Global Meltdown

Well the day started like all saturdays.....everything was habitual, i woke up at 10am n my mom scolding for waking up so late.....ate my breakfast slowly, nibbling n playing with my food ( which i m not allowed to do in front of my mom ;) lol)

After enjoying my delicious meal, i took the newspaper.....wow it was the global economic meltdown that caught my eye......man these share markets are falling like deck of cards . The newspaper has quoted the losses in european, US, canada, australia , India, etc. But i was searching for china, there wasnt even a single report on china in the newspaper.....

It kind of made me think. Y isnt china, an asian country and also a developing country like India didnt plummet??? So i switched over to check the world markets(share market)
Most of the world markets where hard hit in the past 2 weeks, the badly hit where not the US markets, which where actually the cause for this global meltdown.......actually a stream of selling forced exchanges in Austria, Russia and Indonesia to suspend trading, and those which remained open were hammered. The Australians called it the "black friday" because of the heavy drop in the stock prices. At the start of friday's session, losses for the year totalled a staggering $8.3 trillion as measured by DOW Jones Wilshire 5000 composite index which tracks almost all the companies traded in the US. Whereas the Indian markets, the bombay stock exchange(BSE sensex) dropped by 800 basis points to 10527.85 and the national stock exchange(NSE) dropped by 230 basis points to 3279.95.

If followed closely you would notice that the BSE (30-share sensitive index) has lost about 50% from its all time high of 21,206.77 recorded on jan 10th 2008 by closing at 10527.85.

I was sure that definitely the chinese market would have plunged, ya it did happen. The shangai market dropped by 9%.

U might think what is our government doing?? Well the answer is ur seeing our finance minister P.Chidambaram nowadays on a daily basis addressing the investors. The government is trying really hard to gain the trust of the investors, just dont panic when the other markets fall is what the government is saying. Prime minister Manmohan singh claimed that our markets are not very susceptible to the fall in global markets, but he was proved wrong. Now the final option being to reduce the Cash Reserve Ratio(CRR), which pumps more cash into the monetary system there by increasing the liquidity of the market. So the government decreased the CRR by 50 basis points which effected on last monday. But still the markets failed miserably, so the CRR was further reduced by another 100 points which comes into effect from saturday(today).

All these selling pressure forced the weakening of the rupee which plummeted to its all time low of Rs.49.30 against the $dollar. The rupee has dropped from Rs.46.53 on Oct 1st to Rs.49.30 on Oct 10th.

The one thing which surprises me the most is that, (US markets) the DOW fell by 2.9%, the Std & Poor's 500 index was off by 2.87%, while the NASDAQ composite index was down by 1.16%

All these weakening markets have slow down the economic growth of developing countries like India, china, and other asian n african countries. The manufacturing sector is badly hit in India, as a result other sectors have also not faired well.

Now everyone is saying all these damage was caused due to an improper global financial structure, but no one is saying how to repair it!!!