THE ONLOOKER

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The avalanche in Wall Street

The avalanche in Wall Street and burses all over the world is the sole point of discussions everywhere. In fact poor are bearing the burnt when they go to the market and fail to understand what relation the price of rice or cooking oil has with the stock market. So the middle class are, though most of them have burnt their fingers while participating directly investing in equities or through the mutual funds route. The worst sufferers are Americans, though the sub-prime crisis was initially caused by those who took loans but failed to pay. It is obvious that they have spent the money for procuring more goodies or using it for speculative purpose. But now their speculation having turned out to be abysmally wrong, many of them are filing for insolvency or bankruptcy taking with them till date no less than dozens of reputed bankers. The current symptoms suggest another great depression like 1929-30s is surfacing fast. Though the socialistic measure of pumping exchequers money into the b

Oil and Hormuz Strait Pt………III

Earlier I discussed about the strategic importance of Hormuz Strait in relation to global oil supplies. It is equally sensitive to political developments in any of those counties surrounding it, specially Iran. There is an alternative transportation route for oil bypassing this strait out of gulf region. The route is 1190 Km (745 miles) long East-West Pipelines through Saudi Arabia stretching to Red Sea. But this pipe line at best can handle five million barrels per day, that makes one third of the oil what oil tankers can handle. So, additional capacity is required to be created but that would increase the transportation cost. At the same time the pipe line would relieve the strait of its heavy tanker’s traffic and hazards involved. But this move will be unwelcome by many Gulf States , since this will benefit the Saudi Arabia, as it will receive the transit fees for the oil transported, paid by them. There are reports, that Iran threatened closure of the Strait of Hormuz is a glob

The US Rescue Package!

The Bush Government's rescue operation through legislation of bill to address the current avalanche in US economy, may be a welcome relief but not a solution. This is observed by the George Soros, the investment Guru. Here is what Geroge Sores wrote about the rescue package in Financial Times.com : The emergency legislation currently before Congress was ill-conceived – or more accurately, not conceived at all. As Congress tried to improve what Treasury originally requested, an amalgam plan has emerged that consists of Treasury’s original Troubled Asset Relief Programme (Tarp) and a quite different capital infusion programme in which the government invests and stabilises weakened banks and profits from the economy’s eventual improvement. The capital infusion approach will cost tax payers less in future years, and may even make money for them. Two weeks ago the Treasury did not have a plan ready – that is why it had to ask for total discretion in spending the money. But the general i

Oil and Hormuz Strait pt..........II

The importency of Hormuz Strait is understandable in the following statement – practically the entire oil from Bahrain, Iran, Iraq, Qatar, Saudi Arabia and the United Arab Emirates are transported through this. About two fifth of all globally traded oil are transported through it. About 80 per cent of all Japanese oil imports transit through it and the same is applicable for 12 per cent of total American oil imports & 25per cent of total Western European oil imports. A reliable estimate predicts that by 2020 the amount is likely to double than what is transported currently, i.e 35 million barrels per day. That will require about 30 tankers each day. Though the strait is 95 km wide, but only to two 3 km wide channels are available for navigation. Each used exclusively for inbound and outbound traffic. If the prediction comes anywhere near to reality then the traffic will be hazardous and extremely slow. Congestion and prolong delay will be a matter of fact. It may be difficult to h

Oil and Hormuz Strait

Do you have any idea what in the terminology of transport geography `CHOKEPOINTS’ are? Straights are called `Chokepoints’ because they limit the capacity of sea passage that cannot be easily bypassed. Two thirds of world`s oil production are transported by sea routes. This has been in continuance since 1878, when the first oil tanker began shipping oil in the Caspian sea. Ever since the world`s maritime tanker fleet has grown substantially to become a specialized segment of the maritime industry. Like seven wonders, seven seas, seven days; the seven `Chokepoints’ through which oil is transported play a very crucial role, maintaining the global oil demand- supply equation and obviously the price! The seven `Chokepoints’ or straights are, Hormuz, Malacca, Bab el-Mandab, Boshphorus, Gibraltar, Panama and Suez. While the last two are manmade, rest all are gifts of nature. The world`s most important chokepoint is the Strait of Hormuz. This is the most important sea passage from the Persia

