tauro said: 'The delinquency has mainly been in home loans. These are not bad loans only that the incremental EMIs due to the current economic scenario had led to these borrowers defaulting on payments.'

The bank has started taking moves to control the default rate which amounted to nearly Rs 145 crore this quarter. This rate is expected to fall after the situation eases.

Vijaya's retail loans exposure grew by 13.16% year-on-year to Rs 9,069 crore out of which nearly Rs 4,000 crore were home loans. Bank's retail loans comprised 24.70% of its total credit. To read more, please, visit - Rupee Times

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With financial capitalism dead & gone, it’s time to get real - Mukul G Asher

At this juncture, it is still unclear what would replace the financial capitalism which dominated the global economy for the past quarter of a century. Even as the countries cope with the current global financial turmoil, policymakers (including those in India) would do well to focus on the fundamentals of sustained economic growth, and improved quality of life.

India must look beyond the immediate measures designed to cope with the financial crisis. To sustain growth, it requires more competent and prudent economic and political management, and an environment in which India’s inherent entrepreneurial capacities have opportunities to create wealth for the society. To read more, please, visit - Daily News & Analysis

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Can our banks weather the financial crisis? - PSM Rao

We want accurate information not assurance:

More than the assurances of the prime minister, finance minister and the RBI governor on the safety of the banks and the money therein, it is accurate information on the uses this public money is put to by the banks holding it in trust that would satisfy people. But, where does one get this information?

It is naive to think that our financial system, of which banks are an important part, will remain totally unaffected once they are allowed to have overseas exposure.

Banks have dealings related to the stock market, so they are not totally outside the danger zone. But, by how much, is the question.

‘Off balance sheet items’ or the ‘Contingent liabilities’:

Though the balance sheets which we talked about do not provide clarification for every single doubt, they give some vital information and scope for useful inference. The amount shown under ‘off balance sheet items’ or the ‘contingent liabilities’ of all the public sector banks aggregated to Rs 18.57 lakh crore in 2007-08, a 46.16% increase over 2006-07’s level of Rs 12.70 lakh crore as per the Indian Banks Association’s (IBA) report on public sector Banks.

IBA report on Private Sector Banks:

In a similar publication on private sector banks, the IBA found that these banks have much bigger sums involved under the head. All the private sector banks put together had Rs 23.61 lakh crore in 2007-08, higher by 77.53% compared with the 2006-07 figure of Rs 13.30 lakh crore. The 16 old private sector banks have Rs 1.11 lakh crore contingent liabilities, whereas the eight new private sector banks account for a whopping Rs 22.50 lakh crore.

ICICI bank and SBI: Contingent Liabilities:

the largest private sector bank in the country, tops the private banks list with 48.76% share. More interestingly, the ICICI Bank’s Rs 11.51 lakh crore off balance sheet amount is 288% higher than its balance sheet size of Rs 3.99 lakh crore.

Also, there is a quantum jump in these liabilities from Rs 5.62 crore last year.
Among public sector banks, SBI’s share in the contingent liabilities was the highest at 43.66%.

Although this bank’s off balance sheet transactions are higher than its balance sheet size, they are not as large as those of some private sector banks including ICICI. SBI’s contingent liabilities of Rs 8.10 lakh crore in 2007-08 work out to about 112% of its balance sheet size of Rs 7.21 lakh crore.

The off balance sheet items also include: derivatives, forward contracts and currency futures, which are not easily understood by the common man, but which have inherent risks all the same.

RBI Notification:

So, the Reserve Bank has recently (notification dated October 13) and rightly so brought these off balance sheet under the scanner of prudential norms and directed for provisioning of the specific items under the head. The impact of this measure will only be discerned in the 2008-09 balance sheets.
All these facts suggest that there is an urgent need for a thorough scrutiny - a bank by bank examination - to take timely and preventive measures needed to put the house in order and to lend credence to the assurances given by the government and the RBI.

The threat created by the US crisis may be converted into an opportunity, through timely measures, to better safeguard the banks and the public savings in them.
raopsmrao@gmail.com
- Daily News & Analysis

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Tuesday, October 28, 2008

There’s more to Diwali than just praying for auspicious gain (Shubh Labh)

Where there’s light and right action can other virtues like health, wealth, daring, and exhilarating happiness lag behind? For achieving all that, good means are as important as great ends.

