Dubai: A Truly World-Class Cosmopolitan City

I have been in the UAE for almost six years, and have traveled all over it. Having lived in Abu Dhabi for two and a half years and in Dubai for almost three and a half years, I think I can fairly assess how it feels like living here in the UAE. It feels awesome! Dubai, in particular, is an awesome city to live in. It truly is a global, cosmopolitan city. I just LOVE living here. 

The great things about this place are its unparalleled and superb law-and-order, cleanliness, peacefulness, infrastructure, roads, shopping centers, dining options, cafes, 145+ nationalities living in tranquility with each other, government systems and processes, et al. Overall, just an awesome place to be in.

Last year, at the onset of the summer, lots of cloud-seeding exercises prolonged the lovely weather too. If those exercises continue going forward, they would make this place even more awesome. Moreover, pleasant weather is directly correlated with more business activities in the emirates. So, it is a win-win for all parties involved, including for the residents, tourists, business owners, and local governments.

This is the place where the East meets the West in all true senses. This is no exaggeration! 

However, I hope to see more developments in certain areas, such as setting up of more world-class educational institutions, hospitals, and R&D activities. Trading, organized retailing, tourism, hospitality, and aviation are already doing superbly well here.

So, I repeat; it feels awesome living here. May the growth and tranquility keep coming. Aamin.

The Proxy for the Imperative of Now: The Interest Rate Game

Today, the Reserve Bank of India hiked the Repo Rate by 25 bps, moving the Repo Rate to 8%. The Indian market was shocked at the RBI’s move! But, why was the market surprised? Wasn’t it blatantly obvious?

Here are the reasons why the market shouldn’t be surprised and should already have priced that in instead:

1) The CPI and the WPI have been riding high, even though the General Election is about to come. The ruling government would not like to piss the voters off at the eleventh hour of the General Election. Both Inflation Indices need to be reined in. Obvious, right?

2) The INR has, of late, been sliding down against the Greenback, touching 63.3, and making the Indian pain points – already-large fiscal deficit and current-account deficit -- worse off.

3) Of late, other emerging economies have also been witnessing a sort of exodus of “loose” foreign money back to the developed economies, as developed economies promise seemingly -- but arguably -- brighter future.

4) The Turkish Lira hit record low against the Greenback yesterday – TL 2.39 to the USD. But, on the back of confident market speculation, which was apparently based on an urgent meeting called upon, between the Turkish Central Bank and the Turkish Government, for discussing the interest rate, the Turkish Lira rallied to 2.29 to the USD. The market expects up to 2.25% hike to the current interest rate of 7.75%. Of course, Turkey has its own pain points – it has a USD 60 billion current-account deficit, has foreign-exchange reserves of meager USD 38 billion, and owes short-term, foreign-exchange debt of USD 168 billion!! Ooppss…. It’s really too much for Turkey to handle all at once, without raising the interest rate!!

5) The Brazilian Real slid to its lowest level -- in past 5 months -- against the Greenback. The prime reason for the sliding Brazilian Real was a promising interest rate in the developed economies, and this “promise” triggered a sell-off by foreign investors of Brazilian assets! The Brazilian reacted in a classic way by increasing the interest rate, and using foreign-exchange reserves as buffers to defend the local currency and to tame the increasing inflation. Awesome, isn’t it? :-) 

6) Last week’s surprising devaluation of the Argentine Peso, which was also the victim of the same global phenomenon – “loose” foreign money exiting the local economy for a promising future in the developed economies.

7) Almost the same kinds of market activities have also been witnessed in some other emerging markets. The pattern has, of late, been so, so obvious!

So, should the Indian market be surprised at the Reserve Bank of India’s today’s move? Of course, not! The global game of interest rate, which was started off by the US Federal Reserve for taming the Great Recession, is STILL full on! Enjoy “the party,” as it won’t last long…

Stay Away From Gold

Here is the price trend, between Jan 01, 2013 and Jan 21, 2014, of Gold. 

On July 06, 2013, I published my blog, for your reference it is below, forecasting forward direction in the price of Gold, and strongly suggesting to stay away from investing in Gold. 

You may decide for yourself whether I was right or wrong in my prediction. Of course, no body could give you the exact future price, but, gauging the direction going forward is a big skill in itself, isn't it? :-)


Source: nytimes.com