Cup of woes...

Iran's return to the oil splurge will see further falls in prices of oil... Sorry  Middle East, this is a new geo-political strategy impacting markets.,.
China's difficulties in containing its tremors. Its efforts at stemming a fall in currency may be a temporary respite in a trend that is headed south...
Bank scrips all over may be under pressure...
Slowdown might affect all basic industries...
Another day when I wish I could be more optimistic...
Staying away from trading seems good unless you want to be hugged by a bear.

US assets continue to remain on top as there appears to be nowhere else to go... Gold may look good but that is a not a longer horizon option...



This blog recommends no investment. All views are without  any risk or responsibility.

Deutsche Bank's woes won't go away ...Hesse applied to the Deutsche

Italian  prosecutors have now accused six former and current Deutsche Bank AG executives of collusion to manipulate the market and whitewash the accounts of  Banca Monte dei Paschi di Siena SpA .
Once again,  it reiterates that mere cosmetic changes do not help. Something is real rotten in the debits and credit of Frankfurt. It is not mere disregard for the laws; it is insensitivity of top managers to any ethical values as long as it makes profits. The rot seems to have crept all the way to the then top echelons. Profit aggrandizement appears to have struck at the very heart of a great institution.

Herman Hesse's Poem Traum may apply 

Es ist immer derselbe Traum

Ein rotbluhnender Kastanienbaum,

Ein Garten, voll von Sommerflor,

Einsam ein altes Haus davor 

Dort, wo der stille Garten liegt,
Hat meine Mutter mich gewiegt;
Vielleicht - es ist so lange her -
Steht Garten, Haus und Baum nicht mehr.

Translation 

It is always the same dream

A rotbluhnder chestnut tree,

a garden full of summer flowers

 A lonely house before

For places where silence is the garden,

where my Mother had cradled me

Maybe it is so long ago,

remains no longer the garden, house and tree

Emerging Economies: Beware your forex reserves are but to wage losing wars ....

According to Bloomberg ( Behind Chinese Yuan's Tiny Drop, Indications of True Crisis Lurk,  Ye Xie, Bonnie Cao)  China has struggled to keep the yuan stable: 
 "In propping up the exchange rate, the People’s Bank of China also burnt through more than half a trillion of dollars in foreign reserves in the past 12 months, cutting them to $3.3 trillion. The draw-down was almost equivalent to the entire stockpile of Switzerland, the world’s fourth largest holder. Regulators also went to great lengths to tighten capital controls, cracking down on illegal money transfers and restricting lenders from conducting some cross-border transactions."

This blog holds the view that emerging currencies are likely to see volatility of a serious kind....Coming events cast their shadow before...

This blog recommends no investment....views expressed here are without any risk or responsibility. 

China must still worry the markets....

There could be a temporary reprieve from the sale wave... but the Chinese winds are still south. None appears to be still  in control. So strains in the markets will continue with fall in oil leading the way to  volatility.

The mega investors are licking their wounds and might be very circumspect.  This blog views that that the best bets therefore continue to be:
USA assets
Japanese Yen
Australian property.

Sector wise, IT , bio technology and pharma may hold.

Tailpiece: Is the RBA defending the Australian dollar? 


Australian  foreign exchange reserves 

	USD mio
Sep ,2015	50, 942
Oct	45, 673
Nov	49, 034
Dec	49, 272

Source RBAustralia. 


This blog is an academic expression, it recommends no investment of any type and any expressions are without any risk or responsibility. 

The Rich are needed ...to lead global growth...

Source : World Bank

Flight to quality : : The Wealthy search for parking...

As the Chinese let the yuan adrift, currencies fall in fear. In the flight to safety, gold appears to be rising. This may be a temporary safe haven avenue but is not logical to expect to be bullish on gold in the wake of a global slowdown triggered by China, among the world's biggest buyers of gold. Purchasing power of the wealthy, the  Gulf upper income groups  and  use of industrial gold both stand curtailed and so one cannot bet on gold except as an immediate reaction. Chinese and Indian consumers are likely to continue to buy gold for social reasons, but sustaining gold prices seem difficult. If one buys gold in difficult days, one has to cut consumption elsewhere. So gold will be a temporary rise.

A better bet for eventual wealth accretion may be the Yen as the base of the Japanese economy seems sound technically. Similarly, the property market in Australia may be a good bet to park. The Chinese will eventually return to Australia. Australia is a resource based economy and a vast continent. Given the falling Aussie ( and with current account deficit threatening to widen, given the fall in commodity prices) it might be a good value for money proposition.

