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What's the bubble all about? Story about US financial crises

A DOCTOR friend recently told me something interesting. The doctors' lounge in the Mumbai hospital where he works has a television that was usually tuned to one of the business news channels during the bull market that took Indian shares to record heights by January 2008. Cardiologists and urinary tract specialists spent time between operations listening to the latest recommendations from analysts and exchanging stories of profitable trades.That television is now on mute.These doctors now scan the tickers that silently flow across the screen, carrying grim news of portfolio losses. They are not alone. Across the country, investor wealth has reduced by Rs 37 trillion because of the sharp fall in share prices from their January peak, despite the splendid recovery on Monday.Most investors find it hard to understand why share prices are tumbling in an economy that is nowhere near recession.That's because problems that started in the US and Europe last year have jumped across oceans like a virus.The first snine was heard in the summer of 2007, in what is known in America as the subprime mortgage market. But the story starts a few years earlier. The dotcom bubble burst in 2001. As the US slipped into recession, the US Federal Reserve cut interest rates by flooding the economy with extra money That made it easier for people to borrow to buy cars, washing machines and houses.America went on a home buying spree.Real estate prices were rising rapidly The boom in housing prices made both banks and homebuyers believe that the price of a Florida condominium and a New York apartment would keep going up. Housing finance seemed a very safe bet. Banks went out of their way to lend to subprime families, or those who had a history of not paying back their loans on time. One innovation was the Ninja loan, an acronym for loans to families that had no income and no assets. Ninja loans were one road to financial hara-kiri.MORE WWW.DSTREETDIRECT.COM

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Nuke deal will benefit these stocks

L&TL&T has done engineering, procurement and construction projects for nuke power plants. It is currently working on the 2,000 MW Kudankulam nuclear project. The company will get into mainstream nuclear projects if the deal goes through. L&T’s talks with Toshibha failed. It entered into a recent tie-up with Mitsubishi for super critical boilers. The Mitsubishi technology would be used for Nuclear Power Corp. L&T may leverage its relationship with Mitsubishi for its other nuclear business.BHELBHEL supplies up to 500 MW of equipment to Nuclear Power Corp. It is looking for a tie up manufacturing equipment of up to 700 MW & 1500 MW. The company has been in talks with Alstom, GE Energy, Russia's LMZ and Siemens. It has an existing tie-up with Siemens for nuclear technology.NTPCThe company is in talks with Nuclear Power Corporation of India. It is looking at setting up 2000 MW nuclear plant. He is In talks with GE Energy for technology and fuel. NTPC is looking at the project to be operational by 2012-2013.HCCHCC has constructed four of seven nuclear power projects in India. It is an EPC contractor for nuclear projects.RoltaThe Rolta-Stone and Webster joint venture competent provides reactor-building technology. It will leverage on its partner's core competency. Stone & Webster's parent has 20% in Westinghouse Electric, a nuclear reactor maker.ABBABB makes components for power projects. Its parent company’s exposure includes newnuclear power plants, systems and components. The parent company’s exposure includes fuel services, waste management and decommissioning.Areva T&DAreva T&D is looking at a plant for uranium mining and recycling. The plant would be set up after nod from Nuclear Power Corp.Alstom ProjectsThe company already makes nuclear reactors and rotors. Its parent company is a world leader in conventional nuclear projects. It makes turbines for nuclear power stations. It supplies steam turbines to over 30% of nuke power stations globally.Crompton GreavesCrompton Greaves works with Nuclear Power Corporation of India. It has completed a switchyard for nuclear project.Siemens has a marginal exposure through its parent company.Reliance Energy plans to invest additional Rs 12,000 crore in nuclear power capacity. It plans to install 2000 MW of nuclear power capacity.Tata Power has tied up with some major nuclear equipment suppliers like Areva. It already has a relationship with Toshiba; it will leverage on it.Walchandnagar Industries makes critical equipment for India's nuclear power facilities.

