India "Explodes" as its "Time of Reckoning" Arrives

[HongWu]

india is finally at the end of its debt rope. The rupee is collapsing because central bank of india has no more US dollars. China has trillions of US dollars. india borrowed and spent for decades, and producing nothing. The only thing keeping it going was the rising price of gold (india is gold rich). So now gold will flood out of india to pay for its debts.

Expect more harsh crackdowns in india to grab the gold from the population.

 

[Aramsogo]

Wow, you really know very little. Hot money in a non-fully exchangeable currency?? Nope. Hot Money is what's fleeing India.

Long China Short India? thats why ICBC and CCB are down 20% year to date

dude i guess they censored the real definition of an asset bubble over in your neck of the woods. Because there is a third rather crucial component you forgot to mention - easy/hot money ; primarily from fiscal stimulus which your govt has been pouring into the system.

if you think there are no bubbles in china, i really hope you havent bought property...wouldnt want to see u on the streets

 

[RiazHaq]

India industrial output falls 5.1%, reports Wall Street Journal:

Industrial output fell 5.1 % from a year earlier in October, after a 1.9% expansion in September, dragged down by a contraction in manufacturing and mining production, government data showed Monday.

The reading widely missed the median estimate in a poll of 15 economists for a contraction of just 0.55%.

Industrial output last fell in June 2009, when it shrank 1.8%.

Government bonds rose following the data amid growing expectations the RBI will hasten a rate cut. The benchmark 7.80% 2021 bond rose to 101.85 rupees from 101.76 rupees before the data and closed at 102.26 rupees.

Economists said a rate cut may come early next year if inflation continues to decline over the next few months.

"While the governor of the RBI continues to stress that he is more concerned about inflation than growth, this is the sort of number that will surely make him sit up and take notice," said Robert Prior-Wandesforde, director of Asian Economics at Credit Suisse.

The RBI, which has raised interest rates 13 times since March 2010, has previously said the likelihood of another increase at its next policy review on Dec. 16 was low.

Despite headline inflation likely remaining elevated at about 9% for November, the sharp contraction in production could prompt some monetary measures at the policy meeting this week, added Citigroup economists Rohini Malkani and Anushka Shah.

Monday's data showed that manufacturing output, which has a 75.5% weighting in the index of industrial production, fell 6% from a year earlier in October, compared with a 2.4% rise the previous month. Mining output shrank 7.2%, after falling 5.6% in September.

India Industrial Output Shrinks - WSJ.com

 

[Aramsogo]

^^^^

This is the start of the economic death spiral for India.

 

[StingRoy]

This should be enough stimuli for those parties who were opposed to the FDI in retail sector. India needs to open up the retail and aviation sector now. With the inflation slowing down, we should also see a rollback in the interest rates which would bring back the IIP to sustainable levels.

We should expect to see a moderate growth in the next couple of years under the current global economic conditions.

 

[ares]

^^^^

This is the start of the economic death spiral for India.

You can predict all doom and gloom scenario but we are still poised for more than 7.5% growth rate this yr..
It took us but one yr to rise from the last global recession(in which btw our economic growth dropped to 7 % ..with industrial output - 1.8% ..this time around things are still better.

 

[patna_ke_presley]

^^^^

This is the start of the economic death spiral for India.

I read news that there is mass laying off of employees in China due to slowdown in export sector and people are out on roads for demonstrations. Till now in India, no company is laying off their employees. So, China should worry more about their people than India.

 

[Aramsogo]

I read news that there is mass laying off of employees in China due to slowdown in export sector and people are out on roads for demonstrations. Till now in India, no company is laying off their employees. So, China should worry more about their people than India.

Yes, India is paradise on earth where there are no such thing as layoffs (sarcasm in case you missed it).

 

[RiazHaq]

Here's a Bloomberg report on India exaggerating its exports:

India’s commerce ministry said it overstated merchandise exports by $9 billion in the eight months through November because of “misclassification and errors” in computing overseas sales.

“Notwithstanding the misclassification, there were errors in double counting and all sorts of things which inflated exports by about $9 billion,” Commerce Secretary Rahul Khullar told reporters in New Delhi yesterday. Overseas sales in the April-to-November period now stands at $192.7 billion, Khullar said.

India’s monthly export growth has averaged about 44 percent since April even as Europe’s debt crisis and a faltering U.S. recovery reduced global consumer demand, prompting economists to question the quality of the data. Today’s revision explains “in part the weakening of the rupee,” Asia’s worst-performing currency this year, said Jay Shankar, Mumbai-based economist at Religare Capital Markets Ltd.

“The global economy isn’t doing well, so it was hard to understand how India was posting such fantastic export numbers,” said Biswajit Dhar, director of New Delhi-based Research and Information System for Developing Countries. “There were reasons to believe something was going wrong.”

