A flurry of earnings downgrades will come in the next few days to follopw the great brinksmanship committed by Moody's. Being on the inside track on how SBI never forced the government's hand on fresh capital and was delaying its bond issues etc for the same, Moody's would probably have acted differrently if it were not the india unit. That said, we must first apologise we did not rush to write out our heart yesterday as markets broke on the news, with guests, festivals and bankruptcy (notional) keeping me occupied at home

A few bankers need to churn from this next crop, esp as they all come from ICICI Bank and though chosen to lead at various levels in other units they might be by products of an ill trained aggressiveness of a mid cap India from the last decade. ICICI Bank must fight to establish growth channels for new business too and till then the sob story of the banking sector is not entirely undeserved. The Non performing loans are on their way up at ICICI Bank, the culprit in question SBI and the state owned banks despite protestations by the new chairman that his margins will continue to improve, a by product of higher lending rates ( though not much has been passed on to AAA, AA and even A borrowers an ddeposit rates that are already considerably high continue to get deposits for the bank.

Other fronts have much more positive activity and based on the pending consumption spending boom, retail loans on durables and even auto should bring an uptick in the festive season. Maruti is a due underachiever likely to benefit as also Bharti Airtel, that continues a strrong business model now in umpteen more countries

My prognosis, pending the Thursday Dashera festivity of numbers, I would say the bottom is well near 4400, maybe 4200. Till then, it is not a rough ride if you know your economy ( We pick at http://blue.advantages.us)

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