Sticking that neck out - 7 predictions for the quarter

My top predictions for Apr-Jun quarter of 2009. Yep, the summer of joy!

Equity markets will soon and suddenly "realize" that it takes a lot more than goodwill to make the Geithner plan work. Someone will have to be poorer; and it definitely is not going to be the private funds bidding for mortgage-backed paper. Treasury will need to do the subsidizing for these private funds to "buy" the paper at inflated rates. Just try explaining that to an already whining US congress! Expect equity markets world-over to see new yearly lows. (That was as easy one, wasn't it?!)

Closer home, the Congress, backed by a host of parties constituting the "secooler alliance" will come back to power. Brace yourselves to watch the "Bow before thee, sonia maatey" circus again.

The Congress will not, however, be the single largest party. The single largest party will be forced to sit in the opposition.

Concerns about India's fiscal deficit - already Central plus State running at 9% of GDP - will lead to a massive sell-off in the Rupee. Expect USDINR to cross 56 this quarter.

Expect to see the steepest yield curve in Indian memory: short-term rates at <2% and 10 year yields at >7%.

With no relief in long-term interest rates, real estate will take another bout of hammering. The market will reflect this by trashing real estate and stocks, notably Ansal Infra, Unitech and Parsvnath.

The South African Rand will be one of the better performing currencies for the quarter - thanks to the IPL. Book your flights now...they will only get more expensive with time!