CAUSES OF GLOBAL FINANCIAL SLOWDOWN

THE WORST-EVER financial crisis faced by the United States is the great depression that ravaged the world economy in 1930 which started with the stock market crash at the end of 1929.
ARE COMPARISONS WITH THE GREAT DEPRESSION JUSTIFIED?
The real comparison now is with the financial crisis that preceded the Great Depression, centred on the stock market collapse of 1929. At that time inspite of a 36% fall in the share index, all the Wall Street merchant banks made it throughthe Great Depression.
This time, all five Wall Street behemoths have either -
1. Failed (Lehman Brothers),
2. Been taken over at bargain-basement prices (Bear Stearns, Merrill Lynch),
3. Have sought to change their status to that of commercial banks before they failed (Morgan Stanley and Goldman Sachs).
And the expected economic downturn has only begun. So the financial crisis is much worse than in 1929.
The global financial crisis of 2008–2009 began in July 2007 when a loss of confidence by investors in the value of securitized mortgages in the United States resulted in a liquidity crisis that prompted a substantial injection of capital into financial markets by the United States Federal Reserve, Bank of England and the European Central Bank.
With the financial meltdown continuing unabated, US has already seen the collapse of 16 banks in the last few months -- which is more than one-fourth the total number of failures in the last nine years. With ten bank collapses in February, a total of 68 banks have failed since 2000 in the US. Moreover, 16 bank failures this year is more than half of the total collapses in 2008. Last year, a whopping 25 banks went belly up, mainly after the financial crisis turned severe with the bankruptcy

WHAT CAUSED THE CRISIS?
The immediate cause was the collapse in American house prices, which had doubled between January 2000 and August 2006, and have since fallen by 20%. More than 1% of American households have defaulted on their mortgages.
Up to a quarter of mortgages were "subprime” and financed by the issuing of "residential mortgage-backed securities" rather than by traditional bank loans. The bonds were then sold to investors, pension funds and councils all over the world.
As the banks of US provided loans to the individuals without undergoing much investigation they were forced to undergo such a problem. Large number of people defaulted their mortgages and when the banks wanted to sell out these mortgages they didn’t find such potential buyers as a result they not only lost their anticipated interest but also much of their principal. Subsequently this thing increased and caused what we all know as global meltdown.
Impact of global economic meltdown on India:

What I think India is not greatly affected by the economic slowdown because the banking structure which India has does not provide space for such a downturn. There is no doubt that if the global economies suffer then India is also bound to suffer. But the very fact that India is a domestic consumption-and-investment-driven market where contribution of exports to the growth is not as big goes in her favor to tackle this crisis in much better way than few of the other emerging economies. The inflation rate has also reached in some what comfortable zone and thus economists believe that the government has more room now to focus on the growth rate of our economy.

The stock market crash in India is nothing but the market correction which the large investors are creating to increase their profits at the cost of small investors. The Indian employers are trying to increase the hidden reserves by taking the advantage of foreign crash. I am not saying that the Indian firms are not affected by the economic slowdown but it’s not affected to such an extent as it seems to be.
In India a body with the name ICRA (Investment Information and Credit Rating Agency of India) provides individual credit ratings as a result of which the credit worthiness of every individual can be easily measured. This helps the Indian banks to provide loans to the individuals and avoid malinvestment.

THE RAIL BUDGET – 2009

On 3rd July 2009, when Ms Mamta Banerjee the currrent rail minister of our country entered the parliament to present the rail budget for the year 2009, the entire nation holded their hands to see whether the she gets something new and promising for the country. People were satisfied to some extent by the steps taken by Mr. Lalu Prasad yadav to convert a continuous loss making organisation into a profit making one. Every one was trying to present their own budgets by giving there expert advice but ultimately the ball was in her court. She gave hints by saying before the budget "It will be a common man's budget". And as usual Mamta Banerjee gave something which no one ever expected.

It was humble “jhola” rather than the traditional “leather bag” which she preffered to carry budget paper in the parliament. The patent cloth bag she usually carries hung from her shoulders as she arrived in Parliament to present the Railway Budget 2009-10. Also, the car in which she came was her personal Maruti Zen rather than the official vehicle she has chosen not to take from the government. Before entering into the house she gave a statement “Its Janta Budget” and it she gave what she said.

This budget was mostly in and around the common people and the problems they undergo in their day to day life. It can be easily seen that the entire focus was the “common man”. She stated at the very beginning of her speech that the main focus of her budget would be passenger aminities, cleanliness, quality of railway catering, safety & security, and punctuality. The introduction of non-stop two point trains (stated as “DURONTO” was one of the aggenda which no one even thought for. She declaired to develop 50 stations to world class stations. There was also lots of new creative arangements like Adarsh stations, Mushkil Asan, Izzat, ladies special during peak hours in kolkata, chennai and Delhi., Yuva trains, etc. Her focus can also be seen regarding security of the passengers as she had something for this also in her budget like woman security guards, Doctors in long distance trains, etc. Beside all this large number of new schemes and new trains have been launched. Overall the budget was satisfactory as it was more a consumer oriented budget.

