Money Talk

One of the 4 emerging economies of the BRIC (Brazil, Russia, India, China), has been lowered in its credit rating by Standard & Poor's from 'stable' to 'negative'. What it essentially means is that the once heating up Indian economy may be facing serious headwinds and ..."its fiscal position has deteriorated to a level that is unsustainable in the medium term." Indian Government will have a general deficit and will be forced to take other fiscal measures to issue bonds to raise money to meet the deficits. The deficits are also due to many policy measures (to appease the masses) ahead of the elections, that cause fiscal stress to the budget.

Link to US Federal Budget 2010 http://www.whitehouse.gov/omb/assets/fy2010_new_era/A_New_Era_of_Responsibility2.pdf Budget is projected to be balanced by 2012 Federal Budget Deficit this year - $1.75 Trillion Do you want to know what is the US National Debt ? It is more than $10 trillion, ie 10 followed by 12 zeros. GDP - $14 trillion, Shrank little over 6% last year.

Yesterday Obama addressed the joint session of US Congress for the first time as President with remarks that might well mark the most turbulent economic times of the modern world. Many financial analysts do not see any improvement in the next 6 to 9 months despite the 100s of billions meant to stimulate the economy, simply because it may take that long to work its way through the economy. I am sad that I have a sense that a fairly large number of corporate CEOs and financial analysts are factoring a 3-5 years of recession. Talking of stress test to banks - is it just a test or do they have a remedial measure in place when they hear the results of the test. Bernanke is infusing some hope by saying we will be out of recession by end of this year and the stock market is not functioning on its fundamentals but of the fear and panic among investors. Remains to be seen.