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Various groups at BSE NSE like 'A', ‘B’,'T', ‘S', ‘TS', 'Z'

The scrips traded on BSE have been classified into various groups.BSE has, for the guidance and benefit of the investors, classified the scrips in the Equity Segment into 'A', ‘B’,'T', ‘S', ‘TS' and 'Z' groups on certain qualitative and quantitative parameters.The details of each group can be found at http://www.dstreetdirect.com/stock-discussion-market-buzz/3279-registered-listed-smes-bse-nse.html

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Arbitrage opportunity in Crude

Hey guys I've come up with a good news for the people who look for arbitrage opportunities in crude, There may be opportunity for netting more profits in crude oil futures. Indian companies, with an arm in Dubai, can now keep an eye open for arbitrage between Mumbai-based MCX and Dubai Gold and Commodities Exchange (DGCX), the top exchange in Middle East.DGCX on Tuesday launched cash-settled West Texas Intermediate light sweet crude oil and Brent crude oil futures contracts. Both contracts appear to be a runaway hit with local punters as DGCX recorded its highest first-day volumes exceeding $370 million.Crude is also the most popular contract on MCX. More than 29,000 lots of the June contract were traded today, with the gold June contract a distant second at 18,533 lots. Indian companies that are trading on MCX and have a subsidiary that trades on DGCX can use the slight price difference in crude oil contracts on the two exchanges, which is created largely by the dollar-rupee exchange rate, to make risk-free profits at the end of day. An Indian broker in Dubai says "Both the exchanges will use the same New York price to settle their contracts. So a company can buy the contract where it is relatively underpriced and sell immediately in the other market. The profit will be booked by either the Indian company or its Dubai subsidiary. Unlike normal speculation, arbitrage is a financial transaction which gives immediate profit without involving any risk" .

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Crude Oil Heads Toward $200

They are calling him Arjun "Spike" Murti, but his real middle name is Narayana, the supreme manifestation of the Hindu God Vishnu. Supreme he is, in the oil world. The little known Indian analyst at Goldman Sachs has become a cause célèbre -- or a doomsday prophet -- for his forecasts about oil prices, based on what he calls the "super-spike" theory, predicated on rising demand for crude and limitations in refining capacity. Murti, 38, now a managing director at Goldman Sachs, first came to the fore as far back as 2003-2004 when he predicted that oil prices would breach $80 a barrel when it was still in the 30s. He was sneered at. He was mocked again when he predicted in 2005 that it would double from $50 to $100 before the end of the decade. Last month, when he forecast that a barrel of oil could even touch $200, no one was laughing as it surged to $125 on Friday. So little is known about Murti that it is driving the info-hungry media batty. Unlike many analysts, he does not appear on business television; he does not give interviews (he did not respond to emails for this story), and there are no pictures of him in the public domain. Database searches do not provide much information (other than his dire forecasts) except that he lives in New Jersey with his wife Rita and sold a million dollar home couple of years back. And oh, he ran a 5km race in Summit, NJ in 2006, timing 24:49m. He's the phantom analyst who's got the world market spooked. Some of what he is - a blunt-speaking, candid analyst - can be gleaned from his one appearance before the US House Committee on Energy and Commerce in July 2004, where he is introduced as a "Managing Director and Senior Equity Investment Analyst" covering the oil sector at Goldman Sachs, his lair for nearly a decade. In a trenchant testimony that clearly spoke to the crisis developing today, Murti basically tells US lawmakers that the country is up schitt creek, to use that euphonious euphemism, unless it weans itself away from gas-guzzling SUVs, particularly since it has not build any new refineries for the past 30 years and the administration offers few incentives to energy companies to do so. "The lack of fuel switching options for transportation fuels and consumer preferences for large, powerful, and comfortable vehicles are the key reasons oil demand...Very simply, most Americans would rather own a large, gas-guzzling SUV and pay more for gasoline than an embarrassingly cramped but fuel-efficient Mini," he tells the Congressional panel. "In our view," he continues, "it would be logical for the US government to proactively implement policies that encourage a reduction in the growth rate of oil demand. We note that the cost of waiting will likely result in much greater economic damage over the long term than the short-term inconvenience of no longer being able to buy an inexpensive SUV as an example." Examples of logical demand reduction choices he suggests include *Disincentivize the use of SUVs for mass markets *Encourage market adoption of hybrid vehicles *Introduce incentives to use mass transportation in major population centers (e.g.,tax city driving during certain hours of the day) etc. Obviously, few one paid any heed in the US - and in India for that matter, which has blindly followed American fossil fuel-based auto culture. "Maybe he's a big Buffy fan or something," one blogger sneered, referring to the vampire slayer in the film and TV series, when he first forecast the sharp spike in oil prices. Some conspiracy theorists suggested darkly that his predictions were aimed at helping energy majors rake in windfall profits. But many in the financial media backed him. "Murti's report is a thoughtful, 30-page piece of logical analysis that was grossly oversimplified," noted Fortune , dismissing the notion of insider trading as "idiotic." Newsweek's Fareed Zakaria noted as far back as 2006 that given the consumption patterns in the US, which he called the "gorilla of globas gas," Murti's forecast did not look bubbly anymore. Murti himself never once attributed the demand from India, which consumes 2.5 million barrels of oil a day (one third of China and one eighth of US) for the spike. Today, most doubters of Murti's spike theory stand punctured as price for a barrel of crude moves up from looking like a basketball score to a Twenty20 total. As they moan about paying $3.65 a gallon at the pump, Americans could well be muttering Narayana, Narayana...

