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Globalization – Root cause of the financial problem April 29, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Quality of Living.

Last few decades countries have created financial success by exporting their problem. Look at Japan, Korea, China, Middle east, USSR. We all know it looked good for some time, it has not been sustainable. This has been all done in the name of globalization.

Every country want to outsmart all other country by growing their export. Sounds great on paper, go little deeper and we will realize that it is not a sustainable solution in the long run and will cause enormous disruption.

My prediction is that the country that is in a best position to accelerate Glocalization will emerge from this financial turmoil. China, US, Europe (as a block) are in a strong position in that order.

Economy should be local for every country. I am not advocating socialist agenda, I am advocating a real solution to this financial chaos.

Simple rule to create a long term viable economy.

WTO (World trade organization) should mandate that trade gap between the countries should be zero (export = import).


Create a uniform single world currency and economy will adjust itself to reality of the world.

Alternative energy firm announced in UK that they will close their plant because government is not giving incentive. They can manufacture the wind turbine in China for 10 cents on dollar and send it to UK. Good business decision, bad decision for UK. It is fine to engage in such trade, if China will import from UK the goods or services of equal amount. If UK government does not bail out the Land Rover, TATA will shut plant there and take it low cost place. Great for TATA, bad for UK. should not be allowed to happen.

There should be pressure on each county to work hard, live within their means, and create a long term viable economy. If it is so simple, why do not people do it?

Every county thinks they are smarter then rest. Let us look at China, US and France. US can sell one F-18 to a country, provide them the loan for financing it. Now rest of people in that country can work hard for their life to pay for that F-18 which has no value for them. Why do politician in these country accept that, well that is how they become rich.

Business are obsessed with supply chain optimization by co-locating all the manufacturing into one location. Wrong focus. That is how justify producing a can of beans in a plant in China,  and waste three time the resources to deliver it to consumer. This destryes the local economy and kills job. Let there will simplification of supply chain. Is there really a reason for baby food to be consumed in US should be produced in China? none, what so ever.

Has anybody asked a question, why politician are always so rich? They do not get money by digging hole. They get money by mortgaging the future of the fellow country man. Sounds Harsh, Truth is not always pleasant.

Long run, Glocalization is where the world is headed. We will be in denial until this change has happened.

Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it. Check out the following link.

Glocalization will Kill Globalization

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Walk Score and Twenty Minute Lifestyle April 27, 2009

Posted by Bipin Agarwal in Global Economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Real Estate development in USA.
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April 26, 2009

Today there was a front page article in Denver Post on Walk Score, a Colorado based company. The site give you a walk score based on different facilities from your address. you can check out more at www.walkscore.com

This is a good start but only a small step based on the Twenty Minute Lifestyle (tm) concept promoted by Redhawk Investments Group.  All of the development based on Twenty Minute Lifestyle will have a top walk Score of 100.

Walk Score alone is not enough for quality living. Quality of  living for a family is based on distance, facilities, and factors such as:

  • Place of work
  • Long term viability of business and quality of job opportunities
  • Environment
  • School for kids
  • Health care facilities
  • Recreation
  • Retail
  • Affordability
  • Quality of infrastructure to support walk or bicyle
  • Quality of transportation infrastructure to City or other important
  • Quality of neighborhood (income profile and education profile)
  • Connectivity to Airport, Highway, Railway station, etc.

I want to thank Walk Score team for validating the concept we have been promoting world wide for almost three years.  True quality of living that is vibrant, sustainable, and environment friendly, will require top down approach to future of real estate. Walk score is only a bottom up approach, more useful for real estate brokers then business, families, and environment.

We all know that if you live in down town and you work there, you can walk to lot of facilities, however there are lot of reason that families will not live there or should not live there;  including affordability, quality of neighborhood, safety, lack of family interactions, etc. You may have a perfect walk score but totally unsuitable environment to live. There are lot of neighborhood, where Walk Score will be 100, but weather you should live there is a decision you need to make based on factors outside the scope of walk score.  In short, Walk Score, good as a selling point for your real estate broker, not good for family. It is these factors, that makes Walk Score a bottom up effort as opposed to Top Down approach of  Twenty Minute Lifestyle micro city.

River Walk, a development planned in Fort Collins at I-25 and Harmony, is a good example of Twenty-Minute Lifestyle.  Development is planning a suitable mix of commercial, residential, health care, recreation, retail, community supported agriculture (CSA), and other amenities.  There be a hub for connecting to public transport infrastructure. When you are living in a Twenty Minute Lifestyle, Walk Score will always be 100 plus so many others things that can not be measured using Walk Score. There are several other such micro city around the world.

Future of real estate in the world will be a cluster of Twenty-Minute Lifestyle micro cities built around the efficient public infrastructure.  President Obama announced a high speed train infrastructure for US. This is what China is doing, This is what other developing countries are also planning. To read more about US infrastructure follow the link.


if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Government should buy struggling financial institutions April 20, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Recession.

