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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

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Stimulus, Housing, Wall Street and Obamacare...

Posted on October 30, 2013 at 5:30 PM Comments comments ()
The news from the Federal Reserve that it expects of maintain the Stimulus at $85 billion a month in bond purchases should have been great news for the markets, yet they headed slightly lower.  The fact that there was no mention of the sequester was a bonus.  The damper was I believe the news that Senator Paul is prepared to veto the appointment of Ms Janet Yellen to head the Fed.  It seems the tea-party Republicans have been having a crack at bringing down the government for the last three and a half years, and they are trying to give it another go.  Ultimately, it seems that good common sense will prevail in the good of the nation, and Ms Yellen may yet take control of the spigot and give everyone some punch for the New Year.  At least the majority of analysts at CNBC hold that view, and people are expecting the markets to strengthen further : will the DOW test 16,000 before the year-end?
 
The housing figures were disappointing, but you cannot blame the individual homebuyers.  The air of uncertainity created by the previously on-going sequesteration cuts, then the partial government shutdown, then the delay in agreement on the debt ceiling raise, must have compounded to weigh down sentiment.  Yet it seems the hedge funds have purchased lot of housing stock, and put it into the rental sector, and house prices have been buoyed up.  This may be good for the hedge funds, but for the individual homebuyers it means having to begrudgingly pay rent instead of a mortgage, but a roof is a roof anyhow, and thank God for investors who have the wherewithal to buy and rent them out.
 
Once the air is clear, and assuming the punchbowl is replenished, hopefully until the end of 2014, then housing Recovery should gain some stability.  For the individual homebuyers, it will be a great point to join in in the party.
 
Under Mr Obama and the Fed's accommodative policies, Wall Street has done well, now reaching for a record high.  Money has been invested in equities, turned to working capital for the corporations, income for investors, and built up a substantial cushion for the pension pots and investments.  So far, it has been a good reservoir of capital, and providing confidence is maintained, will continue to be so. 
 
What maintains the house should be good for everybody.  Of course one or two senators may not care much. I hope they will not inflict a lot of pain on the system as a whole by sticking to their guns too rigidly.  The climate is one for accommodative policies of co-operation, so that the world may avoid another recession soon after the longest one in recent history is hardly over.  Just for the sake of humanity, they have to rethink the consequences of their stance.
 
Obamacare is a great idea if it were like the National Health Service in Britain; but it seems the way Medicaid is being expanded to cater for the people who were previously without cover is placing substantial burdens on the system.  Quite a lot of people are having to pay much more then they did previously in order for additional people to get cover.  This just does not seem fair.  Perhaps a parallel stand-alone system of walk-in centres could be sponsored by the government to cover people who did not previously have cover, so that those who were happy with Medicaid could possibly be happy with them once again.  As I have remarked previously in my column, the NHS in Britain evolved for 40 years from the Poor Laws of 1907 to Royal Charter in 1947.  Such a grandoise system cannot evolve in a short few years, and the teething troubles with the glitch in the computers may be the least of the problems.
 
All things being equal, 30th November is not far away, for people to see how Obamacare is rolled out.
I would have suggested even more patience so that a balanced, truly Affordable Health Care may evolve for the United States. 
 
Kind regards,
Duru-darshan.
 

Mr Bernanke's penulimate tesimony before he leaves the Fed.

Posted on September 19, 2013 at 5:56 PM Comments comments ()
Federal Reserve Chairman Ben Bernanke made a cordial testimony yesterday, a month now before he is due to step down from office.  Essentially, he restated that the quantitative easing measures need to remain in place until the economic Recovery picks up further steam, but such measures have greatly benefitted the economic pickup and that the economy is strengthening thanks to such measures. 
 
There is nothing but appreciation for Ben Bernanke's handling of the Federal Reserve policies, and I admire this Statesman greatly.  His unique style has helped keep just that degree of suspense that is discretion, while at the same time sharing as much information as has been necessary to bolster stability.  The world stock markets got a boost after his testimony yesterday.
 
