Highway to Hell

Sub-Prime mortgage troubles have started spreading like California Wild Fire.

Citigroup recently reported loss of over $ 3 Billions due to sub-prime trouble. Its shares are in deep trouble. Bloomberg reports “Citigroup lost $2.78, or 6.7 percent, to $38.58, the steepest slide in the Dow average. CIBC lowered its recommendation on the shares to ``sector under-perform'' from ``sector perform.'' Citigroup may have to cut its dividend, raise cash or sell assets to raise more than $30 billion to shore up its capital, analysts led by Meredith Whitney wrote in a report to clients.”

Read this again, Citigroup has to sell assets worth over US$ 30 Billions!

BBC reports today as under:

QUOTE
Northern Rock has borrowed almost £23bn in emergency funding from the Bank of England, the latest figures from the central bank indicate.
That is roughly £730 for every UK taxpayer, and marks a rise of £2.2bn from the week ended 31 October. Northern Rock has been in trouble since the global credit crunch hurt its business and led to a run on the bank. The UK government has guaranteed all Northern Rock deposits and the bank is now looking at how it will survive.
UNQUOTE

Read it again – GBP 23 Billion emergency funding, that is, equal to almost $48 Billions

And read them again with the following massive losses –

- HSBC lost over $7 Billions
- UBS lost $ 4.5 Billions (reported today)
- Bank of China lost $ 8 Billions (cumulative until today)
- Merrill lost $ 7.5 Billions
- Goldman funds lost over $ 3 Billions
- Countrywide (of USA) lost over $ 16 Billions
- ICICI Bank lost over $300 Millions (which it refuses to provide to keep its shares high)
- 2 German banks lost over $ 18 Billions equivalent.

This is “Highway to Hell”. Do not be mistaken that this will not have effect on global markets, including India. Financials will be the first to take hits.

Most Indian banks show up huge profits of late (UTI, ICICI, IDBI, HDFC Bank) due to their financing of stocks. If the market collapses, all these banks will repeat the performance of Global Trust Bank.

Reliance group will be hit very hard due to highly speculative and manipulative buying which saw RIL trading at 33 times P/E, RIIL at 230 times P/E and RPL at infinity P/E due to no sales or profit on stream until 2008 end, and RNRL trading at over 480 times P/E, and Reliance Capital trading at 57 times P/E. Entire Reliance group is conceiving daily schemes to raise Rs 50,000 crores to Rs 100,000 crores, as if they have never seen money. These are sure signs of massive failure on the card.

Expect some really big scandals in the offing. Former Chief Minister of Gujarat, Mr., Chhabildas Mehta has filed a complaint with Prime Minister and Finance Ministry that Anil Ambani had issued to himself shares of new power ventures @ Rs 2 per share which are to be issued to the public at massive Rs 60 per share. Considering raising of Rs 14000 crores through Public Issue, Anil Ambani will have pocketed over Rs 45000 crores without doing anything except conceving a acheme.

Reliance, Reliance and Reliance, be it from Mukesh or Anil Ambani will bring down Indian market big time. Be prepared!

First time ever, Reliance will no longer be relied on.

The Great Khali

Old news, already taken care of by world banks.