Do it yourself

For the past two weeks my message inbox has been flooded with messages highlighting that recently “Hindenburg Omen Signal”, which preceded the 2008 and 2020 stock market crashes, has been triggered and a stock market collapse may be imminent. There are several other technical and strategy reports cautioning investors against an apparent bubble in the Artificial Intelligence (AI) related stocks. Hindenburg Omen Signal:  The Hindenburg omen is a technical indicator designed to signal the  increased likelihood  of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a preset reference percentage (typically 2.2%) to predict the increasing likelihood of a market crash. The indicator is said to be suitable for about 30 days out, though it's been a false alarm more often than not in the past decade. Four criteria must be met to signal a Hindenburg omen: ·           The daily num...

A few months ago, two reputable Indian corporate leaders opined that Indian youth should work harder and longer. Their opinion triggered an intense debate on social media, about the need for work-life balance and how Indian businesses neglect this important aspect of social-economic development. In this context, it is pertinent to note the outcome of the latest “The Time Use Survey (TUS) 2024, conducted by the National Statistical Office (NSO)”. The survey highlights that these corporate leaders were speaking from their vast experience, and the critics are perhaps oblivious of the ground realities. The Time Use Survey (TUS) 2024 provides a detailed picture of how Indians allocate their 24 hours among different types of activities. The primary objective of the survey is to measure unpaid work, gender participation, and time distribution between paid, unpaid, and personal activities to make an informed assessment of labour participation, care work, and alignment with sustainable deve...

The global macro landscape remains in flux. A strange mix of structural deflationary forces is colliding with equally powerful inflationary pressures. Technology, demographics, geopolitics, and policy responses are all pulling in different directions — making this one of the most complex investing environments in decades. I am not competent enough to decode where the current conditions are driving us. Nonetheless, I would like to share some random thoughts with the readers and seek their views on these. Inflation vs Deflation: The great tug of war At the structural level, Artificial Intelligence, aging demographics, and the rapid adoption of renewable energy are profoundly deflationary for the global economy. ·           AI is driving efficiency, collapsing cost structures, and displacing traditional labor models. ·           Demographics in most major economies — from China to Europe to Japan — ar...

  The Federal Open Market Committee (FOMC) of the US Federal Reserve lowered its benchmark overnight borrowing rate by 25bps to 3.75%-4%. The decision was taken by 10-2 vote, with one member voting for a 50bps cut and another voting against the cut. The Fed also announced that it would terminate the current process of the reduction of its asset purchases (quantitative tightening or QT) on 1 st December 2025. The Fed chairman, Jerome Powell, however, cautioned the market against expectations that the December rate cut was a “foregone conclusion,” saying that it is “far from it.” He cited that there is a “a growing chorus” among the Fed officials to “at least wait a cycle” before cutting again. Notably, after the September FOMC meeting, the Fed officials had indicated the probability of three cuts, including the one in December. Job risks prompt the cut, tariff inflation seen as one=time increase The FOMC decision to cut rate was primarily driven by the cooling job market. T...

Several readers have commented on my yesterday’s post (“USD, Gold, Crypto and a mountain of $38trn debt”). Some agree that the “debt manipulation” theory was far-fetched, others argued that I was underplaying the seriousness of America’s fiscal overhang. Both reactions are valid. My intent, however, was not to trivialize the US debt issue, but to put it in its proper context — and to focus attention on the much larger transitions now underway in the global financial order. I would like to elaborate to convey my point in the right perspective. The Debt Problem Is Real — but Not New The US federal debt now stands around $38 trillion, or roughly 120% of GDP. That sounds alarming, but the ratio has hovered near that level for over a decade. The composition, though, has changed dramatically. After the dotcom bust, debt piled up in corporate and household balance sheets. After Lehman, it migrated to banks. Post-Covid, it has firmly shifted to the sovereign. In essence, the debt hasn’t disapp...

I returned to my desk after a 10-day Diwali break. As I opened my overflowing mailbox, I realized a lot might have changed in the meantime. Nifty50 is flirting with its all-time level. INR has regained some of its lost ground. Precious metal prices have cooled after a sharp upmove. There is a conspicuous thaw in the Indo-US and Sino-US relations. Prime Minister Modi, who hardly missed an opportunity to represent India at various global forums, has missed the ASEAN summit after missing the UNGA annual session, arguably to avoid a one-on-one meeting with President Trump. However, what caught my attention was a large number of notes, reports, messages alluding to the unsustainable $38trn US government debt, and how the US government and the US Federal Reserve are conspiring to dissipate this mountain of debt by manipulating the prices of gold and cryptocurrencies (especially Bitcoins). Most messages are arguing that 2026 could be a 1933 and/or 1971 redux, when USD was devalued 69% (1933...

Following the Custom: Balancing Faith and Fundamentals Each Diwali, as lamps light up homes, optimism lights up Dalal Street too. It’s that time of the year again. Business channels are abuzz with market commentators dressed in their festive best, sharing their annual outlooks on the economy and equities. Almost by ritual, hope dominates the narrative — and that’s not necessarily a bad thing. This year, with investor sentiment subdued and global uncertainties still clouding the horizon, a measured dose of optimism may be just what the market needs. Continuing the custom, here’s a closer look at what could turn favorable for Indian markets over the next one year — and what investors should keep an eye on. Domestic Drivers: The Spark Within Consumption revival on the horizon After three years of subdued consumption, several catalysts are now aligning. Rationalization of income tax and GST rates, material lending reforms by the RBI, a supportive rate environment, and a good monsoon could ...