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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

My Blog


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,

Potholes, potholes everywhere....hello India!

Posted on July 25, 2013 at 9:37 AM Comments comments ()
It is monsoon and rains intermittently, making roadworks difficult.  Much money has been allocated to repairing the roads, which are full of potholes, in Hyderabad, Mumbai and Banglaore.  Within the last 24 hours, 4 people have been killed on the roads as a result of the potholes, sending people off their scooters and cars off balance.  Traffic grinds down, and it is sheer determination of people to go to their work, take children to school or return home that makes them carry out these bumpy, back-arching journeys.  Just to see the roads on NDTV and their representative coverage of this situation makes people cringe.
There is no clarity as to who is responsible for keeping the roads up to date.  The local people have given up on the politicians and councillors, whose job it is to organise the repairs and point them out to the relevant municipal authorities, but confusion over which patch it is, whose jurisdiction it is, who is responsible and so on leaves a poor impression.  Just how do the politicians and councillors and the road works departments liaise and co-ordinate is a fool's blessing. 
Of course there is a lot that can be done to rectify the situation, and ensure the traffic moves at a normal pace, saving people time and frustration.  This would surely add to the economic growth?  Time is money, and a satisfied people can enjoy the finer things in life than being regularly trapped on the bouncy journeys. 
It is time clear maps were drawn for people to know who is responsible for road maintainaince on each patch, and then for the teams responsible to get the work done of filling the potholes.  It may not be the best plan to fill them all in a short while of say 48 hours, but rather to fill in a few roads each day when the weather permits so that the job is well done and the filling solidifies and takes hold and lasts longer.  Attention to this problem of repairing the potholes will do Indian cities a lot of good, and the people proud.  Those who are in charge must ensure they don't let the people down.  Travel on Indian roads ought to be safe and comfort and free of stress as possible.  That's something to achieve.
Kind regards,

Oil price seems far too high to sustain Recovery

Posted on July 10, 2013 at 12:51 PM Comments comments ()
The price of the West Texas Intermediate and the Brent crude, traded on the International Commodities Exchange (hence ICE) seems to be spiking upwards and will probably match any time soon.
The situation in Egypt may have caused that spiking, but since Egypt is not a major oil exporter, there can be no logical reason for the price of oil to be so affected.  However, perhaps the excuse is good that both prices move together in tandem, to create a global parity.
The Fitch downgrading of Italy's rating today may be contested; however, it indicates the weak state of the Recovery in Europe.  Similarly, the news from China that their boom is not so strong as figures had previously indicated (due to numbers which had been inflated) shows there is euphoria amongst the traders.   This brings a reality check, especially for the Oil price bulls, who perhaps will ignore the plentiful supply that currently prevails and the strategic oil reserves that are always there and have not been utilised for a long, long time. 
Why Oil price should be up under the circumstances can only be explained by some traders and commentators, whose kudos will be to make a fast buck or get some furthering of controversy on the grades and quality of oil.  Great talking points, but not anything to help the worldwide economic Recovery, which would suggest the Oil price ought to be lower.  I imagine the OPEC economists and Ministers would agree, to sustain their own economies on a growth phase.  If the rest of the world stalls, the reduction in their GDPs will automatically have an effect on the OPEC nations as well.  The world is a joined-whole, where development and prosperity moves hand in hand for all together. 
I have previously suggested that the Oil price needs to be under $85 a barrel for the worldwide economic Recovery to be sustained.  At that price, most of the infrastructure development in the OPEC nations can be viable, according to several Ministers comments that I have noted previously.  The current spike I hope will be only temporary, until the price starts to  trundle down once again.  Market forces and the situations worldwide will hopefully prove favourable.
Sometimes the numbers of contracts traded at higher prices are so thin; perhaps the reporting price ought to be based on a wider number of actual sales, from a reliable source. 
I will be pleased to receive your comments on this issue.
Kind regards,

