Anatomy of global crisis

GLOBAL TRADE DOMESTIC TRADE GROWTH FACTORS

GLOBAL CRISIS
REAL ESTATE DOT COM BUBBLES STOCK MARKET CREDIT

 GLOBAL INTEGRATION US MARKET MELTDOWN EUROPE MARKET MELTDOWN

 WORLD GROSS PRODUCT DECLINE GLOBAL OUTPUT FALLING BY 0.4% DROP OF DOMESTIC GROWTH DROP IN PER CAPITA INCOME IN 2007

 MILLENNIUM DVELOPEMENT GOALS DECLINE AS PER FOOD AND AGRICULTRAL ORGANISATION 36 COUNTRIES IN CRITICAL CONDITIONS

 OVER POPULATIONS WORSENING PLOTICAL STRIFE WORSENING ECONOMIC CONDITIONS

 APROX 126 MILLION PEOPLE MAY HAVE FALLEN BELOW 1$ PER DAY POVERTY LANE INCREASE IN FOOD PRICE

 SOUTH ASIA AND SOUTH AFRICA VULNERABLE EXPORT GROWTH FALLING IN DEVELOPING COUNTRIES WEAK BOP

 CHANGE IN UNEMPLOYMENT COST OF EXTERNAL BOROWINGS PRIVATE CAPITAL INFLOW DECLINES

CAUSES IN US
BANKS FINACIAL INSTITUTIONS LIQUIDITY CRUNCH

 HOUSING VALUATION REAL ESTATE VALUATION OVER SPENDING

 INDUSTRIAL LOANS CREDIT DEFAULT AUTO LOANS

 DECLINE IN INTEREST RATES GOVERNENCE OF THE MICRO ECONOMIC SYTEMS FAILURE INDISCRIMINATE CREDIT PURCHASE

 LOAN REPAYMENTS COLLAPSE OF BANKS

 GREAT FINANCIAL DEPRESSION OF 1933 INITIATED THE GLASS STEAGALL ACT (GSA) IN 1933 TO BRING BACK AMREICAN BANK IN ACTION WORKED AS FIRE WALL BETWEEN GOVERNMENT AND BANKS

 1970 DESTABLISATION OF US FINANCIAL SECTOR 1999 ELIMINATED PROHIBITIONS IN BANKING SECTORS

MORTGGAGE BASED SECURITIES

RISK FACTORS CREDIT RISK ASSET PRICE RISK LIQUIDITY RISK COUNTERPARTY RISK

HOUSING BOOM AND BURST

SPECULATIVE BORROWERS 3 TYPES HEDGE BORROWERS-DEBT PAYMENTS FROM OTHER CASH FLOW INVESTMENTS SPECULATIVE BORROWER- BELIEVE THAT HE CAN MANGE TO PAY THE INTEREST AND PRINCIPAL ROUTED TO OTHER INVESTMENTS

 PONZI BORROWERS-WIAT FOR APPRECIATION OF VALUES AND DISPOSE AND PAY BACK

 UNSOLD HOME DEFAULT LOANS CREDIT CARDS(12 TO 15 CARDS)

WHY US CRISIS BECOME A GLOBAL CRISIS

INTERGRATED BUSINESS DEPENDENCY ON US MARKET CAPITAL FLOW TRADE FLOW INTERBANK LENDING EXTERNAL BORROWINGS

 DROP IN PRIVATE FUNDING /BORROWINGS REDUCTION IN EQUITY INFLOW US WORLDs LARGEST IMPORTER 17% OF WORLDs IMPORT BY US

CREDIT BASED ECONOMY AND IMPACT

BOOM IN INDIA TRADE IN CHINA

CHAPTER 2

GLOBAL MELTDOWN EAST WEST COMPARISION

 ECONOMY DEVELOPED BS OF GLOBALISATION LIBERALISATION INNOVATIONS

US SHARE
POSITIVE SIDE GOOD MARKET ALLOWED LARGE IMPORT INVESTMENT IN MANY SECTORS

HOW US CONTRIBUTES IN CRISIS

FINANCIAL INNOVATIONS ALLOWING FREEDOM/LIBERILAISED LAON RELAXING CREDIT NORMS

 FERA FEMA INVESTMENT BANKINGS NON BANKING FINANCIAL INSTITUTIONS

FINACIAL INNOVATIONS
INNOVATION PROCESS LIKE ADVANCE INFORMATION TEHNOLOGY TELECOMMUNICATION ELECTRONIC FUND TRNSFER

 ONE LINE TRADING INTERNET BANKING MOBILE BANKING

 EXTERNAL COMMERCIAL BOROWINGS

INNOVATIONS IN PRODUCTS
SERVICES INNOVATIONS FINACIAL SECTORS BANKING SECTORS PRODCUT SECTORS

CAUSES OF CRISIS
DEREGULATIONS NORMS RELAXASATION BETWEEN COMMERCIAL BANKING AND INVESTMENT BANKINGS INSOLVENCY IN BANKING

