Written in Jan 08 to recover from sub prime issue, rates need to go back to 1% and remain there for couple of years -at least 5 years

date Jan 21, 2008 3:42 AM
subject call rates on Friday touched 40-60%- scenario/events/view
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there is sudden cash crunch
-RBI intervention sought
-sensex subdeued
-100busd in losses due to sub prime
-worlds one of the biggest CITI bank is saved from closure/buy out
-Indian is heading citibank to restructue
-job cuts in financial services in US by major banks
-outsourcing to have impact
- exposure by banks to capital market and commodity business to reduce
- there may be a fall in capital markets and commodity prices
- this may lead to real estate prices fall
- forex parity to move southwards on account of outflows
- the other side of the coin - is that the fund allocation may increase for India and china as the returns are safer and higher here
- risks are diversified here in these economies
- the need for returns and safety of lending both are required by the international banks.Lending cannot be stopped otherwise they shall be only at one side of he business and enter into the vicious cycle.
- the recoveries from sub prime portfolio shall be good only when the rates go back to 1% levels and remain there for couple of years -at least 5 years considering duration.
-USD to depreciate further
- yen to appreciate further
-CHF to be volatile
-markets to remain subdued
-infrastructure and retail to see investments
-Super natural profits to reduce
- steel prices to fall
- Indian story to continue with correction in couple industries which are in overbought position. companies in sensex may not be so sought after
- companies in he infrastructure are not pat of the sensex and may not contribute to the sensex
- we should expect infrastructure companies and couple of more banks to come in sensex
- we do not have a healthcare index-pharma index is considered as healthcare index - the same shall change in another year or so
- Europe and euro to be more consistent - the same is expected to continue o be stable, the much awaited decrease in interest in eurozone shall have negative impact on USD which may furher make other currencies to appreciate against dollar- CHF shall further strengthen in that case breaking other such barriers of 1.08 types.

Happy investing!! views are personal and without any risk and liability that without a recourse! Path becomes clearer with passion!!