
How safe are we from catching the cold?
The bankruptcy of the US investment giant, Lehman Brothers. The sale of Merrill Lynch. The turmoils of insurance giant AIG. These three back-to-back upheavals indicate that the global financial crisis has far from bottomed out. Barely six months after the loss of Bear Stearns, the growing list of investment banks going under reverberated in Indian stock markets. The Sensex fell by 469.54 points on Monday. Jittery foreign institutional investors (FIIs) have withdrawn $ 8 billion from the market so far this year. Sentiment will remain subdued for the rest of the week in the bourses due to these adverse developments.
The big question on investors’ minds: what sort of impact will the global financial crisis have on the Indian economy? Reports have detailed huge job losses as the affected US investment banks have expanded their operations in India. Lehman has about 2,500 employees while Merrill about 600 employees who face uncertain prospects. The market valuation of the companies in which Lehman has made investments has taken a hit. A shadow also hangs over AIG’s insurance business. At a different level, these developments are also bound to affect the campus recruitment of management graduates.
However, the biggest impact on India will be when this crisis triggers a global recession. According to former US Treasury Secretary Larry Summers, four vicious cycles are simultaneously underway: falling asset prices forcing leveraged holders to sell, driving prices further down; losses at financial institutions reducing their ability to finance investment, which, in turn, reduces asset values causing further losses; the weakness of the financial system reducing growth, and thus weakening the financial system; and falling output hitting employment, which reduces demand for output.
With unemployment already spiking upwards in the US and Europe, the dreaded R-word has already kicked in. All of this is bad news for our growth prospects that will be seriously affected in 2009. We cannot remain an island unto ourselves when the financial fragility that is integral to modern capitalism takes the world economy down.

News updates from Hindustan Times: CoWIN app develops glitch on day one

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Court to hear defamation case against Smriti Irani on January 23

Shot in the arm for health staff: From facing harassment to being 1st to get jab

Some states report hurdle in vaccination as CoWIN app develops glitches
- Glitches were reported from some districts from states including Maharashtra, Madhya Pradesh, Rajasthan and Uttarkhand.

Launch of vaccination drive marks high point of efforts by SII, Bharat Biotech

Maoist commander carrying a reward of ₹8 lakh killed in Bijapur district
- According to the police, the encounter took place between Kutru and Ketulnar jungles on Saturday evening.

Bird flu in poultry confirmed in 9 districts of Maharashtra

Never said no to dialogue with govt but do not have much hope: Farm union leader

BRO constructs 110-feet bailey bridge at on Jammu-Srinagar highway in 60 hours

Covid-19 vaccination drive was successful on Day 1, says Union health ministry

Microbiologist says Covid-19 vaccines made after in-depth study, research

In bid to meet vaccine needs of other nations, India’s neighbours to be priority
- As the world’s largest manufacturer of vaccines, there is considerable pressure on India, especially from neighbours and developing countries, to supply Covid-19 vaccines.

From Ladakh to Vizag, thousands of military Covid warriors get vaccine jabs
- In the Army alone, a total of 3,129 healthcare workers were vaccinated on the first day, the officials said.
