It is hardly 2 months that US tried ascertaining the world that subprime losses are covered up and things are looking healthy now. Fall of one of the major mortgage company and few billions of losses by Citibank, SCB and few others is what all was shared with world.
Later last week the news started trickling in that nothing is over as yet and troubles are about to start for investors world wide. Lehman Brothers a major investment banker, in business for 158 years, came out with news that they are in deep troubles. BoA and Barclays even didn’t find them worth buying out. LB were left with no option but to file for bankruptcy on weekend. Merrill was saved as BoA pumped $50bn while AIG is still in lurch with requirement of $40bn to make it survive.
The capital losses are as good as some countries GDP’s (like Dubai, Qatar, Oman, Bahrain etc.). Albeit to date no bank from GCC has come forward with declaration on subprime losses; I feel it is bound to be there. These guys have been pumping easy earned oil money into US and Europe only. It is only now they have realized that East gives better security.
I am watching at India; who due to high resilience has always survived all deep water troubles.