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Unpredicatbale Oil price makes the global economy unpredictable May 28, 2008

Posted by Bipin Agarwal in Global Economy.
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What will be the oil price in next twelve months, or five years. Speculators can make or loose money in he short term but can not predict the price based on any fundamental analysis. Economist can make guess and show up CNBC if it turns out to be true, Ask them to put their money based on their prediction and they will run like there is no tomorrow.

How the economy of the countries will behave? Will oil price subsidy will start consuming the significant foreign reserve if they have it? Will it cause inflation or result into innovation of the alternative energy and re-alignment of the lifestyle to make the economy grow. Only time will tell the answer.

It seems like US is in the strong position so far as the economy is concerned only if it choose to act. There are several things US can do to get back on the growth path and lead the world.
Graceful withdrawal from Iraq – There will be big change in the psychology and current account deficit. Make the US economy more robust.
Sub-Prime bubble – In next twelve month US financial institutions will be in a stronger position and better prepared to focus on growth. You hope that both financial institution and consumer have adjusted to the current reality.
Social Security and Health Care cost – Reduce the benefit, encourage saving and tell public the truth about the situation. American are very forgiving if you tell the truth.
Allow Oil drilling in Alaska – Reduce the oil dependence and reduction in the trade deficit. Remember huge amount of our trade deficit comes from oil import and not from other sources.
Lead alternative energy innovation – US is spending big on alternative energy and has the opportunity to take the lead on world energy solution.
Stop managing dollar – Let market define the dollar strength against the world currency

Which country has the opportunity to lead the next phase of global economy? USA.

http://www.redhawkinvestments.com

Bipin Agarwal
https://twentyminutelifestyle.wordpress.com/about/

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IT Offshoring – Challanges of currency, inflation, infrastructure, and innovation May 28, 2008

Posted by Bipin Agarwal in IT Offshoring - Future Direction, IT offshoring and Real Estate development.
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IT offshoring has been a significant driver for lot of countries including India. Party will not last forever. Countries have to learn to justify the value proposition in the face of currency, inflation, infrastructure, and future technology innovation.

As economy gets stronger, currency is likely to get strong which in turn destroys the cost advantage. Inflation puts pressure on the companies to give pay raise, lack of infrastructure makes it hard to keep expanding the operation, and Business will stop seeing the value in offshoring.

Future of offshoring in these countries will be defined by providing innovative solution to above problem. One of the solution is to build a network of micro-cities that are safe, and self sufficient. Result is productivity improvement by eliminating the commute time, better quality of life, efficient land usage, and efficient usage of infrastructure spending.

One area that is being largely ignored by these offshoring destination is how to stay relevant in the wake of future technology innovation. Let us say lot of transaction processing is being moved to some of these offshore center. what happens to these operation when transaction processing gets automated?

http://www.redhawkinvestments.com

Bipin Agarwal
https://twentyminutelifestyle.wordpress.com/about/

High Oil price – Good for everybody May 24, 2008

Posted by Bipin Agarwal in Real Estate Development in Global Economy.
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It is easy to be short term focused and say high oil price is not good. Let us look at why high oil price is good for everybody.

Environment – Take a note, Oil is the biggest source of pollution. high oil price means less oil consumption. It has been proven time and again, that users and providers of energy will innovate and find new sources of energy.
Real Estate & Infrastructure – Real estate development will accelerate all over the world as people will try to move close to hub of public transport. New community development will be more organized with walk to different facilitiies. There will be significant investment in public infrastructure.
Auto Industry – Trust me, the industry will re-invent itself to provide the cars that do not use oil. New cars will replace the older cars, significant sales.
Oil Industry– Industry will re-cast itself as energy industry and find alternative energy sources.
Transportation – Rail industry is particularly likely to benefit. Shipping, truck, and airplane users will invest significantly to use alternative source of energy.
Financial Services – Companies will be ready to arrange financiing for business and consumer as new growth happens.
Technology – There will be significant investment to find killer technology. Biofuel, nuclear will be the looser. They create more problem then solve.

Feel free to let me know if you think a particular industry, country, or demographic will not benefit in the long run from high oil price.

http://www.redhawkinvestments.com

Bipin Agarwal

https://twentyminutelifestyle.wordpress.com/about/

IT & ITES operation have to re-think thier long term plan May 22, 2008

Posted by Bipin Agarwal in IT offshoring and Real Estate development.
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Companies started establishing their IT & ITES operation late 90 in a hurry. Location of the operation was a function of availability of office space and ability to hire away the existing talent. Moving forward, retention, productivity, lifestyle, long term sustainability, infrastructure, dollar .vs. rupee, energy cost, long term commitment of the local government, and environment will be a significant factor while making long term plan for the offshore operation.

Twenty-minute Lifestyle vision from Redhawk addresses most of the issues. Background of the management team gives them a unique advantage over traditional real estate developer. Management team has run IT operation, has been very active in offshoring and have significant relationship with-in IT industry.

If you are thinking about your IT & ITES operation in India, it is worth talking to them.

http://www.redhawkinvestments.com

Bipin Agarwal

https://twentyminutelifestyle.wordpress.com/about/

Future Real Estate development in India May 22, 2008

Posted by Bipin Agarwal in Real Estate Development in Global Economy.
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Real estate development market in India is maturing. Lot of real estate development in India so far has been tactical. Future real estate development will require that any development is aligned with the specific market opportunity. Satellite township such as Redhawk City in Hyderabad based on Twenty Minute lifestyle will be the future.

Having the land bank is not good enough. Value add is critical. Valuation of the real estate company will be done based on the ability to create commercial, residential and other activities tied to specific market opportunity. Real estate developer with the vision and global economic insight will lead the next generation of the real estate development. Twenty minute Lifestyle vision created by Redhawk Investments Group is very compelling vision to deliver business value for families, commercial clients, specialty developers. to know more about it go to http://www.redhawkinvestments.com

Prediction made in this post are coming now true, real estate market is calming down and even with higher inflation, the real estate price is coming down.

Biipin Agarwal

Impact of Oil price on real estate development May 21, 2008

Posted by Bipin Agarwal in Real Estate Development in Global Economy.
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Oil price to reach 200 dollar per barrel according to Goldman Scahs? Is this good news for world?

I think it creates great opportunity for re-aligning the real estate development. Future real estate development should happen where people do not use personal transport for daily needs and are able to walk to work and other amenities reducing use of oil. Our study shows that if a micro city was created with 20000 residence and place to work with other facilities, it will save 250 million liter of oil over 20 years.

That is the oil we will not burn, reduce the carbon and save lot of money for the people. There will be significant saving in the infrastructure cost development for government.

For more info visit http://www.redhawkinvestments.com

Bipin Agarwal