The US Fed has made an emergency weekend rate cut of .25%, just to keep financial markets from falling apart when they open on Monday. The catalyst for this action may have been the disastrous fall of Bear Stearns, which JP Morgan has now bought for a song, following a desperate plea by Fed. The Fed knows that one big domino falling could set off a disastrous runaway chain reaction. It was just a year ago that BS's stock price was $170. How the mighty have fallen.
I'm thinking that India should hedge itself by sharpening its focus on exports to the developing world. But also, disruptive times like these are when Western companies are more willing to outsource than before, to keep themselves safer, and India Inc could cash in on that. We just have to be wary of the foreign protectionist lobbies bubbling up.
I'm also thinking that India might be wise to delay going in for the 123 Deal, since the impending redistribution of global wealth may raise our worth quite a bit, at least in relation to the accelerating devaluation in worth of the United States. But Sonia is more desperate to get re-elected than to get India a better deal, hence her own budgetary populism with its inflation-stoking costs.
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this is getting to be positively scary. yesterday the fed promised in effect a bailout of bear stearns by guaranteeing $30 billion of its debt: this means as much as $30 billion could go from the taxpayer to the creditors of bear stearns. and bear stearns was sold to jp morgan chase at 2.5% of its book value, ie. stockholders lost 97.5% of their value of their shares (although a lot of them were insiders who had previously profited mightily from the mortgage business).
the fed is beginning to panic. in effect, this looks a lot like 1929, doesn't it?
and you're right, san, this is yet another reason to say no to the nuclear deal, if we needed one. but why would sonia get re-elected if the nuclear deal came through? it's more that there are lots of american moles in the UPA.
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