This kind of outright manipulation worked fine until the buyers of these SIVs noticed that these could not be sold to anyone as no one knew what there exact value was. Now we are getting some idea of their intrinsic worth and the news is bad. These SIVs, fetch only 5 to 25 cents for every dollar-most of them at the lower end. And the scary stuff is that this is just the tip of the iceberg.
The world is in an unchartered territory. US has taken undue advantage of the trust that world had by printing God knows how many trillions of dollars and put them into the circulation. This is toxic waste- no one knows intrinsic value of these dollars or for that matter any dollar.
What can India do? Keep the subprime dollars away from entering the Indian stock or real estate market. For example, refuse to accept dollars as a collateral, or if they must, just give 5-10 cents worth of equivalent rupees till the mess clears up.
