Dow, and FTSE - bottom formation? BSE - breaking down?

An eventful week - Central Banks and Treasuries have been playing a major role in calming markets in G7. Finally, markets have begun to take wobbly steps to comfort. Capital has become king and billions are being committed to strengthen balance sheets. Banks have been forced into accepting the funds and with it will come oversight with a vengeance - politicians will be forced to have some control/review.
It wont last long for sure, since that is human nature - to refuse oversight and to demand freedom.

The reemergence of full blown business will of course take time - first step would be complete capitalisation which is inexorably linked to shareholding issues + control issues. Eventhough a full control that results from nationalisation is unlikely, oversight will be intrusive - so we have an area of conflict that will take some effort before comfort returns.
Second step would be to offer depositor (and borrower) protection more widely. A few countries have offered this and now more will be forced into this necessary trap.
Third step would be unshackle the funding and credit markets. No data has still come out to give comfot to banks so that funding can again freely flow. Central Banks will have to concentrate on this, now that the first two issues have been handled.
Lending to non-banks may unfortunately have to come later - since recession plus market disturbances are going to hit corporate profitability and credit rating.

Nevertheless, apparently a first level of support has emerged to support stock indices in G7 - the Dow and FTSE are marginally up this week. The picture for emerging economies is not that good - supports are being broken through. Which seems logical. The problem is essentially a G7 problem and of such intensity that a recession is now on the threshold. G7 countries have been most proactive too and have shown great resolve to come up with solutions. On the other hand emerging economies have felt that the waters of the tsunami would not wash onto their shores and have been blind. Now, it is clear that they will be forced to act. Korea is one shining example of the tsunami effect. The Pakistan Forex Reserves problem (which is similar to the Indian 1991 experience) suggests that some unlikely casualities are going to show up.

Meanwhile, the BSE has crashed through 10,000. However, Banking sector held up quite well. Since so many steps will come from RBI and finance ministry and since liquidity is king I am sure this sector will show good resilience for some time.

The time to accumulate on the Equity markets has begun as Warren Buffet has said. I am sanguine on this because - a)there is a coordinated approach to provide all forms of sops from all Countries b) certain markets and certain sectors have possiby been beaten unfairly and show good opportunities c) we are on the verge of entering into a low interest rate regime when funding gets cheaper and d)governments will now be forced to spend to keep away the demon of rising employment offering good demand conditions and high inflationary conditions that stock markets welcome.