AIG gets a breather (sorry a lifeline), the government has taken over AIG and demonstrated that it will help all the CEOs who indulge in riskier financing that UNCLE SAM is there to look after you after all and take all the bad debts you generate in pursuit of your greed. By this week Uncle Sam owns fannie, freddie and AIG. Poor lehman got left out and had to fend for himself.
In India the Govt owns most of the banking machinery but has not gone to these levels of profligacy. It has been outsourced to the co-operative sector. In the co-operative sector it is "Hush-a Bush-a, we all fall down" going on for a long time and RBI has been tightening the noose rightly. I am proud and happy that i was born in India in these times and have an opportunity to look at the misgivings of the US govt from a safe distance. Anybody interested in a free tip? go short all your dollars it will pummel to the depths in the coming 12 months.
Another prediction, beware of ICICI bank it has all the makings of an Indian Lehman. They are already hiding a lot. They have stopped all their personal and home loan operations for the last four months now.
Look for good old PSU banks who are conservative and good in their book keeping. there are plenty of them and they will shine in the next two years. Beware of flashy private sector banks (barring AXIS which has its head on its shoulders as of now.)