Inflation, Common Wealth Games, Double Dip and Realty Bubble?

Real Estate prices in Mumbai have risen well beyond the peak of 2008, some people who were intelligent enough to buy flats 12-15 months back are sitting on sweet gains. I was talking to my friend, who is an investment banker, and we were discussing whether without the sustained economic growth at fundamental level, Mumbai will be able to maintain the current price levels? Is there be a realty bubble waiting to explode in India, Mumbai? Imagine a flat quoting about 70Lacs just before the crisis in 2008, is now priced at over 1 Cr.

We discussed two points. First, that even at the peak of the crises, the builders were able to manage with minimal sales, though their valuations took a nosedive, but they didn’t went bankrupt, somehow they had the working capital or they managed to get it. So, effectively the supply demand equation does not hold when there is a oversupply. Second, most of the people in India are still buying their first ‘HOME’ and that is not an Investment, it is a basic necessity and they will buy flats as and when prices start falling, even if just by 10%. At least I know 4-5 of my friends who are just waiting for prices to cool a little bit. Contrast this with the develop world where people were living in their home and had 2-3 homes as an investment, they may sell it if they require money or they may not buy another if they don’t have the money, but is it possible in India?

On another note, I don’t understand how government is going to control the food inflation by increasing interest rate. If not, then why the hell they promised 6 months back that inflation is going to come down. Now you see news articles that government has failed on their promise, I say it was never a promise. To control the inflation we need a good agri. production, not just good we need a bumper production. With millions of tonnes of food-grain rotting outside the FCI warehouses, while our agri. minister is juggling between IPL/ICC and asking the prime minister to reduce the burden; only time will tell whether our system can even handle the bumper harvest, if we have it at the first place. Even I think that what Mr. Iyer said about spending 35,000 Cr. for CWG is a waste, not because I second his other opinion of using that money for promoting games in india, but because I think that money should have been spent on setting up new FCI warehouses/upgrading the older ones. Seriously, I don’t mind people bureaucrats gobbling up the same 100 crores while setting up some more warehouses than doing the same while setting up lavish sports complexes. But nothing will happen as the root of the problem remain the same people. The people who still elects these minister; the people who wear branded ties, drives mercedes but still jumps the traffic signal; the people who still do not pay the taxes; the people who still do not cast their vote (but vote their Caste); the people who still spit on the roads; the people who are willing to pay bribe to by-pass the system but not get into the system and clean it; the people who still kills for religion, the people who are we.

The blog has already become so long and I didn’t even start on Double-dip. But let’s just leave it at this.

Err, you looking for a bachelor accommodation?

“yaar yeh bagal wali building mein koi flat nahi hai kya”

“sir woh bachelors ko nahi dete”

In short that means being a bachelor, you are not eligible to rent a house in half of the good societies. Those societies which allow bachelor accommodation demand higher maintenance charges from the landlord as if they are the only ones who understand the concept of high risk-high return. When you meet the landlord, he will start with the normal lecture of ‘no parties, no friends at home’, like you will strictly go by what he wants. If you delay the payment of the rent by even 1 day, he will worry of credit default even more than the Investment Bankers did at the peak of subprime. He will open the internet banking account and re-check whether the last month’s rent was indeed paid or it was just his dream, bloody INCEPTION!!!

Whenever you shop for grocery and bring back the polythene bags, everyone, from the security guard to the distant neighbors will look at the bags as if you are carrying detonators. Any bottle like structure will bring an instant smile on the guard’s face, the smile a "close-up" advertising executive would die for. And if at all he knew telepathy, he will signal that you will be called in the next society meeting unless you give me 1 'CAN' of beer. The house maid is no less than a shrewd economist that she uses the utility function, opportunity cost, and factor cost principle all in one go while quoting the monthly salary. The ‘bai’ is entitled for a 20 days CL and 10 days PL in a month, If there any slightest of chance that she cannot visit a house, it will be the bachelor’s one. Now I understand why my professor always insisted on having a Contingency Plan or Plan-B.

You cannot have relatives/cousins if you are a bachelor. One of my friends couldn’t make the club card for his cousin because the cousin’s name was not on the house lease. When asked whether people having families put each of their family member names on the lease, the society politely replied that only the families can ask for club card for their relatives and bachelors cannot. Even the faintest of the noise coming from the bachelors’ house will find its way to the ear drums of the neighbors and the after effect are heard at the landlord’s house. Forensic experts are no match to the neighbors’ skills as they trace the source of all the “stray” garbage to the Bachelor’s flat, I bet these people should train the Archeologists! 

If one is able to manage these stakeholders for 11 months, the last lessons are learnt in accounting. As my accounting professor said “Management Accounting is an art” and there you see, how beautifully the landlord calculate the depreciation of the flat, having an eye on your security deposit. After all this, I know where you will go to, your old friend, the house agent who has mastered the art of "key account management".

10 Things You Must Know

1. There is only one absolute truth and that is when kareena sings “jaisa filmo mein hota hai, ho raha hai hu-ba-hu” in a song in the movie ‘3 idiots’
2. There is nothing called free lunch but Gyaan is always free, and you’re not even asked if you need it, it is pounced upon you
3. Only those who have already earned Crores, tell others not to worry about salary but work profile
4. Just because the owners aren’t running the company doesn’t mean that the company is professionally run
5. ESOP component of your pay is even more variable than the Variable Pay component (or Performance Linked bonus, if you say so)
6. The most difficult thing to do in Mumbai is search for a good apartment; given that you are a bachelor (will write on this one in detail)
7. The electronic swipe machine at office will always register your swipe if you are coming late or leaving a little early, but it is likely to fail to register the swipe otherwise
8. You will always run out of (sufficient) change to pay the autowallas, especially on weekends
9. You can run, you can hide but you can’t escape the telemarketers calls, they will reach you somehow
10. My blog is becoming more random day by day and I am the one responsible for it, sigh!

P.S. - now please don’t comment that it was the singer and not kareena who was actually singing the song in ‘3 idiots’

Daddu - the Rabbit !

Let me introduce you to my companion at office, Mr. Daddu (video attached.). The following notes explain why Mr. Daddu became popular in the entire office within 2 days of his arrival.


Please note that each one of the points listed below holds independently.

1. Mr. Daddu looks extremely stupid and you can always laugh at him

2. Mr. Daddu can do the same thing every day without getting bored i.e. nod his head whenever you touch him, move him or wake him from his sleep

3. Mr. Daddu greets everyone with the same smile whether it’s the office boy or the big boss of the floor

4. Mr. Daddu is a proof that there is at least someone more stupid than you are

5. Mr. Daddu can stay at the same place doing nothing and he never complains about it

6. All Mr. Daddu can do, is that he nods his head up-down like saying “yes” to whatever you do

7. Mr. Daddu continues to believe that he is a Rabbit, unperturbed by what others have to say about it

8. Mr. Daddu allow his colleagues to poke his nose whenever they want to vent out ‘their’ frustration, he still nods his head

9. Mr. Daddu has applied for a employee number as he thinks he is doing nothing less (if not more) than any other employee on an average day

(P.S: Daddu's is Sanket Bhale Property, he writes at lotofshit.blogspot.com)