No Credit for you

Its here finally. After months of speculation and expectation that troubles in the housing market, in particular the subprime market, catch up with the booming stocks , the prophecy seems to be coming close to being fulfilled. Growing worries on the spill over effects of the subprime mortgage market in US have sent the american stock markets in a tailspin and the effects are being resonating all around the world. Indian stocks were down about 3% in one day, Japan's Nikkei shed weight to the tune of 2.36% and British markets were under water 3.5%. It is another stark reminder that in today's globalized world, financial problems have lost their local character. Just a few months ago, when the chinese markets tanked momentarily, the markets all over the world felt the tremors. On the face of it, it seems that markets are only recovering from a hangover after the late night drinking binge of cheap credit and the resultaning M&A activity. As the credit markets tighten a little more and the private equity premium starts disappearing, the stocks should come down even further from their previously unsustainable levels.