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Honest Information, Profitable Trading

Durudarshan - Investment Analysis

My Blog

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Magnificent, the ECB Stimulus

Posted on January 25, 2015 at 5:08 PM Comments comments (8)
The Trillion Euro stimulus announced this afternoon by ECB President Mario Draghi is nothing less than magnificent in my view, and will help create jobs and industry for millions, and turn into wealth.  This stimulus augurs well for the European stockmarkets and for the Euro itself, which it now underpins with a very positive aspect.  It seems to have been announced at the right time, and although the immediate market reaction may not have been wildly enthusiastic, it is a complex stimulus, needing people to understand and digest its implications.

In plain terms, it is 60 billion Euros per month over 18 months, starting from March to September 2016, meaning a total of 1,080,000,000,000* Euros.  This was announced by Mr Draghi at the press conference in Frankfurt this afternoon.

It will serve the 19 nations that make up the Euro Area, or Eurozone, which now includes as from 1st January 2015 Lithuania.   However, it will not be available at the moment to Greece, which benefits from arrangements already in place from the IMF, which gave them two bailouts and numerous haircuts.  Perhaps there could be cross border mergers of some organisations which would benefit all?

There seems enough appetite for additional funds, especially by companies who have not been able to find funding from the banks so far.  This is a ready segment that will be glad to be served by this Stimulus.  As in England and Britain, where Mr Cameron has been visiting various companies, who have received funding now, something similar needs to be implemented in the Eurozone.  Money invested in companies which need capital for upgrades of machinery, or cash flow to keep the factories operating while their customers arrange to pay them, will maintain employment and sustain livelihoods and, hopefully, even create wealth in the long term.  That 'old school' way of trading had died recently in the credit crunch, and could well do with revival.  It may be the clue to bring Recovery back on stream.


This Trillion Euro Stimulus was long awaited, and probably is just in time, now joining the money flow in the U.S., Japan and China, to maintain the worldwide economic Recovery, which shall flourish to Prosperity for all nations.  The next stage surely must be for the BRICS nations to reduce their benchmark interest rates and for the Emerging Markets to do something similar, in due course to be followed by Africa perhaps?  Or even simultaneously, and soon?  Why not?  The national books can become squared internationally, as each nation develops its resources, trades with the other nations, and brings development and growth at home.  Would that not be the most marvellous thing to happen?


I wish you peace and prosperity, to every nation, man, woman and child.


Kind regards,

Duru-darshan


(c)  Copyright.

P.S. Earlier I left out three 0's.  Aw aw aw!


Hello Putian, Beijing, China....

Posted on October 23, 2013 at 3:29 PM Comments comments (9)
Recently I've had a lot of visitors to my blog and website from Putian as well as Beijing. 
 
I note the Indian Premier Dr Manmohan Singh has been to visit Beijing soon after his trip to Moscow, and
things are looking good for co-operation on peacefully observing each other's shared borders as well as increase in friendly relations and trade.
 
My personal hope is to become nominated by the Congress Party of India (UPA) as the Prime Ministerial candidate for May 2014.  Should my wish be fulfilled with approval of Rahul and Mrs Sonia Gandhi, I would be thrilled and would go to India straight away to start campaigning in earnest. 
 
I have a vision for India as a good neighbour to China, Russia, Pakistan, Nepal, Bangladesh, Afghanistan and the whole region, as well as to unlock the huge potential that there obviously is for growth of infrastructure such as roads, bridges, dams, power generation, further irrigation, as well as housing, hospitals, schools, universities, and so on, which would utilise the resources and cater to the public, as well as use the skills and expertise internationally in building up this great nation.  I have lived in London the last 41 years, and see the n-th degree developments of this nation (United Kingdom) as something India could well try to aim for.  I imagine that with India's resources both of the peoples' savings and growing expectations of improvements in living standards, it would fit hand-in-glove. 
 
It is regrettable that there have been skirmishes on the international border with Pakistan, especially just after Dr Manmohan Singh-ji had constructive talks with Pakistan PM Nawaz Sharif in New York recently. Mr Nawaz Sharif  has a great reputation as a man of his people and a positive personality, who would only wish the best for his people and continuation of peaceful co-existence with India.  The Indian PM has offered bilateral talks on this issue to find a resolution, and I sincerely hope common-sense and peace prevails once again.
 
I hope my readers will be able to make an accurate picture of what I would like to do, and I would welcome your comments on this matter.
 
In the meantime, I wish you a peaceful and happy evening.
 
Kind regards,
Duru-darshan.
 