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Can we use a "visa electron" debit card to receive money?

Yes we can... but unlike credit card it takes about 48 hrs to get ur money into ur account plus some local taxes (dependin upto country to country) applies....e.g. I asked my web hosting company to refund my $450 to my ICICI bank account and they refund it @ 38.5 INR/$ when the actual rate was 40 INR/$ ... so I lost almost 1200 Rs... so u should better opt to get refund via CC

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Sensex Target : Elliot Wave Analysis

The Sensex has been moving sideways since the March 18 trough at 14677. There are three possible counts for this move. (a) This could be the second minor of the third wave of the correction that began in January. As per this count, the index will witness another steep and vertical fall to 14198 or 12805. (b) The second possibility is that the move since March 18 is a more sustainable corrective pull-back (B Wave) that can take Sensex to 17200 or 17500. (c) The more ambivalent count is that the B wave could result in a move between 14500 and 16500 for a few months.For the near term, it is best to be ready for sudden moves in either direction."Hope this helps.----------- By Paresh (Dstreetdirect.com member username: pkapadia)

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Stop loss Buy/Sell Order

Stop loss Order: An order placed with a broker to sell a security when it reaches a certain price. It is just to limit an investor's loss on a security position. A simple example... u bought 10 shares of RIL @ 2400 and expected to reach 2450 the same day but instead of rising it started falling down 2390.... 2380.... 2370.... and more.... what to do in this situation would u book the loss at 2360 or hold the stock for some more days. A smart trader would keep a stop loss of Rs 15 in his mind (Ofcourse he knows that if the stock fell beyond Rs 15 it could fell further down)So when the trader buy 10 RIL @ 2400 at the same time he puts a stop loss order of to sell all the 10 shares @ 2385. It means if the stock start falling and reaches 2385 mark all the shares will be sold @ market price. Whats the benefit of doing that... he can now buy the same stock @ 2370 again.Now if the stock start rising then again u can use this stretegy... like if the stock rises to 2430 and you are unsure that whether it will rise or fall, u can place or modify ur earlier stop loss order to 2425 ... so that it should be sold automatically if tries to fall beyond that point....Its just a like a boundry line u have placed because u want to limit ur losses upto a certain extent....Same is the case with stop loss buy order... if the share at Rs 100 is rising to 101, 102 .... and u know that if it crosses 103 it will zoom to 106, 107 and u want grab it at any cost put a stop loss buy order at 103.... if it remains below 103 or further fall below then no harm as u wont get the shares and u r safe. and if it reaches 103 and u got the shares and it reaches 105,106 u r in profit...But u have to be determined about support and resistence levels of the shares in both cases

