...INTRODUCTIONS The Global Financial Crisis of 2008 is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. It resulted in the threat of total collapse of large financial institutions, the bailout of small and big banks by national governments, and downturns in stock markets around the world. In United States, the housing market also suffered, resulting in evictions, foreclosures and prolonged unemployment. The crisis played a significant role in the failure of key businesses, declines in consumer confidence, declines in consumer wealth estimated in trillions of US dollars, and a downturn in economic activity leading to the 2008–2012 global recession and contributing to the European sovereign-debt crisis. The bursting of the U.S. housing bubble, which peaked in 2006, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally. Economies worldwide slowed during this period, as credit tightened and international trade declined. Governments and central banks responded with unprecedented fiscal stimulus, monetary policy expansion and institutional bailouts. In the U.S., Congress passed the American Recovery and Reinvestment Act of 2009. In the EU, the UK responded with austerity measures of spending cuts and tax increases. Causes of Financial Crises Subprime lending During a period of intense competition between mortgage lenders for revenue and market...
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...Economic Recession: Causes and Effects Student’s Name University Affiliation Economic Recession: Causes and Effects An economic recession is a slowdown in economic activities such as employment, distribution, production, real income and real GDP. The 2008-2009 economic recession was the longest in duration and deepest in contraction since the great depression of 1929-1932, (Roberts, 2009). Its causes were mainly preventable through a series of legislations and so it can be avoided in the future. This paper champions the thesis that the recent economic recession was largely avoidable, but the application of inappropriate economic strategies as presented below caused its occurrence, and has so far had overarching effects on the world. According to (Simpson, 2009), the recession was the direct and unavoidable result of the credit boom that preceded it. First, the credit boom was partly a result of low interest rates that lasted too long, facilitated by governments and their central banks. This resulted in the build-up of a credit bubble. Secondly, governments failed in the role of regulating the credit market. This encouraged borrowing of those who were least able to repay, resulting in an increase in demand of properties, (Bessler, Leatham and Zhang, 2006). Once demand had risen, property prices went up, attracting more investors into the market. Then the desire for profit was overtaken by the fear of loss as the market was flooded with...
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...December 2007, at the beginning of the Great Recession of 2007-2008, the typical length of time for an unemployed person to find a new job was 7.7 weeks. These times increased through June 2012, when they peaked at a record high of 24.8 weeks (McConnell, Brue, Flynn, 2015, p. 212). Why did employment take so long to recover after this recession compared to others, such as the Great Depression of the 1930s? This article looks at the economic factors that may have attributed such a long recovery in the employment numbers. Economists agree that there were many economic factors at work that effected employment. For example, in July 2009, the federal minimum wage was increased from $6.55 to $7.25. Though fewer than 3 percent were affected...
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...The great depression was a very hard situation for many. The Great Depression lasted nearly a decay. Started 1929 and ended 1939, can you believe that? This was the deepest and longest- lasting economic downturn in the history of the Western industrialized World. In the United States, the great depression began shortly after the stock market had crashed down in October 1929, which sent many people to panic and wipe out millions of investors. So many people have asked, “How does the current Economic Recession compare to the great depression” well here are some answers. The great depression saw the Federal Reserve do little to ‘save’ their policy actions were limited by a currency backed by precious metal. They say fed knew that money needed...
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...Asian Transactions on Basic and Applied Sciences (ATBAS ISSN: 2221-4267) Volume 01 Issue 06 GLOBAL RECESSION, OIL SECTOR AND ECONOMIC GROWTH IN NIGERIA. BY S. O. OLADIPO (M.sc) Department of Economics and Accounting Bells University of Technology, Ota. E-mail address: giftsamniyo@yahoo.com AND PROF. J. O. FABAYO Department of Economics, Obafemi Awolowo University, Ile-Ife ABSTRACT This study investigates global recession and the oil sector, based on its effects on economic growth in Nigeria. No doubt the global economy has been experiencing some disturbances. Major economies of the world have been affected and so has the major sectors of these economies especially the ones that has a direct bearing with international trade been affected. The oil sector particularly has been one of the hit. For a country like Nigeria whose international trade is majorly in oil, the effect has become an issue. Empirical analysis using the Ordinary Least Square (OLS) reveals that there was a negative relationship between GDP and oil produced (domestic consumption and export) which is significant at 5% lever of significance i.e. (P < 0.05). The result also showed that there exists decline in the oil sector due to the global recession despite all measures given by government to curb it effects. It was Jan 2012 recommended that the federal government needs to deregulate the sector for efficient performance, and also come up with more rigorous policies that will reduce this effects on the real sector...
