Turmoil Again

Today was another day of turmoil in the US financial markets. A 158 year old financial institution announced banckruptcy due to the global credit crunch. It is said that it had around $46 million of mortgages account. Merrill Lynch, is also being bought out by Bank of America at $29 per share.

This did send the stock markets into a tizzy, but what one wonders is the impact it would have on the job situation and the general economic condition of that country and the countries that have substantial workforce of these organisations. The roubustness of the US economy is necessary for other economies to sustain themselves. At this point of time, there is no other economy that can be an alternative to the US, in leadership.

Back in India, a direct consequence of the banckruptcy declaration is the immediate wipe-off of around Rs. 2,000 crores from the institutions in which it invested. Their stock prices fell immediately.  I am not sure as to how much it is correct to predict that the Indian Banking sector is immune to the sub-prime crisis in the US. The crisis is now not limited to just itself, it has spread into other financial sectors, and in the long run is going to impact us, if it is not controlled and taken care right now.

Let us hope for the best.