 JP MORGANS TAKING OVER BEAR STEARNS AMERICAN BANK TAKING OVER MERRILL LYNCH RESULTED CRASH IN STOCK MARKET

 CURENCY CRISIS BANKING CRISIS REGULATORY DEFAULT

 NEGATIVE WEALTH EFFECT CUSTOMER CONFIDENCE WAS DESTROYED FINACIAL INSTITIUIONS AND COMPANIES IN THE FORM OF INVESTMENT BANKS LENDING LIKE SHADOW BANKING

 INNOVATION OF NEW FINANCIAL INSTRUMENT WITH CREDIT CHECK AND IMPLICATIONS INVESTMENT BANKS MUTUAL UNDERWRITINGS-DEBTS,DERIVATIVES INSURANCE BETWEEN INVESTMENT BANKS

 LOW MARGIN AND HIGH VOLUME CONCEPT IN FINANCIAL SECTOR INVESTMENT AND BANKING CREDIT EXPANSION WITHOUT ADEQUATE CAPITAL BASE LOAN DEFAULTERS

 RELAXING IN LOAN NORMS OVER ESTIMATION OF LOAN HIGH INTERST FOR ASHORT TERM LOAN(OPEN CATOGORY)

AFTERMATH OF FINACIAL CRISIS

SLOWER GOBAL GROWTH G7 COUNTRIES EXPECTATION OF GROWTH FROM 5 % AND IMF EXPECTATION OF 3% IN REAL TERMS IT WAS JUST 9% IN JULLY2008 INDIA FAR LESS JOLT OR IMPACT

 INDIAN GROWTH CONSISTENTLY 9% FOR LAST 3 YEARS SAVED INDIA CURENT YEAR WE ACHIEVE 7.9% GROWTH OF EMPLOYEMENT SAVED INDIA DEPTH OF SLOW DOWN HIGH IN ENERGY PRICE TRIGGED MORE CRISIS

FINANCIAL CHALLENGES FOR GOVERNMENTS RAISING FUNDS NEW PROJECTS INCOMPLETE PROJECTS TIME DELAY IN CONTRACTS PRICE ESCALATIONS

 RISING STANDARD OF LIVING RDUCTION IN SALRY/WAGES UNEMPLOYEMENT IN SOME SECTORS

 REDUCED WORLD TRADE VOLUME RISING INCOME INSECURITY DISPROPORTIONATE IMPACT ON LOW INCOME-GROUPS

 REDUCTION IN RETIREMENT AND SAVINGS DROPPED HIGHER COMMODITY PRICES HIGHER OIL PRICES

IMPACT OF INDIAN ECONOMY

LEAST AFFECTED SOME NEGATIVE EFFECTS CAPITAL INFLOW LOW EXTERNAL COMMERCIAL BOROWINGS

 FDI FOREIGN INSTITUTIONAL INVESTMENTS STOCK MARKET COLLAPSE IN INDIA RUPEE LOSING STEADILY AGAINST US $

 BOP DROP IN EXPORTS REDUCTION IN INDUSTRIAL GROWTH DROP IN AGRICULTURAL GROWTH

 REAL ESTATE CRISIS BANKING LOSES DEFAULT IN LOAN REPAYMENTS IT/SERVICES NEGATIVE GROWTH

 SLIDING FEW INDUSTRY SPECULATIONS IN CRISIS TOO MUCH DEPENDENCY ON FDI

CHAPTER 3

GLOBAL ECONOMIC RECESSION AND INDIAN ECONOMY

GLOBAL CRISIS
COLLAPSE OF LEHMAN BROTHERS AND COLLASPE IN WALL STREET ICONS GROWING RECESSION SLARE SCALE DEFAULT IN HOUSING MARKETS RISKY LOANS LENDINGS-CAUSED HEAVILY

 US IMPORTS DECLINED UNREGULATED ENVIRONMENT MORTAGAGE LENDINGS

 LOW CONFIDENCE OF CUSTOMERS DECREASE IN PRODUCTIONS SLOW GROWTH IN INTERNATIONAL TRADE

 STRUCTURAL FLAWS CDO-COLLATERALIZED DEBT OBLIGATIONS SHADOW BANKING SYSTEMS HEDGING PRIVATE EQUITY FUNDS SPECIAL INVESTMENT VEHICLE

 LOST LIQUIDITY IN MANY FINANCIAL PRODUCTS

INDIAN SLOW DOWN

STRUCTRUAL FAILURE LOW GDP GROWTH LOW PRIVATE INVESTMENT LOW EXPORTS REDUCTION IN FDI

INFRASTRUCTRE- GAP POLICY DELAY REDUCTION IN FOREIGN EXCHANGE HIGH INFLATIONS DROP IN GDP LIQUDITY CRISIS

+ SIDE OR HOW INDIA MANGED

MINIMUM EMPLOYMENT SCHEME ROPING PRIVATE SECTORS PRIVATE AND PUBLIC INVESTMENT

 LARGE SCALE LIBERLISATION NORMS IN RELAXING FDI NEW PRIVATE INVESTMENT/INSTRUMENTS

DEVELOPMNENTS
HIGWAY PROJECTS AIRPORTS SEAPORTS INFRA PROJECTS