I've always wondered whether the BSE SENSEX is really a sense of the Indian Economy. Just thinking about the present day scenario, the food prices are soaring without rhyme or reason and so is the Gold price.
[Six months back a 25 kg bag of rice cost Rs. 625/-, now it is ~925/-. Gold hit an all time high of Rs. ~1650/gm yesterday; the turmeric has doubled in price in just over a month]
So, what does it mean? As my 12th standard Economics teacher taught us, "If food prices are hitting the roof and also the gold prices, it means that the agricultural production is bottoming out, whereas the money circulation is excessive. A typical case of inflationary trend. While a little bit of inflation around 2 to 3 % is good for the economy - that little bit inflation is what makes the economy grow - a whole lot of it is bad; the economy will get overheated and if tight credit policies are not put in place, the inflation will get out of hand"
And all this in the midst of a global economic downturn. When people can't get decent jobs, when farmers are committing suicides, when monsoon has been both a failure and excessive, where from is this demand fueling the gallop?
By any sensible criteria, the SENSEX should be down and the runaway index might perhaps explained by the article in the Sydney Morning Herald explaining a new 'questionable' trading practice using computer software programming. Shouldn't SEBI take a hard look?
From Sydney Morning Herald of Thursday, Nov 6, 2009
[yeah, yeah, yeah - I know Thurs was not Nov, 6th. But it was SMH of Nov, 6th, but "Thursday" here at Chennai; see screenshot of my RSS reader below]
If you have some pull with SEBI, tell them to take a look or tell Ms. Olga Tellis at The Asian Age to bring it up. BTW - I don't know why no Indian newspaper or TV channel has picked it up till now - seeing the amount of interest about the Indians facing racial abuse in Oz -
[Six months back a 25 kg bag of rice cost Rs. 625/-, now it is ~925/-. Gold hit an all time high of Rs. ~1650/gm yesterday; the turmeric has doubled in price in just over a month]
So, what does it mean? As my 12th standard Economics teacher taught us, "If food prices are hitting the roof and also the gold prices, it means that the agricultural production is bottoming out, whereas the money circulation is excessive. A typical case of inflationary trend. While a little bit of inflation around 2 to 3 % is good for the economy - that little bit inflation is what makes the economy grow - a whole lot of it is bad; the economy will get overheated and if tight credit policies are not put in place, the inflation will get out of hand"
And all this in the midst of a global economic downturn. When people can't get decent jobs, when farmers are committing suicides, when monsoon has been both a failure and excessive, where from is this demand fueling the gallop?
By any sensible criteria, the SENSEX should be down and the runaway index might perhaps explained by the article in the Sydney Morning Herald explaining a new 'questionable' trading practice using computer software programming. Shouldn't SEBI take a hard look?
From Sydney Morning Herald of Thursday, Nov 6, 2009
[yeah, yeah, yeah - I know Thurs was not Nov, 6th. But it was SMH of Nov, 6th, but "Thursday" here at Chennai; see screenshot of my RSS reader below]
Secret software is helping a new breed of high-speed traders get really rich, really, quick ... it is the dark side of share trading - proof that the dice are loaded against the average investor. However you look at it, it is being used to get filthy rich. Quickly ... US sharemarket officials and Congress are mulling bans on some of their tricks. And it is so profitable, the big banks are using it ... Transcripts and taped conversations included in the commissions's case reveal that traders in Optiver's Chicago office talked openly among themselves of ''whacking'' and ''bullying up'' the price of oil ... One claim states how, in 2004, Optiver employees wrote a a piece of programming code to improve its trading speed from 80 milliseconds to between 0.5 to 1.5 milliseconds - speeds with which mere mortals cannot compete.All I want to say is that, just be careful if you are in any kind of speculative trading - don't jump into the bandwagon, because others do so or tell you to do so.
If you have some pull with SEBI, tell them to take a look or tell Ms. Olga Tellis at The Asian Age to bring it up. BTW - I don't know why no Indian newspaper or TV channel has picked it up till now - seeing the amount of interest about the Indians facing racial abuse in Oz -
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