The following two years the NASDAQ index had fallen 4900 points to 1200 points. A 75% decrease in value. One of the main reasons for the burst was dot com companies not being able to make profit and going bankrupt. Dot com companies were often invested in even before investors enquired about the business plan. Irrational investors were so blind from the euphoria sweeping the nation from frequency of the dot com companies emerging.
In the mid of 2007, the real estate markets of U.S. started showing signs of weakening ("Top 10 Bankruptcies - TIME", 2016). At that time Lehman Brothers and the other investment banks came under huge scrutiny with respect to the value of their real estate assets and the liquidity of these assets too. The analysts and rating agencies stared demanding the investment banks to reduce their leverage. Two choices were available to the firms for reducing leverage, i.e. either to raise their equity or sell assets.
Upon the discovery, the stock price of the company reduced by 33% leading to a loss of over $6 billion by the investors (SEC, 2002). This meant that Waste Management Inc. had breached the principle of integrity and credibility as stipulated by the Institute of Management Accountant in the statement of Ethical Professional Practice. The Waste Management Inc. scandal was activated by a number of reasons that can be categorized as incentive factors, opportunity factors, and attitude factor. To start with, attitude factors included the need to meet predetermined earnings target through increased profit while pushing down the expenses. The chief officers realized that revenues were not increasing as fast as they were expecting.
European countries were unable to buy American products, a problem that was increased by the raising of tariffs on imports to new heights by American producers leading to worldwide trade coming to a halt when times were as a desperate as ever. European economies collapsed due to unemployment levels rising, products becoming overpriced when only a minority could afford the products, and deflation resulted when the economic system collapsed in on
Introduction: The financial crises of 2007-2008 and also knows as the Global Financial Crisis, is considered to have been the worst financial crisis since the Great Depression back in the 1930’s. The Global Financial Crisis affected a lot of large companies, financial institutions, banks, central banks, insurers, and many more entities around the world and many of these entities declared bankruptcy and went out of business while some where absorbed by other financial institutions, some also converted into financial holding companies. The main cause of the Global Financial Crisis was the United States housing bubble, which caused the value of securities tied to U.S real state pricing to fall down which damaged financial institutions globally.
The Great Crash generally refers to the stock market crash (in America - Wall Street) on 29 October, 1929. It started on Thursday, 23 October when just before the 3:00 pm bell rang, the stock prices instantly fell. For the following week stocks fell lower and faster and changed hands so fast, the machines that kept track of these stocks seemed unable to cope up with the activity. All along while President Herbert Hoover reassured the people of America that the nation was “on a sound and prosperous basis”, more panic spread and because the uncertainty and risk was rising, people wanted their money back. In all this frenzy the United States Securities Regulation agencies could have shut down the market but they feared that would only spread more fear and could have led to a violent display of the emotions of the public.
The Suez Crisis brought limits to Britain’s political actions, when, the U.S put economic pressure on Britain and France, the British and French troops withdrew from Egypt after only a few days. Which shows that Britain can no longer conduct a military intervention without American backing. a lesson which the British Government took very seriously after 1956.In January 1957, Sir Anthony Eden, the British prime minister resigned. his political credibility severely damaged. Guy Mollet, the French prime minister, survived longer despite fierce criticism, but his government collapsed in June 1957 over the taxation he imposed to pay for the Algerian
CFO, Andrew Fastow not only lead Englads, BOD & audit committee on high risk accounting practices but also pressured Anderson to ignore the issues. Enrons shareholders filed a 40b $ law suit on to the company’s stock price which achieved a high of $90.75 but plommitted to less than $1 by the end of November, 2001. On December 2, 2001, Enron
The banking framework in India has assumed a critical part in Indian economy. It was instrumental in social and monetary charges since nationalization of real banks in 1969. System of branches expanded from 8262 in 1969 to 67118 in June 2004, diminishing the populace secured per branch of commercial bank from 66,000 to 16,000. At present 290 banks are working in the nation, comprising of 27 open part banks, 30 private division banks and 32 outside banks, 196 local banks and 5 non-booked neighborhood. Private area banks have share of 8.5 percent in branch connect with 5,737 branches of which 50 percent are in urban and metro urban communities.
Malaysia ringgit (RM) reached a low point of 4.88 on 7 January 1998.After a short time, it appeared possible that the 5.00 level would be breached. This drastic drop was caused by speculation, because the speculators sold the ringgit “short”. The speculator sold the Malaysia ringgit (RM) in the forward market at the current exchange rate with a view to turn over the ringgit at a date in future. Another situation is the speculator borrowed Malaysia ringgit (RM) in order to sell it now and hold US dollars. These two actions contributed to the weakening of the Malaysia ringgit (RM) as the increase of demand for the US dollar.