Sunday, March 29, 2009

Is it a liquidity crunch in India??

I have a random thought....Is it really a liquidity crunch in India?? Generally, financial crisis is a viscious circle which goes from lenders not trusting the borrower, leading to lower disbursements.... leading to a slowdown... Lower demand... inturn the businesses expand less... in turn there are no loans lent and so on....I think the problem in india has reached to the corporates.... the viscious circle, If could have been arrested at the lender stage, could have made things much better. Now the markets are not making things any better. The businesses are growing slower.... low of confidence... predictions of weak demand...In India, my opinion is that banks may have money but its a viscious circle of low confidence thats driving the crunch than what's happening in the Western world, where the problem is more to do with the sub-prime....

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