THE FACTS OF DARJEELING

“DARJEELING”, the very name of this hill station in India reminds you the colonial days and tea. Because it was the British colonizers; who were constantly on look out for cooler places, obviously in India it uses to be in hills what would remind them their home. The temperature in tropical countries, particularly in summer months use to be unbearable for them for mercury touching anywhere between 35 to 44 degree Celsius! In India Shimla and Darjeeling earned their reputation for hosting the colonial administrators with their staffs with families during summer months for running colonial administration for years. Though with English rulers, gone are the colonial days and prestige of Darjeeling, but it still holds name in world for its tea. It still the producer of world number one flavored tea and sold at a price, unthinkable for we ordinary mortals! Off late, a new hue for Gorkhaland is raised time and again. It stared in the decades of 90s, lot of agitations, number of strikes call

MONEY MATTERS

Taking the global queue, the Indian Stock indexes have plunged and everyday finding new low. Informed experts opine that the bear phase is ushering. Everybody is busy with all their wisdom, calculations how long the bear phase will last. No doubt it is pertinent question. The investors have deserted the market, without a sign of returning early. The day traders are trying hard to recover their loses. The general feelings of payment crises under existing circumstances is not ruled out. News are there as brokers committing suicides. Obviously it transpires that they did so apprehending trouble due to non payment of their dues. The Finance Minister assured neither Indian Banks nor Indian burses are under any sort of threat. Let us trust him and raise no question. Whenever the bear phase users in the market , you know, people start guessing the bottom. Because the bottom offers ideal time to enter the market. But most of us, keep guessing but can never identify the true bottom. Better not

Young would be investors

The Stock Market is going tumble tosser all over the world due to US economy. The sub prime crisis is finally taking heavy tolls. Many old bankers are getting bankrupt. The Indian banks are safe but the withdrawal of funds by FIIs is taking toll on its burses. The budding young investors should take the steps carefully and stage wise. Better they follow the simple rule of saving first. Few tips I am giving here. First of all budgeting is most important factor in young professional’s life. Unless you do that you wonder where your money goes! Writing a budget shows actually how do spend and shows the area and how you can control them. You can identify the area needs to be controlled. Never forget to add the expenses you do on shopping and entertainment and include your savings too. Keep a track on your utility bills and keep comparing them. Mind you the plastic money or credit cards are major boosters to spending. Not that they do not have any role to play. At an odd hours, god forbid,

THE OIL GAME

The world oil price rebounded above $100 per barrel after touching recent low to $99 per barrel. On September the 10th the member of OPEC countries met to discuss the oil price which dramatically declined from their peak $147 per barrel in July amid a global economic slowdown. All over the world the rate of inflation rose high and they are still hovering around their recent peak level. However a surprise decision to cut production by 520000 barrels a day taken by member of OPEC cartel. It is reported that OPEC president and Algerian energy minister, Mr Chakib Khelil said the output cut would start immediately. He further added "if you do your own calculations, it is a cut of 520000 barrels per day"; announcing a new OPEC output quota of 28.8 million barrels per day. The International Energy Agency (IEA) meanwhile cut its estimate for global oil demand this year and next, saying consumers mainly in the United States are changing their lifestyles in response to high prices. T

The Wayward Children

Lack of parental care harms to the full blown growth of their child to what extent, one has to see to believe it. The orphans do not have their parents. Whether are they are raised in a orphanage or on the streets, they grow like their alike amidst of them. So at orphanage, the only difference is under supervision of nurses and teachers they grow better, disciplined and balanced. But the children who are growing under the most uncaring and negligent parents are the worst suffers. Because of presence of their parents prevents others to interfere. Neither have they belonged to streets nor to home. At school most of these children are worst performers and keep very low profile. They are introverts. In the initial stages it is very difficult to separate them from others of their age group. Problems become visible in at their teens and it aggravates fast. If the care is taken even at the initial stages, it results better in reforming. Later it becomes almost impossible, most of them turn ps

