SUBPRIME LENDING ....A BANE FOR US BANKS

"We sow bad loans in good times " a old proverb now seen in light with the subprime lending problems in US .
Subprime lending is done to customers who dont have any prior credit worthy history with tha bank , this state of lending is called predatory lending , in the late 90s US economy saw a growth in real estate and a boom in the sector which lead to banks giving loans to people who were not credit worthy at low interest rates . As US has a ARM system , that is adjustable rate mortgage system , which changes with fluctuations in the economy , this was pegged in the form of 2/28 i.e for 2 yrs a market rate of 1.1% was fixed as interest and after 2 years a increased interest rate i.e (1.1% + 300basis points) for a period of 28 years but in 2005 this changed to 3.3% and now it had touched around 8 times more than the original rate .
As the people who have taken loans for a house have also taken loans, on the basis of the house itself as mortgage , now this gave rise to a crisis where there was no records for the credit history of the people , people were reluctant to pay back the debt and houses were auctioned at the market price ,as supply was more than demand in the housing sector .. this led to huge losses accumulating to $2.5 trillion .
Now its global implication , as FIIs have invested in global markets such as Japan , India and to offset the losses in US market they are selling their shares and liquidating it ,leading to fast outflow of money from a country . Globally stock markets are sensitive to changes in the US market , markets are apprehensive and investors are selling their shares so there is decrease in share prices globally , indexes in Japan and India have fallen marginally. Now this resulted in a shortage of liquidity in US , a start to a recessionary phase in US economy , for the time being the federal reserve has intervened by reducing the loan rates by 500 basis points to bring about liqiduity in the US economy , thus leading to outflow of dollars into emerging markets like India .
Now it is to be seen when global markets stabilize though subprime lending will remain a achilles heel to US mortgage firms for a long time now.

REDDYNOMICS

Rupee appreciating , IT exports hit , Indian service sector' s profitability decreasing , inflation in control , Growth to be sustainable or not .
These are the headlines found nowadays on every newspaper dailies and magazines . Now
lets know the intricacies and the dynamics of Indian economiy by having a glance at the latest monetary policy made some days back .This year monetary policies was reviewed by Dr Reddy , the governor of RBI , in his policies he has tried to balance inflation with growth .
India is thriving on a huge influx of FDI , FIIs and forex reserves at US$ 206.9 billion , growth at 8.5% but inflation has been Mr reddy's archilees heel for a long time .
He realizes that we are currently going through a catch 22 situation where increase in growth will result in increase in inflation and vice versa.
In his present policy measures to control inflation he has hiked the CRR rate( cash reserve ratio is the amount of money that a bank has to give to the RBI) by 50 basis points thus flushing out 16000 crores of money out of the market , He has also increased the reverse repo rate ( the amount that the bank gives to the RBI as loan ) , his main objective is to take out money from the market curbing spendings and investments. The irony of this measure is that as inflation reduces , growth also reduces . The shortage of money will curb the growth in real estate and retail sector as the money for investments are curtailed .Another aspect of money taken out from the market is that there is now shortage of rupee in the market which is resulting in the appreciation of the rupee against the dollar.
Dr reddy cannot allow excess money to flow in the market and as well cannot curtail the growth rate which is presently pegged at 8.5% , in his recent policies he has smartly not increased the interest rates on Loans but has chosen to decrease the interest rates on savings so that the bank reserves are not affected.
Dr reddy cannot continously take out money from the market as it will lead to rupee being appreciated below 40 thus making the Indian service sector lose its competitive advantage . IT companies like Infosys and TCS have forward hedged all their export earnings to save itself from huge losses but if the rupee continously appreciates , we lose significant portion of foreign earnings .
In Indias quest for developement Dr Reddy has to play a pivotal role in striking a right balance between growth and inflation .

levis ......is it diluting its name

welllll this name is not new to us , as a teen we grew up looking upto this brand , i remember having my first pair of levis jeans , i was so excited and thrilled since then it has being a integral part of my life , it gives me a sense of freedom , a sense of independence ...ya its rebellous but thats what levis has always been .
The jeans itself has a sense of aura in it right from the red tabs to the linings everything is so authentic and rugged , i personally feel this jeans has developed into a cult brand and since its introduction to indian market , it has catered to the elite and who chose to be different.....and we are paying a price to be different , a difference in attitude and perception. I have always had a soft corner for this brand , its just feels great when u have that levis tag on your back , its just makes you feel confident , i had always looked upto this brand till recently ...I had been to chennai a land deep down where people are known for their dhotis and their culture which they strictly adhere to but as times changing , chennai had developed into a cosmoplotian city and with every growing city comes with a high growth in peoples purchasing power . Chennai boasts of some good malls ,i happened to visit some , theres a mall called spensers plaza , it claims to be one of the largest in india welllll i visited this mall some 4 times and observed a shocking fact which i am sharing with u all , levis as we know has come up with a brand called levis signature catering to a different segment of customers , it has its own stores too....I found out that levis signature store was found very close to the gate and the main levis stores bit far way which was bit surprising to me . On the first day i observed buyers who wanted to buy levis ended up buying levis signature instead everytime i found out that people shopped more in levis signature stores rather in levis stores due to the convenient location of the store and the name of the brand levis assosciated with signature.....as a loyal fan of levis i was surprised by the companies marketing & branding strategies , how myopic can a company become now levis has become a common mans brand , though its sales are increasing but the brand name is getting diluted , in some years i think people will detest buying a levis , as the very essence of the jeans is being eroded.

diya......my cute bhanji

FAILURE...

