Hello,
Ancient India was known as the most favored place for trade. FromPersians to England, all came to India to trade. History RepeatsItself. Today India is considered as the hottest place to do business.It won't surprise you to know that the total new mobile connection weadd each month is equal to the population of FINLAND.
A 5,000 Years old civilization has taught us not to invade any countryand respect freedom. It is the efforts of all Indians that we aretoday world's largest democracy and second largest economy.
Today A Common Man has been offered daily truck load of negativismabout weakness of our country or society. Its my first effort to helppeople understand what their country is - MY FIRST MESSAGE TO ALLINDIANS.
Please click on the below mentioned link.
It is an Audio VisualPresentation onBRAND INDIA - THE RIGHT PLACE, THE RIGHT TIME.
http://ishare.rediff.com/filevideo.php?id=130013
(The purpose of this video is to spread awareness only. There is nocommercial value attached to it. Recommended to view with broadbandconnection)
Awaiting your comments...
Regards,
Allies Financial Services
Gsm : ( +91 ) 9820191219
Yahoo ID : alliesfin9
Website : http://alliesfin.blogspot.com/
Group : http://groups.google.com/group/alliesfin
Sms Service : http://www.smsgupshup.com/groups/ALLIESFIN
& Our sms services : http://www.smsgupshup.com/groups/ALLIESFIN9
Sunday, 30 March 2008
Saturday, 29 March 2008
ASSET BUBBLE :-) GOOD EXPLANATIONS
Here's a very intersting anecdote that describes how an "asset bubble"
builds up and what are its consequences.
ANCEDOTE -
Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC.
As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only."
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar.
C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6
dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar.
****************End of the story***************************
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
builds up and what are its consequences.
ANCEDOTE -
Once there was a little island country. The land of this country was thetiny island itself. The total money in circulation was 2 dollar as therewere only two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. Band C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, A and C now eachown 1 dollar while B owned a piece of land that is worth 1 dollar.
The net asset of the country = 3 dollar.
3) C thought that since there is only one piece of land in the country andland is non produceable asset, its value must definitely go up. So, heborrowed 1 dollar from A and together with his own 1 dollar, he bought theland from B for 2 dollar.
A has a loan to C of 1 dollar, so his net asset is 1 dollar.
B sold his land and got 2 dollar, so his net asset is 2 dollar.
C owned the piece of land worth 2 dollar but with his 1 dollar debt to A,his net asset is 1 dollar.
The net asset of the country = 4 dollar.
4) A saw that the land he once owned has risen in value. He regrettedselling it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollarfrom B and and acquired the land back from C for 3 dollar. The payment is by
2 dollar cash (which he borrowed) and cancellation of the 1 dollar loan toC.
As a result, A now owned a piece of land that is worth 3 dollar. But sincehe owed B 2 dollar, his net asset is 1 dollar.
B loaned 2 dollar to A. So his net asset is 2 dollar.
C now has the 2 coins. His net asset is also 2 dollar.
The net asset of the country = 5 dollar. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own theland. So he bought the land from A for 4 dollar. The payment is by borrowing2 dollar from C and cancellation of his 2 dollar loan to A.
As a result, A has got his debt cleared and he got the 2 coins. His netasset is 2 dollar.
B owned a piece of land that is worth 4 dollar but since he has a debt of 2dollar with C, his net Asset is 2 dollar.
C loaned 2 dollar to B, so his net asset is 2 dollar.
The net asset of the country = 6 dollar. Even though, the country has onlyone piece of land and 2 Dollar in circulation.
6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blowed. An evil thought came to C's mind. "Hey,what if the land price stop going up, how could B repay my loan. There isonly 2 dollar in circulation, I think after all the land that B owns isworth at most 1 dollar only."
A also thought the same.
(8) Nobody wanted to buy land anymore. In the end, A owns the 2 dollarcoins, his net asset is 2 dollar. B owed C 2 dollar and the land he ownedwhich he thought worth 4 dollar is now 1 dollar. His net asset become -1dollar.
C has a loan of 2 dollar to B. But it is a bad debt. Although his net assetis still 2 dollar, his Heart is palpitating.
The net asset of the country = 3 dollar again.
Who has stolen the 3 dollar from the country ? Of course, before the bubble burst B thought his land worth 4 dollar.Actually, right before the collapse, the net asset of the country was 6
dollar in paper. his net asset is still 2 dollar, his heart is palpitating.
The net asset of the country = 3 dollar again.
(9) B had no choice but to declare bankruptcy. C as to relinquish his 2dollar bad debt to B but in return he acquired the land which is worth 1dollar now.
A owns the 2 coins, his net asset is 2 dollar. B is bankrupt, his net assetis 0 dollar. ( B lost everything ) C got no choice but end up with a landworth only 1 dollar (C lost one dollar) The net asset of the country = 3dollar.
****************End of the story***************************
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) When a bubble is building up, the debt of individual in a country to oneanother is also building up.
