In our November 19 post, we said we are monitoring five key dimensions on ten key asset categories to gauge when, how and how much to commit the cash we raised in the summer to the markets in the future.

1. Technical Market Factors 2. Valuation Fundamentals 3. Risk Levels 4. Government Intervention Policies 5. Economic Conditions

Ten Key Asset Categories Relative Performance Since Oct 1:

click image to enlarge

Headlines Re - Government Policies and Economic Conditions:

The headlines in the financial press over the last 24 hours, clearly show that our 4th and 5th monitoring dimensions are not near to being settled enough to risk cash. Consider this headlines sample:

Nov 19 (Financial Times) — Junk bond yields spike — Average yields on US junk bonds have topped 20 per cent for the first time amid rising concerns about a protracted

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by Edward Hugh: BarcelonaIndian inflation fell back again in the last week of October, as energy and commodity prices continued to fall, and the impact of the global financial turmoil and credit crunch ricocheted its way across one country after another. The IMF last week forecast annual growth for India of 6.3% in 2008 while India's manufacturing expansion, which continued to weaken, still held out against the global trend, according to the latest JPMorgan global manufacturing PMI.So, as we enter November, and a number of Indian indicators start to improve, it is certainly worth asking ourselves, has India turned the corner? Will India lead the emerging markets charge during the next global expansion?I am not, I am sure, alone in feeling that this is a distinct possibility, and, indeed, a similar view was expressed only last week by Sharmila Whelan, senior economist at CLSA ...

Indian inflation fell back again in the last week of October, as energy and commodity prices continued to fall, and the impact of the global financial turmoil and credit crunch ricocheted its way across one country after another. The IMF last week forecast annual growth for India of 6.3% in 2008 while India’s manufacturing expansion, which continued to weaken, still held out against the global trend, according to the latest JPMorgan global manufacturing PMI.

So, as we enter November, and a number of Indian indicators start to improve, it is certainly worth asking ourselves, has India turned the corner? Will India lead the emerging markets charge during the next global expansion?

I am not, I am sure, alone in feeling that this is a distinct possibility, and, indeed, a similar view was expressed only last week by Sharmila Whelan, senior economist at CLSA Asia-Pacific Markets.

“We do expect the Indian business cycle to

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Halliburton’s Slight Loss; “The Force” Boosts Hasbro; Better-Than-Expected Economic Outlook; Indian Airline Labor Reversal; NetFlix Earnings Pop; Home Prices to Fall Another 10%; Citi Wins Settlement; Merrill Cuts Jobs

Halliburton Co. (HAL) yesterday (Monday) announced a third quarter loss of $21 million, or 2 cents per share, compared to a gain of $727 million, or 79 cents a share, for the same period in the prior year. The Houston, Tex.-based oil and energy services firm attributed the loss to financing expenses including $693 million in costs related to the redemption of convertible bonds, Bloomberg News reported. Toymaker Hasbro Inc. (HAS) posted a gain of $138.2 million, or 89 cents a share, for its fiscal third quarter, compared with a profit of $161.6 million, or 95 cents per share, which included a tax benefit of 17 cents per share for the same period in 2007. ...

The turmoil in US stock markets is making all the headlines. But BRIC nations are facing a much deeper crisis in their stock markets.

On Monday, authorities halted trading on Brazil's Bovespa for 30 minutes after it tumbled 10%. Trading in Russia was frozen on several occasions in the last two weeks to prevent an all-out collapse of the market. And China's CSI Index has lost 58% of its value so far this year.

Despite recent setbacks, however, Andrew Gordon reckons Brazil is the most likely of the pack to weather the current financial storm

Did you know that the Indian government imposes a cess on indigenously produced crude oil? The Oil Industry Development Act, 1974 based on which the cess is being charged, states that “the cess collected under this provision would be made available to the development of petroleum sector”. The cess was introduced to provide financial assistance to state-owned oil companies, and is not applicable to private oil producers.

Since then, the government has collected Rs.74972.36 crore as cess, but only Rs.902

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Now, this one is an interesting situation. The Indian government likes to tom-tom the oil subsidy bill as a proof of its socialistic credentials; the media targets the government for unfairly subsidising the expenditure of the middle class; and most economists lay the blame at the door of the government for distorting the free market mechanism of price determination via these subsidies.

There are three duties/ taxes collected by the government on the sale of petroleum products. The state governments collect the sales tax while the excise and custom duties go into the kitty of the central government.

 

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India’s inflation rate shot up to its highest level in more than 16 years this month, increasing the chances of the fourth rise in interest rates in Asia’s third-largest economy since June. Wholesale prices rose 12.63 percent in the week to Aug. 9, after increasing 12.44 percent in the previous week, according to data from the commerce ministry in New Delhi today. And inflation may climb even higher following a decision last week by Prime Minister Manmohan Singh's cabinet to approve an average 21 percent pay rise for 5 million civil servants, ahead of elections due by May. Indian stocks declined after the news was released on concern faster inflation and higher interest rates will crimp consumer spending and slow the pace of economic growth even further. Bonds also declined with the yield on the benchmark ...

By Martin Hutchinson Contributing Editor With sky-high growth potential, China and India are the two markets no investor can afford to miss out on. But that doesn’t mean they’re impervious to market turbulence, and in times of trouble, India is the more reliable investment. No doubt, both countries’ markets are suffering this year, with China’s Shanghai A Index down 50%, and India’s Sensex Index down 25%.  It’s no secret that India is struggling with both a growing budget deficit and mounting inflationary pressure. But China has problems too – it’s just hiding them under the carpet until the Olympics are over. That’s why, for me at least, the investment decision is clear – I’ll buy the country whose problems are out in the open and already reflected in stock prices. China’s Pending Credit Crunch China’s inflation has been quiescent recently. It declined from 8.7% ...

by Edward Hugh: Barcelona

Executive SummaryIndia’s latest run of strong economic growth and continuing macroeconomic stability is a tribute the important progress made in recent years in macroeconomic management techniques as well as to an earlier generation of structural reforms. India’s economy has now expanded at an average rate of about 8½ percent for four years running, on the back of rising productivity and sustained investment. Inflation after ebbing in the second half of 2007 has now returned in full force and become one of the most pressing macro problems facing the Indian economy. In fact the record capital inflows which have followed the bout of global financial turbulance and a slowing U.S. economy, while in the long run beneficial, have only served to complicate the application of sound monetary policy. The current account deficit, which had remained modest, is now – on the back of high oil

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