That may explain why Sri Lakshmi, the presiding goddess of the festival, is also the reigning deity of good goals (lakshya) and prosperity in its eight-fold aspects called Ashta Lakshmi or eight incarnations. These are believed to be secondary manifestations of the Original — Adi- or Maha-Lakshmi. The other seven are Dhanya Lakshmi, wealth of granaries; that of arms (Dhairya Lakshmi) and of royal elephants (Gaja Lakshmi); not to forget wealth begotten through progeny (Santana Lakshmi) and prosperity through battle-field victory (Vijaya Lakshmi) or due to knowledge (Vidya Lakshmi). The eighth is the goddess of good fortune (Dhana Lakshmi) who completes the octet.

Nor does the worship of the Wealth Goddess on the day of Dhanteras preclude the quest for other aspirations. The four arms of Mahalakshmi, for example, are said to represent the four main goals of human life, namely, desire (kama); commerce (artha) and ethics (dharma) leading to liberation (moksha).

The Mother Goddess and her eight manifestations represent the harmony of charity balanced with acquisition as well as desire tempered with liberation.

So go out and have a blast on Diwali.
Vithal C Nadkarni- Cosmic Uplink - The Economic Times

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Saturday, October 25, 2008

India's growth story to continue....India not in recessionary mode - Reserve Bank Governor D Subbarao

There will be only a slight deceleration:

India's growth story will continue despite a slight deceleration, but there will be no recession as in some advanced economies, Reserve Bank Governor D Subbarao said on Saturday. (photo: AP / J. Scott Applewhite)

"India's growth will continue and even if there is some moderation, it will only be a modest moderation. But it will not be a recession...there will only be a slight deceleration," Subbarao said.

Pegging GDP growth for FY'09 at 7.5-8 per cent, he said, this was "our best growth estimate", even though there were other estimates ranging from 7.2-8.7 per cent.

As India's growth is mainly driven by domestic demand and consumption, the country would be less affected by the global financial turmoil but it would not go completely unscathed, Subbarao said.

Justifying RBI's cautious credit policy announced on Friday, Subbarao said that as a central bank, it had to balance price and financial stability with growth as inflation, though declining, continued to be a matter of concern. To read more, please, visit - Daily News & Analysis

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Thursday, October 23, 2008

Should i cancel my booking at Nanded City Pune?

Time to reconsider your Pune real estate investment decisions:

Present economic conditions, Pune real estate slow down and expectations of property prices coming down in the next few months is compelling property buyers to reconsider their investment decisions in Pune and even in a project like Magarpatta City's 700 acre township Nanded City Pune on Sinhagad road.

Share your views, please!

Now a days, "Should i cancel my booking at Nanded City Pune?" is one of the questions i am most frequently asked. Day by day, as the time is coming close to finalize your 'application to book' into actual booking by paying your own contribution at Nanded City Pune, more and more people are going to reconsider their decision. Considering this, i thought, let us share our views and have a meaningful discussion on this important topic.

Useful information for booking a flat:

When property buyers call me on my mobile, +91 98600 44110, i know, most of the time they actually do not want to cancel but they just want to think loudly or discuss this issue with someone who knows little bit about Pune real estate.

My readers know that, basically, i am a real estate salesman. On my blogs, Ravi Karandeekar's Pune Real Estate Market News Blog and Ravi Karandeekar's Pune Real Estate Blog, i share information about real estate projects with my readers because i want to assist them in making well informed decisions to book flats in Pune.

Still, at the beginning of the conversation, i remind them that i am an expert in advising about 'booking a flat', not in the 'canceling the booking'.

Why you booked a flat in Nanded City Pune?

Magarpatta's Nanded City, Pune - 700 acre mega township on Sinhagad road, Pune
After making my position clear, i ask the caller to go back to the point of time when he took the decision to book a flat and ask himself, "Why i booked the flat at Nanded City Pune?" and list the reasons for booking.

Then, i request the caller, to ask himself, "Are there any major changes in your reasons for booking a flat at Nanded City Pune?"