 
 
 
 
 

My blog posts this month

Posted on September 28, 2013 at 5:43 PM Comments comments (42)
Thanks for visiting my blog and website, I hope you found something interesting to read.
 
There seems a constant swirl of stacks of information, both online and in printed form.
 
Most of the relevant information that makes an impact on affairs is both time sensitive and scarce,
that is the information that I try and gather and interpret, for my own reference as well as to share with my readers.
 
I wrote these blogs this month....I am happy a lot of people enjoy reading my take on various topical issues, with several thousand visiting my blog just last Friday and Saturday, especially from Chicago.
 
  Hello guys, wear your thinking caps on...
  Mr Bernanke's penultimate testimony before he leaves the Fed.
  Forward guidance and the UK housing market
  Light a cancle...
  Thanks for visiting my website
  Notes from the LDS chapel, Ilford
  Germany a good model of employment
  The paradox in inflation
  Stimulus?  Taper?  Where we headed?
  Bank of England forward guidance.
 
Have a read, and let me know what you think. 
In the meantime, thanks to all the readers who have written in their
compliments and suggestions.
 
Kind regards,
Duru-darshan.
 
 
 

Bank of England's forward guidance

Posted on August 29, 2013 at 4:52 AM Comments comments (4)
The Bank of England Governor Mark Carney has reassured the markets that a further stimulus would be available if market conditions dictate it.  In the meantime, he has restated what he mentioned when he took over the reigns a month and a half ago, namely :
 
 That the record low interest rate, currently 0.5 percent, would be maintained until such time as the unemployment figure falls to 7 percent. 
 
Most market forecasters believe this indicates a period of about three years, according to the BBC.
 
So industry and enterprise can assume an atmosphere of prevailing calm and steady investment and growth over the coming three years in the United Kingdom, perhaps even rescue and turnaround of sectors which may be in the doldrums at the moment.  The forward moves will probably be in construction, as demand for housing in Britain continues to grow.  Currently there are government incentives for new-built houses; new year, starting April-May 2014, there would be help available for those purchasing older houses.  The government is trying to satisfy the appetite for home ownership, at the same time welcoming qualified people from abroad who see Britain as a safe and pleasant land to live in.  More demands will arise in the health (probably private now) and schools sector, and accordingly new buildings will need to go up. 
 
So long as banks continue to lend (from the stimulus portfolio of about £375 Billions already issued) there should be little trouble in seeing growth and opportunities in the U.K. for the foreseeable future. It is for entrepreneurs and business owners to take up courage and ask for working capital, and set about their work with vim and vigour.  The time has never been better.
 
Kind regards,
Duru-darshan
 
 
 
 

Mixed signals about the economic picture

Posted on July 30, 2013 at 8:08 AM Comments comments (2)
There seem to be mixed signals about the economy. 
 
The OPEC countries exported oil worth $1.27 Trillion last year, so that much wealth has been created for their economies and the nations who trade with them.  What is baffling is the high Oil price, which in my calculation is far too high to sustain Recovery.  Couple that with an observation made by Prince Al-waleed bin Talaal that in view of increasing shale gas production, especially in the U.S., the world is less reliant on oil from OPEC, meaning declining demand in years to come.  Most OPEC nations' infrastructure development projects would stay on line were the price per barrel no less than $85, that was according to Sheikh Al-Naimi and Sheikh Al-Badari as well as the Algerian oil minister about a year ago. 
 
The housing numbers from the U.S. on the Case-Schiller map have not been as robust as was expected; indeed, housing starts have been the slowest for 18 years.  While reduced inventory is holding up prices, there needs to be much more construction activity.
 
In the meantime, Lakshman Achuthan of the Economic Cycles Research Institute, who looks at the leading indicators, suggests he has seen figures to indicate a slow-down, which would probably show up in the real economy in another four-five months time.  Corrective measures by government and big corporations in creating jobs and a resurgence of confidence could help to avert that scenario. 
 
All humans like to eat and drink well, dress well, live in comfortable housing, have good transport, have good entertainment, read books, listen to music, watch movies, play in the park, go on holidays, and so on, and people always have aspirations that the economy - in the combined efforts of all to innovate, develop, utilize and monetize all that God has put on earth - will help them with improving standards of living.  That is what everyone wants. 
 
Good news from the U.S. is that they are creating about 150,000 or more jobs each month, and today sees the announcement by Amazon of the creation of 5,000 jobs at their HQ.
 
I suggest a lower Oil price would help Recovery regain its sure steps, for a worldwide economic Recovery.  I pray for that.
 