The Lingering Wish

A Blogger keeps posting because he wants his blog to remain alive and read as widely as possible. Most of the blogs are dedicated to a specific subject. There are professional bloggers who for the obvious reason to attract more traffics insist on covering those subjects which are current market craze. Like life-style, traveling and making money in as many ways as possible. Though I am not a professional blogger, it was just out of freak I started once blogging with my childhood memories. It began with the famous Google’s social network site: Orkut. I kept postings few in a series till my childhood days at my hometown where I was born and brought up was covered. It was a industrial town, where my father served and I was born, schooled. It was a industrial town, where we lived in a quarter, that I used to consider as our home, without realizing what a home meant. This I realized in my late teens, when I joined Air Force and understood that town I belonged to, never belonged to me. With

RESERVATION AND POLITICS IN INDIA (PART -II)

In a recent move, Indian human resource minister, Mr, Arjun Singh promulgated a fresh bill that reservation should apply to the member of faculty in all government educational institutions even in premium institutions like IITs or IIMs! Here the ruling parties’ president, being self form a European country advocates the applications of reservations in corporate or private jobs as well. The vehement opposition by different industry leaders on any such move and a threat to move out elsewhere, if they are forced to recruit substandard staffs; for time being it is sent to cold store. All the chambers of commerce declared in unison that Indian government should take care of backwards in macro level for improving their lots, instead of pushing and absorbing them in government organization and educational institution, resulting poor quality and demoralizing the deserving lots. This hampers all the way national interest. It is well known that such policy is not sustainable in national interest

RESERVATION AND POLITICS IN INDIA

I remember in my school days, we were asked to write a passage justifying an adage or moral. One of them was “Public opinion is humbug”. This still holds good, when we watch the political developments around the world based on public opinion thrives despite of being wrong. Like US and its cartel`s invasion on Iraq, on the plea of elimination of WMD (weapon of mass destruction) and its creator. After all democracy is “government of the people, by the people , for the people”, so all actions taken by government are supported by the majority . Now the term “majority” is critical. Different country adopted different terms for judging the opinion of major portion of mass. Even in most advanced democracy like France, till recent years women had not voting rights! Just think where they constituted no less than 50 per cent of total population, and during French revolution they took part along with their male counterparts. This gender bias plays its role elsewhere too. However, while justif

India and ASEAN signs Trade in Goods Agreement

ASEAN –Southeast Asian trading bloc and India at last are prepared for signing a free trade agreement in goods like European Union style open market. The pact was supposed to have been reached last year but could not be, because there was some difference of opinion on products that India wanted to exclude from tariff cuts. New Delhi bad submitted a list of 1414 products, while the ASEAN`s target number was 400. India`s commerce minister Mr Kamal Nath described as “key regional milestone” this Trade in Goods (TIG) agreement with the 10 member ASEAN. The deal is likely to be signed in the next December in Bangkok during Indo-Asean summit. The minister observed “The countries of East Asia are important drivers of growth……with large consumption to drive global economies”, he referred to the combined market of 1.5 billion people that is waiting to be tapped. India and ASEAN currently enjoy a total trade of $38 billion and expect it to touch $50 billion by 2010. Under the pact India and ASEA

Internet Cafe Refugees in Japan

I believe that the seed of communism was planted in the field of capitalism. With the advent of communism, in came few terms in our vocabulary and we were so used to them. Words like neo-rich, reactionary, proletariat, bourgeoise were circulated in 50s and 60s and gained momentum in 70s of last century. However gone are the days of Soviet Union, China; the communist citadel, Cuba and North Korea are in doldrums, it appears that socialistic (!) capitalism is the new mantra for survival in the era of globalization. Here again Russia, China, Brazil, India have taken the leads, former two are from communist bloc with capitalist outlook. Those of us born after World War II, have witnessed the rise and fall of communism are confused lots. We sometime fail to differentiate communism from capitalism. The former open offers the scopes to get rich, the later offers the same only to few, the party strongmen or henchmen. However after Second World War the countries like West German and Japan far e