The rupee weakened 0.6 percent to 52.04 per dollar in Mumbai yesterday, extending its decline this year to 14.1 percent. The BSE India Sensitive Index (SENSEX), which has lost a fifth of its value in 2011, dropped 1.7 percent. The yield on the 8.79 percent bonds due November 2021 rose two basis points, or 0.02 percentage point, to 8.54 percent.
Waning Demand

India’s exports in November were $22.3 billion, Khullar said, without elaborating. Bloomberg calculations based on previously announced data show exports grew 3.7 percent last month from a year earlier, the slowest pace in more than two years.

The South Asian nation’s imports in November were $35.9 billion, he said. Imports in the eight months through November were $309.5 billion, causing a trade deficit of $116.8 billion in the period, Khullar said.

India will get “close to, but not quite $300 billion in exports” in the year ending March 31, he said.

The South Asian nation’s export growth has vacillated this year, surging 82 percent in July before slowing to an 11 percent gain in October, according to previously reported data by the commerce ministry.

A report by Mumbai-based Kotak Institutional Equities Research in October showed “wide gaps” in engineering export numbers released by the government and data culled from annual reports of the top 500 companies on India’s exchanges for the year ended March 31.

While official announcement showed engineering exports jumped 79 percent to $68 billion in the year through March, data collected by Kotak from company reports indicated only an 11 percent increase to 638 billion rupees ($12.3 billion) during the period, according to the report written by Sanjeev Prasad, Sunita Baldawa and Amit Kumar.

India Overstated Exports by $9 Billion Because of Data

 

[patna_ke_presley]

Yes, India is paradise on earth where there are no such thing as layoffs (sarcasm in case you missed it).

Forget Paradise or Hell as Chinese are atheist. The thing is even with 7.5% growth rate no company is laying off in India because Indian economy is based on domestic consumption mostly. But for China the US/EU crisis has brought mayhem in export sector and people are on road because they don't have work and raw materials are accumulating on ports and factories because there is small demand of Chinese goods outside. This is happening in 9.1% growth, there would be anarchy in China if it will ever slows down to 7%.

 

[Storm Force]

INDIA growth is internal demand

NOT EXPORT driven it will hardly be touched by world reccsion.

incidently 7% growth on $1.8 trillion GDP is $150 billion for next year.

EVEN IN SLOW DOWN INDIA will add the nearly equivalent the entire Pakistani GDP in 12 months ie $170 billion

thats some slow down

 

[IndoCarib]

Here's a Bloomberg report on India exaggerating its exports:

India’s commerce ministry said it overstated merchandise exports by $9 billion in the eight months through November because of “misclassification and errors” in computing overseas sales.

“Notwithstanding the misclassification, there were errors in double counting and all sorts of things which inflated exports by about $9 billion,” Commerce Secretary Rahul Khullar told reporters in New Delhi yesterday. Overseas sales in the April-to-November period now stands at $192.7 billion, Khullar said.

India’s monthly export growth has averaged about 44 percent since April even as Europe’s debt crisis and a faltering U.S. recovery reduced global consumer demand, prompting economists to question the quality of the data. Today’s revision explains “in part the weakening of the rupee,” Asia’s worst-performing currency this year, said Jay Shankar, Mumbai-based economist at Religare Capital Markets Ltd.

“The global economy isn’t doing well, so it was hard to understand how India was posting such fantastic export numbers,” said Biswajit Dhar, director of New Delhi-based Research and Information System for Developing Countries. “There were reasons to believe something was going wrong.”

The rupee weakened 0.6 percent to 52.04 per dollar in Mumbai yesterday, extending its decline this year to 14.1 percent. The BSE India Sensitive Index (SENSEX), which has lost a fifth of its value in 2011, dropped 1.7 percent. The yield on the 8.79 percent bonds due November 2021 rose two basis points, or 0.02 percentage point, to 8.54 percent.
Waning Demand

India’s exports in November were $22.3 billion, Khullar said, without elaborating. Bloomberg calculations based on previously announced data show exports grew 3.7 percent last month from a year earlier, the slowest pace in more than two years.

The South Asian nation’s imports in November were $35.9 billion, he said. Imports in the eight months through November were $309.5 billion, causing a trade deficit of $116.8 billion in the period, Khullar said.

India will get “close to, but not quite $300 billion in exports” in the year ending March 31, he said.

The South Asian nation’s export growth has vacillated this year, surging 82 percent in July before slowing to an 11 percent gain in October, according to previously reported data by the commerce ministry.

A report by Mumbai-based Kotak Institutional Equities Research in October showed “wide gaps” in engineering export numbers released by the government and data culled from annual reports of the top 500 companies on India’s exchanges for the year ended March 31.

While official announcement showed engineering exports jumped 79 percent to $68 billion in the year through March, data collected by Kotak from company reports indicated only an 11 percent increase to 638 billion rupees ($12.3 billion) during the period, according to the report written by Sanjeev Prasad, Sunita Baldawa and Amit Kumar.