Kind regards,
Duru-darshan.
 
 
 

Hello Everybody....Oakland, Detroit, Miami

Posted on July 21, 2013 at 12:36 PM Comments comments (1)
The Chapter 9 Bankruptcy of Detroit last Friday is a stark reminder of what happens to an economy when trust breaks down between communities and disrupts the social fabric, leading to decline and decay and a sad breakdown of an economy.
 
I understand from cursory reading of books on Detroit that the 1967 riots sparked off a distrust between the communities, and may have been the turning point for the breakdown of the economy which has now resulted to this sad, sad decline.
 
No two children of the same family will be totally understanding or obedient to their parent(s), but if family members work in harmony and common objectives, they tend to be more successful.  That rule of harmony holds true for organisations as well as for communities, there is no reason why it should not hold true for cities or even nations, hence last week I referred to Cario and Oakland but of course I should also have mentioned Miami.
 
Just imagine Detroit in the 1950s, which now appears to have been its heyday, full of harmony and enterprise, inspiring dreams, the American dream, contributing to its status as a city of great reputation worldwide, with its ballrooms, museums, theatres, skyscrapers....The industry and enterprise was there to give a livelihood to the 465,000 residents there, who soon grew to over a million and to nearly two million towards the peak.  The infrastructure was added to as it served the citizens and visitors, and the town grew to a city. 
 
The decline has seen people leave, mainly white people leaving the city to suburbs, leaving a ghetto at its core, the deserted buildings falling apart, now ready for demolition or refurbishment. 
 
The population has fallen, leaving the municipality with an income of about $1 billion a year, when it probably needs at least a billion-and-a-half just to service the interest on the bonds. 
 
A solution may be repopulation, with some company and a group of New Economy companies able to generate a lot of jobs and sustain the livelihoods of the citizens.  Obviously there is a lot of talent and raw energy, that can be purposefully employed and will create wealth and sustain the people and regenerate the city.  All that is now needed is for a few men and women of vision to locate their wealth generating companies there, and give a boost to the regeneration of the housing and public buildings.
The talent is there, you cannot stand and see a great city die.  Hopefully, the government can make a special provision for a funding programme to regenerate this great iconic city with its beautiful landmarks. 
 
As harmony exists between people, so will Recovery and Prosperity bloom in their midst. Today, I pray for restoration of faith in Detroit. 
 
Kind regards,
Duru-darshan.
 

The huge APR moneylenders

Posted on June 27, 2013 at 2:38 PM Comments comments (2)
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,
Duru-darshan
 
 
 

The world is swimming in money.....!

Posted on June 25, 2013 at 6:56 AM Comments comments (31)
According to Reg Varney, the Fox news commentator, the world's central banks collectively have pumped in some Fifteen Trillion Dollars into the economies over the last few years.  This is a hugely interesting figure...it should suggest the world is swimming in money, and not in need of further stimulus at all at all...
 
So far as publicly available figures indicate, the U.S. raised its Debt Ceiling by $2.15 Trillion Dollars on 3rd August 2011, and thereafter via QE 2 and  QE 3 by a further $85 Billion a month, which has been trimmed by 1/12 since February 2013 since the Sequestration cuts kicked in. 
 
In the United Kingdom, some £375 Billion of Credit Easing facilities have been introduced by the Bank of England, all told, till currently.
 
I wonder which other central banks have printed that gigantic amount of cash and released it into the system. 
 
The current figures from Russia indicate a slow-down there, with GDP figures progressively being downwards, mainly due to lowering Oil prices on which the economy relies so heavily.  Oil prices in the global context are of course likely to head down further, if recession is to be avoided once again.
The current oil stockpiles in the Middle East and the Strategic Oil Reserves would corroborate this scenario, and it can only help the oil exporting nations to keep the oil price low for some time till economies can pick up again. 
 
To avert a slow-down at home which would impact the world, I believe the BRICS nations, with the exception of China, should consider a generous cut in the benchmark interest rate. I would suggest, that is the silver bullet, and they ought to utilise it.
 
China under the Rising Star of Chairman Xi is bound to do well and he likes progress and prosperity for his people; however, they are unlikely to keep on manufacturing goods cheaply and ship them out to the rest of the world, and on credit at that.  A greater demand and consumerism in China itself is likely, and a re-focus is probably causing the current mild hiccup.  It is a matter of record that when Honourable Xi was a rising star in his party, his comments and suggestions created a boom.  I cannot believe that now he is in charge, anything but the best will be possible for China. 
 
