Goldman and Morgan turn into commercial banks under Fed

The Wall Street that shaped the financial world for two decades ended on Sunday night New York time, when Goldman Sachs Group Inc and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.

The Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc into bankruptcy and led to the rushed sale of Merrill Lynch & Co to Bank of America Corp.

"The decision marks the end of Wall Street as we have known it," said William Isaac, a former chairman of the Federal Deposit Insurance Corp. "It's too bad."

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PepsiCo commits $500 million, aims to triple business

PepsiCo on Sunday announced a $500-million investment in India in a clear endorsement of the attraction of emerging markets like India amidst a global financial meltdown.The $39-billion food & beverage giant's plans cover the next three years. The fresh investments underscores that the company is betting big on the continuation of the Indian growth story that is pushing up the number of middle class every year.

The chairman & CEO of PepsiCo, Indra Nooyi, said the current financial turmoil on Wall Street would not hit her company, which has strong cash reserves. She said the India investment would create 50,000 direct and indirect jobs. PepsiCo has so far invested $700 million in the country,which means the new investment would push the aggregate figure above the $1-billion mark.

Chennai-born Nooyi said PepsiCo hopes to triple its business in the country in the next five years. Considering the country's growth potential and economic parameters, this is a conservative estimate, she said. Inflation, she said, is a major concern. "Sometimes you can cover part of it with changes in product prices but when you have inflation over 10-12% it is difficult to coverall,"she said.

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Rupee slide persists

The rupee fell the sharpest in a decade on speculation that the trouble on Wall Street would lead to emerging-market asset sell-offs by jittery global investors.The currency hit its lowest level against the dollar in more than two years. The Sensex also fell for a sixth day in tandem with equity markets world wide. It lost a marginal 12.47 points to end at 13,518.80, heading for its first annual loss since 2001.

The rupee may come under more intense pressure as FIIs continue to hawk Indian equities. The Indian currency ended at 46.89/90 against the dollar, off a trough of 46.99-its lowest since July 24, 2006-as banks arbitraged with a weaker overseas market. Dealers suspected RBI intervened to halt the slide just short of 47 against the greenback. JPM organ forecasts the rupee to drop to 47 by the end of the year. The rupee was the second biggest loser among the ten most active currencies in Asia outside Japan on Tuesday.

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