To this most of the people say, "But aren't the property rates coming down in Pune?". I say, "Yes, property rates are coming down in Pune. Not in Nanded City Pune!"

"And you haven't booked a flat in Nanded City Pune because property rates were less than Pune? Did you?"

"I think even rates in Nanded City Pune will come down and many people will cancel their bookings." the caller says.

"Not a big deal. Every builder knows that when the hype is over around 25% cancellation always happens. He never lowers the rate because of these cancellations." i try to give him some insight into real estate marketing.

Sometimes i also add, "Have you ever thought why Nanded City Pune collected the 'applications to book a flat' in the first place?"

"Do you think they wanted to collect 50,000 or 1,00,000 rupees from the applicants?" i ask.

"No! I do not think so." i myself answer my question.

"Did they want to sell the flats?" i ask.

"No, not at all." i answer.

"Whatever they wanted to get out of the response, i am sure, they got more than they required. Now, you cancel or not is not going to affect the project. It will only affect you." i take full advantage of my role as an expert of Pune real estate market and tell the caller, "So, now go fast forward by, say, 8 or 10 years from today, imagine that Nanded City Pune is almost complete and ask yourself, "Was it a good decision to cancel my booking?"

Take a long term view:

I believe that real estate investment is a long term decision. One should not expect to get good returns in a short period of time. Most of the real estate investors know this but because of the recent boom in Pune real estate some people have forgotten this. We all know that current slow down in Pune real estate market may be longer than we expect. My point is, in this situation property buyer should remain invested for a long time.

I have said what i think is right. Let me remind you once again, basically, i am a real estate salesman. You will have a different view, I am sure. I respect your views. And i request you to share your views. Please, tell me, what is your take on investing in Nanded City Pune? Please, read the comments policy and share your views to add value to this conversation.

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Related Stories:

1) Is this the right time for NRIs to book a flat at Amanora Park Town?

2) Paranjape Schemes' Crystal Garden on Baner-Pashan Link Road and the beginning of a new world, Blue Ridge at Hinjewadi!

3) How to get "preferential property rate" for a flat in Kumar Builders' upcoming townships at Hinjewadi and Kharadi?

My blogs on Nanded City Pune:

1) What are your views on living in a gated community, townships like Amanora Park Town or Kumar Properties' Megapolis?

2) Everybody in Pune is talking about Magarpatta City's upcoming project 'Nanded City' on Sinhgad Road

3) Magarpatta's Nanded City may be on Sinhagad Road but it is an extension of Warje, Kothrud annex!

4) Launch of Nanded City, Pune - visit to the venue of Magarpatta's upcoming mega township on Sinhagad road

5) Launching of Nanded City, Pune - A farewell to India!

6) Nanded farmers turn shareholders in realty venture

7) Is Nanded City, Pune all about real estate development?

8) Nanded City - Pune opens bookings at Rs. 3,250 per sq.ft. from today morning at site on Sinhagad road in Pune

9) Magarpatta's Nanded City Pune closes it's offer of phase 1 with a promise to open 2nd phase in December 2008

10) Magarpatta's Nanded City - Pune: Mr. Suresh Kalmadi, MP and Chairman, Pune Vyaspeeth, you too?

Sunday, October 19, 2008

What micro-finance institutions can teach Wall Street - S A Aiyar

Big financial institutions of all sorts are in dire straits across the globe. But one category remains unaffected - micro-finance. Even as the global financial system freezes and giants like Lehman Brothers collapse, micro-finance institutions (MFIs) are expanding unfazed. Famous financiers face defaults big enough to wipe them out, but MFIs report virtually zero default.

This is extraordinary. Big financiers lend against collateral, a back-up if their borrower defaults. But MFIs lend with no collateral at all. Big financiers lend to the most creditworthy corporations. MFIs lend to poor women whom nobody in history considered creditworthy before. Yet, the secured loans to big corporations are bombing, while unsecured loans to poor women are being repaid in full.