It remains to be seen how the Obama administration will fix the debt ceiling issue, which Treasury Secretary Jack Lew has indicated may fall due in October.  Will it be bi-partisan co-operation by the Republicans and the Democrats as before?  When everything is going so well, it is to be expected that they will push through the required votes to help Recovery stay on course, as would be both prudent and necessary.
 
Whoever is selected to be the next Fed Chairman, essentially the pro-growth policies are expected to stay in place. 
 
I have a hunch that the Dow Jones Industrial Index will either shoot for 17000 by the end of the year, or head up for 16000.  What the mind of man can conceive and believe, it can achieve.  I sense it will be possible.
 
Kind regards,
Duru-darshan.
 
 

The situation in Egypt

Posted on August 15, 2013 at 6:17 PM Comments comments ()
It has been called a massacre, the deaths of nearly 500 people in clashes between the military and pro-Mursi supporters, after the ruling junta lost patience with the protestors occupying squares in Cairo and Alexandria.  Bulldozer-tanks demolished the barricades Dr Mursi's supporters had built around themselves, and soon thus provoked the people started to throw bricks and stones at the tanks, and soon the army moved in to confront the protestors.
 
In the midst of this, or soon after it started, the Interim Vice President Mr El Baradei resigned, leaving the leadership mostly composed of military brass headed by General Sisi.
 
It has been a sad situation, and I hope and pray that during the one month of a State Emergency, when curfew is being enforced rigidly at night time, the ruling junta will consider the possibilities of how to now form a civilian government under its aegis and continue with restoration of the democracy and continuation of the economy vis a vis the world.  The best solution, a pragmatic jigsaw fix, would be to reinstate Dr Mursi in a power-sharing leadership, which will appease the Muslim Brotherhood and not give U.S. the excuse to withdraw aid, which it could well do if the leadership is a de facto military one.
Under the aegis of the military, Dr Mursi can be relied upon to interpret the constitutional parameters of his duties.  Perhaps if peace prevails, Dr El Baradei hopefully could be asked to also resume his position, perhaps as Joint Vice President with Dr Mursi.  I am taking the liberty to give my impartial view, but I believe the Egyptian democracy must be saved at this first sign of trouble, so that it can continue to function normally with the tourism and trading, thereby putting this nation onto a path of Recovery, which it can achieve if there is a peaceful outcome to the current situation.  I dread to imagine this nation of Nasser's and Anwar Sadat's people, who believe in Arab unity and regional peace, having such violence and anger which has visited Egypt in the last few days.  I pray all sides will show restraint and unending patience and help to resolve the crisis peacefully.
 
The stock market in Cairo was a plunger, and the world markets too have taken fright, fearing escalation of violence in Egypt in the absence of a sound plan of reinstatement of an acceptable leadership that will appease the Muslim brotherhood protestors, who feel robbed of legitimate representation in the form of Dr Mursi, who the Yemini Nobel laureate Tawakkol Karman has described as 'the Nelson Mandela of the Arab world'.
 
The Oil price has headed up again, when really it should be heading down given the weak figure of 0.1 percent growth in Eurozone GDP.  Okay, we don't have a recession, but it is very weak growth. 
The high unemployment in Israel should give people food for thought.  Oil price is far too high, and a few traders becoming millionaires will leave a lot of people suffering, especially in places like Yemen, Kenya, India, Pakistan, Bangladesh, Myanmar and China.  High oil prices just slow the economies down, that is now pure common-sense, based on extensive data from the time Oil hit a high of $147 and saw the world economies suffer a slow down and the deepest recession in living memory. 
 
May Allah inspire the Egyptian people to bridge their differences and set their nation back on track for peace and Recovery.  My prayers are with all brothers and sisters in Egypt.
 
Kind regards,
Duru-darshan.
 
