Friday, March 02, 2007

India onion rising price and world stock market slump

There can be little relation between the price of onion in India and the slump of stock markets around the world. The possible one can be that of value. Onion has raised in value for one reason or another, maybe demand is higher than offer. Shares plunged because of speculations about Chinese economic majors.

So it seems, everything reaches a climax only to have a slope. There are daily ups and downs at the stock markets, but they concern one area rather than all. The slumps look minors as they are offset by quick recoveries.

The countries that can be hit by the slump are those with weak economies depending on exporting raw materials, which are the backup for industrialised economy. The slump in the world markets shows the other side of the coin. When a major market plunges into difficulties, it affects those related to it directly or indirectly. Tourism, to give just an example, can be hardly hit, which is bad news for developing countries depending on the affluent tourists from developed ones.

For current world stock slump affecting international and national economies, it shows world economy is like a group of cards that can all fall when one slides. Speculations about China’s government measures aimed at clamping down on illegal share trading and might impose a capital gains tax on stock market earnings. This in a way shows that China, as a result of its liberal economic measures has become an influential factor in the world economy, contrary to the purely communist era when its crises were purely its own concern, scarcely affecting the stock markets. It is time to redress world economy before having a crash similar to that of 1929 with its dire economic and social consequences.

Personally, I have no shares in any stock markets. I have nothing to lose. I don't work for a company with shares at the stock market. So I have no fear for my job. I work in the public sector where the wages are constant and whose value fluctuates because of the level of national inflation.

I feel sorry only for those who put their money in the basket of the stock markets and can't see their eggs hatch to become fat poultry.

Life is a risk and markets are constant risks for investors because of their fluctuation and unpredictability even for big economic experts.

Maybe markets will recover quickly if movers and shakers of the world economy join efforts before what is done can’t be undone.

On a final note,

Those who have small shares won't have to worry as they consider them as a lottery ticket on which they don't realistically expect lucrative gains. But those who put huge sums have their reasons to be fretted each day things don't look better.

Stock markets should be managed reasonably without too much speculation. They can have the famous crash of Enron company whose fall took everyone by surprise.

In other words stock markets shouldn't turn into casinos where money is simply thrown without thoughtful calculations.

Maybe, onion price and stock markets shares will return to their normal level.

1 comment:

Anonymous said...

Buy CAIRN INDIA at current 135. Target : 192