With increased trade between nations, and extension of credit facilities and investment into one another's cultures, a great hope of continuation of the world economic Recovery is always bright.
 
Kind regards,
Duru-darshan.
 
 

Fed Chief Ben Bernanke's speech

Posted on June 19, 2013 at 4:06 PM Comments comments (0)
The Federal Reserve Chairman spoke about triggers and thresholds, but did not mention the punch bowl.  Regardless, the speech was abundantly clear for those who listened intently, although the Dow heading downwards indicates the markets were not cheered although the picture is quite optimistic.
But then again, market participants tend to be greedy, and expect huge gains overnight if not instantly.  I expect the market will pick up after the retail investors and mutual funds have digested and acted on the news.
 
There is the sign of stability in the economy going forwards.  Interest rate at a quarter percent is at a record low, and unlikely to be cut further.  So the low interest rate is going to hold into 2014.
 
If the unemployment rate were to go down towards 6.5 percent from the current 7.6 percent, then that would be the threshold (but not a trigger) for considering increase of the interest rate.  So rates wouldn't be going up any time soon, although in the last few weeks some companies in unfounded anticipation have put up their interest rates.  Depending on market dynamics, those are likely to be corrected (downwards) in due course.
 
Monetary policy will continue to support Recovery, stated Mr Bernanke.  200,000 jobs per month have been created on average over the last six months.  This has improved the housing market, and is feeding optimism into household spending. 
 
The economy continues to improve at a modest pace, and the policy is geared to return to maximum employment in the context of price stability. 
 
Regarding the QE, through purchase of mortgage backed securities, these would be reduced in measured steps, beginning of 2014.  This is the intention but would be reviewed in context of how the economy actually delivers.  The brakes are not being applied yet (so should cheer people up for the foreseeable future). 
 
Kind regards,
Duru-darshan.
 
 
(c) Durudarshan Dadlani, 19th June 2013. 
 

The London Business Show, Excel, today

Posted on June 7, 2013 at 10:54 AM Comments comments (4)
I visited the London Business Show at Custom House today.  It is such a beautiful and photogenic area, a film could be made here.  It is right in the centre of everything.  The City, whose banks  stand next to the cable cars in the horizon, as well as neat houses which are not far from City airport.  There are cafes, winebars, sauna and massage places, boxers' gyms as you would expect to find in the East End, as well as new buildings going up all the while, although I didn't see too many cranes today. 
 
It is good that Abu Dhabi has invested in this venue; it was quite busy with an Accountancy exhibition as well.
 
First speaker I went to listen to is the Property Mermaid, Vicki Wusche.  She guides people who wish to invest in property, helping them source suitable investments which will produce good returns.  She charges a fee of nearly 7,000 for sourcing each property.  Her ideas and assistance would be quite valueable for someone with good amount to invest, say 100K to 500K.  I haven't got anything like that, so I could only be appreciative of Mrs Wusche's direct and interesting presentation.
 
Second speaker was Philip Bryan of Senfori, who made a very important point.  Namely, that a lot of people don't believe in their own idea, they will listen to one-hundred-and-one ideas from other people and still have doubts.  There you have it, a statement that is an absolute gem.
 
I thought I'll try and see if Angels Den could help me raise some funds.  Half an hour told me it was good listening to Bill Morrow, who gets 140 business funding proposals a day at 8 branches of Angels Den worldwide.  Out of these, 138 are rejected.  The other two get the pleasure of being trained to pitch their proposal to a group of angel investors.  The charge for the presentation is £800, which will include solicitors' fees for the equity share documents.  And then, the Entrepreneur gets 4 minutes flat to explain his proposal.  Fewer men get the funding, because they often look for £250,000 or £750,000 or a million.  Ladies seem to go over their business plans with much rigour, and will often have worked out why they need £55,864.91 exactly, and how they are going to invest it in a pin-cushion factory and double the investment in 3 years.  And consequently, women seem to get the funding, which they richly deserve. 
 
Also an sad fact : that angel investors die at 52 (perhaps out of ennui).  So if there is an angel investor who would rather look at something interesting, I hope s/he gets in touch with me.  Either to make a film (for which I can certainly write a script) or back one of my business ventures, please let me know.
 
It was a great show, with many different services, especially creating websites, like Mr Site. Today there are a few more companies doing the same thing.  What was missing was the lollipops and the jellybeans.  Some stands were keeping the chocolates like they would prefer to take them home.
 
I filled in a form for the Guardian.  Should I win some free publicity for my website, I would be happy.
 
Kind regards,
Duru-darshan.