General Immigration Discussion

[cbpds1]

"Europe is also an important market for U.S. goods. Companies in the Standard & Poor's 500 stock index earn about 20 percent of their profits in Europe, according to Bank of America." -yahoo finance

Wow.... but it really misses my lay man mind, how italy going default is making our markets take a dump... it shld hv been effected a little but 500+ is a lot...might be nervousness ehh?

[gcseeker]

cbpds1

True I definetly agree and this is what is different about this global recession.Localized recoveries will not happen.Everybody has hitched his or her wagon to the other and events in one part of the world will amplify the tremors to another part .

I would highly recommend Nassim Taleb's critically acclaimed book. " The black swan: Impact of the highly improbable" which offers some insights into these seemingly un-related events like Italy or Europe which in fact will acts as triggers to other events.People are living beyond their means and there is no escaping an correction.Healthy borrowing is required for an economy but not toxic derivatives in trillions and outsized government debts.

"Europe is also an important market for U.S. goods. Companies in the Standard & Poor's 500 stock index earn about 20 percent of their profits in Europe, according to Bank of America." -yahoo finance

[Osaka001]

Cisco layoffs are due to the crappy products they make that people dont want to buy.

You are wrong on Cisco, they make product so good that people/companies don't need to replace them for many years, thats the disadvantage in this market,ofcourse they are little expensive. On other hand there are bunch of small companies they do sell similar products (crappy) for cheap and you need refresh every year. It's like , when people have money they go for Luxury restaurants, if they dont have money, they celebrate it at McDonald.

[gcseeker]

Q

Thanks for moving the threads to the general section .I keep on getting tempted to discuss this when posts appear in the EB2 predictions thread.

I will try to make a note and post it here in this section.

[qesehmk]

gcseeker,

I didn't move it this time around. May be one of S T or V. But I would've done the same. The discussion is great but better done on this thread.

If you are so much into finance and economics then you might enjoy www.minyanville.com This is IMHO the best website out there on Finance and Economics.

My relatively illiterate view on this whole financial mess is as follows:

Since 1986, Alan Greenspan (sworn by Reagon) and co. have misused monetary policy while regulation has gone complerely AWOL. This has increased valuations across board and far away from fundamentals. Housing is just one piece of the puzzle but it is true across board for all kinds of asset classes. Along with Greenspan and Co. came IT revolution which produced 2 things that ran contrary to each other. 1) With IT revolution complex financial products were created. 2) Ability to process massive amounts of data and reduced transaction costs - that gave rise to hedge funds.

Hedge funds identified weaknesses in teh fundamentals and started betting against those complex products and finally those products collapsed.

Now only if the markets were allowed to take their course everything would've been nice. But markets taking their course means valuations reversing to fundamentals in the long run and below fundamentals in the short run. OF course this would involved tremendous and disproportionate wealth destruction at the top end of the society. So this wealth had to be preserved under whatever pretext.

Then came bernanke who is basically a professor (not an economist) with specialization in depression studies. The guy has beyond strong belief in monetary policy and is called "helicopter ben" for his belief that government can print as much as necessary and they can create any amount of inflation desired. The little detail that he misses is that the US Fed is no longer sovereign owing to massive amount of globalization going on since 1970s. However, the powers that be select him as the next chief of Fed. He then uses his true belief in the power of monetary policy to generate inflation and achieve price stability AKA wealth preservation for the richest people on the earth.

I am not wise enough to understand every single move they made since Sep 2008-Feb 2009. However what was clear to me was the bondholders of all the big banks and corporations were basically saved. A lot of the bad assets were moved to Fed's balance sheet. Then come all kinds of liquidity boosting programs which do little to boost liquidity .... but hey liquidity was only a short term problem when bears and sterns was destroyed literrally in a day or two. The real problem was and has always been out-of-whack-valuation rather than liquidity.

So all this extra liquidity is sitting with big banks. These bankds by now have been allowed to play in the stock market. So the money goes into commodities and emerging regions. A lot of people make a lot of money in short term. Then comes the time to book profits. The music will stop someday. Apparently the music at least had a break today! Don't know if it has stopped yet. And we are now again on a path towards valuation reversal.

The funny thing is valuation reversal is going to show itself in two forms - one: actual price reduction for immobile assets. And two: inflation (and reduction in living standard) for mobile assets (i.e. exportable assets). So overall its going to reduce the living standard in the developed world.

But even this process is quite complicated. A man once said "The world is bad". Wise guy asked "Compared to what"?

