| While India's growth remains high, there is a distinct trending down in the numbers, whether of industry, infrastructure or corporate sales and profits. This could have an impact on investment levels which have driven India's growth story so far. The bigger challenge, though, will be the sharp slump in the US and the possibility the global crisis, which still has a long way to unfold, could get worse. Just about $120 bn of capital has been written down by banks against the sub-prime loss estimate of $300-400 bn "" as more loans come up for resets, more losses will become public. Since the housing boom was not restricted to the US, it is an open question as to how prices will move in Europe, particularly as growth there reduces. The more immediate worry is that bond insurance firms who've rated $2,400 bn of securities have been hit by losses "" if they lose their AAA ratings, the securities they've insured will also get downgraded, triggering off another round of bank writedowns ... |
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