Nifty failed to sustain above the trend line level of 4500. There for we saw the profit booking. Sensex also failed to sustains above 15100.Coming days we need to watch out for its movement. It could test 4330 and 4200 as of now. Below that we may be heading towards 4000 and 3800 again. Alot of gaps in stocks may be filled and that could support the market.
Fannie Mae and Freddie Mac. Am sure every one is reading about it. A little of my view on it. These two companies control 60% of the mortgage market of USA. The total value of this is 5.5 trillion dollar. Double of Indians economy.
Now a bank in india needs to maintain 12% as capital of its total credit. Thats the minimum and there for indian banks are well regulated. Fannie and Freddie have just 80 billion $ in capital against 5.5 trillion as credits. Which works out to less than 2%. At the current juncture I dont think its easy for Fed also to come forward with any saving option for them.
US as such is in a soup for sure. but they do have huge gold reserves. Matter to time. coming few quarters they should be able to solve issues. The property prices there have fallen drastically. The price one would pay for a property in india, he would get two in US. more over theirs is a developed economy. so over time it would still be a good bet and i expect US to come out of this in a few year or may be months also.
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