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...1st off, tell your teacher the President has nothing to do with interest rates. The Fed (Federal Reserve or Central Bank) controls that. The Fed would LOWER interest. If that fails, they would increase the money supply http://www.investopedia.com/terms/q/quan... The President MAY, on advice, ask Congress to INCREASE spending, using the money the Fed has bought Treasury securities with, to stimulate the economy. You NEVER ever raise taxes during a recession. ------------- If he wants not to lose his job by turning USA into a non-market, Government controlled economy, he should allow the Federal Reserve Board to deal with interest rates: whether or not the Fed succeeds in increasing employment by reducing interest rates is not the President's concern. 2. President's focus should be on how by the Government's legitimate actions, the spending power of the households and businesses can be increased. It seems that he has no choice but to continue the stimulus spending for another year. But that alone may not help sustain fall in unemployment rate. He must reduce taxes at the lower levels of income drastically and reduce the corporate tax rates for the next two years so that their effective disposal income increases and they buy more locally produced goods and invest in capacity to produce more. Of course, reducing taxes would mean, the Government will have a larger deficit and high deficit can cause problem of inflation later besides making it costlier for private firms...
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...“It’s a recession when your neighbour loses his job; it's a depression when you lose yours.” These wise words from a former U.S. president made me question how true this really is in reality. It is obvious that our minds and what we think play an enormous role in what goes on around us. Our thoughts seem to take over, causing us to act or react in a certain way. These reactions in reality are caused by our immediate perceptions of the given subject, issue or concern. What if recessions are caused by our reactions to things around us such as the media and so called “experts”? The recession had to start somewhere. How many times have you turned on the news hearing “we are in a recession, we have to save our money and stop spending”? The majority of people will hear this and follow along because of the constant charts and graphs supposed experts bombard the public with. Contrary to popular belief, people’s perspective of a recession, can in actuality, cause and fuel it even further. The famous Greek philosopher Plato, in his work Allegory of the Cave provides insight into how a recession can be perpetuated due to the public’s perspective. In his allegory, humans are depicted as prisoners chained in a cave only seeing shadows from the light and creatures that walk behind them. One of the prisoners was released and was exposed to the reality outside the cave. Allegory of the Cave can be interpreted in many ways. The way I see it, people accept reality from the perception...
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...1. ISSUES FOR DISCUSSION In recession economies, companies react to these changes in the marketplace by reducing costs, cutting production, reducing investment, entering foreign markets, working more with equity capital, improving efficiency, re-structuring debt (Beaver and Ross, 1999; Laitinen, 2000; Pearce and Michael; 1997; Zehir, 2005). An economic crisis requires some changes to be made in companies´ strategies. The fast food retailers even avoided increasing prices during this economic crisis. While consumers feel insecure in their job and negotiate more about financial matters (Shama, 1978). Despite many companies cutting theirs operational costs or reducing employees, McDonald’s in India planned to increase its headcount and strategically do not cut its cost. Taking advantage from the reducing prices of real estates, McDonalds start to gain more market share. McDonald’s management team believed that the economic crisis gives more opportunities to conduct business aggressively. Exploring the case study for McDonalds – Business Strategy in India, a study approach is to explore the whole picture of a successful this fast good chain’s action and strategy to cope with down turn economy. In other words, this case was about to discusses how McDonald’s managed to buck the trend, its early years and business strategy to get more out of its stores in India. On the same time, how McDonald’s can maintain and improve their performance by adjusting their competitive strategy...
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...process of evaluating the value of any security and certificate by analyzing the real time factors, which are based on qualitative and quantitative factors. Economic and the social factors also effect while you are finding out the intrinsic value of any security or asset. Fundamental analysis when made for evaluating the value of security all the factors that can affect the security considered like macroeconomic factors, microeconomic factors and the company based factors. Not only have the external factors about the internal factors also affected the value of any asset (Bedford, 2008). You need to consider in fundamental analysis: * Market analysis * Company analysis * Industry analysis For an investor the fundamental analysis is very important to invest in any asset or security. The investor when found the intrinsic value of security with its current value than this make easy for them to invest or not. Global financial crises are the period, which is experienced by the society, and the marketers, a situation of great difficulty in the world where nothing is stable in any state of the world. The economic situation in the global crises become worst and the purchase power of the customer reduces, and this is a difficult time for the marketers to improve their purchase when customer will wait for the end of the recession. The recent global financial crises were of 2007-2008, which were the worst crises in the history (CORNELL and KEHOE, 2012). ANZ bank is the largest bank...
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...within company (fashion vs. wine and spirits) • Forward and backward integration • Finance problems: net sales decreased by nearly 6% in 2003 • Declining shares Weaknesses 1. The luxury goods are very sensitive to the fluctuation of economy; any economic wave could influence its sales. LVMH’s business largely depends on the economic sitation of the buyer, if economy was depressed, its sales growth slow down sharply like it did in 2002, ( after 11th septmber ) or the financial kises in 2009nsince demand for luxury goods declines markedly when recession or depression happens. 2. Broad acquisition makes no sense and could bring burden, such as it acquired Pury & Luxembourg, which is criticized since there was no room for art auction market. Opportunities • Merger and acquisition (The small companies are seeking shield to exist in fierce competition.) usage of snob effect makes rising the demand of luxury products • New consumer trends • increase in wealth • New buying potential in Emerging markets • Improvement of way of selling their large product line ( new distribution channels) Threats • Change of trends and consumer taste • Economic recession (problems in coping with the recent economic downturn) • Competitor in smaller markets • Cometition ( The strongest...
