India/US: The economic term can be described in the reduction of a country's gross domestic product (GDP) for at least two or more consecutive quarters.The term rhyme very similar to depression.
I read somewhere, a simple explanation to show the difference between both the words.A recession is when your colleague loses his job without any reason.A depression is when you are removed from the job.A recession eventually results in a depression.
I have been reading and constantly following up the economy news and how different developed and developing governments are responding.Why is everyone keen on US stimulus packages? US is one of the richest and strongest economy in the world. Is this the reason why every eye is on U.S. Absolutly not, US is the biggest consumer of the world. About 80% of the developed and developing countires do trade with U.S.Toyota and Sony are best example to name.
Its not the sudden fall of WaMu or the DSP Merrill Lynch or Lehman Brothers that caused this turmoil.The common man never realized that recession began in Dec 2007.The U.S mortgage market has just contributed to the collapse. Was the stock market only depending on these few behemoths? Absolutly not. Neither did foreign workers in a country resulted this mess.(You must admit that foreign workers also pay tax and add growth same as a citizen)
Inflation is one important factor for recession. Less spending by U.S. consumers and companies reduce demand.As corporate houses look for ways to trim costs, the GDP decline.A common man who gets smaller percentage of services with certain amount.Therefore he/she will now spend less, budget more, saving money.
Predictors of recession are significant stock market drop and unemployment rate increases. The effects of recession is well known;the absense of business expansion.
Where is the money that was with fortune 500 companies a year back? Did someone stole entire money from the banks? I believe just like SDLC, life cycle there is also a cycle of money.It the chain breaks, it affects everyone. No one stole money from anyone.It is just that he/she feels insecure with economy. It the same sentiment that in a relationship. People loose faith in investment and the fear reflects in their expendicture portfolio.
Faces turn away to loans, they don't buy new apartments, construction business gets affected. If construction is down, gradually the demand for steel, aluminium, machineries fall.Employee doesn't get bonus or pay hike. Percentage of folks who were planning a vacation or to replace his/her car changes mind. Car sale gets affected.Flight companies see a fall in revenue. People who want to upgrade television to HD plasma, buy macbook will think twice.A teenager would hesitate to buy a new ipod for his girl friend for Christmas. Demand and Supply ratio differs with a big gap (Manufactured goods gets slumped).The companies who use software to maintain their huge databases, support activities reduces. Now,folks in IT sector will be affected. New application developments halts. A mere support activities continue.Thus the companies with decrease in sales demand bail-outs,perform layoffs in order to sustain.
Its a big challenge to bring back the flow.Various approach can be taken stimulus packages (TARP) to generate, tax cuts to ignite growth again.Economists say that the only advantages with recession that it helps to curb inflation and bring the economy to be disciplined.
Apart from the normal methods, I strongly believe that the emerging eco-friendly products,advancement in technologies, new inventions/innovations would surely add and keep the interests of consumers.
To conclude, Its a myth to believe in the magic wand of new year or new president and remain idle. I guess each and every human being are equally responsible and should stand together to overcome this depression.
I read somewhere, a simple explanation to show the difference between both the words.A recession is when your colleague loses his job without any reason.A depression is when you are removed from the job.A recession eventually results in a depression.
I have been reading and constantly following up the economy news and how different developed and developing governments are responding.Why is everyone keen on US stimulus packages? US is one of the richest and strongest economy in the world. Is this the reason why every eye is on U.S. Absolutly not, US is the biggest consumer of the world. About 80% of the developed and developing countires do trade with U.S.Toyota and Sony are best example to name.
Its not the sudden fall of WaMu or the DSP Merrill Lynch or Lehman Brothers that caused this turmoil.The common man never realized that recession began in Dec 2007.The U.S mortgage market has just contributed to the collapse. Was the stock market only depending on these few behemoths? Absolutly not. Neither did foreign workers in a country resulted this mess.(You must admit that foreign workers also pay tax and add growth same as a citizen)
Inflation is one important factor for recession. Less spending by U.S. consumers and companies reduce demand.As corporate houses look for ways to trim costs, the GDP decline.A common man who gets smaller percentage of services with certain amount.Therefore he/she will now spend less, budget more, saving money.
Predictors of recession are significant stock market drop and unemployment rate increases. The effects of recession is well known;the absense of business expansion.
Where is the money that was with fortune 500 companies a year back? Did someone stole entire money from the banks? I believe just like SDLC, life cycle there is also a cycle of money.It the chain breaks, it affects everyone. No one stole money from anyone.It is just that he/she feels insecure with economy. It the same sentiment that in a relationship. People loose faith in investment and the fear reflects in their expendicture portfolio.
Faces turn away to loans, they don't buy new apartments, construction business gets affected. If construction is down, gradually the demand for steel, aluminium, machineries fall.Employee doesn't get bonus or pay hike. Percentage of folks who were planning a vacation or to replace his/her car changes mind. Car sale gets affected.Flight companies see a fall in revenue. People who want to upgrade television to HD plasma, buy macbook will think twice.A teenager would hesitate to buy a new ipod for his girl friend for Christmas. Demand and Supply ratio differs with a big gap (Manufactured goods gets slumped).The companies who use software to maintain their huge databases, support activities reduces. Now,folks in IT sector will be affected. New application developments halts. A mere support activities continue.Thus the companies with decrease in sales demand bail-outs,perform layoffs in order to sustain.
Its a big challenge to bring back the flow.Various approach can be taken stimulus packages (TARP) to generate, tax cuts to ignite growth again.Economists say that the only advantages with recession that it helps to curb inflation and bring the economy to be disciplined.
Apart from the normal methods, I strongly believe that the emerging eco-friendly products,advancement in technologies, new inventions/innovations would surely add and keep the interests of consumers.
To conclude, Its a myth to believe in the magic wand of new year or new president and remain idle. I guess each and every human being are equally responsible and should stand together to overcome this depression.