How so? What lessons does micro-finance have for Wall Street? I distilled some answers from feedback from promoters of three MFIs that i myself have a stake in: Shubhankar Sengupta of Arohan, Kolkata; Rakesh Dubey of Sonata Finance, Allahabad; and Manab Chakraborty of Mimo Finance, Dehra Dun." To read more, please, visit - The Times of India

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Saturday, October 18, 2008

India's steps to beat global crisis

Following are the steps taken by India's government and central bank over the past month to shore up liquidity as the global financial crisis has spilled into the country's financial markets.

Overnight cash rates have eased to 6.90/7.00, well below the central bank's main lending rate of 9 per cent and down from 10.00 per cent on Wednesday and 23 per cent last Friday.

To read more, please, visit - The Economic Times

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Friday, October 17, 2008

NRIs take advantage of the current situation of high exchange rates and interest rates - Venugopalan

Indian Banks are safe:

Indian banks are seen at a safer position during the current global financial crisis due to their "insignificant" exposure to the US markets. These banks also did not have a large presence of structured products, which were responsible for the crisis in the West.

Venugopalan, India's Federal Bank CEO and Managing Director, says that it is advisable to invest in non-resident ordinary (NRO) deposits or relatives' domestic deposits as rates are higher now. To read more, please, visit - NRIs to invest in India following the global crisis

Related Story:

Investment opportunities for Non Resident Indian (NRI) in India

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Investment opportunities for Non Resident Indian (NRI) in India

India is emerging as one of the most exciting markets in the world for foreign investments. India's dynamic and highly competitive private sector has been the backbone of its economic activity and offers considerable scope for foreign direct investment.
Karishma Julka and Anju Thukral from Ernst & Young highlight the various Investment opportunities that are available to a Non Resident Indian (NRI) in India.

NRI:
As per the Foreign Exchange Management Act, 1999 (FEMA), NRI means a person resident outside India who is an 'Indian citizen' or a 'Person of Indian Origin' (PIO).

FEMA:
FEMA broadly covers all matters related to investment avenues for NRIs such as investment in immovable property, foreign exchange, bank deposits, government bonds, investment in shares, units, securities, and foreign direct investment in India.

Tax and RBI:
While NRIs can invest in India as per the FEMA rules, the tax implications under the Income tax Act, 1961 (Act) for the income generated from investments in India; and regulations governed by the Reserve Bank of India (RBI) will have to be kept in mind.

Investment Opportunities Available to NRI's:

Automatic Route:
Primarily, NRIs can make investments directly in areas covered under the automatic route (i.e. areas where no specific approval is required by RBI), either through direct remittance from abroad or through the authorized dealers (eg banks).
Not Automatic:
For areas not covered under the automatic route, a specific approval from RBI or other specified authorities is required.

Accounts:
RBI regulations permit NRIs to open and maintain rupee accounts like the NRE a/c (Non - Resident (External) Rupee a/c), NRO a/c (Ordinary Non-Resident Rupee a/c), or FCNR a/c (Foreign currency (Non - Resident) Accounts) with any recognized authorized dealer in India.

Few Opportunities:
1) Government securities or Units of UTI through authorised dealers. Units can also be directly purchased from UTI.
2) National Savings Certificates
3) Portfolio investments i.e. purchase of shares / debentures of Indian companies through stock exchanges in India. This facility is granted both on repatriation and non repatriation basis.
4) Investments in Mutual Funds
5) Property:
NRI's holding Indian passports and persons of Indian origin enjoy parity of status. Therefore they can invest or inherit immovable property subject to certain exceptions and prescribed conditions.
Home Loans:
Housing finance companies and banks have been permitted to offer home loans to NRI and they can repay home loans through inward remittance using normal banking channels or by debit to his NRE/FCNR(B)/NRO account or out of rental income derived from renting out such property.

Lock-in Period & Repatriation of Funds:
There is no lock-in period with regard to immovable property that is inherited however, repatriation of funds from a residential property is restricted to a maximum of two properties only.

No Opportunity:
Some of the areas where investments are restricted for an NRI include agriculture, plantation and construction of farm houses.

Gift:
NRIs are also allowed to transfer as gift any residential/commercial property in India to a person resident in India or to an NRI or PIO subject to certain exceptions, and the sale proceeds of the property received as gift will be credited only to an NRO account.

Sale:
There is no lock-in period for sale of residential/commercial property.