April 24, 2009

Stress test framework has been issued. It seems like a reasonable framework.

This is what a risk management part of organization of these financial institutions was supposed to do, what happened? What were CEO, CFO, high paid management, and Board doing? CEO of Bank of America has demonstrated that CEO can not be trusted to take care of shareholders.  Board members are typically recruited by the CEO, you can not expect them to behave any different.

Come May 4th, final report will be out.  At this time, government,  not the financial institutions should decide the capital raising approach if these financial institutions do not have adequate at risk capital. Why would private investors invest in the common equity of failing financial institutions? As I have suggested earlier, get rid of the dead wood and move on. Press, politician will make lot of noise to protect their owners.

US government, please focus on the real banks, and not your vote bank.

God bless America

Bipin Agarwal

April 20, 2009

First quarter 2009  results for all major US financial institutions are out.  As a follow up to my blog on March 4, 2009 I wanted to reiterate my conclusion.

I had suggested earlier that Government should acquire these major financial institutions at the market value and get over this market gyrations every day based on the prediction of the analyst or economist who in any case have no clue of what is going to happen.

From market point of view, CITI and BOA are the two wild cards related to so called stress test. Government is not helping by not being upfront. It seems like there is a fight going on between industry, government and some vested interest. Some would like CITI to be nationalized, CITI may be saying if you do that to us, we will take BOA down with us.  Please get over it. Take care of the country first. This is not the time for personal agenda.

The latest estimate from IMF is that there will be total loss of 4.1 trillion as a result of the credit crisis, few weeks back IMF estimated that US financial institution will loose $2.7 trillion from the credit crisis. This estimate for the United States was nearly double the IMF’s projection from just six months ago. I would make a humble request that entire IMF management should resign for their incompetence.

I read yesterday that Dr. Doom (NYU prof. Nouriel Roubini) is predicting another 400 billion in losses for US. I have to be honest and respectful, Dr. Doom has no clue. He is always shifting the goal post.

I saw another comment from the  Nobel Prize winner, that makes lot of sense and is consistent with my view. “We have little to lose, and much to gain, by breaking up these behemoths, which are not just too big to fail, but also too big to save and too big to manage,” said 2001 Nobel Prize recipient and Columbia University professor Joseph Stiglitz, one of the witnesses testifying before the Joint Economic Committee of the U.S. Congress Tuesday morning.

Simple proposal for Banking industry – Solution I have proposed is not complicated. US government, please acquire BOA, CITI, WFC and several other regional banks. clean up the balance sheet. create a regulated banking utility (regional) to handle basic banking function. Take all the loan portfolio, create six businesses out of it, that will be initially majority owned by government and can be then sold off over time.  Politicians (both party) will create lot of noise, who cares? Trust me, they will be relived at the end and can go back to their voters saying the Problem Fixed.

Stay tuned.

March 4, 2009

Everyday sames news get repeated on the TV about economy, recession, CDO, credit loss, and market keeps swinging.  Now that government is conducting the stress test, they will know the real health of the big 19 financial institutions.  The institutions that do not pass the test, government should acquire them (buy them at the market value) or let them fail right away without any further support.

In addition to cleaning up the US financial institution, US need to put pressure on other countries not to be the safe haven. This will help world economy.

Acquire the banks not nationalize them

Shareholders have paid dearly for the mistakes made by the corporate executives, consumer, and government. it is time to bring some sanity to this mess and move on.

US can acquire some of the large financial institutions like CITI, and Bank of America at the current market value. It will create lot of confidence in the market and get rid of everyday bad news. US should buy rest of the AIG as well and be done.

Put pressure to eliminate Safe haven

Another area where US can force and help clean up the financial world is to force the disclosure in offshore tax haven world. Why it is legal to move your money (legal or illegal source) into a different county? Switzerland, Panama, lot of other countries are involved. Rather then focusing on Iran nuclear ambition,  US along with UN should focus on this issue.

There are significant benefit to both US and developing countries if black money can be reduced. It is possible to introduce legislation in all the countries to give people one time opportunity to declare all illegal asset, pay 50% tax and they become legal. After a cooling period of one year, any illegal money will be subjected to full seizure and jail term.  We will see right away that money will flow back to the countries from safe haven countries and US will benefit a lot because of the perceived transparency of the market and fundamentals of the country.


It is time for all the political parties to come together and focus on the country for a change. You all will get the credit for making it happen. Democrat and Republic alike are doing more damage to the confidence of the people then any other known issue.