 
 
 
   
 

My posts for the last 30 days, to 1st June

Posted on June 1, 2013 at 9:21 AM Comments comments ()
Hello Readers,
Thanks for your visits to my website and blog.  The stats are quite impressive to me anyway, with an average of 12,000 visitors a month over the last six months, with a total of 196,493 visitors so far since I started to blog in June 2011.  So the latest numbers indicate a gratifying growing number of readers, thanks to you all.  I hope you continue to find my blog informative on debates of contemporary concern In the world of finance, economics, philanthropy and other issues of human concern.
 
Anyway, my posts over the last 30 days were as follows, and you may wish to look them up and have a read :-
 
   Heavenly Father likes us to be joyful
 
  Ramdev Ayurvedic - Goodmayes Business Centre
 
  Winds, be thee still
 
  Hello, Dorking and Oakland
 
  What should we have instead of austerity
 
  Namaste, Indore!
 
  Welcome Amsterdam, Walnut, Atlanta
 
  The youth employment and the Retirement age.
 
  What's happening with the economy?
 
  Hello, Amsterdam.  Masseur voor Frozen shoulder.
 
That's it for the moment.  Wish you all an enjoyable weekend.
 
Kind regards,
Duru-darshan.
 
 
 
 

The youth unemployment and the Retirement age

Posted on May 28, 2013 at 7:24 AM Comments comments ()
It seems a little bit of tweaking and changes in policy may improve the situation in Europe dramatically, at least I believe so.
 
The high rate of unemployment amongst the under-25s and the debate about the Retirement age surely throws up possibilities of correction and growth in the right segments. 
 
People like to retire early, not work into their old age!  People like to work a slightly shorter week, so they can enjoy some leisure time enjoying the sunshine, pottering around town, meeting friends, playing cards, taking youngsters to all the exciting places, and so on.  That is the boon of the Digital age, where people shouldn't have to work long hours.  Each new generation should have more leisure time, and a better standard of living.  Why not? 
 
And the young people, why should they be unemployed?  If there is work to be done, they should do it instead of the older people.  Does it not make sense?  It would reduce unemployment amongst the young people, who are the strength of this generation.  What a relief it would bring. 
 
If more young people are facilitated into the jobs market, they will become empowered to do all the traditional jobs such as plumbing, shop-keeping, driving, cooking and catering, house-building, architecture, book-keeping, teaching, nursing, pharmacology, dentistry, librarianship, well you can add a few names as well.
 
As the young people work, the economy will boom, able to support the people who need to retire and draw a pension.  It will seem fair if people who have worked hard for so many years can retire at a reasonable age and enjoy a future of a leisurely life, whilst the young can convert all their talents and energy into wealth for their nations, by work, enterprise and innovation. 
 
Europe can endeavour to put young people into traditional occupations, as well as nurturing talents for the digital economy.  Maybe the lucky ones will help create some star performers like Facebook or Pulse or Tumblr, and those can be developed as hobbies by the rest of us I guess. 
 
Now I hope the legislators and labour department superemos can sit down and formulate some ideas that will turn all that latent energy into wealth and growth for Europe.
 
Kind regards,
Duru-darshan.
 

My blog posts over the last 30 days

Posted on May 16, 2013 at 7:35 AM Comments comments ()
Dear Readers,
I am very glad that I have so many readers who regularly visit my website and check out my blogs.
For your continued reading pleasure, I wrote the following blogs recently, in the last 30 days :-
 
   Interest only mortgages, what's the fuss?
   RBI repo rate cut of 0.25 percent (25 basis points)
   This is time for buyers to support Bangladesh factories
   Time for the Presidential Prerogative, I believe
   Ramdev shop Ilford address
   The Queen's Speech 8th May
   How does money get to the real economy?
   Wear a silly hat and sing a song
   From 2008 to Recovery
   When the monetary expansion stops, does the party end?
 
What was Cinderella told?  Is the beautiful carriage going to turn back to a pumpkin?
Is the slipper going to lead her Prince to her?
 
I hope my blog posts will provide you some amusement.
 
Kind regards,
Duru-darshan.
 