Now the most important question which arises is that will she impliment all the undertakings in the similar fashion as she had announced it? Will she be able to give the same profits which was given by privious minister? This are the questions which will be resolved as the time passes. It should not act as a candy shown to a small kid and then taken away. The revenue chart will definitely show some fluctuations as there is lot to be done.

On a concluding note the budget covered every person and will definitely act as a new milestone for the country in the perioud of global downturn.

THE MOST FEARFUL MOMENT OF MY LIFE. . . . . .

It was 21st may, 8:30am when we (me and 2 of my frnds) were moving towards the college as had our 2nd semister exams going. we were sitting on the last seats of the bus and with no difference from the other days we were discussing the answer and having a great time. everything was going gud and there were around 40 people in the bus but suddenly after 15 mins near dharamtala crossing another bus of same root with no care tried to take over our bus. since both the buses were of the same root with an intention of getting more passengers they drived rashly and on the main crossing both the buses took turn in opposite direction and while taking over from left side a severe accident between the two buses took place. the intensity was so hard that the thick glass behind us was no more in 1 peice and our eyes with full of dust. It was a 15 secounds break when everyone was in a state of unconciousness. But suddenly we heard a hard sound from the front seat shouting with a great pain in voice "kaiu aamake bachao re " (somebody help me ) we were afraid. We jumped from our seats to know what exactly happened. But we did not succeeded in our task. Suddenly we saw that everyone is getting down from the bus in hurry and the persons seating in the front seats started shouting fearfully. . Since we were seating in the very last seat we got down at last. But when i followed that paining voice i saw the most fearfull scene of my entire life. The right hand of the person who was crying with pain lost it completely and the entire place was full with blood. He was shouting loud but there was non to help him out. Even no body put any effort to call the police or ambulance. Suddenly a girl whose age was around 21 started shouting "somebody help him , call the ambulance" but as usual nobody responded. Everybody was watching as if it was a movie show going on. We (me and my friends) after landing from the bus ran towards the cop who was standing on the crossing. A small conversation which we had with the cop truly reflects the real scenareo of the police department
Me- "A accident took place and the person has lost his hand. please come with us"
cop- "where?"
Me- " near by place (pointing towards the spot) please come fast"
cop- "oh its not my line of duty please go to that cop who is standing on the opposite side of the road"

I was shocked to hear this and simply dissapointed. The cop was looking for his place of duty when the person was in complete pain. Even if it was not his place of duty he could have contacted the another cop who was on the opposite crossing through his walky- talky because the crossing was a long one and by the time we would have reached there he could have lost his life. But we had no option than to move towards the other cop as per his direction. We reached the place where 3 policeman were standing we approached them in the similar fashion and after enquiring few things two of the came with us. They reached the spot and took the person with them in a cab. It was more shocking to see that all the persons who were in the bus were still standing over there but none of the took any step. Atleast the girl has more curtosy than the people standing over there. It was her who motivated us to reach the cops.
It wont be wrong to say after this incident that the YOUTHS of our country has more courtesy than the old people.

After that the girl (who took the very first step to ask for help) asked us " u all have college naaa.??"we replied positively. Than she asked us to leave as we might be late. We left the spot as we did whatever we can. We reached our college and gave the exam although the only thing which we were thinking that time was about that person.

Later on we came to know that he was taken to SSKM hospital where doctor informed that he is out of danger but they had to cut his hand as it is bleeding badly.

That was the most fearful moment of my life which i will pray that no one else might witness in his entire life. God bless that person and his family.

IS CENSORSHIP ON MEDIA A RIGHT DECISION??

Media which is one of the most important parts of our society will soon become a puppet in the hands of government if the censorship bill on media which government is trying to pass comes into existence. According to this bill no news channels will be having a complete freedom to regulate the news which is to be telecasted regularly. The government can restrict any news to be on air. Any cops (not necessarily to be of specific class) can enter the news room and stop the telecast of any news. This means that government will decide which news is good for the society or I should rather say will be good for the governments vote bank. It is said by Mahatma Gandhi that “bura mat dekho, bura mat bolo, bura mat suno” (don’t see bad, don’t say bad and don’t hear bad), the media represents that very truth of the society but after this bill the media will say, hear and see what government will decide. It is somewhat similar to the “emergency” which was laid down at the time of Indra Gandhi. If this bill gets a green signal in the parliament it will be undoubtedly a black day in the history of India. As it will stop in raising there own views.

