Well, I would think there is need for caution rather than reason for elation. Reasons are already visible and would become clearer in the next two days.

As the Asian markets closed on Friday, Wall Street investors were feeling nervous before the markets opened there, wondering about the likely outcome of Kenneth Starr's findings on Bill Clinton. Clinton could face impeachment. He could also resign. If that happens, there will be tremors on Wall Street which will echo in other markets. Why should Clinton's discretion matter so much, you might ask. It matters because markets are not cerebral but emotional. All investors dislike uncertainties. But the political uncertainty is only one of the numerous others facing the USinvestors right now.

Japan continues to cause increasing worries. According to the latest report from the Central Bank of Japan, growth rates have dropped very badly. And the government will now be downgrading the forecast for growth for the current fiscal. What happens in Japan is bound to affect the fortunes of American business. Japan has to handle its serious problems of growth and restructuring. As a first step it has cut the interest rates for the first time in the last three years. But this is just scratching the surface of reform and much more needs to be done. The problem here is that the new political leadership is not seen to be too willing to undertake hard reforms. And Japan is not the only worry for US. Latin America is facing economic storms as well.

Brazil is on the brink of currency devaluation. Its hard currency reserves are at a nine-month low at $2 billion. The Brazilian stock markets recorded their biggest one-day drop in stock prices in 11 years on Thursday. Investors can get anidea of the economic turmoil that other countries face.

Brazil's reserves have fallen from $70 billion in August to $55 billion. The outflow of hot money is so swift that the reserves went down by $12 billion in just 10 days! Right now, it is facing the prospect of losing $1 billion of its reserves every day. The stock index is reported to have fallen by 15.8 per cent, with a fall of 10 per cent in the first 67 minutes.

Brazilian troubles have a rub-off effect on Argentina, which exports a sizeable portion of its trade to Brazil. Argentinian stocks fell 13 per cent in response to Brazil's woes. The Mexican stock markets are already at their two-and-a-half year's low.

So, if any Indian investor thought of basing their investment strategy on the belief that foreign institutional investors (FIIs) would come in sooner than later, they should think it over once again. Fund managers are pulling out of equities the world over and parking them in bonds. Around $50 billion pulled out of equities is reported tobe waiting on the sidelines.

Before one can make an assumption about the likely return of the FIIs to the Indian bourses soon, we must remember this: All of us are spending time guessing what global fund managers would do and there is no guarantee that FII funds would come when the dust settles down. Because when the dust settles down, there could be greater opportunities staring us in the face in the light of a sharp downturn in several stock markets across the globe.

Sure, India has its plus points and has received higher ranking for investment among global markets. But what I am pointing out here is the timing. Funds may not come in next week or the week thereafter. One would not be surprised if it took another three to six months for sizeable funds to come in.

Let us not forget that fund managers would assess the second quarter performance before committing their funds. So, investors might as well proceed on the basis that they are on their own. Worse still, they should be prepared for further FIIpullouts to compensate for losses elsewhere.

For the week ahead, the risks seem considerable. The Russian Duma may after all approve of Yevegeny Primakov as the prime minister. Primakov has already made a bargain to give more berths to hard core communists. This amounts to walking back on reforms and with that the West might as well reconcile to writing off their bad debts.

While the Indian stock market fell by only one per cent on Friday, the other Asian markets lost much more. South Korea fell by 5 per cent. Kuala Lumpur lost 3.58 per cent in response to threats of imposition of capital gains tax on stock trading. The Thai stocks dropped by 2.49 per cent. At Tokyo, the Nikkei Index fell by 5.1 per cent in response to the Central Bank's report pointing to a deflationary spiral under way. This is bound to end up mauling American profits.

So the US actually has problems all around - from Japan, Asia and Latin America in terms of its global business. In turn, the global economic activity can slow down.

In the week to September 10, Yashwant Sinha tried to cheer up investors. But all of us know that finance ministers apart, economic sense is a `no, no' to opportunist politicians. While Sinha has his own problems as fund manager, politicians have their own games to play.

In the ultimate analysis, if you are a short-term trader you should think over carefully if you should go bullish next week. You must remember stock prices are on their way up and have recovered quite a bit. At the time of writing this column, the Dow Jones was recovering sharply and was up by 90 points after a remarkable confession by Bill Clinton to the nation. But as always in any stock market, one still needs to see what the settled trend looks like at the end of the week.

Also, it is too early to say how this confession would affect the ongoing proceedings against Clinton. On Monday you need to update yourself before the terminals open and blend the right amount of caution with your valour. But remember this: there are problemsbeyond Clinton as well, like the Brazilian brew.