Remit:
NRIs can remit abroad an additional amount up to $1 million per year from the sale of immovable property in India, subject to certain conditions.

Shares, Bonds and Debentures:
NRIs have the option to freely sell any shares, bonds and debentures acquired on non-repatriation or repatriation basis under both Direct Investment Scheme and Portfolio Investment Scheme. Gift:
NRIs can also gift shares and securities to resident relatives; however, gifting to non-resident relatives (other than NRIs) would require RBI's permission.
Sale/transfer of shares/securities to other NRIs does not require RBI's permission.

Taxability:
Once the area of investment has been decided, it may be prudent to know the taxability of income from such investments.

Residential status:
Taxability of income in India depends on the residential status of the NRI under the Indian Income tax Act. One of the key points to remember is that the residential status in this regard is determined as per the Income tax Act, which may be different from the residential status determination under FEMA.

Tax-friendly Schemes:
In case of a Non Resident, only income received in India, or accrued in India, or income deemed to accrue or arise or receive in India, is subject to tax in India.
It is also worthwhile to note that in order to promote investment in India by NRIs, Government of India has initiated various tax-friendly schemes like NRI Bonds, Millennium Deposits etc. where the interest income earned is tax exempt.

India has opened its doors and liberalized regulations relating to foreign exchange and remittance of funds from India. There are various opportunities beckoning NRI's however, every investment, no matter how lucrative, should be carefully analyzed to ensure compliance with the Indian laws both from an exchange control and tax perspective.
The Economic Times

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Big bang financial crisis

1) Bank of Credit & Commerce:

This Luxembourg-registered bank was founded in London in ’72 by a Pakistani financier.

The bank collapsed in ’91 after action by regulators from the US and the UK after it was found that the bank had almost $13 billion in unaccounted money.

The bank’s Indian operations were taken over by SBI.

For the slide show, please, visit --The Economic Times

Related Stories:

1) Nobel winner Krugman says world recession likely

2) Risk Drifts From Banks to Governments to You, Me: Mark Gilbert

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Risk Drifts From Banks to Governments to You, Me: Mark Gilbert

Anyone who lost money in the collapse of Lehman Brothers Holdings Inc. should probably be reaching for their lawyers about now.

Our money -- yours and mine -- is now keeping the global financial system afloat. In a capitulation that beggars belief, governments all around the world have pledged our money -- yours and mine -- to fund a ``No Bank Left Behind'' program. And no matter what the politicians say, that means our money -- yours and mine -- is now at risk in the casino. To read more, please, visit - Bloomberg.com: Opinion

Related Story:

1) Nobel winner Krugman says world recession likely

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Thursday, October 16, 2008

Fears of deep global slowdown hit Asia stocks

Asian stocks fell as much as 9 per cent and oil prices dropped to a one-year low on Thursday after downbeat US economic data spread fears of a more protracted and sharp global slowdown than initially expected.

Optimism about the stabilization in money markets has been swept aside and widespread selling of global equities has resumed in earnest as the quarterly results season gets underway and reports filter in about sharp losses at funds. To read more, please, visit - The Economic Times

Related Story:

1) Nobel winner Krugman says world recession likely

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Wednesday, October 15, 2008

Nobel winner Krugman says world recession likely

The world is likely headed for a deep recession despite the European-led plan to bail out banks hit by the credit meltdown, the US economist who won the 2008 Nobel prize for economics said on Monday.

Paul Krugman, an economics professor at Princeton University and columnist for The New York Times, said the plan to recapitalize banks has the potential to heal financial institutions, unlike the U.S.-led plan to buy bad debt that preceded it.

Earlier on Monday he told reporters in Sweden: "We're going to have a recession and perhaps a prolonged one but perhaps not a collapse."

Krugman, an outspoken critic of the Bush administration in his newspaper columns, denied that he felt vindicated by the Nobel Prize because it was given for his professional work as an economist rather than for his commentary.

Krugman argued that the crisis signals a cultural shift away from the belief in the primacy of markets, as espoused by the Bush administration.

"The people who assured us that markets work, that the private pursuit of profit always leads to a good result have been rather massively wrong," he said.

The Nobel committee awarded Krugman the prize for work that helps explain why some countries dominate international trade.