MANY PEOPLE DETEST THIS WORD .....THIS WORD HAS BEEN A NEMESIS TO ALL THE MIGHTY , THIS WORD HAS BEEN A CURSE TO MANY .....THE NAME ITESLF CARRIES WITH IT A UNCANNY FEELING OF DEJECTION AND NEGATIVITY....MANY ARE VULNERABLE TO THE EFFECTS OF THIS WORD ,....THIS WORD NEVER LEAVES ANYONE....IT NEITHER SEES RICH OR POOR .....NEITHER IT SEES COLOUR , CREED AND RELIGION...I HAVE HAD MY SHARES OF EXPERIENCE WITH THIS WORD ....AND THE AFTERMATHS OF ITS EFFECTS ....BUT I REALIZED ONE THING WITH EVERY FAILURE COMES A STAGE WHERE U THINK ...THINK ....THINK.....WHEN U THINK U COME UP WITH IDEAS WHICH MAKE U MORE STRONGER , MORE EXPERIENCED ..MORE CONFIDENT....ITS RIGHTLY SAID FAILURES ARE THE PILLARS OF SUCCESS ...PILLARS WHICH ARE MADE ON THE RETROSPECTION ONE GOES THROUGH.....FAILURE SHOULD BE TAKEN POSITIVILY AND ADRESSED WITH CAUTION ...WE OFTEN NEGLECT THIS WORD AND ASSOSCIATE WITH PEOPLE WHO HAVE OFTEN BEEN SUBJECTED TO THE WHIMS AND NAUNCES OF THIS WORD ...BUT IT LINGERS CLOSE BY .....IT FOLLOWS EVERYONE AS A SHADOW...SO NEXT TIME YOU COME ACROSS THIS WORD ....TAKE IT GRACEFULLY FOR THIS WORD TEACHES US THE ESSENCE OF LIFE .....

MARKET RESEARCH ......MY PERSPECTIVE(part one)

welll the name itself is self explanatory...but like to share something which i learnt about this subject in these few months .... from my early days as a management student i developed a likeness to this subject.... i was a neophyte in the world of marketing ...and marketing seemed to be little vague to me but its not that vague it seems thanks to stastistics , marketing is redefined and has given the subject all its flesh and blood ...lets start with what marketing .is ..Defn of marketing is " (anticipating, identifying and satisfying customer needs profitably), ...then whats marketing research ....wellll for a layman its analysis of datas and understanding the market based on consumer behaviour and preferences , but to me marketing research is the essence of marketing without which i think the foundation of marketing lies weak..i sometimes wonder why people often show disregards to this subject in terms of prospects and challenege....i find the subject intriguing ..imagine you are able to formulate plans and analyse people's preferences...i was astounded when i got to know that companies postioning statements are often based on brand analsyis done by research techniques ...bajaj pulsar's tag line "definitely male " was due to a concept of levels of assosciation in product preference made possible due to research analysis ...market research helps in product developement , segmenting the target profile , postiioning your product so that it occupies a consumers mind space ...various factors involved in the buying process , behaviour , choice and preference...marketing research starts from the exploratory research knowing about the organisation , its a form of internal survey which helps to know about business strength , financial willingness and other factors related to the business ....here we take facors for the final analysis...then we go for the external survey by the help of a questionnaire....though people find it boring i find it challenging imagine setting questions probing about a persons likes , wants , desires ..understanding the mindset of your respondent , probing into his mind and getting the hidden part ...in the world of marketing everyones try to outsmart each other....companies who understand the needs will fill in the gaps succesfully and with a age where the average product life cycle is decreasing market research will help in repositioning a product or extending the product line or category so that the product outlives its life cycle.

I LOOK AHEAD ALWAYS

I HAVE PLANNED , I HAVE HONNED MY SKILLS
I HAVE STAYED IN THE WINGS , DONE THE DRILL
I HAVE FALTERED A LITTLE , LEARNT A LOT
I HAVE GAINED THE KNOWLEDGE I ONCE SOUGHT
I HAVE TO LEAVE MY NEST NOW , EXPLORE THE WORLD OUTSIDE
I HAVE FOLLOWED THE MAP BUT NOW I AM ON MY OWN GUIDE
I WANT TO SEEK MY OWN DESTINY..................................
I WANT TO MAKE THE FUTURE NOT JUST HISTORY
I LOOK AHEAD ALWAYS...........