India's wages are cheaper than China's wages.
Posted on 04/18/2006 7:56:45 PM PDT by TigerLikesRooster
April 18, 2006
Bulls Are Running to India, Raising Fears of a Bubble
By SARITHA RAI
BANGALORE, India, April 17 — Shashibhushana Reddy, a 28-year-old software professional with the local division of the Intel Corporation, has invested a quarter of his earnings in India's equity markets for the last three years.
Mainly choosing media, pharmaceutical and manufacturing stocks, he has seen his investments triple as he rides a boom in the country's equity markets.
Now Mr. Reddy is preparing to get even more aggressive. "Indian companies are doing extremely well," he said, "and I plan to soon start investing half my earnings in the stock market."
Thanks to investors like Mr. Reddy, the bellwether Sensex stock market index in Mumbai soared 45 percent in 2005, and it has already risen 20 percent in the first three months of this year. The impressive gains have been spurred by India's surging economy, which posted a growth rate of 7.5 percent last year.
At the same time, the country has attracted more overseas investors, who poured $10.7 billion into Indian equities in 2005, and $4.13 billion in just the first quarter of this year.
But analysts and fund managers are cautioning that the stock market pendulum may have swung too far, and they warn that some companies are highly overvalued.
As a result of such concerns, the Sensex recorded a two-day decline of 3.6 percent last Wednesday and Thursday, the steepest in six months. The markets were closed Friday for Good Friday, but investors saw a buying opportunity Monday, sending the index up 2.7 percent.
(Excerpt) Read more at nytimes.com ...
Ever since Rumsfeld was seen beaming at an international security conference in Singapore last summer, lauding India and snubbing China, India's profile is suddenly rising, while China is in a stall.
I suspect Wall St sharks are already there trying to make a killing.:)
Ping!
China's not stalled in the European press:
http://news.independent.co.uk/world/americas/article358568.ece
Outside the U.S., China is already treated as 'a' superpower under the assumption that "before long" it will be 'the' superpower, and Europe is increasingly coming around to adopting that tone in its public discourse. (Regardless of the reality.)
Meanwhile, outside of the U.S. and Europe the next conventional wisdom is that India, too, will supplant the United States, knocking us to third in the pecking order. I expect this is a tone that will be adopted soon in Europe's public discourse as well.
Anyone who is stupid enough to invest their life savings into the stock market, and NOT be heavily diversified, deserves to lose their shirt and pull a rickshaw for a living the rest of their lives.
Hope Mr untouchable Indian learns this lesson the hard way.
Third?
No surely you mean fifth, behind Germany and Japan too. Or is it sixth, behind the soviets as well?
Latin america has been on fire the past couple years.
Massive growth in sectors like banking, minerals, and wireless carriers.
No, third, we're expected to settle comfortably in there. Japan is generally assumed to fall under China's sphere by the latter third of the century, and neither it or Germany is expected to move anywhere but down in the pecking order.
Of course the conventional wisdom could come to pass, should China maintain very high growth, America conservative (but good) growth, the yuan appreciate very substantially and the dollar depreciate very substantially. But if any of those factors are off, the picture in four decades is much different than that of The Independent's piece. Unfortunately, perception is reality, especially as it impacts soft power, and it will take only a short time for 'journalism' such as this to erode that heavily.
India's wages are cheaper than China's wages.
This as India is currently outsourcing to China.
The longer China manipulates its currency, the most shakey its economy will be.
It could be setting itself up for a major recession. Japan is still trying to dig itself out of a more than decade long recession after massive manipulations of its trade and banking loan system.
Opinion leaders in Europe tend to be slow especially at grasping what is unfolding in Asia. It does not help that many Europeans are still under the spell of the Marco polo tales.
'Tis better to be sacred than eaten.
it is a very interesting question which I might live long enough to have some idea on the likely outcome, at least for the end-century picture. Obviously so much depends on the development of chinese society and government, the latter of which the CCP hopes to avoid entirely.
As far as the US (not the fortune 100), I cannot see how the general population is going to benefit from coming economic adjustments of globalization.
So he'll give up a Slushee a month?
bump for later
Yes but dont bet on it.
http://www.hinduonnet.com/2001/09/16/stories/13160467.htm
"(Business Line, September 4) presented Central Government statistics which stated that the meat India produces most is beef (1.44 million tonnes in 2000); the second is buffalo meat (1.42 million tonnes) and only third, is mutton and lamb (0.7 million tonnes). Beef and buffalo meat together account for as much as 60 per cent of domestic meat production."
"The per capita consumption of beef/buffalo in India is 2.8 kg, about half that of fish, but more than twice the average intake of mutton, pork and poultry - indirect evidence that beef consumption must be quite common among meat-eaters of all religions. "
You are correct. It will be a tragedy when this bubble bursts - not only will people lose money, they will also lose faith in the market and the capitalistic economy.
'Tis better to be living amongst a population who's beef consumption is (1.44 x 10^9 tons/year)*(2000 lbs/ton)/(1.09 x 10^12) = 2.64 lbs/person/year than amongst a population who's beef consumption is ~ 60 lbs/person/year, even if there are 3 times more folks in India.
(Moo)
Tks for ther ping.
Bubbles inevitably burst. IMO, small bursts are better than big ones. The former are inbuilt corrective mkt mechanisms whereas the latter lead to loss of faith in free mkts and a leftist-socialist insurgency into national economics.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.