All the media persons around the country have strongly opposed this bill and so will I because this bill has nothing right in it. This kind of bill is against that legislature of the country which says that every person have freedom of speech.

(For the time being Prime Minister Dr. Manmohan Singh has put a stay on this bill. He further added that he will have a talk with the media representative before taking any decision.)

NO SATYA (TRUTH) BY SATYAM COMPUTERS

Satyam Computer Services Limited, one of the India’s largest IT companies shocked his investors and other interested persons when his founder-chairman Ramalinga Raju admitted one of the India’s biggest corporate frauds. He admitted that the accounts of the company was been manipulated and shows a funds of 1.5 billion US dollars (70 billion Indian rupees) which was never in existence.


He disclosed details of the fraud in a resignation letter to the company’s board of directors forwarded to stock exchange authorities as well as the regulator of the country’s capital markets, the Securities and Exchange Board of India (SEBI). Soon after his disclosure the share prices of Satyam came down by 78%. He said, "It was like riding a tiger, not knowing how to get off without being eaten,"


The accounts were not manipulated in a single day. It was continued from the past several years. Satyam computers balance sheet and books of accounts were audited by one of the worlds most reputed firm of auditors “price water house coopers”.


Satyam computers which is the fourth largest IT Company of India and which holds a good share in the portfolio of majority of mutual funds presented an unexpected truth. Satyam's stock is listed on the New York Stock Exchange; it had business operations in 66 countries and counted 185 companies in the Fortune 500 list as its clients and customers.


The downfall of Satyam began from December itself when the World Bank barred Satyam computers to offer his services for the next eight years on the charge of bribery and corruption. Raju was aware that the hidden truth of the company can be disclosed any time thus he made an item to acquire two companies held by his sons – Maytas Properties and Maytas Infrastructure for 1.6 billion dollar. So that he can bridge the gap. But his plan failed when the investors opposed it on the charge of misuse of company funds.


With that Raju felt that he was in a broken boat and there was no way out. He was soon sacked by the government. As the companies act 1956 has a provision regarding “lifting & piercing up of corporate veil” which contains a clause that although a company has a separate legal existence no one can take shelter under that flaw and if any one will be found to provide illegitimate benefit to any person the government can break the wall of corporate veil.


The government created a new board of Satyam computers in order to see the benefits of 53000 workers working under the company. The board is also in search of a new auditing firm to look after the accounts of the company with retrospective effect.

MENTAL TERROR Vs PHYSICAL TERROR

The word terror has come from a Latin word which means “to frighten”. But at present its meaning has not been confined till frightening but has been used in much broader sence which can be taken as coercion. ‘Terror’ it’s not just a word for the whole world but has become a scary dream which blow everyone’s mind. Everyday when we walk from our home we are not sure that whether we will return back home or somewhere a bullet is waiting for us. But is this really what terrorism is ...??? The damage which the terrorist attack causes is not limited till killing of life and damaging property, but it also effects the self-confidence of peoples not only those who are effected to it but also those who are not at all effected by it. My question is that whether it is a physical fear or a fear in peoples mind. Every year like holy, diwali, Christmas, etc. we tend to face a big terrorist attack also. The only difference is that all other festivals brings joy in our faces while a terrorist attack wipe those joy off. The words which we come across in our home during that time is “kalyug aa gaya hai sambhal ke bahar nikla karo”. This terrorist attack not only disruppts the normal life of people facing it but it also creates a fear in our mind due to which we tend to react more aggressively. There is a principle popularly known as 10/90 principle according to it the effect of every activity in our life is 10% automatic and 90 % as how we react to it. Similarly after every terrorist activities we react so hard that a fear sets his palace in our mind.

Last week I was watching a movie “Wednesday” from which I got the idea of writing this blog. This movie has showed what a normal person feel about terrorism and how much he is frustated from it. Although many of us might not have heard about this movie because its a tradition that until a movie has an item number or any big star shaking his hibs doesnot gain any recognition. I will not describe the story but will request everyone to watch it.

We all know that neither this terrorist nor the terrorism was developed in a single day nor it can be destroyed in a single day. But what we can do is that we can stand against this terrorism with full unity. After every terrorist attack we see big banners showing sympathy but just after few days we see same banners covering the story of a latest movie. The only thing which we can do to protest against this terrorism is that we can remove the terror from our mind and walk out with same confidence that we use to do. This passes a message to the terrorist that by doing all this stuff they can never screw our normal life which their sole objective. The objective of any terrorist attack is not to kill people or destroy man made structures what they intend to do is to attack the moral and confidence of people. Thus our step should be towards such activities.