India Overstated Exports by $9 Billion Because of Data

It was a software glitch. And India admitted the error unlike some counties who deliberately cook their books but never admit

 

[Splurgenxs]

INDIA growth is internal demand

NOT EXPORT driven it will hardly be touched by world reccsion.

incidently 7% growth on $1.8 trillion GDP is $150 billion for next year.

EVEN IN SLOW DOWN INDIA will add the nearly equivalent the entire Pakistani GDP in 12 months ie $170 billion

thats some slow down

its like saying were crating another pakistan sized economy or our soil in 1 year.
All the infra Pakistan has, in ONE year!

No wonder there so desperate with there Headlines

Just rubbing in deep so that something gets through lol

 

[FairAndUnbiased]

Bond market asset bubble ? Now I've seen it all apparently all the CN fanboys are waiting for the US to go bust before they go bankrupt !

You've got no clue about what you posted btw if you're saying no one is out there for making a few quick bucks(leveraged speculation) then you're more delusional than you think you are !

China is a currency manipulator period, if you ever freely float the yuan then the biggest farce(your exports) ever in the world will come to a grinding halt(they won't stop overnight but will become insanely expensive) that's why the CPC has denied any external pressure to do so !

Yeah the whole economy as a bubble, you're sounding more foolish than anyone with Schizophrenia ! Speculation leads to bubbles & there are so many of them around the world but when demand outstrips supply the prices will keep on rising, IND has a third of China's area & a pop that will exceed yours in the next decade so a real estate bubble is impossible here !

You are one sick fan of the China dream built on the single principle of manipulation !

looking out to make a few quick bucks = speculation.

going into debt in the hopes that your asset increase will balance out the debt+interest = LEVERAGED speculation.

if assets aren't mispriced, then going into debt is OK.

if they are, you lose big time when the assets depreciate and you're left with not only the debt but even less money than you started with.

if you didn't go into debt, then its no big deal, since you don't owe anyone anything.

US bond market is a bubble because of those 2 things. T bonds are grossly mispriced due to the weak market fundamentals of the US economy, historical high prices combined with extremely low interest rates, and the biggest tell sign, very few private investors or foreign governments buying.

The whole point of investment is to buy low and sell high. You have to be out of your mind to buy an investment instrument at its highest price in decades, with the lowest returns in history, and almost no one else buying. Why would anyone sell low and buy high?!

the answer: US g o v e rn m e nt because otherwise its printed dollars will cause Zimbabwe-style hyperinflation.

 

[RiazHaq]

India rupee has slid 19% against US dollar since March this year, according to the Wall Street Journal:

The Indian rupee partially recovered from a fresh record low against the U.S. dollar Tuesday, aided by a late rebound in local stocks and as the euro pared its losses.

The dollar was at INR53.22 late Tuesday, after touching an intraday high of INR53.515, and compared with INR52.84 late Monday. The greenback's previous record high was INR52.85, on Monday.

The rupee has borne the brunt of global risk aversion emanating from the euro-zone crisis and due to concerns over high domestic inflation, slowing growth and a possible widening of the federal government's budget deficit.

The dollar has gained nearly 19% against the rupee since March, making it Asia's worst-performing currency this year.

The rupee could easily be set to fall to as much as 55 to a dollar by the end of the year, as unhedged local firms rush for cover on their dollar debt, said Ashish Vaidya, head of trading at UBS in India.

Local authorities are making efforts to boost foreign-exchange supplies to help arrest the rupee's slide against the U.S. dollar, the junior minister of finance said. "The finance ministry has been keeping a close watch on the situation," Namo Narain Meena said in the upper house of parliament.

A subcommittee of the Financial Stability and Development Council, headed by Reserve Bank of India Governor Duvvuri Subbarao, is also continuously assessing the matter, he added.

The Bombay Stock Exchange's Sensitive Index rose 0.8% to end at 16,002.51, recovering from its intraday low of 15,771.59.

Meanwhile, Indian government bonds rose on investors' expectation that moderating economic growth will allow the central bank to take a dovish stance and ease policy rates sooner than expected.

The 8.79% 2021 bond ended at INR102.55, up from INR102.26 Monday.

The Reserve Bank of India is likely to pause tightening interest rates at its rate-setting meeting Friday, after 13 increases since March 2010.

"But a fast depreciating rupee may add to some imported inflation as India buys about 80% of its crude oil need," said a senior dealer at a state-run bank.

The market is awaiting November's inflation data, due Wednesday.

According to the median estimate in a Dow Jones Newswires poll of 15 economists, the wholesale price index likely rose 9.04% in November from a year earlier, compared with a 9.73% increase in October.

India Rupee Hits New Low; Bonds Higher Ahead Of Inflation Data - WSJ.com