A 100% chance for a global recession
In this issue:
» Once again, Bihar is the fastest growing state
» Investments in the country are slowing
» Dismal car sales seen in May
» Can a tracking system help speed up projects?
» ...and more!
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In India the story doesn't get any better. While India's PMI still stands steady at 54.8, growth in the country has contracted significantly. Growth in the country has sunk to a nine year low, with 4QFY12 GDP growth of only 5.3%. Full-year growth for India in FY12 dropped to 6.5%, down from a healthy 8.4% in the previous year.
Last time around, the Indian elephant and the Chinese dragon helped alleviate the global financial crisis. However, this time the elephant is weary and the dragon seems to have lost its fire. Plus other developed nations don't seem to have the necessary ammunition to come out of this new crisis. The issuance of Euro-bonds may help ease the debt burdens in countries like Greece and Spain. However stronger countries like Germany are opposed to the idea as they will have to take on an additional debt burden and deal with higher interest rates. Either way, with so much trouble on the horizon, Faber believes that the global recession could hit either towards the end of this year or early 2013. Being optimistic right now seems difficult and investing in equities foolhardy. But with even blue-chip valuations correcting sharply it may just be the right time to find a good bargain.
With a global recession on the horizon where would you park your surplus funds? Let us know your views or you can also comment on our Facebook page / Google+ page.
01:25 | Chart of the day | |
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Data source: CNN Money, Economic Times |
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It may be noted that Bihar is reaping the benefits of high growth on a low base. At the same time large and industrialized states of Gujarat and Tamil Nadu are showing no let-up in the growth momentum. Both the states grew at a robust 9%, much higher than the country's GDP growth of 6.5% in 2011-12.
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In India, the week witnessed a slew of negative news as rupee touched new lows and the GDP numbers for quarter ending March turned out to be well below expectations. The Indian equity markets finally closed the week 1.6% lower.
Amongst, the other world markets, Asian stock markets were down on account of Euro zone concerns. Barring China (up 1.7%), all Asian markets closed on a negative note with Russia and Germany being the top losers.
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Source: Yahoo Finance |
04:55 | Weekend investing mantra |
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6 Responses to "A 100% chance for a global recession"
N.M.R.Shreedhar
Jun 4, 2012Hi,Where to park investible surplus is the million dollar question--at the moment, equities is a big NO though it may improve if we have consecutively encouraging quarterly results;fixed income returns barely cover the inflation;and gold has become unpredictable. Real estate seems to be good buy, especially land as it is a tangible asset, and historically land prices have never gone down. Of course land deals don't come cheap and they their own problems of liquidity, ownership conflict etc.regds
sunilkumar tejwani
Jun 3, 2012As is common, during troubled times, one should invest a part of surplus funds in to safer instruments like PPF, government bonds or Liquid Mutual funds and a part in Gold to hedge against inflation and uncertainty in the economy. Once the economic problems are fixed and equity valuations come down to the historic lows then one should gradually start building up portfolio of good equity investments.
uday
Jun 3, 2012Being an NRI i would park my funds in LIC INTERNATIONAL
Guaranteed returns policy of 5.5% for 5 years in dollar
terms so i dont have to worry about currency risk. Uncle
Sam would make sure the dollar is steady against any
currency by hook or crook .As for investing in equity
around the world , the investors would watch the fund
managers drive lambhorginis while he would sell one to
buy a bicycle.
sanjeev shah
Jun 2, 2012We right now put surplus money in Fixed deposit and wait for right moment after sensing things are over or near to over and economic are starting to turnaround & postive then start nimbling the equities, but with caution & start with frontline stocks first.
Srinivas
Jun 4, 2012Systematic, selective, dividend paying stocks will be the best Bet in this turbulent times.