Hey friends..

Hope you all are having great time...!!

So wats up these days....

rather my question should be...

Whats up with Slow down or Recession that was expected..??

First talking about the Recession or Slowdown that has hit the economy world wide let it be USA or Euro -Zone..

In the last post as I stated that S&P has reduced USA ratings from AAA to AA+ on account of debt-ceiling crisis..

One thing I can Say is US, European economies still tenous. In USA The growth expectations are downgraded because of expected slower pace of income and spending growth and the rate of U.S. hiring slowed and the jobless rate,exceeds 9 percent.

About Euro-Zone crisis I can say that The GDP growth estimates are reduced by a full percentage point for this year and the next year owing to softening domestic demand in the core countries. This could affect the euro area as a whole, slowdown in global trade momentum marked by deceleration in manufacturing indicators, difficulties faced by banks in accessing term funding at reasonable rates and likelihood of increased funding costs that could impact investment projects.

The saviour factor for USA would be last round of Quantative Easing(QE),which will keep the interest rates low till 2013 and thereby lifting the economy and Federal Cheif Ben Bernanke has stated Strong fundamentals will drive US out of recession.Their exporting market is largest,and the recovery there is modest.

and the redeeming factor for Euro-Zone would be they have taken very important steps. Many countries have announced additional austerity measures and are accelerating their deficit cuts. The other thing they have done is to agree to increase the flexibility of the European stabilisation fund and according to European Financial Stability Fund and Deutsche Bank central bank toolkits will be able to keep banks alive, at the cost of interest margins and reduce the amount of investment funds that are borrowed.There banks may likely face some problem but Liquidity crisis unlikely to hit European banks.

and and and other thing..gear up for placements..All the Best...Do well..!!!!

There is an old saying on Wall Street that the market is driven by just two emotions: fear and greed.

One of the best sayings by Warren Buffet is :"Be fearful when others are greedy, and be greedy when others are fearful."

The situation may be critical to understand but then the message conveyed over here is that

Scenario 1

When people are greedy and things go higher.There is a desire in people to make money which ends in selling and when it reaches a saturation level.It starts coming down.Investors get caught up in greed (excessive desire).

Scenario 2

In simple words I can say that the lower things go, or When stocks suffer large losses for a sustained period, the overall market can become more fearful of sustaining further losses and taking advantage of such situation an intelligent investor can buy.

In my previous post as I said USA will lose its AAA rating that means the best one..

It happened actually S&P has reduced their ratings from AAA to AA+ which resulting in plunging of stock markets world wide.

Now i think i should throw some light on AA and AAA+

What Does AAA Mean?

It means the country who holds this rank has extremely strong capacity to meet its financial commitments. 'AAA' is the highest issuer credit rating assigned by Standard & Poor's.

what does AA+ means ?

The meaning remains almost the same but it shows high quality, with very low credit risk, but susceptibility to long-term risks appears somewhat greater.

and the bottom line is whether US hold an AAA or AA+ rating, the difference didn't seem to matter and chances of recession happening are 1 in 3 in next coming 6 months.

As far as Indian markets and companies are concerned I think they just over-reacted to the US downgrade.

But they recovered well which was driven by a combination of factors:

The government's efforts to reassure the market with talk of the limited impact of the downgrade on our own growth, some dutiful buying by domestic state-owned players like LIC, UTI and nationalized banks.

Moreover we don't have depreciated currency value and reserves like USA.

Indian economy as well as the world economy wont be hit so hard with this event.Although I came across the fact that hiring by Indian IT's and other banks will be reduced only by 10 % on account of this world crisis.

But this wont have much of the adverse effects on India..

So relax and we should be proud on what we are..

HAPPY INDEPENDENCE DAY...n good luck..:)

Hey friends..

Presently we can see us grappling with debt crisis...

When Bill Clinton left the white house the American govt had surplus..n so had the title of super power..but after that when George bush came into power the expenses were like

1.Medicine -$180 bn

2.TARP -$224 bn

3.Discretionary -$608 bn

4.Stimulus -$773 bn

5. Defense-$1469 bn

6.Tax cuts -$1612 bn

and the projected spending of Barrack Obama includes

1.Medicine -$152 bn

2.Discretionary -$278 bn

3.Stimulus Tax cuts -$425 bn

4.Stimulus Spending -$711 bn

What Does Default Mean?

In simplest words i would say the failure to promptly pay interest or principal when due..

What is Debt Ceiling ?

The legal limit on borrowing by the federal government.The United States Constitution gives the Congress the sole power to borrow money on the credit of the United States.Before 1917, Congress had to approve borrowing each time it came up. In order to allow for more flexibility as the nation entered World War I, lawmakers agreed to give the federal government blanket

approval for most types of borrowing — as long as the total was less than an established limit.

problems affecting now.The nation’s debt is nearly closer to the legal limit of $14.3 trillion.

In the near time if this will be breached then I think effects will be worst which includes:-

1.The new debt deal formed by Barrack Obama raises the debt ceiling by $900 billion to $17.7 trillion.

2.It cuts spending by $917 billion over the next decade and a special congressional committee will be assigned to find another $1.5 trillion in deficit savings by late November.

3.If Congress comes up with the savings, or passes a balanced-budget amendment to the constitution, the government will accrue another $1.5 trillion boost the debt ceiling - sufficient to pay the country's bills through 2013.

4.If Congress fails, the president will be granted a $1.2 trillion debt-ceiling extension - but automatic, government-wide spending cuts (half of which will come from the defense budget) will take effect in 2013. There will be no automatic tax increases.

But this debt crisis is the best thing that has happened in a very long time!

Why?

Because it woke up the world, especially Americans. We gazed in astonishment as the blind idiosyncrasy of the USA,unfolded. The truth spilled out, covering the loopholes of the government along with that USA is threatened to lose its AAA rating...basically world's super power rating essence on Indian Economy primarily US debt crisis unlikely to impact Indian economy but as far as I see the domestic economy is not insulated from the world economy, there will definitely be some tremors here in India. Both imports and exports will be impacted. India’s exports to the US, particularly IT services, will have an adverse impact.

Any slowdown in the US will have an impact on India in terms of our ability to export..as during 2008-09 there was a sharp decline in Indian exports..but at the same time we can see appreciation of the rupee, which in turn will help bring down the current account deficit...

But still we can see downfall of economy as well as politics tooo...

so hope for the best and next time when the share markets falls there is an amazing opportunity to buy and make profits...

good luck...take care...:)