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rajiv's review
Investment Sector: Equities Submitted by Rajiv 
, An Investor...
at Bank Of Baroda....migrating to USA
8 months ago Add Tag |
Friends,
I would like to start a discussion on US Economy...here at Fingad
How it is panning out in next 12-18 months....Is it sure that US economy will slow down or go in for a recession?Or none of these will happen and Subprime Mortagage crisis will be averted....as I read that Subprime Mortagage debacle is the biggest concern and it may put US economy in bad state of affairs.....
What will be the implications of slow down or recession in US itself and to world economy...
Those who are playing in US market, should tell us whether Dow will make a new low or not...if not then is there any chances of making new low is there?as this answer will led us whether one should buy in US market or not..in present...
US dollar is weaker , but then it was weaker before Subprime Mortagage crisis took place...and I have read some where that the US has kept the dollar purposefully weak so as to take care of trade deficit of China with US ,which is as big as over $300 bn.......I don't understand what that means, $ becoming weak, as I have not dig in how it will help US....
I can only say, on Indian market front that whether there is a slow down or recession or not in US , Indian Economy is going to remain vibrant for times to come and the only way for Citi gr,Blackstone,UBS,Meriil Lynch,Goldman Scahs, and others who have written off billions of dollars in Subprime Mortagage debacle, the only place to makeup that losses is India......
India has a long way to go from here and if one goes by theSensex Indices , which is making newer highs , 20000 and more,and not invest in Indian market then I am afraid it can miss the Bus of a prolonged Bull Market that is going to unfold .......
With P/E of Indian market at 20 , I think Indian market is grossly undervalued while looking to China's Shanghai which isquoting at P/E 55!
Freinds,I have writtem my view and hope all would participate and will write what is their view on US Economy and market and if anyone wants to ask me on Indian Economy...on what I have written or for that matter anything else.....on Indian Economy then he may write me,...I will try my level best to answer it...
Thanks,
Rajiv
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President & CEO at Blackhawk Partners, Inc
The subprime crisis, he wrote in The Financial Times, has moved from being a financial system issue to a potentially recession-inducing "threat" to growth, one that will affect the entire world and last for years.
"Even if necessary changes in policy are implemented, the odds now favor a U.S. recession that slows growth significantly on a global basis," Summers wrote.
"Without stronger policy responses than have been observed to date, moreover, there is the risk that the adverse impacts will be felt for the rest of this decade and beyond," he wrote.
Summer cited several statistics, including a housing market that is in "free fall" from prices that seemed to be at "basement levels a few months ago." One forecast sees house prices declining as much at 25 percent over previous highs.
Foreclosure rates will accelerate, he pointed out. Adjustable-rate mortgages will soon begin to reset to higher rates, forcing the pain to spread to other credit markets, like credit card and auto loans.
Banks simply won't be in a position, in that case, to keep ahead of the steam on the economy. New lending will wither, and even "good" borrowers will encounter trouble, pushing prices down even harder as the number of buyers dries up, Summers warned.
Add to that a weakening dollar, high energy costs and problems in the Middle East.
The U.S. government must quickly enunciate a clear public policy regarding the financial system or face the consequences of a crisis that feeds on itself and will likely continue to do so for longer than is necessary, Summers urged....and the government must own up to the reality of the problem - and do it quickly.
"In the U.S. today, as in many other countries in the past, confidence will return the first day an official statement about the economy proves to have been too pessimistic," Summers wrote.
Is there a way out? Yes, says Summers, and he prescribes three steps:
1. Lower the federal funds rate to stimulate the economy, and potentially offer low- and middle-income families tax breaks or add spending to foster confidence;
2. Establish a clear policy on declining credit availability; and
3. Keep up demand for housing, perhaps through direct government loans to home buyers.
Existing adjustable-rate loans likely to default should be automatically converted to lower, fixed rates in many cases, he contends.
"All of this may not be enough to avert a recession. But it is much more than is under way right now," Summers wrote.
Director of Engineering at Market Research Firm - IAG
An Investor... at Bank Of Baroda....migrating to USA
President & CEO at Blackhawk Partners, Inc
An Investor... at Bank Of Baroda....migrating to USA
Director of Engineering at Auctoritas
An Investor... at Bank Of Baroda....migrating to USA
Director of Engineering at Auctoritas
Director of Engineering at Auctoritas
Director of Engineering at Auctoritas