 
 

From 2008 to Recovery

Posted on May 13, 2013 at 4:09 AM Comments comments ()
The 2008 banking crisis and the collapse that followed could be summed up in a few vignettes:
 
The two major banks in Iceland, who had invested in two entrepreneurs who were buying up British retailers on the High Streets of Britain, went belly up, leading their Finance Minister to remark some time later that "perhaps we should go back to fishing".  The size of the hole was £61 Billion, many times the GDP of that nation.
 
Then came the blow up of the boiler houses like Bear Stearns and Lehmann Bros, whose chairman Mr Fuld had readied an exit strategy of taking a golden parachute of $300 million, totally oblivious to the small investors in India and Brazil and other places bereft of their investments of lifetime savings.
 
The stockmarkets at that time plunged hundreds of points.
 
The next initiative in the Recovery process was the meetings of the G7, then the G20, of discussions of ideas on how to climb out of the mess.  A new infusion of approximately $1.5 Trillion was put into the U.S. and  European economies, in emergency measures, and slowly, steadily some semblance of normality started to materialise.
 
Since then, the U.S. has put in a very necessary and prudent stimulus in the form of quantitative easing (QE I, II or III) and likewise the British economy has been blessed with measure of £375 Billion.  Currently the Bank of Japan is infusing $85 Billion per month, equalling that of the U.S., who have somehow put in a sequestration of one-twelfth of that, to reduce $85Billion over a year.
 
Still, there is plenty of money in the system.  The British banks like HSBC and Barclays are said to be flush with cash.  The stockmarkets worldwide look in a healthy shape, including Kenya and Ghana in the developing nations. 
 
This current week the markets will take a breather, as not much detail is available as to what the G7 and IMF M.D. Christine Lagarde have come up with from their recent meeting in Buckinghamshire.
While there is talk of the stimulus in U.S. being tapered off, the new U.S. Treasury Secretary seems to be calling for a resolution of the Debt Ceiling issue before Labour Day. 
 
Banks seem in robust shape currently, and risk appetite is growing, a good bullish sign in which it is hoped the banks will take courage and loan to small family businesses and young entrepreneurs, and help them transform that mountain of readies into wealth in the long term, creating sustainance for the people and taxes for the nations, and much happiness for all.  When people start to practice the law of generosity and become well-wishers to one and all, everyone will prosper.  For that I pray.
 
Kind regards,
Duru-darshan.
 
 

Time for the Presidential Prerogative, I believe

Posted on May 5, 2013 at 4:20 PM Comments comments ()
A time will come very soon when the U.S. debt clock hits 16.15 Trillion.  That is a self-reminder to the American nation to review its finances, and see what savings and improvements could be made, to eventually balance the National Ledger one day.  As is true of all sovereign nations, the national ledgers are very seldom balanced, thank God, for development, expansion, review and progress are activities that are forward looking. 
 
Nations which are having to balance their books and keep expenditure strictly under control due to lack of overseas support typically are tiny nations, with limited natural resources, who have exhausted their credits with other nations and thus become at the mercy of God and the goodwill of friendly nations.
 
With the U.S., it has plenty of natural resources, a nation that is influential in its friendship across the globe, and in spite of being one of the major developed nations still has plenty of scope for further development.  To wit, they are still building extensions to the railways in Pasadena, in California, and with the product developments there, the U.S. in my opinion is fully several years ahead of most other economies. 
 
Many fine houses were lying empty across the U.S. in the midst of a housing meltdown; that has now gradually and surely started to heal.  Every month the U.S. is creating more jobs, and the unemployment rate has started to go down.  The 165,000 new jobs created in April were something that cheered the markets, and took the DOW to over the golden 15,000 bar which I believed it would vault over (I wrote as much in early 2012). 
 
The only thing that remains is for the U.S. Recovery to continue is the Debt Ceiling II, the date for this seems to be around May the 18th. 
 
