razzyan n
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hey ..in simple terms .............the US real estate market went down steeply ...........in fact the situation became so worst ...............that the present market rate of flats were less then the home loan the occupants had borrowed...........so many of them stopped repaying home loan ..........and one more reason was.....loans given with out proper fulfillment of required criteria so couldn't recover the load amount .............the two major reason due to which the banks went bankrupt ...coz no hard cash in hand/Bank ....which caused the crises ...................it shud take another definite six months ..to stabilize..... |
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SREIOUS P JOHN
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The main reason behind the slow down of the economy is that the US real estate market went down steeply in fact the situation became so worst.That the present market rate of flats were less then the home loan the occupants had borrowed.so many of them stopped repaying home loan and one more reason was loans given with out proper fulfillment of required criteria so couldn't recover the load amount .The two major reason due to which the banks went bankrupt because no hard cash in hand/Bank which caused the crises .It should take another definite six months to stabilize.
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Aquarian
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Look, the recent global financial crisis which had its origin in the USA, is basically a story of crossing the limits of taking to the riskier business in lending and creating more money to sustain further lending in the process of earning even more and even more. It was a typical case of creating too much scope for real estate at one hand and supporting the sales of the real estate at the other.The financial regulations of the US allowed certain kinds of financial deals which permitted such king of banking business in the country. Such problems can not arise in India as such rules are not in the place. the housing/real estate bubble was to burst as happens with all the bubbles the crisis started. Now the overall impact is so grave that people together with the financial world is losing confidence in the economy, falling demands of the goods and services around the world.
(As the crisis includes so many factual things from the US financial world my answer may look you incomplete, but I can not help - in very consise way I have tried to answer your querry)
The remedy: The problem is faliing demands of goods and services so the remedy lies in creating more demands. To create demands you can do only 2 things - cut down the prices of the goods which are seeing falling demands at one hand and pesuading people to create demands by enreaching them(via low interest rates, enhanced wages, etc.). |
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ashish c
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sub Prime loan. Loan against bad property.mortgage property.Govt. should come forward to tide over the situation.Investing huge amount through Bank and Financial Institution and moniter. |
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amitabha39
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In the last few decades excessive computerisation has not only squeezed the employment opportunity but also has created a tendency in the minds of industrialists to bring down the labour cost. For example many a bank now-a-days has a smaller number of employees. Among them again only one or two get fabulous salary and the other gets very poor salary. Computerisation has created a very rich upper class and a rich middle class at the cost of the lower middle and the poor classes The purchasing capacity of the lower middle and the poor classes, which make more than 90% of the populace has come down drastically. This has effected lower demand of commodity making the production units sick. If the computerisation would have taken a slow process things won't have come to such a crisis. |
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shijin s
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IT HAPPENS AS DURING IRAQ WAR THE AMERICA HAVE SPENT A LOT OF MONEY TO DE TRON SADDAM AND HOPED THAT THE ARABS MAY CO OPERATE TO FILL THEIR BANKS.BUT THEY WAS WRONG AS THEIR FINANCE GROW BAD TO BAD THE CENTRAL BANK WITHDRAWN MONEY FROM SHARE MARKET AND PEOPLE THEN THE AMERICAN COMPANIES WERE TO THE CRISIS.THERE ARE MANY AMERICAN COMPANIES IN EUROPE,THEY TOO GET COLLIDED,THE ASIAN AND COMMON WEALTH COUNTRIES INCLUDIN INDIA AS HUGE INVESTMENT SHARES OF THIS COMPANIES <RELIANCE,TATA AIG,HDFC.ICICIETC>,THEY COLLIDED.MANY INDIAN COMPANIES DO SECTIONAL JOBS OF BIG PROJECTS CONDUCTED BY AMERICANS AND EUROPIANS,THEY LOOSE THEIR CONTRACTS,THESE LED TO GLOBAL CRISIS
THE WORLD EXPECT THAT IT MAY TAKE ABOUT SIX MONTHS TO FILL THESE HUGE DEPTHS, |
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B.K. P
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Greed and mismanagement is the main cause.Ecnomist & Financial expert of repute should join together and suggest measures to bring the economy of many nations in order. |
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S.K. G
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Yes, there's a big pinch due to the "sky-is-falling" financial situation. I am not an economist but I think all these scare mongering are created by one country - USA. The most debt ridden country in the world. They spent money on all available items what any country produced in the world thinking that they can shoo shoo anybody without paying. And the involvement in two unwanted wars. 5 billion Dollars a day in Iraq is little bit too much I suppose. A wonderful country destroyed beyond repair. It is said that if China holds 25% of US$ and if it freezes, US is gone forever. Unfortunate part is that the whole world (I don't) trade in US Dollars. Internally US is in turmoil. So, to have the US Dollar strength and get the benefit out of world trade, they have to create a panic in the world by which can push down Euro and all other currency. As we all know US are the biggest of all liars and can convincingly make the whole world believe what they say like the WMD in Iraq. Otherwise, commonsensically I cannot figure out how US Dollar is still strong when the whole country is in dolldrums!! All Americans should be begging for food now. I hope that happens. As I said, I am not an economist.
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1badss
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OK ill answer but stop being paranoid... OK there is more than one reason and ill tell them to you.. 1 social security- right now millions of baby boomers are retirering especially after the dow went down, what that means? after every baby boomer is retired the government will pay 80 million a month in social security payments and they are aware of this... 2nd the war in iraw is extremely expensive pulling cash from the states to europe then to the middle east to oil princes who need to keep high supply of oil to fuel the war..3rd the subrime mortgage meltdown, which is unregulated brokers getting any person on the planet a loan for housing, why is that bad ill tell you cause when the economy went down the arm rates went up and a once 800 mortgage a month went to 1600 dollars a month and people started to forclose and banks went into deficiet becauce people cant pay their mortgage payments and know they want a government bail out for everything because they made bad loans because of greed....Hope this helps but dont worry because if the country goes to hell you can move to canada where its cheap and a lot lot lot less crime
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