Now thats the buzzing piece of news coming in from the USA which has led to todays crash in the Indian markets. First let us analyze how bad is the situation over there in US Economy. Just last Sunday we heard of the news about Bank Of America(BOA) bailing out the largest players in the mortgage giants called Fannie Mae and Freddie Mac. Both of these companies have given out half of the USA’s $11 trillion outstanding home mortgages.

And just this morning the news of Bank Of America(BOA) purchasing Merrill Lynch came in a all stock deal of about $50 billion which is a 70% premium at the last Fridays closing price of the company in Dow and Nasdaq. Then comes the Lehman brother which has also gone bankrupt. Both of them are among the largest private investment banking companies in US and across the world.

You can imagine the significance of such companies going bankrupt. Meanwhile the famous investor from US Jim Rogers feel that the US government move to bail out beleaguered financial institutions like it has done with Bear Stearns in Feb last, now with Fannie and Freddie and then with Merrill Lynch will only add to the surmounting problems.

According to him ” it is important to allow a beleaguered financial system to crash once to clean up the system.” He is the cofounder of the Quantum fund along with another famed investor George Soros. He is of the view that the worst recession of US after the second world war is still ahead. His prediction about the stock market and US dollar crash which he made last year, came to be surprisingly true now.

Now the crude has fallen down to $93/barrel in todays trade but again surprisingly the gold prices was seen increasing which should actually fall with the falling crude which is generally a trend in the commodity market. Due ato all this developments the Indian markets crashed badly today by 470 points to touch 13,531 levels and Nifty closed at 4,072 levels down by 156 points. The worst hit sectors were banking,realty, IT space and selling was seen across the board today. The markets now need to retract from these levels soon.

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