crisis, crisis, crisis..

The market doesnt look like its gona stand by the bull! U.S. stocks fell for a second day on concern Congress will hold up a $700 billion bank bailout that Federal Reserve Chairman Ben S. Bernanke said is critical to keeping the economy out of recession.

Citigroup Inc. and Bank of America Corp. tumbled more than 3 percent after members of the Senate Banking Committee expressed skepticism about Treasury Secretary Henry Paulson's plan. General Electric Co., the world's third-biggest company, retreated 5 percent as Merrill Lynch & Co. downgraded the stock on ``growing fundamental pressures.'' ConocoPhillips and Newmont Mining Co. slumped more than 2 percent as oil retreated following a record advance and gold and copper prices decreased.

The Standard & Poor's 500 Index slipped 8.74 points, or 0.7 percent, to 1,198.35 at 3:39 p.m. in New York, after earlier increasing 1.2 percent. The Dow Jones Industrial Average lost 87.69, or 0.8 percent, to 10,928, erasing a 128-point rally. The Nasdaq Composite Index declined 5.39 to 2,173.59. Two stocks fell for every three that gained on the New York Stock Exchange.

``The credit crunch is going to become far more severe than anybody thought two weeks ago,'' said Tom Wirth, senior investment officer at Chemung Canal Trust Co. in Elmira, New York, which manages $1.7 billion. ``In my opinion this is not understood by the politicians in Washington.''

Barclays Plc, the U.K. bank that bought parts of Lehman Brothers Holdings Inc.'s U.S. businesses, may cut as many as 5,000 jobs at the bankrupt company, Wall Street recruiters said.

The estimate, based on the $2.5 billion Barclays set aside for potential severance and retention costs, would mean half the Lehman employees transferred to the London-based company may be let go. Barclays, which paid $1.7 billion for the business, said it will decide in three months who will be offered permanent positions.

you know what my worries are..

UBS says costs of closing out LEH exposures below $300m

UBS is aware of a recent research report circulating in markets regarding its exposure to the Chapter 11 filing by Lehman Brothers. UBS confirms that its direct and counterparty exposures to Lehman Brothers, net of hedges, are now substantially closed out. UBS does not expect the total cost of closing out its exposures to Lehman Brothers to exceed $300m.

I trust Marcel Rohner.. That's what i could do now! :-)

ib crisis

the financial world has been witnessing this storm for quite some time. it seems that the hurricane is now on its way! ib-investment banking is witnessing its worst days [hopefully]!! the move made by lehman brothers - filing for bankruptancy could have been seen as an isolated event if it was not followed by the BOA's move of bidding for Merryl Lynch , the dramatic move of Fed to bail out AIG and for the latest - the gossips of Morgan Stanley looking for a buyer for their ib bussiness in US!

So how does this affect you and me?

the financial market worldwide is inter related. So its quite obvious that this turmoil would definitely have its ripples in other parts of the world - india included. As for jobs - to begin with - 25k + employees have been out of their job from LB, 50k + from ML, 2.5K of them from India!
Out of the 5 leading brokerage firms in Wall Street 3 have been shut down, and with this new gossip of Morgan Stanley the future of the fourth is unknown!

Stock markets are witnesing new lows everyday! India, however, has seen the least pressure till now - thanks for the public sectors! It should be noted that even though the banks in india seems to be insulated, the rupee is depriciating to the 2-year low against dollar!

for me the question is : how would this crisis affect me? the question is significant looking at the fact that i work for a europian financial service firm which has significant exposure in US market! Let the market gurus save my bank.. let them save my salary statements!! :-)

Hot News:

I have so much to wirte, but i dont have time!! :-( The hot news is that I am going to visit my parents! Its the festival of Onam.. And finally, I am going Hoooooooome :-)
I would start my journey today and would be back on 21st. That also means that I would not be regular over here cos I dont have a computer at home and trust me, I hate i-cafes.. I am gona miss this world and all my friends here, especially vins, athi and sen..
Happy Onam to you all..