Financial Meltdown

FINANCIAL MELTDOWN

Before, understanding “Recession”, we need to understand the market economy; TWO STAGES OF MARKET ECONOMY

A] TWO STAGES OF MARKET ECONOMY

A1 ] Growing Market Economy

A2 ] Declining Market Economy

A1 ] Growing Market Economy

Starting Point = Willingness to buy

A2 ] Declining Market Economy Starting Point = Unwillingness to buy

What is Recession?

Recession is the economy shrinking for two consecutive quarters (=6 months) with a decrease in the GDP (=Gross Domestic Product)

GDP = Value of all the reported goods and services produced by the people operating in the country GDP = MONEY VALUE OF { C + I + G + ( X – M )} C = Consumables , I = Gross Investments , Government Spending , X = Exports , M = Imports

G =

GDP GROWTH TREND Overview of the World Economic Outlook Projections

 

Year over Year

 

 

 

Projections

 

2007

2008

2009

2010

World Output

5.1

3.1

-1.4

2.5

Advanced Economies

2.7

0.8

-3.8

0.6

United States

2

1.1

-2.6

0.8

Euro area

2.7

0.8

-4.8

-0.3

Germany

2.5

1.3

-6.2

-0.6

Japan

2.3

-0.7

-6

1.7

Africa

6.2

5.2

1.8

4.1

Russia

8.1

5.6

-6.5

1.5

China

13

9

7.5

8.5

India

9.4

7.3

5.4

6.5

Middle East

6.3

5.2

2

3.7

Brazil

5.7

5.1

-1.3

2.5

Months of year-on-year negative growth rates (sorted by decreasing order)

Trade turnover: Year-on-year monthly growth rates, January 1965 to March 2009

Some who have been heavily effected by the financial meltdown Company

Worth

Loss

£33.24bn

£21.4bn

£4.05bn

£3.28bn

£4.287bn

£2.95bn

Resources Sports Direct ((Feb May 08) Bear 07) Stearns (Dec 07) Schroders

£1.169bn

£1bn

£670m

£602m

£1.521

£508m

(Sept 07) 08) ICAP (Jan

£895

£483m

Lakshmi Mittal Arcelor & family Kim (June 08) Vladimir Kazakhmys 08) Anil Agarwal (May Vendanta Mike Ashley Joe Lewis Bruno Schroder Michael & family Spencer

These are billionaires among the big losers of the 2008 financial meltdown

THANK YOU

http://www.ft.com/indepth/global-financial-crisis http://en.wikipedia.org/wiki/Subprime_mortgage_crisis http://en.wikipedia.org/wiki/Bailout

http://www.imf.org/external/pubs/ft/weo/2009/update/02/index.htm http://www.econ.yale.edu/~shiller/data.htm http://rapidlibrary.com/index.php?q=latest+recession+ppt http://www.google.co.in/search?hl=en&source=hp&fkt=6484&fsdt=14687&q=reces   http://www.oecd.org/document/15/0,2340,en_2649_33715_1873295_1_1_1_1,00.html#emplo

Well AIG certainly knew what to do with the bailout money. http://rainbowwarrior2005.wordpress.com/2008/10/08/guess-what-aig-did-after-the-ba nber- national be of economic and research imf  

http://www.tourismeconomics.com/docs/financial_crisis_update(ja pdf