It is my assumption that the best course of action would be for the President to exercise his Prerogative in this regard, and sign in, with the full bi-partisan co-operation of Congress, a further figure of 1T.  This may even be modified to say 250B over 6 months from 18th May in view of the improving economy and creation of jobs on a wholesome budget.  That would ensure continuation of Recovery and happiness and welfare of people, together with creation of wealth through exchange of production and consuming thereof, and money swirling in the system and returning to banks and eventually to the Fed
(through financing and creating wealth). 
 
In about two years, when Prosperity appears in U.S. and the other nations which follow and further Peace, the name of the undersigned may be forgotten, but who cares? 
 
God is our Heavenly Father, and as He has so inspired capable men and women to administer the affairs of nations, He has so inspired scribes to give a helping hand. Today, it is my belief that everything will be fine by the grace of God, and the suggested course of action will lead to a greater Prosperity for all. 
 
I am always glad to hear from my Readers their comments and opinions, and any hints they wish to share with me.
 
Kind regards,
Duru-darshan.
 

Silly hat store song

Posted on February 19, 2013 at 12:12 PM Comments comments ()
Yes, it is that kind of day, when business is slow, yet somehow the store assistants feel so moody they are making customers turn away.  Okay, probably they are just window-shopping, but they may buy in the future. The idea always is, let the customers soak up the image of whatever they enjoy looking at,
then in the future when finances permit, they'll come back and buy it.
 
The silly hat store song is the wisdom of one of the Waltons of Wal-Mart. Nothing like lightness to cheer
people up, and then something happens, they buy what they like. So, wear a silly hat and sing a song!
 
Honestly, the stockmarkets have been in a long-term bull trend since the 1930s, and will probably continue on that trajectory. That is the observation I made on my Facebok page after visiting the Market Technicians meeting yesterday evening. When I saw the chart of the S&P 500, a lightness descended upon me. Suddenly, I felt very very optimistic. Everything, I believe, is going to be fine.
 
The Oil price is a tad to high for propeling Recovery, including in the Oil producing world. So, there we have it : we can't al eat cake and charge a lot for it. The oil price ought to be lower, with warm weather and growing stockpiles and the SR. Don't need someone from the CIA to tell us that, surely?
 
The Japanese like the U.S. are puting more money into the system, to maintain a good standard of living for their citizens. People should just enjoy it. Grandchildren in future generations will appreciate our aplomb.
 
Someone was going to upgrade his mobile phone and buy a suit, when he got a text message that his job interview had been cancelled. That would not have happened in the olden days, when people didn't have mobile phones! I would say the world is communicating too fast for its own good. Slow down a bit of the new tech sector, and breathe life into the real world, where people eat, drink, worry, make merry, wear suits, work in ofices with desks and chairs - and use computers, occasionally.
 
Kind regards,
Duru-darshan.
 

Bangladesh cuts its key rate by 50 basis points

Posted on January 31, 2013 at 10:10 AM Comments comments ()
I have long been an advocate of the reduction of key interest rates in the so called Emerging Markets.
Therefore I was happy to hear the news that Bangladesh has cut its key rate from 7.75 percent to 7.25.
This reduction of 50 points may seem like a bold step, but it is a courageous step to be met with applause.  Money should be as cheap and widely available as possible, and definitely it will spur growth, in this nation of hard-working and enterprising people. 
 
Fair interest at six percent is an inspired wisdom of Benjamin Franklin, and somehow I believe it still holds true today, and I would suggest an aim towards this rate for all the economies, especially India, where the rate after nine months was cut 25 basis points, and Nigeria, where vast potential remains untapped as the interest remains high. 
 
Just like China threw the books out the window and adopted a rational approach to development of their economy, increasing the money supply and easing the rate (or tigthening it) as necessary, likewise it would serve the other nations to do likewise, to serving their peoples' needs and providing them with the life-blood to fulfill their dreams of improvements in living standards and development of their natural and human resources.  Money is magic, it makes a lot of things possible, and, again, if it is available to as many as cheaply the better.
 
Kind regards,
Duru-darshan.
 
 

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