Friday, February 27, 2009
Saturday, February 21, 2009
A number of times in the past I have read that current crisis is the crisis of confidence and not cash, at least in India. This is not referring to the ever plunging indices. There indeed it is a fair lot of foreign money that was buying has been selling. But the statement above largely refers to the contraction of consumption. Consumption of goodies in malls, supplies in supermarkets, vehicles in auto lots, houses in residential markets and all those other purchases that have been either cancelled or put on hold by millions of Indians, fearing, hmmm, well, what??? Job loss? Respective industries going to dirt? Erosion of savings? General fear for financial well being? Impending political changes? Terrorism? Perhaps, a concoction of all these has made a drink potent enough to pull the rug under our feet. And rightly so.