Fin-nomics

  How real is the real estate industry in India?                                                           -by Abhishek Maity Real Estate sector has seen immense challenges in the past 5-6 years, currently valued at Rs 65,000 crore being the second largest employer generating strong multiplier effects, this sector is expected to reach US $ 1 trillion in market size by 2030, at present the sector contributes 6-7% to the Indian GDP and this is expected to increase up to 13% of GDP in 2025 as per Indian Brand Equity Foundation recent report. Firstly, the sector is infested with speculators or informal agents locally called the Hundis who buy in bulk the housing inventory from the developer firms in ...

  Securitization an Art or a curse?              -by Abhishek Maity   Securitization is a procedure where an issuer creates a financial instrument by pooling together various financial assets into one group. An advanced form of the above process is a mortgage-backed security which is a pool of only mortgages exclusively. Assume that a bank has a lot of housing loans on the book which provide returns in terms of interests and principal payments to the bank plus these loans are also guaranteed by the underlying housing properties known as mortgages. But then an investment bank approaches the older bank to create a new financial instrument by pooling all the housing loans into different tranches according to their credit-worthiness, known as collateralized debit obligations (CDOs) and then selling units of these CDOs to a different class of investors. So, our traditional bank get returns from the usual intere...

  Which Apple will we prefer, the man made one or the natural one -          By Abhishek Maity   Physiocrats were an 18 th century group of French economists who believed that agriculture was the source of all wealth whereas the manufacturing and service industries did not produce any surplus. Physiocracy was a theory of wealth which was the first to grasp the general principles behind the workings of economic phenomenon, the founder of this group Francois Quesnay believed in free trade and minimal intervention of the government in the markets to ensure that entrepreneurial spirits of the farmers or agricultural workers are not taxed away which in turn could stymie the growth of the economy. But come the 21 st century the theory of physiocracy seems redundant as clearly the companies like Google, Microsoft, Apple and many other firms whose valuation runs into billions are not producing agriculture related products such firms ...

Darwinism of Financial Sector in India                                       -by Abhishek Maity   In India a lot development is underway in varied fields to achieve the goal of a self-reliant India and reaching the target of a 5 trillion U.S. dollar economy by 2024-25, currently the value of the Indian economy is around $3.1 trillion which implies that accomplishing the desired objectives will not be a challenging task though a few structural impediments still exist which need to be figure out. The most important is the finance sector as we know it performs the activity of allocating scare resources to the best possible usage in the economy. Though the Indian finance sector has grown at 15% in the past few years exhibiting stability as compared to the other Asian markets with a market capital...

 CRYPTO A FRIEND OR A FOE ?   The euphoria of investing in cryptocurrencies has been spreading like an enigmatic fire all over the world in the past two years. This had been a manifestation of the ultra-loose monetary policies followed by central banks all over the world to promote growth during the spread of Covid-19 virus, as of October 2020 roughly $2.59 trillion was released by the USA government to respond to the challenges inflicted by this infectious virus plus the excess amount of liquidity sloshing around in the Indian economy was around rupees 13lakh crore during the October and November 2021 period. Such amount of free cash ends up searching for the best asset class promising the highest possible returns. Cryptocurrency as per the Forbes Advisor is a medium of exchange that is digital, encrypted and decentralized which is based upon the blockchain technology.  Basically blockchain is a system for recording information in a way that makes it difficult to ch...