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...2.6%. A total of 214 areas documented August unemployment rates below the United States total of 8.2%, 150 areas reported rates beyond it, and eight areas had rates equal to that of the nation (Bureau of Labor Statistics, 2012). As of August, Florida’s unemployment rate was 8.8%. In the current economy, many Americans are concerned that a rebound is still many years away. The hope and expectation appears to be that a new Presidential administration will help turn the tide on the depressed economy. However, expectations do not appear to be overzealous as Americans still witness home foreclosures, job layoffs, bankruptcies, and an increase in requests for public assistance. The average American still seems to be overwhelmed with these economic issues, whether on a personal basis or among friends and family. Expectations seem hopeful but not overly optimistic, as many families continue to live paycheck to paycheck,...
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...Reasons and Objections to Obtain an MBA Van Emery MGT 521 May 09, 2011 Walter Goodwyn Abstract In this paper the subject to address are the objections to obtain an MBA and argue the points with reason to obtain an MBA. The three main objections to entering an MBA program are: 1) Cost, 2) Time and effort required, and 3) Job availability in the current economic slowdown. Each argument against obtaining an MBA is countered with evidence that supports reasoning to obtain an MBA at almost any time, personal situation or career position. Reasons and Objections to Obtain an MBA Masters of Business Administration An MBA or a Master of Business Administration is a degree that provides training in the theories and practices of business management. An MBA degree certifies that the recipient has detailed knowledge of functional management roles found in most organizations. The MBA is recognized worldwide as a valuable asset for business and administrative careers. The first MBA program started in the 1900s and has evolved over the past century as the business requirements for a highly skilled management have become mandatory in the globalization of the economy. MBA programs have become specialized and more accessible to full-time workers. Some of the concentrations for an MBA are accounting, health care management...
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...transmitted through these channels. Ordinarily, the role of digital media is to act as a medium of communication. However, in the case that the accuracy of the information is not controlled, it can lead to various impacts to the society. The digital media played a very significant role in the financial crisis through the spread of information. As such, this paper analyses digital media ethics in relation to the global financial crisis and its effects to the society. The World Financial Crisis The global economic crisis has caused many problems nearly to all the sectors of the economy in the world. Many countries have suffered deep in their growth domestic product while recession has a common experience all over the world. The severity of the crisis has persisted to the recent times, but this can be attributed to the debts incurred by some developed economies like Greece even after strong support from other countries. As a result, the world’s financial system experiencing these global economic crisis of severe staggering magnitude, there are those who believe that it will continue to be experienced across all sectors of the economy. The financial crisis is thought to have been caused by the United States mortgage market through its decision to sell sub-prime mortgages to an expanded number of consumers and, which resulted to modest or insufficient...
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...retaining the very best talent is a key element to stability at any time, but it is especially so during a recession. Successful companies know that they must have the entire team fully engaged in the success of “their” company during challenging times. This is important to success not only during the recovery, but also well beyond. A lack of engagement, according to recent research, can lead to an overall reduction of 10 percent in our GNP, not to mention its effects on the corporate bottom line. Creating a climate of appreciation, where efforts are recognized and potentially rewarded, can go a long way toward strengthening the process of engagement and improving the outlook for the company as a whole. Further complicating the recession economy is the shrinking talent pool. As baby boomers retire (or hope to soon), so-called baby busters and millennials are taking over leadership roles throughout corporate America. A shortage of talented workers worldwide is inevitable in the coming years. Global recruitment will see an increase in diversity – in age, experience, language, culture and values – thus challenging companies to consider multiple strategies and tactics to drive performance and employee engagement. Developing recognition and reward programs to encourage an engaged, diverse and talented team is an important tool for thriving in the best times and surviving during economic downturns. Even though the environment in which companies are operating...
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...The airline industry is highly competitive and regulations are heavily implemented. Aside from these, the airline industry also faces different challenges brought about by drastic changes in consumer behavior affected by different external factors such as economic condition.( Prosser, T. (n.d).) Political The airline industry is subjected and governed by stringent air regulatory controls. Regulations are applied in the courses that the airline chooses to travel, the partners that the airline chooses to works with, the airport schedule it uses, the fare it sets as well as the infrastructure costs. One more area which is heavily regarded is safety and security. British airways identified and introduced an array of security measures and protocol to curb the threat of terrorism and illegal immigration. The European Union, being a regulatory body in Europe published a list of airlines that failed to meet the safety standards set by ICAO. These airlines are banned in Europe (Department of Transport 2009). Economic The airline industry is highly sensitive to any economic recession. Economic downturn causes company to cut down business travel which contributes greatly to the sales of the airlines industry. The global recession that took place in 2008, has massive impacts on the airline industry. A couple of factors affected the business of British Airways such as prices increases in oil and commodities, the decline of sterling pounds, unparalleled financial crisis faced by UK. Instead...
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