USA’s Subprime Crisis And Its Ripple Effect
By Kamla Bhatt • Aug 31st, 2007Category: Americas, Ideas, India
USA’s subprime crisis is a topic that is hotly debated and dominates the headlines everyday of the week. Before we go any further here is an excellent primer and backgrounder from Paul Solomon from the Lehrer News Hour about subprime market and how it works.
Earlier today President George Bush finally announced a package to help the country out of this current subprime moorage crisis that is spilling out from the “wall street to the main street” as one analyst pointed out. According to Economist the reasons for President Bush’s help is colored by politics and not by economic factors. The mortgage crisis has become a “hot political issue,” and Hillary Clinton has likened the current crisis to the savings and loan crisis of the1970s and 1980s the magazine points out. Are President Bush’s current measures a cosmetic one asks one analyst on PBS’s news hour.
While the US is grappling on how to resolve the issue, the subprime crisis has spread and seeped into other parts of the world. I have read with growing confusion and concern about the contradictory information about subprime crisis and its impact in India. For a while now Indian companies and policy makers have denied that subprime crisis will impact the Indian economy. For instance, I read a news items that writes Infosys thinks the mortgage crisis will not impact them, and I have also read another news article where Infosys says the mortgage crisis will impact them. And here is another news item where India’s central bank, the Reserve Bank of India, has expressed concern about the subprime crisis impacting the Indian economy.
Why this mixed messages?
Thr subprime crisis will have an effect on the Indian Economy and the same is a concern of the Central Bank.
The magnitude and ultitude of the crisis is yet to be measured,anticipated,analysed