Over the past several years the great Indian real estate story has been front and center. From a Bombay point of view it’s been fun to hear about how prices will never come down and the time to buy is now.  Even in the last 3 months, people have been saying the real estate market will not crater like in the US.  I’m sorta leaning towards bulls@#$ when I hear that.  

I’m expecting every country that had a real estate bubble will have at least one bank and one developer go bust. Every time I rattle off a list of developers people have a reason why they will never implode:

Indiabulls – politically connected, it’s just a front for converting black to white money
DLF – lots of land, good rental income, political money
Unitech – backers with deep pockets
HDIL – politically connected, focused on slum rehab projects

On the bank front, the last 48 hours have generated more headlines and rumors about a bank going under. The one name that consistently seems to come up is ICICI, hence they have been appearing on TV the last 2 weeks telling everyone everything is okay. I’m sure the only reason it comes up because it was the most aggressive of the Indian banks. I have pulled all my money out of ICICI because if they fail, I’m not sure the Indian gov’t can create magic like Paulson and Company.