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What is Short Sell

When an investor goes long on an investment, it means he has bought a stock believing its price will rise in the future. Conversely, when an investor goes short, he is selling a stock (ofcourse he's not holding the same) anticipating a decrease in share price.Its just like you are short of money in a casino but are sure that you would win the next game and you lend some money from your friend to play and return the same after the game (you have to).The only difference is that in stocks you have to return the stock back that has been sold without holding it and thats too before the market close (there are some cases in which you can't buy back, any guessess.)However in derivatives trading you have the time buy back until its expiry...Confused? Ok simple when you short sell a stock, your broker will lend it to you. The stock will come from the brokerage's own inventory, from another one of the firm's customers, or from another brokerage firm. The shares are sold and the proceeds are credited to your account. You must "close" the short by buying back the same number of shares (called covering) and returning them to your broker. If the price drops, you can buy back the stock at the lower price and make a profit on the difference. If the price of the stock rises, you have to buy it back at the higher price, and you lose money"

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Companies to watch out for or not?

Hopefully these stocks took advantage of the market correction to increase their stake in this companies.Just give some comments, advice or information about this companies, so that we can also take part in earning some bucks.Click on http://www.dstreetdirect.com/blogs/nawab/207-companies-watch-out-not.html to see

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Short Term Stocks/Buys - IT Sector

Although the IT sector at year ending is near its bottom, some of them have turned SBs.With Rupee slated to go down to 41/42 levels, SBs shld show price hikes in the short term.SB means one can buy in small quantities of 25% to 50% of what they want to buy in that script.Visit http://www.dstreetdirect.com/equity-market/1919-sector-revisited.html#post4669 to see the short term stocks buys in IT Sector

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US Markets First Quarter 2008 Performance at a Glance

All ten economic sectors are set to post a loss. Technology is the worst performing sector with a 15.4% decline, with financials close behind with a 14.8% slide. Consumer staples and industrials are relative outperformers with losses of 2.7% and 4.5%, respectively.The weakness in the dollar has captured the market's attention, some arguing it is bad, and some arguing it is good. The DXY Index--a basket of major currencies compared against the dollar--is down 6.5%, which is its largest quarterly decline since 2004. Of the ten major currencies, the Swiss Franc has posted the largest gain of 14.3%. The only major currency to post a loss against the dollar is the Canadian dollar (-3.3%). In emerging currencies, the largest gainer is the Chilean Peso (+14.3%) and the largest decliner is the Iceland Krona (-16.9%). The S&P 400 Mid Cap Index is down 9.4%. Its best performing stock is homebuilder Hovnanian (HOV), up 48.0%. PMI Group (PMI) is down 56.1%, making it the worst performing stock.Seven of the 30 Dow components have posted a gain. Wal-Mart (WMT) is up 11.6%, making it the best performing component. Merck (MRK) is the worst performing component with a 35.0% decline.The small-cap Russell 2000 Index (-9.6%) is performing on par with its large-cap counterparts. Encysive Pharmaceuticals (ENCY) is its best performing stock, with a 175.3% advance. Keryx Biopharmaceuticals (KERX) saw the steepest drop of 92.9%.The Nasdaq 100 is down 14.7%. Its best performing component is biopharm company Celgene (CELG), with a 31.9% gain. The worst performing stock is GPS maker Garmin (GRMN) with a 44.3% drop.The CRB Commodity Index is posting a gain of 8.2%, which is its largest in 2.5 years. However, the index is well off its best levels of the quarter when it was up 17.7%. Natural gas has seen the largest gain of 31.9%, while cattle are posting the largest loss of 15.7%. Crude oil is up 7.7%, but was up as much as 16.5% when it hit its all-time high of $111.80 per barrel.The U.S. stock market’s weakness has garnered a lot of negative press, although it is actually outperforming most of the major world stock markets. The S&P 500’s 9.8% drop is better than returns on France’s CAC (-16.2%), Germany’s DAX (-19.0%), London’s FTSE (-11.7%), Japan’s Nikkei (-18.2%), China's CSI 300 (-29.0%) and Hong Kong’s Hang Seng (-17.8%). Of the 90 primary world stock market indices, 21 have posted a gain. Ghana is leading the way with a 15.4% advance. The Vietnam Stock Index is the worst performing with a 44.2% drop.The best performing S&P 500 industry group has been trucking (+29%)--its only component is Ryder System (R).Of the S&P 500's 130 industry groups, 109 have posted a loss. The worst performing group is education services (-41%), which got clipped after traders were displeased with results from for-profit education provider Apollo (APOL).The S&P 500 is down 10.2%. The worst performing stock is Bear Stearns (BSC) with a 88% decline. Rumors of liquidity problems caused a run on the bank, causing it to sell itself to JPMorgan for $2 per share to avoid bankruptcy. The offer was later raised to $10 per share.Only 110 S&P 500 stocks are in the green. The best performing S&P 500 stock has been Big Lots (BIG) with a 40.2% gain."The end result is that the S&P 500 extended its losing streak to five consecutive months - the longest such losing streak since 1990."

