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An insight into the Credit Crunch in America, and its fallout in the rest of the world.
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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!