(2) This story of the island is a close system whereby there is no othercountry and hence no foreign debt. The worth of the asset can only becalculated using the island's own currency. Hence, there is no net loss.
(3) An overdamped system is assumed when the bubble burst, meaning theland's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellowshaving the land or extending loan to others are the loser. The asset couldshrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another pieceof land but refrain to take part in the game. At the end of the day, he willneither win nor lose. But he will see the value of his money or land go upand down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it isworthwhile to borrow money (like A ) and take part in the game. But you mustknow when you should change everything back to cash.
(8) Instead of land, the above applies to stocks as well.
(9) The actual worth of land or stocks depend largely on psychology.
INFLATION – FLAYING ALL CONTROLS
Ask the common man on the street about rising prices and there are chances that he will get into a nonstop tirade of how things were good five years ago and how bad things are now. There has always been a disparity between what the man suffers as inflation and what the Govt shows as inflation figures. And now, after a long time, looks like the Govt inflation figure is also catching up with reality.
For the week ended 15th March 2008, the inflation touched a record 59-week high of 6.68%, the highest since February 2007. Vegetable prices are up 2.5%, iron and steel prices are up 5.3% and prices of basic metals for foundry and castings are up by a whopping 10.9%.
We all know that prices are rising and this is going to be one of the biggest concerns of not just India but all around the globe, stemming growth rates. Infact Japan also today reported its highest ever inflation at 1%, which is its fastest increase recorded in a decade.
This is an issue which is core to the Indian Government right now as it knows that the soaring inflation, if not curbed will eat away the entire success story which it has woven since the past five years, certainly something it does not need when it is going to the polls. Today, the Govt suspended export subsidy under the duty entitlement pass book scheme (DEPB) on some steel products temporarily to control inflation and boost domestic supplies. The Govt has also withdrawn DEPB on cement, manganese, chrome and ferrous metals.
The net savings on account of DEPB withdrawal is estimated at around Rs.593 crore and the main aim of this withdrawal is to make exports look less attractive. Steelmakers currently enjoy DEPB benefits of 5% on galvanised products, 4% on billets, 6% on TMT bars and 4% on hot rolled coils. Since the past one month, steel makers have been increasing their prices consistently by Rs.3,000 – Rs.4,000 per tonne.
It has also completely withdrawn the benefits on overseas sales of non-basmati rice. Govt raised the minimum price for non-basmati rice exports to $1,000 per tonne from $650 per tonne free-on-board, in a move to slow down overseas sales. The Govt had earlier banned exports of all non-basmati rice but later gave way to protests from traders and allowed sales at a floor price of $425 a tonne. Now that price has since then been raised.
So what is the benefit of this move?
1: The Govt will save Rs.593 crore. Naturally after having doled out so many largesses, it will have to cut corners somewhere and generate some sources of revenues, however paltry they might be. Now this is one subsidy withdrawal, which the Left will not protest against.
2: Prices are most certainly expected to cool off in the domestic markets, though how far this will help cool the prices of foodgrains is doubtful.
3: Prices of steel and cement, which directly affects most of the infrastructure projects, which in turn affects the overall cost structure, will see some correction. This is what will ultimately lead to some cooling off of prices.
4: Naturally, if moves are made to cull exports and imports continue to soar, the current account deficit is expected to go for a complete toss. So this gap in the current account deficit is expected to further widen.
5: Corporate bottomlines will most certainly take a hit. One man’s gain is other's loss. So if the prices are reduced, naturally, the profits of the companies will take a hit.
6: Industrial production, which has been low is not expected to get any boost due to these moves. 9% economic growth rate is a myth now, we are looking at a more realistic figure of anywhere between 7-7.5% growth rate. But look at it like this – when we had an inflation of 4% and growth rates were 8.5%, then we are looking at a nominal GDP of 12.5%. Now the inflation rate is 6.68% and the growth rate of 8 or 7.5% is expected, that means we are looking at a nominal of over 14%. So actually, what is better? (real GDP measures the increase in the volume of economic activity. When inflation is added, nominal GDP is an estimate of national income, which is divided between government, individuals and corporations – with the bulk of the latter representing profit)
Well, the Govt has no alternative but to now hone all its skills and focus all its attention on bringing down the rising prices. It is always the real GDP which matters the most. And now we all have reset our minds to a lower growth rate, the Govt has to work on reining-in the prices. Otherwise no amount of pay hikes and waiver of loans will help it win the votes!
For the week ended 15th March 2008, the inflation touched a record 59-week high of 6.68%, the highest since February 2007. Vegetable prices are up 2.5%, iron and steel prices are up 5.3% and prices of basic metals for foundry and castings are up by a whopping 10.9%.
We all know that prices are rising and this is going to be one of the biggest concerns of not just India but all around the globe, stemming growth rates. Infact Japan also today reported its highest ever inflation at 1%, which is its fastest increase recorded in a decade.
