More bailouts

So, now the Indian government is going into baliout mode. I wonder what it is, China envy, if you can come up with a 500 million dollar bailout, so can we.

There are a couple of problems here
- The Chinese government is rolling in cash with huge surpluses. The Indian government is broke and the true magnitude of how broke is hidden because they keep items like fertilizer/oil subsidy out of the budget statement
- They are targetting the wrong segments. I completely agree with help for the auto and textile segments. But realty? Come on.
- They're trying to make it cheaper to get loans for homes/cars etc. But what they don't realize is that we Indians are among the most risk averse people in the world. When the future is so hazy, why would people go out and take a loan even if it 2-3% cheaper than a couple of months ago?

Talking about realty again, no amount of stimulus is going to turn the situation around till prices come down to reasonable levels. Charging 80 lakhs for an apartment that falls apart in a couple of years is just not sustainable. Even if you give it a fancy name and come up with great looking brochures and websites. Has anyone considered the average income level of people in this country before taking prices to such absurd levels?

It's the same with automobiles. We're seeing a war of words between the auto companies and banks. The auto companies are saying that banks are not bringing down the interest rates fast enough while the banks are saying that no one is actually approaching them for auto loans. The auto companies were blinded by the boom years and thought that the cycle of people upgrading their cars every 2, 3 or 4 years will continue forever. They didn't realize that when people are uncertain about their jobs, cars are one of the easiest purchases to defer.

Overall, I am extemely uncomfortable with the whole bailout idea. My reasoning is simple, we had many excesses during the last few years primarily caused by a huge oversupply of money. At some point the bubble has to burst before things get back to normal. But, by throwing more money at the problem, aren't governments just postponing the inevitable and setting us up for an even greater bust?