Will Banks Lend, or Hoard???

     

 Have banks stopped lending?

Actually, no.

Large commercial banks expanded their outstanding loans by almost $200 billion, or 5%, in the four weeks ended Oct. 15, a period that included the passage of the bailout bill. That's after doing little net lending in the first eight months of the year. Small banks showed a much smaller 1.5% increase in loans over the same four-week period.

But it is true, given the extreme market and economic turmoil, these increases may be somewhat misleading. For example, some of the additional lending probably represents corporations drawing down already-existing bank credit lines, rather than banks actually extending new loans. 

Nevertheless, the increase in bank loan portfolios is a step in the right direction.

The 5 Biggest Stock Market Myths

It's important to keep a realistic view of the stock market. Regardless of the real problems, common myths about the stock market often arise. Here are few myths in order to bust them.

1) Investing in stocks is just like gambling.

2) The stock market is an exclusive club in which only brokers and rich people make money.

3)Fallen angels will all go back up, eventually.

4) Stocks that go up must come down.

5) Having just a little knowledge, because it is better than none, is enough to invest in the stock market.

UnderGrad Medical Interns will get increased Stipend

The Central government has agreed to increase the stipend of undergraduate medical interns in all its medical colleges to nearly Rs 9,000, thus ending a day-long strike by medical students of two colleges in the capital. 

Read more about it at :

http://timesofindia.indiatimes.com/India/Medical_interns_to_get_more_stipend/articleshow/3659654.cms

One Indian Amongst Ten Billionaires world wide---

Mr. Shivinder Mohan Singh, is the Director, Ranbaxy Laboratories Limited and one of the principal promoters of Fortis Healthcare & SRL Ranbaxy. Currently Jt. Managing Director of Fortis Healthcare Ltd. and Managing Director of Escorts Heart Institute & Research Center (EHIRC). 

An alumnus of the Doon School and an Honours Graduate in Mathematics from St. Stephens College, Delhi, Mr. Singh is an MBA with specialisation in health sector management from the Duke University Business School, US.

He is 32 years old and has $2.5bn but the wealth has been inherited.He's one among the ten young Billionaires. Seeing the economy melt down this aspect still is a matter of commendability...

The Race for The White House-- Obama or McCain??

                             

                          

                                      

                        Will Obama Make A Better President than 

                        Mc Cain...???

Not only USA but the world is under the blanket of two grave crisis-- the economic meltdown and the terror war. Whoever becomes the President now needs to face and overcome both these challenges.

This race for the White House between Barack Obama and John McCain is not just a battle between Democrats and Republicans.It's also a battle of ideologies; a race that pits youth vs experience, the fresh vs the tested.

Presently,with the victory in sight, Senator Obama speaks the language of hope and unity.The Democrat candidate appears to be the front runner-- age is on his side, he's young and dynamic-this is missing since the Bill Clinton times.

On the other hand, Senator McCain, if loses, would fade away graciously.And, if he were to stand against the unlikely win would be able to receive it with grace but atleast not generate bitterness and deep divisions.Despite his age he has shown he's still very much in the race.Senator McCain is experienced, impulsive, charitable and deeply emotional in his perspectives. But his spirit is not in full throttle yet.

Now we need to wait and see that whether the US, as a fading power, needs Senator Obama to balm the spirits or needs Senator McCain to hold the ground until victory is arrested...!!!!!

Holding Corporations--- Are they for us or not??

Holding corporations, or Holdco for short, works for some people and not so well for others.  

What is a Holdco then?

A holdco, as the name implies, is a corporation which is incorporated for the sole purpose of holding something.  Usually, that “something” is shares in an active corporation (typically referred to as an operating corporation or optco).

For example, Rose and Marie are sisters who own a winery. They incorporate a corporation,optco, to retain the employees, sell wine and own the land. The optco, in turn, is owned by the holdco. Rose and Marie own holdco. Thus, the relationship is that the individual owners own holdco who own (or hold) all the shares in optco. In other words, a corporation owns a corporation.

Why a holdco?