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Emerging stock markets .... good or bad?

Emerging Markets equities recovered somewhat from their steep losses suffered in January and thus were able to survive the current crisis in capital markets better than their big brothers in the developed countries like US, Japan, China...To the best of my knowledge and collective info from other resources...The MSCI (Morgan Stanley Capital International, An index publisher best known for its emerging market indices) Emerging Markets World Total Return Index (December 1988=100) advanced 7.4 % in US dollars and 4.7 % in euros.Year-to-date, the global emerging markets benchmark is down 6 % in US dollars and 9.5 % in euros.During the last fourteen months, the MSCI EM Index gained 31 % in US dollars and 13.8 % in euros.By regions, Latin America gained 8.8 % in February, Asia was up 7.4 %, and Europe, Middle East and Africa (EMEA) advanced 6.2 %.Over the last fourteen months, Latin America was the best performer with a gain of 53.5 %, Asia came in with a total return of 29.8 % and EMEA gained 17.9 %.Performance numbers are in US dollars unless mentioned otherwise.Twenty-one markets in the MSCI Emerging Markets universe rose in February and four declined. Peru (+16.2 %), Taiwan (+14.8 %) and Thailand (+13.4 %) delivered the best performance.The Philippines (-4.2 %), India (-2.4 %) and Malaysia (-0.3 %) provided the lowest monthly returns.Over the previous fourteen months all but one of the twenty-five markets covered here rose.The best performing countries were Peru (+115.7 %), Brazil (+84.5 %) and Egypt (+69.4 %).There was only one losing market over the past fourteen months: Argentina declined by 3 %. Other relatively poor performers were Hungary (+2.4 %), Colombia (+7.7 %) and South Africa (+8.6 %).

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Reliance Power, A powerless Listing

Reliance Power, the country's biggest IPO fell flat on its face. Millions investing in the stock have had their dreams shattered. Reliance Power listed at Rs 430 versus its issue price of Rs 450; it showed a disappointing and unexpected opening. Many investors sold off the stock in desperation as it ran even lower to almost Rs 360.Udayan Mukherjee of CNBC TV18 says “Just work with a ballpark number of Rs 300. At Rs 300, the company would have a marketcap of something like Rs 68,000 crore - that would be 40%-42% of NTPC’s current marketcap. I think that is fair, the company does not have any power in the ground. NTPC has the entire capacity that Reliance Power wants to put up over eight years functioning, on ground today - not eight years forward. Give it 40% of that value today. At Rs 300, assuming Rs 80 of value, you are paying almost four times book for potential five years forward. You are paying 40% of a company’s value, which has already got the capacity in ground; which you want to achieve over eight years and I think that is fair enough. So for my money, Rs 300 is fair value for Reliance Power, Rs 450 is expensive and overvalued; Rs 550 is certainly pushing it.”

