Tuesday, February 12, 2008

To be or not to be .. .. !! .. ..

In early morning trades, U.S. markets were up a couple of percentage points after U.S. Billionaire Warren Buffett . offered to come to the rescue of troubled bond insurers. Warren Buffett has offered a second level of insurance on up to $800 billion in municipal bonds. The generous offering held out by the billionaire seems to have cheered the investors who rushed to pick up cheap stocks, which had taken a huge beating off late. Although Buffett's offer to help out the troubled insurers is limited only to municipal bonds and not the financially risky and complicated financial instruments, investors and market experts are hopeful of experiencing relief from the worsening credit situation.

Additionally, the Fed also auctioned off $30 billion to commercial banks at interest rates of 3.01% on Tuesday. The current inflow of funds should be able to stem the credit squeeze which the markets had witnessed off late. But will the world markets, especially, the Indian stock markets, respond positively to the inflow of liquidity in the U.S. markets? Chances are they will.. The Indian markets seem to have bottomed out; analysts believe that a correction of no more than 10% is likely from current levels. The December industrial output figures which were released earlier today were encouraging and in-line with expectations. Additionally, the retail investors could have just found the short-term trigger which will drive them back to the primary markets. Though investors remain wary and shaky after the events of the past few days, they are likely to respond positively on signs of the U.S. economy improving.

By the way got an interesting picture to share with you all.. hope you like it..


A very scary roller coaster ride, isn't it??

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