Alan Greenspan, Bill Gross, Warren Buffet are all stock picker or losers. Alan Greenspan could not figure out how to run FED, when he was in-charge (I do not know what music was he listening). Warren Buffet got lucky with two stocks (McDonald and Coke), Bill Gross has lost more money for the investors then he will admit.  Economic policy of country should not be decided based on what these people are saying. FED, Treasury, and Economic council has the people to make it happen.

God bless America.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Obama Master Stroke – High speed Train infrastructure April 18, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate development in USA.

Updated April 29, 2009

Financial Times today carried an article, Bill Ford chairman of Ford is advocating the gas price of $3.50 to change the auto buying pattern of consumer. Thank you chairman for endorsing my position in the article I published on April 18th below.

In fact I had suggested, tax of $2 per gallon is more appropriate.  This will change the buying pattern, tax dollars help create the high speed train infrastructure, lead people to innovate to create personal urban transportation (Smart car, Nano, improved bicycle,  other less or non polluting transportation mechanism.

Thank you Chairman Bill Ford. Bipin Agarwal

April 18, 2009

Few days back President Obama announced the massive investments for building high speed train infrastructure for USA. I call it a Master Stroke. I have been advocating such an initiative for almost a year. This initiative will go a long way in making US energy independent and also reduce carbon foot print. This effort is also consistent with my forecast of accelerating glocalization. Biggest challenge for the government is, not try to do everything right but is to make sure that there is clear agenda (no right wing or left wing) and there is transparency.

I am no Dr.  Nouriel Roubini (famous and accidentally right) who has been branded as Dr. Doom. I would rather be focused on providing solution for USA  and be identified as Dr. Boom (does not matter that I do not have a formal Dr. designation).

Industry to loose – You should expect Oil, aircraft, and Auto industry to call it a wasteful spending with no ROI. This is expected, most of the industry is having a difficult time adjusting to new reality of USA. Easy way to stop all the pain of oil industry is to impose a energy Tax (two dollar per gallon). People will pay the same price they were paying a year back. However this money can be used to build the mass transit infrastructure. This money will also reduce the Fed deficit, in addition Fed will be able to raise the interest rate to avoid inflation as well.

Industry to win – Industrial Company, financial company, construction, real estate development, environment, alternative energy, and average worker will win big. Most important, USA will be the big winner. There will be lot of real estate development opportunities. GE, Hitachi will benefit a lot. New real estate development around the concept of Twenty-Minute Lifestyle will gain significant mind share.

Industry in the middle – There will be some industries that will not see any significant upside or downside.  Expect them to declare that economy is on a stand still or government stimulus plan is not enough. It happened today with CAT declaring that China is doing a better job on infrastructure then USA. That is great. US government need to spend the money based on the priority for the country not based on the need of specific company.

Great opportunity for Colorado – Colorado is the state for next twenty to fifty years. Several mid tier cities in Colorado are ready to grow but do not have the connectivity to each other. Colorado has a unique opportunity to grab this opportunity and layout a blue print for high speed train connectivity from Colorado spring, Denver, Fort Collins, Bolder, Grand Junction, etc. I undestand that these are long term plans, but we have to start now. Phase one could be the Fast train from Fort Collins (I-25/ Harmony junction ) to Denver to Colorado Spring. Colorado. Political leadership, wake up and  make it happen. All the best, Incredible Colorado!


Reason Glocalization will happen is not because government or large corporation want it, it is because people will demand it.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask


Bipin Agarwal



Florida does not get it – Real estate development April 12, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Recession.

Coming soon to the Sunshine state: the sunshine city.

There was a big announcement from sunshine state about a major real estate development. This will be an eighteen thousand (18000) acres development for eight thousand homes along with retail, work space and other amenities. Trying to put lipstick on this pig by announcing a 75 MW solar energy plan by the  Florida Power and light, utility industry for 400 million dollars. You can read more by following the link below.


Real estate development claims that everything will be in walking distance including work, retail, and play. This will be model environment friendly city. A former sports player is involved in this development.

Florida does not seem to get it. Let us see, 18000 acres is about 100 plus sq miles. You can walk to every facility under a hot sun riding a fast horse. How else will you walk 10 miles and feel good about it? Even if you are ready to believe that they will keep half open space, there is probably 4000 acres of golf and park. How much water they will use for rich 8000 families?  They call it socially responsible and sustainable? Let us go ahead and put state of the art electric train system funded by government to make their life comfortable at the expense of Tax dollars. I sure hope they are not using any of the  energy independence dollars to turn their dream into reality. It seems like a scam not a sustainable real estate project.

The history of Florida is littered with spectacular, landscape-changing proposals that never made it past the drawing board. Real estate industry is flooded with so called old business, politicians, and sports star (including gambling). We all know if the project is not feasible on the economic basis, political connections are always there to help.

What they do not understand that world is changing. People are looking for great living experience, affordable, and environment friendly.

Real estate industry has to wake up and change for the new reality of the world.

Bipin Agarwal