WHY MARKETS ARE TANKING........

WHY THE MARKETS ARE TANKING....
The fall in the Indian Equity Market is due to systemic global risk that is common to entire market and not specific to Indian Market.
The big Foreign institutions are liquidating because they borrowed a lot of money and made investments whose value depended on home prices and credit. American Home prices have fallen dramatically, and credit is hard to get now, so the value of their investments is down. That causes the people who lent them money to immediately demand more collateral or repayment.
Either way, those big investors who borrowed all that money must sell something to come up with the cash... and fast. Unfortunately, the housing-related investments they bought aren`t popular right now and can`t be sold quickly. So the large institutions are selling anything they can sell quickly. Stocks are liquid and sell quickly, so investors are calling up their brokers and telling them to sell everything right away.

That`s why stocks have been falling so much. It`s like a giant bankruptcy sale. Or perhaps, to be a little more accurate, it`s a giant sale that represents a mass attempt to prevent bankruptcy.

Not only have overindebted investors been selling, many others are selling simply because... everyone else is selling. They`re even selling gold by the truckload.
This is not going to stop for sometime, but surely it cant continue losing 1000 points a day, as another 9 days like that we will be zero.So just stay calm and let this tsuanmi pass. it will clear, sky is not falling, some people want to project it that way for their own self interest. for some people at 3200 reliance was a buy at 990 it is a sell, tell me what has happened to Reliance in this 10 months? Long term investors should not panic in this real panicky situation and hang on and slowly buy quality stocks in the next coming 12 months. and surely sensex which appears going to 2900 levels from where this bull run started will be at 30000 in 3 0r 4 years.and then at 30000 all will exclaim it is buy time. watch out stay calm.People who look at downside of things are more successful than those who look only at upsides.Never act in HASTE.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore