Recession and India

From last few months or may be an year or so everyone is talking about recession, economy is bad , etc, etc..,
But what actually is recession ??
A recession is when there are 2 quarters of negative growth in the economy. Note that this means the GDP should be negetive. Not a slowdown in growth (say, from a growth rate of 8.5% of GDP to 7.0% of GDP) but a negative number. For example, if growth is -3% in one quarter and then falls again by 2% then because we have two consecutive quarters of negative growth, we can say that the economy is in a recession. A reversal. A decline.

And what actually is economic slowdown ??
It's slowdown in economic activity which actually fuels the GDP of a country.
So, when the GDP rates are positive but less than that of previous years, we say this as a slowdown.

US , UK and many europian countries are in recession, i.e negetive GDP numbers.

India, China and some of the emerging markets are suffering from slowdown.

So, the US is in a recession and most of its financial institutions are morally bankrupt and financially close to the edge. Yet, Indian stock markets is getting affected the most and why is that ??
This is because Indian Stock market has lot money from investors from US and other FII who just come in for a short term, make money and go back. When their economy itself is bad, they needed their money back and there they go .. every one is taking money back from India.

And the people suffering is the small investors who came into markets when they should not and trying to exit when everything is gone.

India is a story that is starting now and people who are patient and ready to be in markets for long term should be in the markets regarless of the fluctuations. India is not in recession and it has a strong local market and un matchable resource called PEOPLE.

So, be patient and we will be the next super power calling the shots.

Cheers....
Vinay