This refers to your conclusion that the worst is over for both the global and the Indian economy (StatsGuru, April 6). If true, this is certainly good news. It does, however, seem premature. As the charts show, risk spreads continue to remain at over 1,000 basis points for BB-rated companies in the US, or around five times what they were two years ago. How does this show the risk appetite is back or that things are getting back to normal? There have been similar moments in the past when some data show an upward movement, but you need to be cautious before thinking that the appearance of one swallow signals the coming of spring. A whole series of things can go wrong — banks still haven’t begun to lend and their problem of toxic assets remain.
US joblessness is increasing every week and until this starts falling, consumer confidence will not come back. Most of the economic and other growth numbers being reported are artificial. They represent the pump-priming by the US government. Take away the economic stimulus and the numbers will look far worse.
Samir Gupta, New Delhi
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