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Old 30th September 2008, 08:57   #1
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Default Wall street turmoil

Do you think there is an end to it?
With the $700B bailout plan rejected, DOW Jones fell 778 points.

Banks like Washington Mutual, Wachovia are up for sell.

There doesnt seem to be any bottom for the DOW now.
And this is all with the ban on short selling!!

God knows what will happen when short selling starts again later this week.

Your thoughts/comments?

How will this affect Indian economy as a whole, as most of the businesses in India primarily depend on US markets.
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Old 30th September 2008, 09:43   #2
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People have been searching for the bottom for the past so many months now. Its like a downward spiral.

And its effect is visible on almost all economies. Dutch bank Fortis had to be bailed out and a British bank had to be nationalized.

And i dont think i will get any bonus come december :( heck i will be glad to hang onto my job itself.
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Old 30th September 2008, 09:48   #3
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I have warned about this crisis over 1 year back itself, but people still continue to think too +ve which has caused this economy crash, I know we should go positive but need to address the issues and go forward.

Expect subprime issues to hit India in 2009 and Indian markets will bottom out by that time during election time! Election might happen well advance say in Jan 2009 itself.
Only by 2009 end we can see something will start better shaping the economy.

Regards,

Ravi.
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Old 30th September 2008, 10:02   #4
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Originally Posted by ravibhat View Post

Expect subprime issues to hit India in 2009 and Indian markets will bottom out by that time during election time! Election might happen well advance say in Jan 2009 itself.
Only by 2009 end we can see something will start better shaping the economy.

Regards,

Ravi.
A good time to finally buy a house.
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Old 30th September 2008, 10:07   #5
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Originally Posted by ravibhat View Post
Expect subprime issues to hit India in 2009 and Indian markets will bottom out by that time during election time!
Ravi, what kind of subprime issues will hit india that will make the markets bottom out? I thought its a blessing in disguise that the mortgage backed securities market in india is nearly non existent.
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Old 30th September 2008, 10:12   #6
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Although the bailout plan was defeated, among Democrats, 140 supported the bill and 95 voted against. For Republicans, 65 in favour and 133 against. More ammo for Obama.

Also read this how voter fury defeated the plan. Can this voter power be imagined here:

How Voter Fury Stopped Bailout - WSJ.com
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Old 30th September 2008, 11:43   #7
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Default Jeremy Clarkson on the current economic crisis

Well, he did get a few predictions right! Bradford & Bingley is being bailed out as we speak. Read on for a hilarious take on the current economic crisis.

Source: Jeremy Clarkson Aston Martin Vantage review | Driving - Times Online

Quote:
Over the years, we’ve been told by solemn-faced experts that life as we know it is about to end. Strange to report, then, that we’ve managed to survive communism, particle accelerators, fascism, asteroids, Cuba, bird flu, global warming, terrorism, nuclear war, various tsunamis and Aids, and now we are going to be finished off by Fannie Mae.

I don’t even know what Fannie Mae is. Apparently, it’s not a bank and it’s not a building society, but it seems to have been buying mortgages and debts from various institutions. And then, one day, it appears to have woken up and thought: “Oops.” Quite how it was allowed to get in this mess, I’m not sure. Did nobody think it odd that a mysterious organisation was stomping around the world buying debt? Did nobody stop for a moment and wonder if perhaps Fannie Mae was a home for mentals? I mean, we’re talking here about an operation named after the human bottom. How did it sign its deals? With crayons?

Seriously, if I set up a business called Arse and went around buying outstanding loans on the nation’s never-never-land three-piece suites, I wouldn’t get very far before someone with a soothing voice and a corduroy jacket put me in a padded room for the rest of time.
Whatever. We have now arrived at a point where the world is going bankrupt. Politicians keep explaining that Britain is well placed to face the future, but we’re not. Not when the food in our fridge is worth more than the contents of our jewellery box and we’re scared witless that the Bradford & Bingley is about to go belly-up with all our life savings.

The net result is that half the country can’t afford to buy anything and the other half daren’t. This means companies can’t sell anything, which means they can’t employ anyone, which means everyone will fail to pay their mortgages, which will increase the likelihood of Bradford & Bingley going bust, which will accelerate the downward spiral to such an extent that it will be spinning faster than the atom-basher in Geneva. In short, we are all on the Titanic. It is holed. It is a mathematical certainty that it will sink. And all Gordon Brown can do is offer the ship’s most elderly passengers a few extra winter logs as they drown in a sea of disease, debt and destitution.
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Old 30th September 2008, 12:11   #8
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Arrow

The Bust was predicted by many in US clearly 6 months back, there'd be SURELY more to go down in the months to come. Some of my friends / relatives in IT, who could opt out have switched to many onsite locations to UK or Europe instead of USA, 5 have migrated too.

