The Nikkei was down 339 points as bad loans are now seen to be close to 30 per cent of the country's economy (GDP). This is much more serious than assumed earlier and have grave implications for other economies.

The global markets now feel a little more desperate with Allan Greenspan ruling out US taking the lead to bring about a concerted and unified action for bringing down interest rates across the G7 countries. Such reduction would have helped the economies in these countries to counter the recessionary threats.

As a result, all European markets witnessed a sell off. The FTSE was down by 184 points, DAX by 215 points, CAC-40 by 193 points and Mexico by 181 points.

All these after the Senate Banking Housing Committee in the US went into a detailed discussion on whether the US should bail out other ailing economies with a $20 billion aid through IMF. SeveralSenators have argued that the IMF prescriptions have failed. They have not helped to revive ailing economies.

Russia's six year experiment with IMF prescribed reforms with a $20 billion aid has proved disastrous. Manufacturing, traditionally a strong activity even under communism, has grounded to a halt. Worse still, it has made the life of poor in these economies to suffer more misery, while enabling a few to become billionaires!

Some have now come around to argue that capitalism as the world knew it in the last six years is on its deathbed. With such apprehensions around, it is natural that there is a sell off in the global markets. No one knows what the new world economic structure would be.

At Washington, the ongoing hearing in the Senate Judicial Committee is being keenly watched. The committee is viewing the videoed testimony of Bill Clinton.

The possibility of Clinton being impeached still hangs in the air. The Dow Jones has reacted 200 points down at opening on Thursday. Under the changedcircumstances, the Sensex has the potential to move down to 3086 or 3065 levels. Actually this should be seen a god sent opportunity by investors to continue to pick strong scrips as prices dip. The present downturn could well be short lived for reasons obvious and already touched upon partly in this column earlier.