The Real Estate Market of US and Global Economy

The real estate market in the US does not seem to be recovering which may prove to be somewhat risky for the global economy.
Central banks in the US, Europe, Japan, Australia and Canada have pumped in billions of dollars in the proximity of $136 billion in their banking systems due to the liquidity shortage created from the subprime mortgage problem, which was done to prevent the overnight rates from surging and ensuring banks have access to funding. The Bank of Japan injected Y600 billion yesterday (13 August, 2007) into the money market following its Y1000 billion emergency injection on Friday, to help reduce the pressure on inter bank lending rates amidst global jitters in financial markets due to the huge demand of funds from the various players as credit has dried up. Central banks in South Korea, Philippines, Singapore, Indonesia, India and Malaysia said they were prepared to add cash into their financial systems.
Indian banks have not yet faced a liquidity crunch, however if the global panic persists, soon Indian banks too may have to look upon RBI for support.
The support of central banks has been able to enforce investor confidence which rallied the Asian stock markets modestly.

However the current situation would have impacts in dimensions more than obvious such as incase of Bank of Japan which was expected to raise its interest rates from 0.5% (lowest of the major economies) to 0.75% later this month may not happen now since the GDP rose by 0.5 % which was weaker than expected during the second quarter due to drop in exports to the US, and also drop in housing investments and public spending. A sharp withdrawal of FII from the Indian stock market may raise panic and bust the market here too, if the situation gets worse.
The effect of downtrodden housing and subprime lending market of US which has shot the excessive withdrawal of the credit would constrain the growth in spending (US spending) and output of this can be contagious thereby leading to a snag in the other economies worldwide; however the extent to which these financial events would affect global growth remains uncertain.