This is an issue which is core to the Indian Government right now as it knows that the soaring inflation, if not curbed will eat away the entire success story which it has woven since the past five years, certainly something it does not need when it is going to the polls. Today, the Govt suspended export subsidy under the duty entitlement pass book scheme (DEPB) on some steel products temporarily to control inflation and boost domestic supplies. The Govt has also withdrawn DEPB on cement, manganese, chrome and ferrous metals.
The net savings on account of DEPB withdrawal is estimated at around Rs.593 crore and the main aim of this withdrawal is to make exports look less attractive. Steelmakers currently enjoy DEPB benefits of 5% on galvanised products, 4% on billets, 6% on TMT bars and 4% on hot rolled coils. Since the past one month, steel makers have been increasing their prices consistently by Rs.3,000 – Rs.4,000 per tonne.
It has also completely withdrawn the benefits on overseas sales of non-basmati rice. Govt raised the minimum price for non-basmati rice exports to $1,000 per tonne from $650 per tonne free-on-board, in a move to slow down overseas sales. The Govt had earlier banned exports of all non-basmati rice but later gave way to protests from traders and allowed sales at a floor price of $425 a tonne. Now that price has since then been raised.
So what is the benefit of this move?
1: The Govt will save Rs.593 crore. Naturally after having doled out so many largesses, it will have to cut corners somewhere and generate some sources of revenues, however paltry they might be. Now this is one subsidy withdrawal, which the Left will not protest against.
2: Prices are most certainly expected to cool off in the domestic markets, though how far this will help cool the prices of foodgrains is doubtful.
3: Prices of steel and cement, which directly affects most of the infrastructure projects, which in turn affects the overall cost structure, will see some correction. This is what will ultimately lead to some cooling off of prices.
4: Naturally, if moves are made to cull exports and imports continue to soar, the current account deficit is expected to go for a complete toss. So this gap in the current account deficit is expected to further widen.
5: Corporate bottomlines will most certainly take a hit. One man’s gain is other's loss. So if the prices are reduced, naturally, the profits of the companies will take a hit.
6: Industrial production, which has been low is not expected to get any boost due to these moves. 9% economic growth rate is a myth now, we are looking at a more realistic figure of anywhere between 7-7.5% growth rate. But look at it like this – when we had an inflation of 4% and growth rates were 8.5%, then we are looking at a nominal GDP of 12.5%. Now the inflation rate is 6.68% and the growth rate of 8 or 7.5% is expected, that means we are looking at a nominal of over 14%. So actually, what is better? (real GDP measures the increase in the volume of economic activity. When inflation is added, nominal GDP is an estimate of national income, which is divided between government, individuals and corporations – with the bulk of the latter representing profit)
Well, the Govt has no alternative but to now hone all its skills and focus all its attention on bringing down the rising prices. It is always the real GDP which matters the most. And now we all have reset our minds to a lower growth rate, the Govt has to work on reining-in the prices. Otherwise no amount of pay hikes and waiver of loans will help it win the votes!
Thursday, 13 March 2008
GOVT TO FREEZE DEMAT A/C WITHOUT PAN CARD
Hello Friends / Investors,
Attached herewith is the scanned copy of the article appearing on the front page head lines of The Economic Times dated 12.3.2008 where by it has been stated that Govt. is moving towards attaching the shares of the demat accounts where the PAN card details are not yet been updated. We request you to act on this urgent issue seriously to avoid any such attachment move by the govt..
Regards,
Allies Financial Services
Mobile Gsm : ( 0091 ) 9820191219
Yahoo ID : alliesfin9
Website : http://alliesfin.blogspot.com/
Group : http://groups.google.com/group/alliesfin
Sms Service : http://www.smsgupshup.com/groups/AlliesFin
Attached herewith is the scanned copy of the article appearing on the front page head lines of The Economic Times dated 12.3.2008 where by it has been stated that Govt. is moving towards attaching the shares of the demat accounts where the PAN card details are not yet been updated. We request you to act on this urgent issue seriously to avoid any such attachment move by the govt..
Regards,
Allies Financial Services
Mobile Gsm : ( 0091 ) 9820191219
Yahoo ID : alliesfin9
Website : http://alliesfin.blogspot.com/
Group : http://groups.google.com/group/alliesfin
Sms Service : http://www.smsgupshup.com/groups/AlliesFin
Wednesday, 12 March 2008
MONEYKUMAR COMIC
Get this file on the following link :
http://groups.google.com/group/alliesfin
Worth Reading & learning
Regards,
Allies Financial Services
Mobile Gsm : ( 0091 ) 9820191219
Yahoo ID : alliesfin9
Website : http://alliesfin.blogspot.com/
Group : http://groups.google.com/group/alliesfin
Sms Service : http://www.smsgupshup.com/groups/AlliesFin
http://groups.google.com/group/alliesfin
Worth Reading & learning
Regards,
Allies Financial Services
Mobile Gsm : ( 0091 ) 9820191219
Yahoo ID : alliesfin9
Website : http://alliesfin.blogspot.com/
Group : http://groups.google.com/group/alliesfin
Sms Service : http://www.smsgupshup.com/groups/AlliesFin
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