WORLD MARKET USA
Down plunging continue with Lehman dead and Merrill sold off with AIG on the brink and Washington Mutual not far behind for collapsed. We are expecting in coming days.
1. The dow is still far from its all time high, with a lot further pain in USA economy expected and likely target 7500 + in coming days. More financial failures you have been so far are just the tip of the iceberg.....
2. Lehman Brothers is merely the first to fail. Expect more in the weeks ahead, possibly starting with that have the smallest capital cushion.
3. Bank of America is making horrendous mistake. Its already bogged down with its earlier purchase of Countrywide Financial, classic pig in the poke. Now, on tope of that bad move, its taking on all the debts and risks of Merril Lynch.
4. AIG, the biggest insurance firm of the USA is desperately trying to shore up its balance sheet after suffering losses of millions over the past three quarters. It is planning to dump assets, raise capital and asking the Federal Reserve for a 40 $ billion bridge loan. Don't be surprised if AIG is taken over by insurance regulators in the days ahead. And do not be shocked if more insurance copy any failures follow.
5. Look out for bigger financial troubles in the banking industry including not only the names that are in the news, like Washington Mutual and Wachovia, but also at Citocorp, HSBC and yes Bank of America.
6. We expect that the USA market and economy will recover eventually, but only after the nation's bad debts are liquidated, a process that will be extremely painful and traumatic.
So what to do.........in Indian Market.
?
