and Merril Lynch is going to be taken over by Bank of America. Being from a science background, I don't understand a lot about this except that this is important.
https://www.bangkokpost.com/210908_Spectrum/21Sep2008_spec001.php somewhere in there.......actually AIG was bailed out by the fed reserve..... but markets are still crashing even with the reserve injecting money into the big companies....... i dont really know how the markets work........so i cant understand the situation or the outcome fully...... anyone care to enlighten me?
US economy is in doldrums. Thats all you need to know. The gory details being that Indian economy will also be affected to some extent. And the stock exchange even more. So all these dubya companies, when they lose their monies in their homes, they come to India to pull out any money they have invested here, to bail themselves out back home. All this again mainly cause by greedy americans living far beyond their financial capacity and capabilities, living on credit like mortgage, which they are unable to close.
bush has planned to pump $800 'B'illion to bail out on da crisis....dats roughly india's GDP................
credit crunch.......da US banks didnt know how much money dey had wid dem.................so dey refused to loan or mortgage any sum to da lehman or AIG..........Lehman's going to file for bankruptcy............ dat effects India because Lehman has shares of 1% or more in 18 indian companies and 2500 employees in its back office in india.........so da investors are sellin dere shares in da companies leading to a furthur crisis........
I disagree. They were encouraged quite keenly to live beyond their capability...wouldn't you be tempted? The banks are reaping what they have sown.
True. We see a similar thing beginning to start in India too. Ppl buying houses which they have to repay for 20-30 years. Ppl buying cars even though they don't have bank balance to buy even a bike. Well the way I see this is the way modern life progresses. But the interest rates are too high for the standard of living in India. Plus the main problem in US is that they are willing to take too much risk with their money. The sub-prime, eg, is for the ppl who have history of defaulting on loans. Now the banks in US just hike their interest rates for sanctioning a loan for such ppl (to cover the risk of non-recovery). Whereas in India, such a person will not get a loan under any circumstances. Or his loan amount would be drastically less. Guess Amroos are too darn optimistic about their money.
No, it's not that they're willing to take risks. The logic behind this was that they could foreclose the property being purchased and actually benefit more from the defaulters rather than if they'd paid back the loan. They just got greedy. What bit them in the ass was that the value of properties declined to a level where they couldn't recover their money in either case. At least, that's what I understood. I could be totally off the mark.
Property rates did decline and what made it worse was that nobody wanted to buy. We'll see the same thing happen here pretty soon.
This is the situation which has happend now. Correct. The sub-prime mortgage crisis had already started from the beginning of the last year. It has just deteriorated to the level that govt has to come with plans to bail out (like it usually happens in India). Just check the stock indices for the last 2-3 years. There hasn't been any overall increase in that last one year.
Unfortunately when that (sub prime - liquidity crisis) happens, the money pours our from all the markets. Much of investment (stock, real estate, infra) in India is by Foreign funds. When foreign fund pull out money, they pull out dollars. Less number of dollars in India, means rising value of dollars vis-a-vis rupee. Making the value of our domestic income even less. Ofcourse, had ours been a closed economy, we wouldn't have given two hoots about all this.
https://www.hindustantimes.com/StoryPage/StoryPage.aspx?id=d33ef45c-03ce-4c4e-b031-64c35c9c2ef1 yea mate da bank could earn a lot more a dan $100 sellin a bunch of old playboys................
true.........bt india's economy was closed before 1991/92 and da truth is that it went under a debt trap........unlike china we could not support our economy just by ourselves.......