Similarly yes US and the whole developed world is doing terrible, but the fact is the rest of the world (i.e. developing) is not ready to increase consumption. Consumption is a function of purchasing power and propensity to consume. Propensity to consume is clearly less in all of Asia including the most developed country Japan. But purchasing power continues to remain low because the wealth generation and distribution is skewed so unfavorably to a few which then results into waste such as $2B residence!! You know what I mean!

And so back to sqaure one. The world depends on US for growth and dollar continues to be the currency of choice (which is exactly what you saw today). Dollar rallied today.

I dont know whats next. But that's the basic understanding that i have of financial events in the last 2-3 years.

Q

Thanks for moving the threads to the general section .I keep on getting tempted to discuss this when posts appear in the EB2 predictions thread.

I will try to make a note and post it here in this section.

[soggadu]

Soggadu bhai

Your id reminds of of Sobhan babu and of course the avatar always cracks me up. If I may volunteer my opinion and hopefully I dont divert the thread too much.

1.Markets reacted with unfounded confidence on the state of economy in mid 2009 and inflated themselves to unbeleivable levels . Some may even say the hidden actors orchestrated this.This was due to the effects of the huge stimulus trickling through the system.Free money to borrow from government and then charge interest on the same money lending to others.The government takes care of all the toxic debts on the books and banks went crazy.Companies already were flush with cash and they further reduced headcount making their accounting books and P/E ratios look good.This made their stocks extremely valuable to stockholders and hence you saw companies like BAC go from 2$ to 12$!!!! even with those toxic derivatives on their books.

2.Now the music has stopped.Actually it stopped 2 months back.The debt deal exposed Usa's credit rating to downgrades and those downgrades will happen thus affecting the bonds and Us government security markets which are traditional safe havens from customers.Also the jobs numbers have been dismal coming in the past 2-3 months . Government cannot spend a single pie now (thanks to the debt deal) .So Mr Bernanke cannot use his printing presses.

Also it does not matter if tech is doing okay. Every other job lost is of a person who is an consumer for some other company.Without those people buying products ultimately how will the economy come up.The nation cannot be run by bunch of teenagers browsing facebooks and playing games on Zynga.It requires an manufacturing base and actual products to be produced.Italy and europe are additional concerns adding to this.

There is no way out of this except for the economy to self correct itself finally. This is just the beginning. The only silver lining to this whole thing is ...I feel we will have significant SOFAD in 2012.

Wow seeker Garu... Thank you so very much for explaining me all this... So it is indeed just the beginning then.... Also why are people worried about Italy goig bad ??? We can discuss here as it is general talk thread... Please tell me more...

[mesan123]

Q or any moderate can you tell me how to change username????

[Monica12]

Q or any moderate can you tell me how to change username????

Someone PLEASE help nnnnn behen....I'm sure people who are unhappy with their names can relate Sometimes, I wish I could change mine...
Nishant.. I hope the VB comes out by tuesday..God help us, if it gets delayed till Friday... I'm counting every minute...

[gcseeker]

Q

Very very well put summary and you nailed it on two counts. Inflation is the definetly the key and news came out today that Inflation has been falling across the globe . One would be tempted to beleive that would help consumers but unfortunately it will have exactly the reverse effect because the danger with an falling inflation is that it could lead to deflation and rapidly falling asset prices and then everybody would be in firesale mode leading to huge asset destruction.At the same time we cannot have sky high inflation leading to huge increases in the cost of food as being seen across the world.

It is a tightrope walk and Helicopter ben so far does not seem to have an handle on things. China is trying very hard to move away from the USD to a basket of currencies but does not look like it is going to happen overnight.It might take atleast 5 years before an serious challenger emerges for the USD...but hey you never know the downgrading of the rating might do the trick.

Thanks for reminding me about minyanville ( used to read this site a lot in 2009 and then forgot all about it ) .

The funny thing is valuation reversal is going to show itself in two forms - one: actual price reduction for immobile assets. And two: inflation (and reduction in living standard) for mobile assets (i.e. exportable assets). So overall its going to reduce the living standard in the developed world.

And so back to sqaure one. The world depends on US for growth and dollar continues to be the currency of choice (which is exactly what you saw today). Dollar rallied today.

I dont know whats next. But that's the basic understanding that i have of financial events in the last 2-3 years.

[gcseeker]

Soggadu Bhai

with the garu you have sent me back 10 more years in time. (J/k) In fact I will have to start calling you that since you provide much needed welcome humour in the predictions thread which cheers up a lot of people. I am more of the doom and gloom guy

Some reasons why wallstreet is extremely worried about Italy.



