recession | wealthymatters

Remember

May 4, 2013 Leave a comment

Filed under Theory, Tool Kit Tagged with crash in commodity prices, crash in gold price, crash in oil prices, postaday, recession

For over a decade now I have enjoyed reading Swaminathan S. Anklesaria Aiyar’s Sunday TOI editorial column Swaminomics.I like his insight and willingness to call a spade a spade.Read and enjoy his article below.

Bad news: World is sliding into a new recession

24 JUN, 2012,SWAMINATHAN S ANKLESARIA AIYAR,TNN

Many rich countries have struggled for three years to emerge fully from the Great Recession of 2008-09 . Alas, the world is slipping into a new recession. No global authority has dared say so, but the writing is on the wall.

A classic lead indicator of a global recession is a crash in commodity prices, which is evident today.

Brent crude, the benchmark variety that determines Gulf oil prices for India, has fallen from $125/barrel in January to barely $ 90/barrel. Major global commodity indices have slumped over 20%. Mittal and Tata are closing some global steel plants because of falling demand. Prices of non-ferrous metals, cotton, coal and iron ore have crashed. Read more of this post

Filed under Tidbits Tagged with Brent crude, crash in commodity prices, European Central Bank (ECB), Fiscal Deficit, global recession, Great Recession of 2008-09, HSBC Purchasing Managers' Index, IMF, Josef Joffe, lead indicator of recession, Maastricht Treaty, postaday, recession, Swaminathan S. Anklesaria Aiyar, Swaminomics, The US Federal Reserve

Of Skyscrapers And Recessions

January 15, 2012 Leave a comment

I came across an interesting hypothesis by Andrew Lawrence in today’s ET.

Lawrence explains that “high buildings are typically driven by cheap and available capital-high land values,high construction costs-and therefore marks the cyclical peak of the credit cycle.The higher the building the often more abundant and cheaper capital is relatively.”

“Skyscraper building booms do not appear in every economic upturn,but simply in those with strong expansion and typically driven by cheap credit.So when you see a skyscraper boom it should signal concern over the extent,nature of the upswing and the extent of the downturn.”

Mmm…..food for thought isn’t it?Mumbai today seems to have a couple of new towers coming up in almost every street.

Filed under Theory, Tool Kit Tagged with Andrew Lawrence, credit cycle, downturn, India, peak of credit cycle, postaday, recession, Skyscraper Index, skyscrapers Mumbai, upswing

The Yield Curve

April 6, 2011 5 Comments

The yield curve is a graph that plots the yields of similar-quality debt instruments against their maturities, ranging from shortest to longest. The yield curve is is also known as the term structure of interest rates. As yield curve shows the various yields that are currently being offered on debt instruments of different maturities it helps investors quickly compare the yields offered by short-term, medium-term and long-term debt instruments.

The yield curve can take three primary shapes. If short-term yields are lower than long-term yields i.e.the line is sloping upwards, then the curve is referred to a positive (or “normal”) yield curve. Below you’ll find an example of a normal yield curve.