The huge APR moneylenders

Posted on June 27, 2013 at 2:38 PM Comments comments ()
It seems the government is supposed to be doing something about curbing the big APR moneylenders, precisely what remains to be seen.
Just a look at some of the moneylenders' shop windows suggests some things that may as well be included in any future legislation. 
One shop says 'You can borrow upto £1,000'.  It does not give any rate of interest or any such indication.
Another, which used to display a rate of 2487%, does not display that rate any more.  But it urges borrowers to only borrow what they can afford to repay. 
A positive step would be for them to display the rate, and give a table of figures, giving say repayments for every £50 and £100 per month, so the borrowers are clear what it is going to cost.
I also note the Department of Work and Pensions is no longer offering Emergency Loans.  This may make the people in need turn to the loan sharks and suchlike....Something the government should be helping people avoid, that would be a people-friendly government, that serves the people.
The government could do well to teach basic budgeting and good housekeeping to people who are unemployed or ill, to help them prevent borrowing money which they could seldom afford to repay.
As for the people trying to live on a food allowance of £3 a day, that is £21 a week, and can buy a variety of good food, maybe walking to the supermarket twice a week and picking up fresh.  Bit of exercise as well.  And if you save £28 every four weeks, well, you'll be the richer every year. 
As the saying goes, pennies make pounds.  And the need won't arise to borrow from the sharks.
Kind regards,

Namaste, Indore!

Posted on May 24, 2013 at 4:36 AM Comments comments ()
As the weather shoots up another 5 degrees in most parts of India, including the normally cooler hills, there is a drought in the state of Maharashtra.  The water wells are empty, and water is being brought in by tankers, which move along and inefficiently distribute the precious water, spilling some of it as the tanker moves along,  one pewter container per person.
The drought is all no thanks to the sugar cane industry, which drinks up most of the irrigated water.  There are handsome subsidies in the sugar cane industry, and more acres are earmarked for further plantation of this crop.  The sugar factory bosses are happy, and the regional government ministers have to get their favour.  But it seems absurd as the drought is likely to drive people away from parts of Maharashtra, and the overfill of treasury to the sugar bosses will bring poverty to the rest of the region.
That is something which is best faced up to and averted before it becomes glaringly obvious. 
Sugar could be imported quite economically from regions of Africa where there is plenty of land and water, such as Uganda, where the Indian Madhvani family have the biggest sugar mill.
In Pune, normally a cool area compared to other parts of Maharashtra, temperatures have soared up to 45 degrees centigrade, and there seems just about enough water to wash the face and brush teeth with a glass of water.  This is in stark contrast to how it used to be, when people could take a comfortable bath.  The CM of Maharashtra and his cabinet must rethink on this policy of allowing more sugar cane plantation, to ensure the economy doesn't become unbalanced.  I hope they will listen to this as constructive criticism, as I have stayed in Pune and have many relatives there.
Kind regards,

Inspiration from a church in Pasadena

Posted on November 11, 2012 at 12:29 PM Comments comments ()
Last Sunday, I was in Pasadena.   Normally in England, I go to my church here in Ilford, so I took a stroll to the local church, the Church of Christ Jesus, Scientist.
This is a great church, started with the work of Mrs Mary Baker Eddy, whose story is worth reading as an inspiration of a woman who found courage and inspiration in the works of Christ, and was inspired to write Science and Health with a Key to the Scriptures.  I have read that book, and benefited from improved health and improved outlook. 
The church building in Pasadena is beautiful, with an inscription from Christ :
     "If you believeth on me, you shall do great things;
       you shall do greater things than me;
        for I go on my Father"
I thought of the parable of Christ, where He turns two fish into five hundred, and provides water for the many.
It occured to me, that that is the same as a man who spends 500 at a club but could instead distribute a dollar each to many, people who are obviously in need. 
A few days later, on a bridge in a mall in Las Vegas, I had the good fortune to buy a bottle of water for a dollar.  This bottle retails for 99 cents in the cheapest store.  This was a great spirit, selling water to the thirsty, doing good deeds.  As I turned, I realised, that she was the same good spirit I had bought water from in the Ajanta and Ellora caves in India about eight years ago.  Once again, I realised, this is the good spirit that has come to bless me, and others who drink from her.
I wish you a happy Sunday, and may you give generously to those in need.
Kind regards,

The Paralympics, a celebration of human spirit...

