Financial crisis as on 21st Oct 2008

It's just early days yet. No one can aver how severe or how long this downslide/ recession will continue. For example, when US goes into a recession(officially they've still not), most people believe it will go on for two years. This is mainly based on the fact that the last recession lasted barely two years. But Paul Krugmann, this year's Nobel laureate for Economic sciences, argues that it could last more than that this time around. That's because the last time around, after the IT bubble burst, the US was able to come out of it mainly because of the mortgages market. They just managed to pull themselves out before two years. But this time around, from the magnitude(huge) of loss of the sub-prime crisis(remember that this market is alone worth $15 trillion. if you want, read it again. It is fifteen trillion dollars. Just for comparison sake, India's GDP is ONE trillion dollars), he says no other sector could quickly salvage the US economy.

So it's just early days yet. As to its impact on the Indian economy, definitely there will be an impact as around 40% of software exports to the US are to the BFSI sector. But the "shivering" sensation in the Indian economic scenario is not to be seen yet. But again, it is early days. The SWITCH companies(Satyam, Wipro, Infy, TCS, Cognisant, HCL) have reduced their fresher intake and many others have frozen hiring of experienced hands. But still the general mood is not gloomy. So we can take some heart and plan what we could possibly do - as your 10 points say.

Loans:
Already, to hold the markets from tumbling down, the RBI and Government have taken quite a few steps of which some(CRR, repo rate) will directly affect the rates at which loans are disbursed by banks to the common man. So we can expect the loan rates to go further down...which translates into lesser cost for owning a house or a car. But then again our salaries could be lesser. But the point is that, one should not decide not to take a loan. Flexibility is the best policy when it comes to managing money.

Investments:
Warren Buffett buys when everyone sells. In January this year, the Sensex was climbing at nearly 21K. Who might have had the audacity to predict that it will fall below 10000 in 10 months? Isn't it such a mouth-watering oppurtunity to buy now? If there was ever a BEST time to buy, it is NOW. That's because it will not fall below 9K and the only direction it can go is skywards.