recession - final 11111
Post on 09-Apr-2018
229 Views
Preview:
TRANSCRIPT
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 1/22
Recession
``A significant decline in the economic activity spread across the
country, lasting more than a few months, normally visible
in real GDP growth, real personal income, employment (non-farm
payrolls), industrial production, and wholesale-retail sales´
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 2/22
TYPES OF RECESSION
V Type W Type
U Type L Type
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 3/22
Causes of recession globally
1. Sub Prime lending crisis
2. Rising oil prices
3. Tightening of liquidity
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 4/22
Causes of recession
in India
1. Currency crisis
2. Inflation
3. Credit crunch
4. Falling houses prices
5. Loss of confidence
6. Decrease in production & a sharp rise in unemployment
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 5/22
Examples of recession
1. India¶s IT
export growth is slowing down.
2. Real Estate are finding it difficult to raise finance.
3. Unemployment in diamond jewellery, textiles, leather & many othersectors.
4. Many companies have put their further expansion plans on hold.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 6/22
So how did recession begin?
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 7/22
Subprime mortgage crisis
The reckless lending practices by
financial institutions ± no backgr ound
check.
Failed regulation of Wall Street rating
agencies. Gover nment deregulation- Federal
Reser ve
Encourage the home owners to take
high loans overlooking the interest
rates.
Collapse of the housing bubble.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 8/22
How did the recent recession started and
spread acr oss the glo be?
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 9/22
Loans f or mortgage, credit card, and auto
were easy to o btain.
Financial innovations called mortgage-
backed securities (MBS) and collateralized
debt o bligations (CDO) increased.
These enabled institutions and investorsar ound the world to invest in the U.S.
housing market.
As housing prices declined, major glo bal
financial institutions that borr owed and
invested heavily in subprime MBS reported
significant losses.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 10/22
During the weekend of Septem ber 14-15, Lehman Br others declared bankruptcy after
failing to find buyers.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 11/22
Bank of America agreed to purchase Merrill Lynch, & consortium of 10 banks created
an emergency fund of at least $70 billion to deal with the effects of Lehman's closure.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 12/22
Another bank failure occurred on
Septem ber 25 when JP Morgan
Chase agreed to purchase the banking assets of Washington
Mutual.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 13/22
Effects
1. Unemployment
2. Falling Profitability
3. Falling Stock Market
4. Decline in Consumer Confidence
5. Foreclosure
6. Bankruptcies
7. fall in Investment
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 14/22
Extent to which organizations have
been affected by the economic
recession
53% of the com panies sur veyed indicated that their organizations have been somehow
affected by the economic recession while 32% have been affected severely.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 15/22
Highlights of some survey findings
1. Sales of about 53% of the participating companies were just or wellbelow the company¶s expectation in 2008.
2. Profitability of about 57% of the companies were just or well below thecompany¶s expectation in 2008.
3. Productivity of about 45% of the companies was just or well below thecompany¶s expectation in 2008.
4. Export performance of 60% of the companies were just or well belowthe company¶s expectation in 2008.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 16/22
What should India do to deal with
Recession?
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 17/22
Personal Measures
1. Avoid unnecessary and overspending of personal income and wealth.
2. Keep our personal debts down.
3. Work extra hard at work to ensure your job is secured.
4. Be prepared for bad times and invest money wisely to deal withfuture recession.
5. Avoid wastage of food.
6. Avoid switch of jobs during recession.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 18/22
Government Measures
1. Crackdown on hoarders and black marketers could help preventprices from rising further.
2. The Government should allow the private sector to import.
3. There is need for simultaneous monitoring of at least the schemesrelating to food and employment of poor.
4. Higher government spending is good in infrastructural andagricultural activities
5. Encourage Import Trade.
6. Maintenance of Buffer Stock
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 19/22
Lessons from Recent Recession
For Organizations:
Be aware of the wider economic environment.
Maximize productivity and efficiency.
Understand your market place.
Be adaptable and flexible.Take risks in proportion to your business.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 20/22
Continued
For Governments:
Boost infrastructure spending.
Public-private partnership for development of country
Keep check on Bank¶s lending policy.
Actively manage your cash flow.
Create more job opportunities.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 21/22
Continued
For Customers/Common Man:
Actively manage your investment accounts.
Budgeting.
Respect your job.
Plan for the future.
Expect the unexpected.
8/8/2019 Recession - Final 11111
http://slidepdf.com/reader/full/recession-final-11111 22/22
THANK YOU
Group Members
Aarti Nevrekar- Roll No 9
Deven Prajapati- Roll No 19
Hanoze Malesra- Roll No 29
Kedar Date- Roll No 39
Megha Kotian- Roll No 49
Nikita Haldankar- Roll No 59
top related