SATISFACTION

• Have you ever thought of that what exactly satisfaction is? Most of us are apt to think when you do not have anything to ask for, we are satisfied. Is it true? No! Never so; reason being that at that point of time you did not have urge for anything since you’re the then needs are met. But you have the yearnings; may be for years or decades! Satisfaction is a feeling that offers a sort of fullness mostly physically for time being. In fact you are satisfied truly when you want something and you get that. Not that after full course of lunch you are offered something what you might have not needed, you are served, you take it to oblige your host, and feel satisfied. Satisfaction is that what you get when you want the same.

UNPREDICTABLE STOCK MARKET

This year India has celebrated Independence Day with inflation rate touching new high; with same pomp and show, and the ruling government keeping the ensuing vote in mind has been generous with the largesse by hiking the pay of 5.5 millions government employees by 21% and more. Rest is left for to mend for themselves. Here is the release from Ministry of Finance Statement released by the Department of Economic Affairs, Ministry of Finance: "The rate of inflation for all commodities for the week ending August 2, 2008 stands at 12.44%, higher than the rate of 12.01% reported last week. After being nearly stable for four weeks, this rise has come as a major disappointment. The Wholesale Price Index (WPI) moved up from 239.6 in the week ending July 26, 2008 to 240.4 in the week ending August 2, 2008. The silver lining is that the inflation rate for the group of 30 essential commodities at 6.54 per cent was lower than the inflation rate of 6.66 per cent recorded in the previous we

CRUDE AND GOLD PRICE MOVEMENTS IN FUTURE

A recent study in the investment options for the fund managers and big investors has drawn my attention, it seems to be interesting, and so I thought why not to share this with my readers. We generally think when the stock market takes a south bound bend or plunges, showing the bear phase is out to take over, then the price of precious metal Gold go high. Gold has always been considered as a safe haven for investors to park their funds till the fresh opportunity emerges, so was the dollar earlier. With US economy under pressure and recession looming large, the dollars have lost much of its sheen. The investors and fund managers finding the unstable stock market in the emerging economy and US federal rate not being attractive, switched over to commodity market and speculating on crude. This led the world wide inflation and partially caused the food crisis too, these all issues have been discussed earlier on many of my articles. The current article is to focus on a new area of market a

CRUDE FACTS ABOUT CRUDE OIL

Rising crude oil price has taken the global economy on ride. In India the inflation rate has crossed 12.01% last week, this is based on whole sale price index in India, but the real rate of inflation considering consumer price index is anything between 60-70% and so with other developing economy in the world. Now the oil price is cooling down and revolving around $125 per barrel from its all time high $153 per barrel, is still failing to make any visible impact on the rising inflation rate. Let us see what the crude facts about global crude demand are and supply position. The demand of oil has increased considerably in the developing nations, no doubt since last ten years. In China for the demand of oil has been registered as compounded annual growth rate of 6.5% for the last ten years (1997-2007). Last year India has taken the 4th largest oil consuming country in the world overtaking Germany and Russia. At the same time India`s position as a oil producer in 23rd in the world. This is

SPECULATION, INFLATION AND COMMODITY MARKET

The excessive volatility in commodity market can be attributed to excessive speculation. The current phase of inflation under which all the countries, the developed, developing and not to mention the poor, are reeling is a direct fall out of this. The excessive speculation in commodity market if allowed unfettered the mankind may go through this roller coaster rides for ever. Obviously it will be sickening and threats to derail the world economy and spreading famine, unemployment, drought and obviously another world war. Let us not forget the terms of surrender for Germans in 1st world war contained the seeds of the 2nd. The “reparation” clause as a term of surrender imposed upon Germany by the victors was not sustainable, so the result was the Second World War. The rest is history. The recent oil price hike, as alleged by Saudi Arabia, is not due to shortage of crude but excessive speculation of crude in the global commodity market. The oil price is looking down currently around $122