Six of world's top 10 economies out of recession.

I have expressed my views on such topics earlier and when the situation was grave...I thought it is more in our minds than on paper.

Really it is nice that all the hard work paid for...and now it is CONFIDENCE that will land us on the shore.

I always say: darkness is temporary, but confidence is a tool to outsmart it.

Hopefuly the recovery is just ahead. The reality was there were 99mn subprime mortgage owners of which 15% defaulted which costs banks 200bn dollars. If this number goes above this nubmer in the future then many banks are going to be liable for the losses. Though the stress tests were successful the banks holding the interbank contracts may not come back for some time to come till the fate of the rest of the 85% is affirmed and the future of the structured debt they hold is clearly known. If there is going to be such a scenario then default on other debts like auto loans, credit cards might come into play. So far so good.

The condition was very bad just a few months ago. The amount of people losing jobs were also tremendous. Many companies were bound to close down. It seemed that this recession is going to last for long. But luckily, it has recovered sooner than we expected.

A recovery is bound to happen then  a full recovery can be affirmed only when the big engine of world economy the  US economy starts whining again. The credit crunch there is forecasted to last some time since many financial instituions have refund agreements which are connected in chains with other financial players. Once these positions starts unwinding and no body knows how long will it take to figure out who all are going to be affected. I think Citbank was one in some precarious conditions which got out for the time being with other banks some of them already out of woods and many may be in line. So the short term lending market is very dull and might take some time to pick up as per information coming from there. Once these paranoia in short term lending is sorted out and snctity restored we can see the US economy pumping back into action again and the recovery is begun other wise some more time. The Federal Reserve conducted some stress tests which is doing a Monte carlos simulation of possible stress scenarios and I think they are quite satisfied with most of the Institutions they covered and may be still they need to finish the whole financial institutions suspected of troubled.

We are moving in the direction of a qualified Yes rather than absolute Yes and we are moving away from an absolute No rather than qualified No. Paul Krugman talks of W shaped recovery, which means our perspectives on the basis of Quarter to Quarter developments can lead to a direction while a longer direction may potentially differ from the Quarter to Quarter direction. Germany, France and Japan are very important Top Economies, but whether they assure the world like an engine of growth or an engine of stability - I am not very sure. I have been watching Japan for long and have lived and worked in Germany about from 10 years back upto end of 2002. These economies (France I would prefer to ignore for the discussion) are traditionally export led and are prone to no growth or low growth for long, which mean they speak out now from low bases, in terms of economic development in a global perspective. I would rather look for revival in UK and US accompanying these developments, as these economies represent the breadth and depth in terms of financial services whose revival is very important for an economic revival. In my view, the number of economies recovering as a proportion of number of economies that matter is not irrelevant, it is a relevant but inadequate indicator for the overall turn around. US is facing enormous fiscal challenge. US has been a consumer led economy. And credit has been the centrifugal force for this economy. Without reviving mortgages as an engine of economic development, without reviving residential property valuations, without ensuring a smooth transition to normal in consumer credit and without setting right the commercial property segment and without having a couple of quarters of unqualified performance of financial services sector as such, it is difficult to say, how US will face its challenges. US has been printing money as a major element of solution. Its debt component as of GDP is too huge. It needs to become a strong exporter through a sustained global demand for capital goods, technology, aircrafts, weapons and services where US can outsell others. This will help it propel a decent GDP growth that prevents fiscal deficit from worsening and brings public debt into manageable proportions. US needs to manage impending inflation. US needs to keep the Dollar from appreciating. More than investments, US needs to work harder to export and compete with various other export led economies bringing business confidence and consumer confidence into play for boosting its huge domestic economy as a corollary. As long as US does not turn around, I feel we cannot speak in terms of an absolute YES. A qualified YES now is due, though, by various parameters. Qualification may be W shaped, not at all V shaped. Or it could be a hook, between V and W. A ray of hope: Yes. Dawn: not yet.

Yes, definitely there are signs of recovery and many economic experts are predicting end of recession by the end of this quarter. But I am not quite sure about the rate of recovery. Let us be optimistic