2008 financial crisis may not be reprised in US or India but play out in some other countries: Maneesh Dangi
Maneesh Dangi, Founder, Macro Mosaic Investing, says “it is very unlikely that the US would have a 2008 play out because the US balance sheets are pretty clean in terms of household balance sheets and corporate balance sheets are not levered. But that cannot be said for Europe, cannot be said for China, it cannot be said for many other emerging markets. So I do not know and I do not think a GFC kind of liquidation or credit events are going to play out in the US but then it is more likely that it could pay out in some other places. Thankfully, Indian balance sheets look as clean as they were in 2007. So India is out of the picture as far as that sort of balance sheet stress is concerned.” Do you think everything is moving on expected lines? The Fed was not supposed to increase rates, they have not increased rates. The Fed was supposed to say that they are keeping the interest rate window open, which is what they said. The Fed was supposed to increase their outlook for the US economy, which they did. So, the Fed is becoming rather easy to call now.
Yes, it is a sensible Fed because having taken the rates higher by about 550 basis point, Fed is deeply aware as we all are, that interest rates work with a lot of lag and incidentally I was reading a research report today early that perhaps today's interest rates operating in US could be of last Diwali.
So, a lot of rate hikes which have happened in the last 12 months are yet to percolate down to the economy.
As a matter of fact, the US households are actually paying only 3.5% on their mortgages when the 30-year mortgage is at 5.5%. The US corporates are paying barely as much as they were paying pre-Covid wherein in reality the markets have repriced coupons significantly or
