Wednesday, July 9, 2008

Directly Coming from Horses mouth.........

Friends,
It has ultimately come .Economy/Market will bounce back, that is what PC Chidambaram , our Fin Min spoke today......What more now one wants?
Here is the text:

Economy will bounce back: Chidambaram
9 Jul, 2008, 1721 hrs IST, PTI

CHENNAI: Asserting that economy would bounce back, Finance Minister P Chidambaram on Wednesday said "right attitude and patience" could help the country face the problems like soaring inflation. "Fast growing economies (like India) will face such problems. But the right attitude, patience and grit can help us not only face the problem but also tackle it," he said after laying foundation stone for Indian Bank's new head office here. "We came out of crises like the 1997-98 Asian financial crisis and the 1989-90 foreign exchange reserve crisis. Can't we come out of the present situation?" he said. India had bailed itself out of other crises like the "first oil shock in 1973" and the 24 per cent inflation rate in 1979-80, he said.
"Despite the growing inflation (at 11.63 per cent for the week ended June 14), banks are still issuing loans and education loans alone to the tune of Rs 20,000 crore has been disbursed to 12 lakh students in the country," he said. He reiterated that the growing rates of crude oil had influenced prices commodities and metals, leading to overall rise and inflation. "But we can patiently handle the situation using globally accepted economic formulae," Chidambaram said. Since India was a growing economy, it was a "different ball game" to finance a growth rate of nine per cent against the five per cent a few years back. "Credit flow and money flow has expanded, as is the case with capital flow from abroad. Sometimes it leads to embarrassments like inflation, but we have to tackle it," the minister said.

1 comment:

  1. AN ARTICLE FROM CNN:

    Warren Buffett gets busy
    For the second time in the past few months, the Oracle of Omaha's Berkshire Hathaway is helping to finance a big deal. That's an encouraging sign.

    See all CNNMoney.com RSS FEEDS (close) By Paul R. La Monica, CNNMoney.com editor at large
    Last Updated: July 10, 2008: 10:24
    NEW YORK (CNNMoney.com) -- American consumers aren't the only ones going shopping. So is Warren Buffett.

    Stocks initially rose Thursday morning thanks to better-than-expected sales reports from Wal-Mart (WMT, Fortune 500) and other top retail chains.

    But the other big corporate event of the day was the news that Dow Chemical (DOW, Fortune 500) agreed to buy rival specialty chemical maker Rohm & Haas (ROH, Fortune 500) for $78 a share, a whopping 74% premium to yesterday's closing price.

    Talkback: Do you follow Warren Buffett's investment moves?
    Dow is getting some help to finance the deal, including money from a Kuwaiti sovereign wealth fund and none other than Berkshire Hathaway (BRKA, Fortune 500), the investment arm of Buffett.

    This is interesting since it marks the second time in the past few months that Berkshire has taken part in a high-profile deal.

    In April, Berkshire agreed to help privately held Mars finance its $23 billion takeover of The Wm. Wrigley Jr. Company, the gum and candy maker. Berkshire also said it was taking a $2.1 billion stake in Wrigley (WWY, Fortune 500).

    It all just goes to show that Buffett is not panicking in this rocky market and is instead searching for opportunities.

    To be sure, Buffett is not ignoring the obvious bad news about the economy. He's said in numerous interviews this year that he believes the economy is already in a recession and that it could be worse than some fear.

    But Buffett is putting things in perspective. Recession does not equal the second Great Depression or economic Armageddon. Rather, Buffett seems to be following the tried and true investing axiom that the best time to make long-term bets is when fear is at its peak.

    And make no mistake, this is a market ruled by fear right now. Investors are scared that oil prices are going to head even higher due to the uncertainties in Iran. They are afraid that mortgage financing giants Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) may need a government bailout.

    Keep in mind, Buffett isn't making trading calls here. So his recent activity doesn't necessarily mean that the markets can't still head lower in the next few months.

    What Buffett is doing though, is signaling that this is not a time for investors to be overly cautious. Stocks are still a good bet for the long haul.

    For example, he told Fortune's Carol Loomis earlier this year that he has a bet with New York investment firm Protege Partners about where the market is going to head in the next 10 years. Buffett is betting that the S&P 500 will post a bigger return than a group of top hedge funds over the next decade.

    In addition, Berkshire has also made some very contrarian bets in financial services this year that only can be justified by a belief that the market turmoil has created some deep values in that beaten-down sector.

    In the first quarter of this year, Berkshire increased its stake in regional banks Wells Fargo (WFC, Fortune 500), U.S. Bancorp (USB, Fortune 500) and M&T Bank (MTB). Berkshire also boosted its exposure to some consumer stocks in the quarter, most notably food giant Kraft (KFT, Fortune 500) and used car retailer CarMax (KMX, Fortune 500).

    At the end of the day, investors should be reassured that the Oracle of Omaha is staying busy. Yes, it certainly seems like a frightening time right now to invest. But if Buffett's not hiding under the bed, why should you?

    ReplyDelete