Recession sentiment in India

On a recent trip to India, it seems to be the question on most people's minds - I almost inevitably got asked the question about how I was faring with the recession and whether things are as bad as they hear on the news in the US and Europe. There is some degree of optimism there though - they expect the trend toward cutting costs and offshoring will continue - this will certainly benefit the Indian industry.

This is despite the recent setbacks with Satyam fraud debacle which will no doubt increase suspicion on dealing with the third world, particularly when handing over core corporate processes to them.

A not so new approach with not so new results

Robert Mugabe is apparently taking advice from World War 2 veterans and to his dismay appears to finding exactly the same as the Germans found in those days - printing more money will not take you out of a financial crisis.

Zimbabwe has been experiencing hyperinflation for at least the last year but the economic policy seems to show no signs of adapting. Notes of increasingly higher value are being printed - to the point of a trillion dollar note being introduced a couple of weeks back. Perhaps Mr Mugabe ought to read some basic macroeconomics and if that is above his station, then perhaps the cartoon on Wonkie about the Zimbabwe dollar hyperinflation cartoon may help him understand the mechanics of national finance.

UK Interest rates

Interest rates in the UK have been on a downward trend and many homeowners are hoping the relief on their adjusted monthly mortgage payments will support them through any turbulence on the job front. The recession is no longer impending in the UK.. it has certainly arrived.

My own mortgage payment which is on a variable lifetime tracker rate with the Woolwich, came down by almost 35% since last year this time. The product is good in that it allows overpayments without penalty and I think it is sound advice to make as close to your previous mortgage payment as possible if you are able. The additional amount you pay in will contribute toward bringing down the capital you owe on the mortgage and this is much easier to do when the rates are low for obvious reasons.

I'm certainly glad that most banks have passed on the interest rate cuts from BoE to their customers. One can only hope customers use the savings wisely to reduce their debt and not go on a spending spree with the cash that's freed up.

New Year

Looking forward to some major reshuffles in the New Year - both personally and in the markets. Things are off to a rather rocky start but I'm sure they'll improve after Obama's inauguration on the 20th. It will be really interesting to see how he pitches the financial bailout package to the American people.. there are a number of options forward for Mr Obama and I'm certain the nationalisation one is the least preferred one. However, for the taxpayer this is probably the most effective solution.

Look forward to some interesting discussions and commentary on the economic meltdown for this year - hope your year's been off to a good start too!