Banking crisis not yet over: Puru Saxena

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All across Asia the stocks have tumbled to the lowest in three year on financial concerns after US Government's takeover of American international group (AIG).

Speaking to CNBC-TV18 Puru Saxena, CEO of Puru Saxena Wealth Management says, "I don't think this banking crisis is over. I think dozens if not hundreds of banks are going to go bust within the next few months."

Here is a verbatim transcript of the interview with Puru Saxena on CNBC TV18. Also see the accompanying video.

Q: Considering what Warren Buffet had said that this is a once in a century crisis and there is a risk aversion sentiment with investors, where do you see the money coming in now, if at all for Asia?

A: For long time my view has been that we are in a bear market in Asia and all over the world. We got out of our positions in India and all equity markets earlier in the year and at the moment we still feel the risk is to the downside because I don't think this banking crisis is over. I think dozens if not hundreds of banks are going to go bust within the next few months.

Q: Where do you think it is going to stop because the problem started with US, UK and now there are emerging markets like Russia which are also deep in trouble with the credit crisis?

A: This is a problem of confidence and there is a problem of over leveraging. Financial institutions leveraged to the hilt, banks in the US were leveraged 25 times, European banks are even worst although they haven't disclosed their assets yet. They have huge Tier III assets; I think this is going to become a household word, Tier III assets. Their leveraging is 30 to one, so these banks are still hiding the garbage and nobody knows how much they have on their balance sheets and that is why everyday we hear of bankruptcy, I think there is more to come.

Q: The Securities and Exchange Commission (SEC) in the US have come up with stricter short selling norms, how much of a pressure could that be or how much of a problem could that be in the near-term?

A: I think they are doing all the wrong things because rather than letting the markets wash out they are trying to intervene and government intervention hasn't helped anyone ever. So I think they should let the markets clear out this mess, so the next growth story can begin because the longer these guys intervene, the worst it is going to become and the longer the recession will be.

Q: Natural resources have been a favourite for you considering the rise in gold and silver, what's your take on commodities?

A: We are full invested in resources in fact for our clients we have positions in oil, food companies, bullion gold and silver because in this period of uncertainty and due to the supply and demand imbalances one will only make money in resources because though we have a raging financial crisis on Wall Street there is no oil which has been found, no extra land which has been found, so we have serious supply side problems in natrual resources and demand is still going up.