Hong Kong and Singapore look a difficult terrain as they are strongly dovetailed to China. Europe has to sort out its political and economic concerns. The Swiss policy do not welcome more.

US assets stay on top. Brace for one more currency run!


This blog recommends no investment. All views are expressed without any risk or responsibility. 

Winter in markets...

'Freezing in Fear' Factors:

• Chinese growth slippage.
• Slide in the yuan.
• Japanese recessionary inclination, coupled with strengthening yen - which is seen as a safe haven. 
• Australian commodity price falls.
• North Korean atomic exploits.
• China vs Vietnam.
• Gulf affected by downhill oil prices.
• Europe's economic problems seem to linger.
• Political disunity in Europe. The burden on Germany and France owing to geopolitical tensions. 
• Post 2011 chaos in the Middle East.
• An imperious Russia seeking to reassert.
• Saudi Arabia versus Iran. Sectarian divisions on religious lines. 
• A slow moving India where internal dissensions hold up governance and reforms.
• Volatility in the markets. (Cause and effect)
• Stress in the financial sector.
• Services industry slowdown owing to geopolitical moves. 
• Appreciation of the dollar and a global slowdown might affect USA. 

The views expressed are without any risk or responsibility.

Reserve Bank of Australia Index of Commodity: 4 January 2016

"Preliminary estimates for December indicate that the index declined by 4.9 per cent (on a monthly average basis) in SDR terms, after declining by 3.1 per cent in November (revised). The decline was led by the prices of iron ore and oil. Over the past year, the index has fallen by 23.3 per cent in SDR terms, led by declines in the prices of bulk commodities. The index has fallen by 17.1 per cent in Australian dollar terms over the past year." (RBA) 

Is TCS justified in bidding for Perot? Where Eagles should not dare....

Tata Consultancy Services has reportedly recommenced talks with Dell for its Perot IT business. One  needs to put matters in a proper perspective.

• India's $146-billion IT industry is already facing the impact of global slowdown. TCS would also be affected. 
• Perot Systems is a worldwide provider of information technology services and business solutions;  IT consulting to hospitals and government departments is reportedly its forte. Does TCS really need to strengthen these areas? In hospital care for example it is the times of reverse innovation. 

• Dell has managed to obtain not so satisfactory bids from  TCS, Cognizant and  Atos SE.

• In 2009,  Dell had  acquired Perot Systems in a transaction valued at approximately $3.9 billion.  Michael Dell, Chairman of the Board and Chief Executive Officer, Dell had then stated: “ We consider Perot Systems to be a premium asset with great people that enhances our opportunities for immediate and long-term growth. This significantly expands Dell’s enterprise-solutions capabilities and makes Perot Systems’ strengths available to even more customers around the world. " This dream stands adrift  and the premium asset appears to be at discount. 

 The expanded Dell  was supposed to be

• Providing a broader range of IT services and solutions and optimizing how they’re delivered;
• Extending the reach of Perot Systems’ capabilities, including in the most dynamic customer segments, around the world; and,
• Supplying leading Dell computer systems to even more Perot Systems customers.

The acquisition seems to have not delivered to Dell despite these expectations. 

Questions Investors in TCS  must ask: 

• TCS and Perot Systems do they  share key characteristics or products?
• Are the  services and structures in any manner complementary?
• Do they have mutually acceptable  relationship-based  work cultures?
•  Will there be any synergies?
• Is there complementarities in global commercial customer base between Perot and TCS?
• If Perot had revenue earning services and has a customer base, why should Dell divest?

Caution is the key.

Tailpiece:  "Eagles don't flock. You have to find them one at a time." - H. Ross Perot 

This blog recommends no investment or disnvestment. Views expressed are without any risk or responsibility. 

Dollar might strengthen

Tensions add to flight to dollar. With Saudi Arabia snapping ties with Iran and with US there is anxiety at turn of events on the geopolitical front. The Middle East, at least at the sub terrain level, seeks some conflagration so that oil prices are increased a shade. Any violence,  might instead , add to dollar strengths more  . Oil  may pick up but not so significantly unless there are clearer signs of supply shortages, which is highly unlikely as of now.

Thus, the USD may not have peaked as yet.. Any small move up in oil prices is good for neutral countries like Qatar, Oman and UAE among the GCC countries.  Indo-Pak uncertainties show that economic factors may be a consequence of geo- political tensions.. In a more refined world, economic requirements should destress political tensions but  that seems faraway.

Commodity prices might look up a shade but the turn of events seem good for US stocks. Indian corporates are going to see input and import costs a trifling more ; so the Indian  stock market should be under some pressure.


This blog recommends no investment. Views expressed are without any risk or responsibility.