I saw a discussion on CNBC last week (I think it was the DSPM-Hong Kong OP Head) who said Indian economy would be choppy with a downward bias till election and once a clear political mandate emerges stability will regain. Those who have disposible cash / income would be well advised to do value picks in the market or invest in value real-estates, with at least a 24 - 36 m horizon; bottom is likely to emerge around December, 08. Of course he had lots of figure to rattle off, what would really happen is anybody's guess.

What I'm sure of in the global economy is that there are only Brazil, China and India as highly probable winning candidates where investments would flow. Or are therre others?

It would be interesting to see what other think about bottom fishing / value picks in the stock market or investments in real-estates in the next 3/4 months.

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Old 30th September 2008, 14:27   #9
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I second what ravi is suggesting

The govts which are battling for supporting the credit system WILL get the necessary ammunition, but it will sustain till March 2009, after which there shall be a free fall in all the economies.

What you are witnessing is a great economic situation NEVER been seen in your lifetime. And you shalll cherish it after going through it.

I am asking all my friends to sit on cash, no investyements anywhere, except govt deposits

Quote:
Originally Posted by ravibhat View Post
I have warned about this crisis over 1 year back itself, but people still continue to think too +ve which has caused this economy crash, I know we should go positive but need to address the issues and go forward.

Expect subprime issues to hit India in 2009 and Indian markets will bottom out by that time during election time! Election might happen well advance say in Jan 2009 itself.
Only by 2009 end we can see something will start better shaping the economy.

Regards,

Ravi.
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Old 30th September 2008, 18:18   #10
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Originally Posted by amitoj View Post
Ravi, what kind of subprime issues will hit india that will make the markets bottom out? I thought its a blessing in disguise that the mortgage backed securities market in india is nearly non existent.
What if the super-prime IT industry employers/employees become sub-prime? I think that's the question you would need to answer.

Its a poorly guarded secret that the real estate boom, both commercial and residential, was mainly driven by the IT industry.
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Old 30th September 2008, 18:41   #11
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Originally Posted by spadival View Post
Its a poorly guarded secret that the real estate boom, both commercial and residential, was mainly driven by the IT industry.
Is that the case? I thought IT is a tiny part of overall spending population. At least thats what I see in Mumbai.

Maybe Bangalore/ Pune have larger influence of IT.
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Old 30th September 2008, 19:36   #12
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Originally Posted by abhijitaparadh View Post
How will this affect Indian economy as a whole, as most of the businesses in India primarily depend on US markets.

In India People dont live on Credit, They have saving.

They dont blow their money on buying a new car model every 2 years (that too on credit)
In America people buy things that they dont even need !! without realzing that someone in India/China is working in the sun to manufacture those goods. Things just dont work that way.

Also in India, we dont drive gas guzzlers
In America, even the homeless people had started buying a house



Also, in India people are going hoo-haa over "Subprime"
An year ago they did not know what subprime meant. (not that they have to know, its none of Indias business)

Now, if you want to look cool and knowledgeable, just use the word Subprime, duh.

Even in indian secondary schools, kids are being taught in GK class - about Subprime - something which India has nothing to do with. Crazyness!! Why should our kids be taught their crap?


And the coolest thing in India is - if you dont pay your loan on time, someone will be knocking the door - which is the right thing to do.

Last edited by aerohit : 30th September 2008 at 19:40.
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Old 30th September 2008, 20:05   #13
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Originally Posted by spadival View Post
What if the super-prime IT industry employers/employees become sub-prime? I think that's the question you would need to answer.

Its a poorly guarded secret that the real estate boom, both commercial and residential, was mainly driven by the IT industry.
If the so-called super-prime become sub-prime, the banks will cease their assets and get something back. In US, the banks have sold the loans further into market, with mutual funds being large buyers. The people who have invested in those funds are a big chunk of the population thats suffering. People's 401K accounts have depleted. The baby boomers that are nearing retirement have no savings left!! India is saved from these situations simply because in India the banks cant pass on the loans to investors.

I agree with aerohit. India as well as most of asian population believes in savings. Believe it or not, asian economies are right now set to become financial superpowers overshadowing US and EU. Once the dust has settled, US faces the prospect of losing its AAA status.
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Old 30th September 2008, 20:09   #14
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In India People dont live on Credit, They have saving. They dont blow their money on buying a new car model every 2 years (that too on credit)
Get real!! That may have been true 15-20 years ago. Now a sizable population borrows and lives on credit. Are you saying you don't have an EMI to pay at the end of the month? Then you are one of the rare species (So am I.. this month onwards )
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Old 30th September 2008, 20:12   #15
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Originally Posted by spadival View Post
Get real!! That may have been true 15-20 years ago. Now a sizable population borrows and lives on credit. Are you saying you don't have an EMI to pay at the end of the month? Then you are one of the rare species (So am I.. this month onwards )
But they have savings also!!

But the main point still remains that if people living on credit start defaulting, the impact will not be even half of what we are seeing in US.
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