Holdco’s are ideal structures when the business is cash rich but may also attract a lot of liability. To go back to the above winery example, the business may be cash-rich but think about the liability any winery incurs: bad wine, broken glass, employee lawsuits over allegedly unsafe work conditions etc etc.If you currently own an optco only, a holdco can be set up on a tax-defer basis under what is known as a section 85 rollover. 

Why not a holdco?

A person is only eligible for the lifetime $750,000 capital gains exemption if the sale of shares in an eligible small business is owned by an individual and not holdco. Therefore, if optco is sold, holdco is not subject to the capital gains exemption. One possible solution is to collapse the optco and holdco structure before the sale of optco but this is expensive to accomplish.Holdco’s are also expensive structures to administer. 

3Ds- Darkest Diwali at D-Street

TOI reports- Investors are approaching this Diwali with a heightened sense of dread unparalleled in the history of the Indian stock markets. When trading opens for 'muhurat' for one hour from 6.15 pm on Tuesday, the mood is at a record low, with the sensex having crashed 33% in October alone. Last year during the same festive season ther was a gain of 15% only in one month.This is year people have lose thier hopes and are praying Goddess Laxmi to bless them and recover the market situation soon.

It is seen that not even  Harshad Mehta or Ketan Parekh's bear attacks fuelled had mauled the investors so badly, compared to the crashing world economy in October 2008 which has shaved off market capitalisation of Bombay Stock Exchange by Rs 15 lakh crore. 

This is the time where the collaboration of 3Ds have made the lives of many miserable.People have lost more than 60% of their money.This year during  the Dhanteras--a day  before Diwali the streets were every time people visited to buy gold coins and others, were almost empty as people were found sitting back at home praying for the situation to get better.

The Darkest Diwali ever at the D-street!!!!!!!!!

India -- 48th in global IT competitive index !!

India ranked 48th in the world in the 2008 IT industry competitiveness index, a study said. 

The key attributes of a country in analysing its environment for the IT sector was ample supply of skills, innovation,advancement in technology and infrastructure, protection and enforcement of IPRS, open comeptitive economy and government support.

ET report..."India has an overall score of 28.9 on the IT competitive index as per the study conducted by the Economist Intelligence Unin its second year, assesses and compares the IT industry environments of 66 countries to determine the extent to which they enable IT sector competitiveness. "

The study revealed that India performed best in business environment and support for IT industry development with a score of 59.3 per cent and 54 per cent. Areas of improvement include IT infrastructure and R and D environment in the country which are relatively low in the IT industry competitive index.

India has a long way to go but will definitely achieve a better rank in coming 5-7 years..!!

India's first journey to the Moon - - - -!!!!!

Chandrayaan-1, that lifts off Wednesday morning from Sriharikota, is India's first and the world's 68th mission to the moon, the earth's  closest celestial body which has fascinated every Indian. The world's first moon mission was by the then Union of Soviet Socialist Republics (USSR) on Jan 2, 1959.The Indian Space Research Organisation (ISRO) spent just over Rs 380 crore (quite economical) on Chandrayaan-1, with 1000 scientists toiling over it for three years.This is a proud moment in the India's history and demonstrates India's technological prowess by joining the international community in the peaceful exploration of space---THE FIRST UNMANNED MOON MISSION.It also initiates a fresh era of more ambitious interplanetary missions in the future by India to Mars and other planets. 

After the successful launch of Chandrayaan-1, ISRO is planning to send its second lunar odyssey, Chandrayaan 2, an Indo-Russian joint venture, likely by the end of next year or early 2010.With the Chandrayaan-1 and followed by Chandrayaan-2, India has already set its way to achieve higher milestones......CHEERS..!!!!! Isn't it a moment to celebrate ?????

Have you heard of---- India Post gold coins???