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Is it good to buy stock at IPO or to buy from market

It is much better to buy from the market since it is possible for one to analyze the past performance and the fundamentals of the company. In contrast, in a IPO it is very difficult to guess what the future holds not to mention the troubles one has to go through to get allotment.Find answer to this question at http://www.dstreetdirect.com

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Intraday Calls From Vijay For Jan 30th 2008

NIFTY FUTURE ON 29.1.08 OPENED HIGHER AT 5340, REACHED THE HIGH OF 5393 AND CLSOSED AT 5277 AFTER FALLING TO A LOW 5216.EQUITYBPCL SUPP 380,370 RESIST 390,397,412 SELL AT HIGHER LEVELBHARTI SUPP 845,831 RESIST 876ZEEL SUPP 248,241 RESIST 273,279 SELLFUTURE GMRINFRA SUPP178 RESIST 190,197,203 SELL AT HIGHER LEVELIDFC SUPP 205,198 RESIST 214,220INDIACEM SUPP 203,195 RESIST 214 BUY AT LOWER LEVELCAIRN SUPP 197 RESIST 209 SELL WITH SL 212RPL SUPP 167,160 RESIST 175,182WIPRO SUPP 409,395 RESIST 422,429 SELL AT HIGHER LEVELMTNL BUY 128 SL 125 TGT 135,139M&M SUPP 686 TGT 730SATYAMCOMP SUPP 395,390 RESIST 405,412 SELL AT HIGHER LEVELNTPC SUPP 210,205 RESIST 218,223,228 SELL AT HIGHER LEVELNIFTY FUTURE SUPP 5255,5120,5045 RESIST 5340,5393,5440 .AVOID INTRA DAY LONG BELOW 5150. AVOID ALL SHORTS ABOVE 5450. TRADING WILL BE CHOPPY DUE TO SETTLEMENT ENDING.DO NOT AVOID SL AND HEDGING IS THE ONLY WAY TO SUSTAIN THE VOLATILE MARKET.HAVE A GOOD DAY.

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Emerging markets to grow robustly despite US recession says

A mild recession, limited to US only, can enable emerging markets to grow robustly in 2008, with stock valuations to remain attractive. Earnings in the developed world will show little or no growth at all this year while emerging markets should be able to generate close to 18 per cent earnings growth this year, HSBC said, citing data from the I

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Where's the US markets going?

It was shaping up to be another negative day on Wall Street. Asian markets closed very low on fear of U.S. economic recession, and economic reading on new home sales disappointed. The stock market managed a smart recovery, though, as traders are positive for a rate cut and embraced several better than expected earnings reports.On the economic front, December new home sales came in at a seasonally adjusted annual rate of 604,000 which is 4.7% less than last month's reading and is 40.7% less than last year's number.Our economists expected sales to come in at 647,000.The median sales price of a new house in December was $219,200. This equates to a 10.9% price drop year-over-year, the largest decline in nearly four decades. At the current sales rate, there is a 9.6 month supply of new homes. In 2007, there were an estimated 774,000 new homes sold, down 26.4% from 2006.The number of new home sales is very low, and the large supply of inventory should keep pressure on prices for some time. Homebuilders (+6.4%) shrugged off the negative report. The group is up 36.5% in the last five sessions.Stocks fell to their session lows shortly after the release, but then recovered smartly into positive territory as traders increased their bets on the size of a fed funds rate cut on Jan. 30.Fed funds futures currently indicate an 88% chance of a 50 basis point rate cut, with a 25 basis point cut fully priced in. Prior to today's action, futures suggested a smaller 70% chance of a 50 basis point cut.Of the 22 companies that reported earnings this morning, 12 beat expectations, three met, and seven missed. Some of the notable companies that topped estimates include Corning (GLW 23.10, +0.73), Halliburton (HAL 33.55, +0.46), McDonald's (MCD 51.07, -3.03) and Sysco (SYY 28.33, +0.72). McDonald's traded lower though, as traders were disappointed with its flat December U.S. same-store sales. Verizon (VZ 38.11, +0.35) met expectations.All ten sectors advanced. The financial sector (+3.3%) posted the largest gains, as it stands to benefit from a lower fed funds rate. Beaten down telecoms (+2.6%) came in second. Tech (+0.4%) underperformed on a relative basis due to lack of leadership within the sector.All I can say is volatility is here to stay in the markets for the coming two days especially in Asian markets.

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Intraday Picks for 28 Jan

Visit dstreetdirect.com for Intraday Picks

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