So at last the world is telling America a simple thing. You cannot live beyond your means for too long. When they had a huge deficit, they went to war at Afghanistan. Then at Iraq. It does not matter how much money you have – if you burn it fast enough, it will be over! All the war expenses have been charged to the credit card – now the payments are due. Like a broker friend says “bull market bills come up for payment in bear markets” – that is what is happening. The bills have come for payment, the last date is long past gone, and USA is wondering from where to pay. Who has problems? Well it is the who’s who!! Citibank, Goldmansachs, Merrill, Lehman, AIG, etc.

What will be the implication for the Indian markets? Well, the willingness to spend or invest will go down. So industries which are not cash surplus – retail, life insurance, mutual funds, etc. will surely see a slow down. Airlines and hotel industries will see the survival of the richest and death of the weak. A few banks will close down – if the “gora” is not allowed into India in 2009.

What you can do is just relax, continue your SIPs and watch Animal Planet or Cartoon Network. Stop watching horror channels (some think of them as frenzy channels) which make you itch for action.