Gold is the latest addition to a range of retail activity that India Post has already taken up. India Post has extended its recently launched sale of gold coins to the state of Punjab considering the overwhelming demand for the service. Gold coins will be sold at selected post offices in Ludhiana and Jallandhar. The Department is also offering 5% special discount to its customers during this festive season which will be valid up till the end of the current month. On the eve of Dhanteras, which falls on Sunday the 26th October 2008, India Post has made special arrangements to keep some of its offices open in Delhi, Tamil Nadu, Gujarat, Punjab and Maharashtra. Dhanteras is considered an auspicious day for purchasing precious metals. Apart from enhancing the revenue of the Department, this has enabled India Post to usher in a new image of India Post as a modern and relevant organization in all areas of life. This facility is available in 102 Post offices . This service is done in association with the World Gold Council and Reliance Money Limited. Small investors are buying gold coins from post office for two obvious reasons. First, the gold coin prices are low as compared to other suppliers. Second, Post Office is focusing on the low-end denominations like 0.5 gm., 1 gm., 5 gm., and 8 gm making them more accessible. Isn't it a great and interesting move taken up by the India Post??????

Year 2008- explodes the packet of SHOCKS !!!

It is for the second time this year, the Sensex closed below the 10,000 mark. No one can predict anything substantial at this moment as the period of uncertainty will last a while. Life below 10,000 is the bitter truth and it’s something that those in the markets and the financial services industry will have to be contend with. “It is a colourless Diwali, this year,” says stockbroker Alok Churiwala.Rupee opened trade on Friday at a record low of 50.15 per dollar, weighed down by heavy losses in Asian stocks which raised worries of more outflows from the local share market. Uncertainty is never the best situation to be in and most in the market are caught in this whirlpool. This Diwali wont bring a break to the people but the basket of sweets is likely to hold the grievances and woes of many.The real income is down to about one-tenth of what people had.The moment of candour had made investors opt for other modes of earnings which they never dreamt of.

But as its rightly said, the bad times don’t last too long. Sensex below 10,000 mark is definitely a matter of concern but this is not the right time to panic. Our Finance minister P. Chidambaram said on Thursday that there was adequate liquidity in the banking system and he has advised banks to lend aggressively. Hard times always lead people to make smart decisions.Its already seen in the past that markets have recovered even after the Sensex was marked at its lowest.All what is required to be done is to calm down and watch the Sensex !!!!!!

Time to lock our money in bank FDs

Investors looking at high returns on deposits should soon lock their money with banks since interest rates on retail deposits have peaked.As mentioned in my last post that repo rates have been cut down which indicates that this is the beginning of a soft interest rate regime. Further, it is being said they would first lower their deposit rates and then reduce lending rates. This indicates that banks may come under pressure to reduce deposits rates. Currently, most banks are paying a maximum rate of 10.5% for one to less than three years while senior citizens are entitled for 11%. Interestingly, the 10.5% offered on deposits for three years was last offered in 1999-00, following which the interest rate cycle began to turn southwards. Rates had fallen sharply to 5.25-5.50% in 2003-04. The country’s largest housing finance company, HDFC, offers as high as 10.90% for 30 months if an individual deposits Rs 1 lakh and above. While for deposits below Rs 1 lakh, HDFC offers 10.55%. Although 10.5% for 390 looks attractive, ideally, a depositor should invest in long-term deposits like 890 days. This will help them avoid a negative impact of lower interest rates. This means that if a depositor parks his money in long-term deposits, even if the interest rate cycle turns, the depositor would gain. The highest rate on longest tenure is 10.5% offered by India’s largest bank, SBI, which is for 1,000 days.

Drop in Repo rate

The Reserve Bank of India (RBI) lowered the repo rate,(the rate at which it lends to banks), by 100 basis points to 8 per cent(earlier 9 %).A reduction in the repo rate will lower the cost of funds for banks. In recent weeks there are signs of strain in the credit markets which had an indirect impact in the global liquidity."The global financial situation continues to be uncertain and unsettled. Even as countries directly affected by the turmoil have taken aggressive action to manage the crisis, confidence and calm is yet to be fully restored in the financial markets. Effective October 11, the cash reserve ratio or the proportion of deposits that banks set aside, has been lowered 250 basis points to 6.50 per cent to inject around Rs 100,000 crore liquidity into the system. Further, a special window has been opened to allow banks to access up to

Rs 25,000 crore from RBI against their farm debt relief arrears. In RBI's first liquidity adjustment facility session today, there were no bids from banks to borrow funds through the repo window. Thanks to the RBI's steps the liquidity conditions in the markets have eased a little with the weighted average call rate, according to data on the Clearing Corporation of India.