India’s economic landscape has evolved from a primarily agrarian society to a diverse economy with robust industrial and service sectors. Post-1991 liberalization, trade policies shifted, leading to increased global integration. Despite growth, trade deficits have persisted, reflecting challenges in balancing imports and exports in an ever evolving market. A trade deficit occurs when a country’s…
The stock market is like a busy marketplace where people buy and sell ownership in companies. It’s where we can become part-owners of big names like Nestle, TCS, HDFC Bank, etc. Imagine it as a giant auction where shares of companies are traded, and the prices constantly go up and down. There is a correlation…
Consumer sentiment is a measure of how people feel about the economy, and it can have a significant impact on economic decision-making. When people are feeling confident about the economy, they are more likely to spend money, invest, and start businesses. This can lead to increased economic growth. Conversely, when people are feeling pessimistic about…
There are several factors that improves strength of currency (see this flow chart). When we talk about currency strength – a stronger currency is better, right? But in the world of economics this is not always the case. Majority countries prefer to keep their currency weak over USD. We will see why…(here) Why I researched…
There is an interesting report of World Bank on consumer spending habits of developing nations. It also gives detailed numbers on where do people spend money in India. A report like this gives a nice visualisation of how Indians (and other population across the globe) spend their money. Though the report is dated 2010 but…
When we buy/sell stocks, this trade happens in a financial market. People trading in forex, derivatives, commodities etc do so in a financial market. Even our banks, insurance companies, mutual funds, pension trusts etc are a participant of financial market. In simple term, we can say that a “financial market” is a phrase used to…
In part-2 we have seen what’s causing the short term debt cycles. Availability of cheap credit was causing those cycles. Long term debt cycles are also caused by credit (excess debt accumulation in economy). But how it is possible? Why I am raising this question… Because in short term debt cycles, we saw that, when…
Here in Part-2 of the series of blogs on economy, we will talk about short Term debt cycles. In Part-1 we have seen what is economy, use of money in economy etc. What’s about short term debt cycles? Ray Dalio has beautifully explained the short term debt cycles in his Youtube video. I am only…
These days we often hear the phrase called “taking a haircut”. What does it mean, and how it effects a common man? In simple language, taking a haircut means “agreeing to settle a deal for a loss”. Why banks would agree to accept a loss making deal? To understand this, one must first understand what…
The business model of Banks is different from other businesses. Check Bank Data in Stock Screener. We are more accustomed with “manufacturing” business models. Which is as below: But banks do not work with this model. In order to attempt analysis of banking stocks, an investor must understand the business model of banks. So lets look…
There is a strong relationship between GDP and tax revenue. But before we must know what is GDP (Gross Domestic Product). GDP is an indicator of a countries economic health. GDP figure also show how big is the economy. But why we use GDP. In layman terms GDP compares earning and spending power of different countries….
The functions of RBI (Reserve Bank of India) are as important as the Ministry of Finance. RBI is not just a bank, it bank of banks. When I was a child I always wanted to open a bank account in the Reserve Bank of India. The enormity and magnitude of its office building itself used…
