Since January 2008, Sensex fell 58 per cent in rupee and 68 per cent in dollar terms . 5.Food prices are rising. 6.Global tourism is slowing down. Fighting the crisis:Global response To control the crisis many ways were proposed and taken. On September 15, 2008 China cut its interest rate for the first time since 2002.
It has been difficult for an investment firm to attract investors with the credit ratings on their securities. It specially can be highly detrimental for a venture firm to pull in investors for their financial requirements due to the downgrading of credit ratings. On account of AIG, a September 2008 drop in credit rating implied extending budgetary issues when the organization required capital like never before. Moody's dropped AIG's credit rating down two points to A2 in light of AIG's problems, S&P and Fitch additionally minimized AIG. Overnight, AIG's stock fell 43%.
Evidently, negative rate of return above signals decreasing share prices which in turn mean adverse profitability expectations towards the company. This is, again, probably due to the continuing ‘accounting scandal’ of Tesco which has already had negative impact on the reputation of the company on the eyes of investors. Turning to the riskiness of Tesco’s shares, standard deviation, traditional measure of historical volatility and risk, also reflects negative signs concerning the riskiness of Tesco’s assets, i.e., stocks. The standard deviation with the value of 6% calculated for the returns illustrated above reflects substantial volatility of these returns with respect to expected monthly return which is -0.96%. Even without calculating standard deviation, instability of Tesco’s stock prices during the given period can be observed from Figure 2 just
Asian Financial Crisis in Indonesia Indonesia was one of the countries affected most by Asian Financial Crisis 1997. President Suharato was the leader in Indonesia during that time. The Asian Financial Crisis began on 2nd July 1997 when the Thai government saddled with a huge foreign debt after the decision to float the baht currency speculators had violated the country’s foreign exchange reserves. The purpose of monetary shift was to motivate export revenues but proved to be futile. It soon led to other Asian countries as foreign investors’ contagions who have invested large sums of money into the ‘Asian Economic Miracle countries’ since a decade prior to 1997 and soon they lost confidence in Asian markets and dumped Asian currencies and
With de-regulation of markets the threat of new entrants has also increased (Singapore). This competitive pressure is felt already by Optus which saw price drops under fierce competition especially from Telstra (Australia). Economic Stability The economic stability as well as competitiveness of many major economies was adversely affected by the Asian economic crisis. In addition, as compared to local domestic economy, the developing Asian economies had to struggle with the fierce hike of interest rates during the first half of the 2000’s. The region has generally seen low interest rates in the years that followed the Asian economic crisis as evident by the SIBOR (Singapore Inter-Bank Offered Rate) which is the benchmark for interest rates in the region.
They started defaulting. When default rate increased because of this, banks realized that they have many homes to be auctioned but the buyers are going away from the market because of rise in interest rate. The process started falling and the banks lost huge amount of money in the process. Now since, securitization is a way by which banks had converted their homes loans into liquid assets, they had no funds left to pay for the securitized assets and they defaulted. Because most of the financial institutions have MBS or mortgage backed security in their portfolio, they started losing heavily on the investments and this propagated to everyone in the system.
One of this crisis are the ups and downs of the Economy, In the second half of 2009 there were a Heavy drop in the Global Economy that has taken over a whole new dimension with exacerbation the of financial crisis. Industrial countries have become a more significantly pronounced downward dynamics and the indicators point to a severe slowdown in the world economy. Other countries, saw the slowdown as a result of correction in macroeconomic imbalances. Financial sector led to deteriorating financing conditions to hinder the transmission of monetary policy impulses of private actors. In the coming months, industrial countries are expected to gain momentum from the economic downturn.
• The increase in debt to GDP ratio and the decrease in tax to190 million only 1.8 million people pay tax. Extensive corruption is the main reason in this case. • In International annual report, Pakistan is at 34th position among the most corrupt countries of the world • Energy crisis, including the erratic power supply, crippling inflation, growing security spending and low productive capacity have led to fiscal deficit which, in turn, increases foreign debt. Pakistan is not in a position to formulate an independent fiscal policy due to these external debts and its struggling economy is at the mercy of leading lenders like the IMF and World Bank. Exchange rates
In beginning of the summer in 1997, the economy market arise one incredible financial crisis, also called “Asian Contagion”. In that time arise series currency devaluations and some others factor that make it spread through many Asian market. In this time the first nation failed in currency market as Thailand. The crisis spread rapidly throughout South Asia and make the stock market declined even the revenue of import decrease (Investopedia, n.d.). The investor at that time is very skittish of all the emerging market to do the investment.
‘PH loses $20-B to smuggling each year’ March 5, 2013 at 18:19 Against Smuggling Chairman Ernesto Ordoñez noted smuggling worsened in the last MANILA, Philippines – The total value of smuggling in the Philippines amounts to $20 billion per year, according to former Finance Secretary Roberto de Ocampo. At the Arangkada Philippines Forum on Tuesday, February 26, De Ocampo said smuggling of various commodities such as petroleum, rice and fertilizers into the country is a major blow to government’s efforts to increase its revenues. “The value of smuggled commodities is estimated at almost $20 billion annually. This is a big hole in the drive for a better fiscal situation. BIR (Bureau of Internal Revenue) can’t do it alone,” De Ocampo said.