The Royal Swedish Academy of Sciences said the award recognizes Krugman's formulation of a new theory that addresses what drives worldwide urbanization. "He has thereby integrated the previously disparate research fields of international trade and economic geography," the committee said. To read more, please, visit -The Economic Times

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Sunday, October 12, 2008

India may register a Gross Domestic Product growth of 7.9 % in 2008-09, which may slip to 6.9 % in 2009-10 - World Economic Outlook projection

India's internal growth dynamics:

"We are projecting that the growth in India will come down from eight per cent in 2008 to seven per cent in 2009. But seven per cent is still a strong rate of growth," the IMF official said.

A likely seven per cent growth rate at a time when the world economy is on a downhill path, would reflect India's internal growth dynamics, he said.

Giving reasons for relatively mild impact on India of the ongoing financial turmoil, Blanchard said, "India is still largely a closed economy, has strong internal growth dynamics, from rapid productive growth, from its process of integration into the global economy that is still continuing" To read more, please, visit - Indian economy will continue to perform well

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Saturday, October 11, 2008

11 Things Learned Trying to Figure Out the Financial Crisis

Like a lot of people, I’ve been struggling to understand this financial crisis over the past few weeks. I don’t pretend to be an economic expert - I’ve always been more interested in foreign policy, politics and history - but the issue of this crisis is obviously so important, it seems that it is everyone’s responsibility to find out what went on, what caused this..

read more | digg story

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Friday, October 10, 2008

RBI cuts CRR by additional 1 %

Rs. 60,000 crore:

Taking swift action to inject about Rs 60,000 crore into the cash-strapped system, the Reserve Bank on Friday announced additional one per cent cut in mandatory requirements for banks to keep cash with the central bank over and above 0.50 per cent reduction announced earlier.

With this, a total 1.50 per cent cut in Cash Reserve Ratio (CRR) to 7.50 per cent will come into effect from tomorrow. To read more, please, visit - The Hindu News Update Service

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Understand the Financial Crisis

What does it all mean?

Freddie and Fannie, Bernanke, Bush, mortgages, loans, foreclosure, $700 billion bailout, recession, crisis. These are the words filling the headlines and being tossed around in Washington and on Wall Street in worry and, yes, panic. What does it all mean?

Most of us aren't economists and aren't expected to understand what exactly is going on on Wall Street, but we all have a pretty good sense that things aren't going well and it's bound to affect our economy and eventually our homes, if it hasn't already.

It has sent economists scrambling to get the information out there, to educate those of us who aren't following the trends or the ticker tape. However, it stands to be one of the more crucial and pivotal times for the American economy; all just months before a presidential election. Those in the know promise that the more you know about it, the better the chance you have of withstanding it intact.

So let's get educated on the financial crisis before it's too late. Here's our syllabus.

This article is a wiki. If you know how to explain the financial crisis in layman's terms and can share some links to help those who don't, log in and edit this page.

read more | digg story

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How To Pay Off $14,330 In 20 Months

Along with the links to the Related Consumerist Posts:

Stuck in a $14,300 debt hole, reader Trixare4kids was able to dig herself out using tips she learned about on Consumerist.com. Let's learn how she attacked her personal finances and learned to live frugally, and did it all in just 20 months. "As of today I am debt free...My spirit feels lighter. I am free. I am doing a happy dance."

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Thursday, October 9, 2008

World Financial Crisis: India's Hurting, Too

Despite reassuring words from India's Finance Minister, the country is clearly feeling the shock waves of the global crisis.

It's been one action-packed week in India.

The Bombay Stock Exchange Index, or Sensex, tumbled 6% to a two-year low.

For the first time in five years, the central bank cut the cash reserve ratio—the amount of funds that banks have to keep with the Reserve Bank of India—by 50 basis points, to 8.5%, on Oct. 6.

The same evening, the Securities & Exchange Commission of India eased some restrictions on foreign portfolio investors—such as registering in India before buying shares and limits on offshore derivatives—it had imposed in 2007.

And finance minister Palaniappan Chidambaram made yet another television appearance that day to say that India was safe from the global turmoil, and "the only fear is fear itself."

read more | digg story

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