Monday, October 8, 2012

Toxic Structral Isuues

Toxic Structural Issues

With the blessing of Lord Ganesha as projected in our last blog we expected tactical technical rally and stock index has moved up more than 15% and stocks in specific has moved up in range of  40-90%.
We suggest our readers to book this humongous gain. As structural issue within the economy still exist and all is not honky dory.
During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in the system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions.
We at witdom expect lots of toxic assets within our financial system.
Spain banking system is in deep trouble. From our sources we come to know biggest Real Estate players in Spain may go bust any time. Fiscal cliff problem in America will come as big negatives in coming days. We sound bearish and cautious on financial system for coming days.

Thanking You
Atul Sikrai
Sr Vice President
Witdom investment advisory

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