1.Many of the European banks and American Banks have exposure to the Greek and Italy Debt.
2.In fact they have exposure to the PIIGS countries debts ( And again all of them borrowed from each other !!!!)
3.An default by any of the stakeholders there will ripple immensely through the system.
4.Also European markets acts as end consumers for American goods. Like cbds1 pointed out revenue for American companies is almost 20% from europe market.
5.With austerity measures being taken up in most of these countries.People do not have money to buy food properly , they will not be able to afford american goods.

Last but not least finally the music has stopped and yes this is just the beginning.

Wow seeker Garu... Thank you so very much for explaining me all this... So it is indeed just the beginning then.... Also why are people worried about Italy goig bad ??? We can discuss here as it is general talk thread... Please tell me more...

[qesehmk]

I think you can do it yourself in your profile management option.

If you can't then let me know what name you want and we will change it!

Q or any moderate can you tell me how to change username????

[soggadu]

Soggadu Bhai

with the garu you have sent me back 10 more years in time. (J/k) In fact I will have to start calling you that since you provide much needed welcome humour in the predictions thread which cheers up a lot of people. I am more of the doom and gloom guy

Some reasons why wallstreet is extremely worried about Italy.



1.Many of the European banks and American Banks have exposure to the Greek and Italy Debt.
2.In fact they have exposure to the PIIGS countries debts ( And again all of them borrowed from each other !!!!)
3.An default by any of the stakeholders there will ripple immensely through the system.
4.Also European markets acts as end consumers for American goods. Like cbds1 pointed out revenue for American companies is almost 20% from europe market.
5.With austerity measures being taken up in most of these countries.People do not have money to buy food properly , they will not be able to afford american goods.

Last but not least finally the music has stopped and yes this is just the beginning.

Awesome.... Nice explanation both seeker bhai and q bhai....

Also, Garu is out of respect for your knowledge not for ur age seeker bhai....

[mesan123]

well tried it, but couldnt find place where i can change username ...

can you change my username to mesan123

I think you can do it yourself in your profile management option.

If you can't then let me know what name you want and we will change it!

[mesan123]

Thank you Q

[Spectator]

nnnnn ... now your name is changed!

mesan123, the artist formally known as n*5+123

Sorry. I couldn't resist!

For Monica, she could be Angela, Pamela, Sandra or Rita; Erica, Tina, Mary or Jessica.

Overall, I think I prefer A little bit of Monica in my life.

[leo07]

Congrats mesan123

may your new username bring luck as well

Thank you Q

[mesan123]

nice one

now my name is better i believe.....

mesan123, the artist formally known as n*5+123

Sorry. I couldn't resist!

[mesan123]

If it needs to bring luck.....it shuld have already...as itz my last name....

but hope it brings luck this time for everyone here.....

Congrats mesan123

may your new username bring luck as well

[qesehmk]

Hmmm!

Spec hitting on Monica!!

mesan123, the artist formally known as n*5+123

Sorry. I couldn't resist!

For Monica, she could be Angela, Pamela, Sandra or Rita; Erica, Tina, Mary or Jessica.

Overall, I think I prefer A little bit of Monica in my life.

[nishant2200]

Hmmm!

Spec hitting on Monica!!

most memorable moment.

Also I would like to take credit for coining n*5+123 , will miss u

What a wonderful group if people here. I am priveleged to be part of this forum and getting chance to know you all.

Ok, senti. Back to Q n Spec dialogue. Spec, there's another popular indian song with regards to Monica. You may want to google R.D. Burman Monica, movie is Caravan.

[ssvp22]

Overall, I think I prefer A little bit of Monica in my life.

Same here. Wanted to say that, but resisted

[soggadu]

Guys noise to signal ratio is increasing ;-) ;-)... Good to see everybody having good time..... Moniiiicaaaaaa Kahan ho aap... Yehan pe aap ke naam ka jaap ho raha hein.... Spec.... U too brutee...

[mesan123]

You are reason for the noise to signal ratio !
....shuru app kiya shoban babu(ring valla)... everybody are following you sir.... but it is nice to see people having little fun forgetting there hard chase to GC

Guys noise to signal ratio is increasing ;-) ;-)... Good to see everybody having good time..... Moniiiicaaaaaa Kahan ho aap... Yehan pe aap ke naam ka jaap ho raha hein.... Spec.... U too brutee...

[mesan123]

Yeap Nishant...agreed you are the initiator

most memorable moment.

Also I would like to take credit for coining n*5+123 , will miss u

What a wonderful group if people here. I am priveleged to be part of this forum and getting chance to know you all.

Ok, senti. Back to Q n Spec dialogue. Spec, there's another popular indian song with regards to Monica. You may want to google R.D. Burman Monica, movie is Caravan.

[Monica12]

awe... guys!
meri aankho mein ansoo aa gaye, LOL!
what a wonderful group of people we have in this family