Credit Crisis: Is There an End in Sight?

Credit Crisis: Credit Crisis: Is There An End In Sight?Is There An End In Sight?

What actually happened?What actually happened?

Fed rate drops to 1%

Rising home prices

Finance industry investing heavily in real estate

Spend like there is no tomorrow!

Rising U.S. debts!

Rest of World increase IOUs

Subprime borrowers default!

U.S. housing market bursts

1st wave of mortgage –related losses

Crisis in large global banks

Wall St. down, bankruptcies, credit writedowns of over $500 bn

Turmoil in world markets!

What’s the impact of this?What’s the impact of this?

Escalating credit loss: $1.4 - 2 trillionCredit writedowns of over $500 billionHeavy job losses from the financial crisisCapital raising of over $350 billionThere is more to happen..Governments

◦nationalizing banks◦guaranteeing bank deposits◦raising emergency funds◦slashing interest rates◦planning bailouts

Who has been affected?Who has been affected?

You thought only homeowners, bankers and brokers? No.

Even billionaires,Even small businesses,Even consumers…

There is no free credit anymore!

Credit Crisis: The AmericasCredit Crisis: The Americas

Canada:reduced interest rates and increasing liquidity

Mexico: falling Peso and dwindling economy

Brazil: Heavy credits, but stabilizing and recouping

U.S.: ???still working out financial bail-outs; more bank failures to come

Argentina: Heavy job losses, higher import tariffs and weaker Peso

“Borrow indefinitely: Only in America”“Borrow indefinitely: Only in America”

Some are most affected.Some are most affected.

Europe - European banks have lost more money than American banks due to investments in the U.S. mortgage market. 

Government stepping in to bail out banks from ‘going under’ in Denmark and U.K.

Threat of recession in Irish Republic and Spain

France, Germany, Italy and Portugal follow suit…

Iceland is all but officially bankrupt

Some are indirectly affectedSome are indirectly affected

Some are unaffected..Some are unaffected..

Australia, Malaysia, New Zealand, Singapore, South Korea and the Middle East have protected foreign currency deposits.

Hence a promising economy…

BUT, the crisis is truly GLOBAL!BUT, the crisis is truly GLOBAL!

Ireland: First Eurozone country to slide into recession

Poland: Part of Eurozone,but has a stable banking sector

Russia: Fast growing economy with large foreign reserves

Singapore: Prosperous, government guarantee for deposits till 2010

China: ???Strained with economic surplus and counterfeit goods

India: Economic slowdown with high inflation and poverty

France: Sluggish economy heading for recession

Hungary: -ve credit raing, heavy debts, huge current account deficit

Is there an end in sight?Is there an end in sight?

It is too early to tell.

But, there is already a RED ALERT!Oil trading at $95.71 a barrel!The global economy will weaken further..

The end of American economic dominance and the birth of a new world order..

So, who will be the next superpower?Clue: Asian money is actually bailing out

the western banks!