Friday, 31 October 2008

Dollar Shortage? and Mergers

A shortage of Dollars in India is a comical thing happening around here. The government in US is busy printing dollar bills and handing them out to all and sundry who have CDOs and other dirty liabilities (oops! Assets). I would advise people wanting the dollars to stand back, wait and watch. you'll find dollars strewn allover your backyard in the next nine months. Another tsunami of credit card defaults is on the way in US, which will require more doles from the US Govt and will help large banks gobble up more smaller banks.

When these large banks gobble up smaller banks they are getting a large customer base, acquiring which would have cost them a bomb. Many times this comes gratis and that's the great thing about crisis and acquisitions during crisis. (Remember Bear Sterns was bought over for a song, lock stock, barrel and clients included!)

The Indian markets will rally another 5 - 10% in the next week and then we should expect another bout of selling from FIIs and a correction.

Look forward to a hard take on the state of Indian markets in the next post.
Till then, have a nice weekend.

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