Posted on August 29, 2012 at 12:29 PM Comments comments ()
If you asked me to name three Paralympians, I would not be able to name even one.  That I admit is a shortcoming on my part, which I hope to remedy forthwith.
The Flame has once again reached London, in readiness to light the cauldron tonight, to mark open the London Paralympics, the celebration of human spirit. 
Just seeing some of the clips on TV, I am truly amazed at the javelin thrower in a wheelchair, or the World Wheelchair Tennis Champion in India, who has yet to be given the highest sporting honour by the government there although of course he richly deserves it.  Again, on Facebook I saw a photograph of a man born without the lower limbs, but has worked himself to build a perfect upper part, the body of a bullworker champ.  I cannot help but marvel at the dignity of these personalities, who through sheer determination have triumphed with a competitive spirit of self-worth. 
These sportsmen and women are an inspiration to us all.
Kind regards,

Oil price is once again too high for Recovery

Posted on August 21, 2012 at 7:09 AM Comments comments ()
Oil price of  WTI at $96 and BRENT Ice at $114 currently categorically is too high to help sustain economic Recovery, and will start to drag on all the economies.  It has already caused slow-down in the aviation sector, although more people are inclined to travel and see the world.  The high oil price has meant airlines not being able to pay their fuel bills, and not being able to pay their staff salaries for last eight or nine months.  This is true in the United States, India, and other places, and has necessitated airlines mergers in Europe. 
When the Oil price peaked at $147 a barrel, it took out nearly $250 billion from the Eurozone.  That has probably contributed to a prolonged recession, which has not really left hold of the economies, where once again the toes seem to be in what could turn into a double-dip, God forbid, if corrective measures are not implemented. 
Talks of war in the Middle East should not be allowed to hold.  While it may aid some nations financially to have a higher Oil price, in the long term it will not prove to be of profit if the sentiment actually turns negative.  Recessions are very tricky pot-holes to come out of, and it has taken over three and a half years and still the effects are being felt worldwide.  Demand-destruction would be the next logical scenario.  A sustained period of six months of WTI at $85 a barrel and BRENT Ice at $100 a barrel would help everybody. While the world is in a sentiment of peace and Recovery, if everybody helps to sustain that sentiment and do the necessary, hopefully we will all have helped to avoid a double-dip, on whose brim the world currently stands. 
I sincerely hope the people who can do the necessary influencing will do so.
Kind regards,

American Jobs figures seem good

Posted on August 1, 2012 at 2:10 PM Comments comments ()
The recently released ADP figure of private sector job creation in the U.S. at 167,000 for June seems good news, after the somewhat dismal figures for May.  The lower Oil price is doing its trick, and restoring confidence and productivity into the economy.  Just imagine if such a scenario was maintained for the next six months or so.  In this regard, as long as the diplomatic stance is maintained with regards to Iran, hopefully the Oil price can too be maintained, and that I believe will help Recovery stay on track.
Federal Bank Chief Ben Bernanke has reiterated that the interest rates will remain low till 2014, and a stimulus would be introduced if warranted. 
Now that the Case-Schiller Index seems to be suggesting an improvement in the U.S. housing market, it seems to me that everything augers well for America. This can only give added courage to other economies, that the world trade and political atmosphere will continue to improve.  For this, I pray.
Kind regards,

Huge potential in India

Posted on July 31, 2012 at 4:15 PM Comments comments ()
Today's most important economic news was about India. 
There was a huge power cut in the north, affecting 18 of the 26 Indian States.  In temperatures ranging from 23 to 38 degrees Centigrade, this was a terrible experience for the 670 million people affected.  Most normally have their ceiling fans whirling; today, those who did not have generators or back up supply had to suffer the sweltering heat.  The power grid has failed over two consecutive days, slowing down traffic and making people feel miserable.  Power cuts and water shortage have become common-place in India, but not on such a scale.  To say that the infrastructure needs upgrading is not saying anything that is not obvious.
The second piece of important news was that the Reserve Bank committee had decided to hold the repo rate at 8 percent, despite the slowing economy.  The threat of inflation is seen as the main concern, but the lack of investment in Indian Bonds and the falling value of the Rupee seem disheartening. 
If people are interested in encouraging further investment into India, such as FDI to build businesses which may be mutually beneficial to the investing organisations as well as India's growth, then surely the foreign currencies coming in would be converted into Indian Rupees, and strengthen the value thereof.  In due course of time, that may happen, as more confidence builds in the Indian economy.
India has everything going for it, in terms of demographic mix and resources as well as potential for growth. 
The monsoon has delivered less rain than normal at this time of year, and this will affect the crop yields.  Water is depleted in the reservoirs, and its outflow is being rationed in most States.
However, the RainGod may show kindness and mercy on the people.  For that, I pray
Kind regards,