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.
Everybody lived life like they were supposed to. Not a lot when down, until on October 29, 1929 the Stock Market crashed causing the Great Depression. It caused a panis all around the world. This cause almost 200,000 people in America to lose their jobs. The years out of the initial crash there was 30 million citizens out of jobs or income.
The Great Railroad Strike of 1877 The Great Railroad Strike of 1877 began on July 7, 1877 in Martinsburg, West Virginia. Workers became angry when the company had reduced their wages for the second time within the previous year. “The strikers refused to let the trains run until the most recent pay cut was returned to the employees” (“Great Railroad Strike of 1877”). The decrease in wages was a result of the economy’s recent downfall. According to Joseph Adamczyk, “That year the country was in the fourth year of a prolonged economic depression after the panic of 1873” (Adamczyk).
The bankruptcy lead to criminal charges against Enron’s top executives. In 1987, two years after the company was established, Enron experienced its first crisis where they were on the brink of bankruptcy due to traders making bets on the oil markets. Also Louis Borget, one of the traders was also caught shuffling money into off shore accounts Kenneth Lay, the CEO, was informed by auditors about the wrong doings that was going on but he encouraged them to keep bringing in the money. The traders were fired after gambling away almost all of Enron’s money. Jeffrey Skilling was brought in by Lay under the conditions that Market
On October 24 of 1929, otherwise known as Black Thursday, a record 12,894,650 shares were traded. Investment companies went into scramble as they tried to balance the market. However, the next week, on “Black Tuesday”, the stock market had officially collapsed. By then, around 16,410,030 shares were traded in the New York Stock Exchange. Billions of dollars were lost and many citizens jobs were affected from the collapse.
Now with booming economies both made a dramatic change. China opened up its economy and took the steps necessary before India. This has caused China to be a step ahead of India by thirteen years in the development as a nation and this is still seen today. China was destroyed as a nation by communism in a thirty-year period with his “Great Leap Forward” program. Mao caused a thirty-year famine because of the decrease in agriculture when farmers were forced to give up land.
Wages stagnated and consumers reined in spending. Once deflation set in consumers started to expect prices to fall and they delayed spending for as long as possible in order to save money. That perpetuated the problem and continued the cycle. Japan’s ageing population is now making the problem even worse. By 2020 the country will be losing around 600,000 people a year.
Issues: Internal Issues - Yahoo! in 2008 had rejected Microsoft’s attempt to acquire its internet-search business. - The company encountered 78 percent profit decline in 2009, Because of this decline they reacted by cut down 5 percent of workforce. - Yahoo!’s online advertising business deteriorating due to fell in 13 percent of revenue in 2009. - Aggressive cost cutting increase 7 percent of Yahoo!’s profit but they layoff another 700 workforces.
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.
The rupiah suddenly came under severe attack in August. On 14 August 1997, the managed floating exchange regime was replaced by a free-floating exchange rate arrangement. The rupiah dropped further. The IMF came forward with a rescue package of $23 billion, but the rupiah was sinking further amid fears over corporate debts, massive selling of rupiah, and strong demand for dollars. The rupiah and the Jakarta Stock Exchange touched a historic low in