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Showing posts with label financial crisis. Show all posts
Showing posts with label financial crisis. Show all posts

January 13, 2016

why global stock markets are in the panic mode on chinese financial meltdown fears

"chinese financial meltdown fears"

"chinese debt levels is 282% of its GDP"

At 28billion USD ,China's debt levels have surged 

As a proportion of GDP chinese debt accelerated moderately from the turn of the century. In 2007, it was 121% of GDP. Today it's more than twice that — 282%

After an indifferent 2015, Global markets started off terribly, with china sending shock waves across the world  and setting global stock markets into a panic mode .And many believe that china  could get even worse and lead the world into another financial crisis. George Soros has already "predicted that china will set up a repeat of 2008. And if that was not enough this recent chart from  HSBC warns that   China could be about to go into full-blown "crisis" mode.

China is about to get caught up in a death spiral of falling demand and mountains of debt  which will mean a meltdown and a disaster for the rest of the world. The Caixin Purchasing Managers Index for manufacturing, which measures economic activity, came in at 48.2. Anything below 50 signals contraction and last week's  reading marks the 10th straight month China's industry has shrunk.

These charts from Businessinsider shows  3 reasons why global markets are panicking .China's total debt is now about $28 trillion, larger than that of the United States or Germany,

July 11, 2015

Greece set to join a small and unenviable club of 3 defaulter nations

Greece set to join the developing nations club of zimbabwe , Somalia and and sudan

With Greece tottering towards a default in payments  and on the brink of financial collapse after years of EU and IMF bailouts totalling somewhere in the region of €240 million. It has failed to repay €1.5 billion to the IMF on time and it has now become the very first European Union country in history to fail to repay such a loan. 

 As it is Greece has failed to repay €1.5 billion to the IMF on time and it has now become the very first European Union country in history to fail to repay such a loan. However Greecel now  does have company as  it joins rather unenviable ,unglamorous club containing Zimbabwe, Somalia and Sudan. 
By the end of this year, it needs to repay SDR 4.4 billion ($6.2 billion) and SDR 18.5 billion ($26 billion) over the course of the next 10 years.

July 2, 2015

infographic on greece debt : who lent the country and how much:

"who owns money to greece and by how much"

"list of lenders whom greece does not wish to pay"

"list of lenders whom greece does not wish to pay"
As the greece tragedy unfolds. This infographic  goes behind the scenes to shows  how much greece owned and to whom it owes the money to. The country is 323 billion euros in debt ($352.7 billion) to the International Monetary Fund (IMF), European Central Bank (ECB), and other creditors – more than 175% of its GDP – for an aid package it received during the 2008-2009 global financial crisis. Greece was supposed to have made a $1.8 billion payment by midnight (5 p.m. ET) June 30. Next month, it owes another $3.9 billion.

If debt to GDP ratio measures a country's output and is a symbol of the creditworthiness,Greece has a 174.9% debt-to-GDP ratio. Its Eurozone brethren Italy, Portugal, and Ireland come in high as well, at 132.1%, 129%, and 123.3% respectively.But then Greece refused to pits creditors nor wishes to undertake any austerity measures as it has been elected on a populist platform of doing away with the harsh measured which the earlier government tried to do "

May 14, 2011

Indian Reverse Outsourcing :Infographic

Chart: Corp-Corp_Returning to India

Corp-Corp conducted a survey among Indian IT professionals in the US during first week of March-2011 shows more than half of the Indian IT brainpower is planning to return to India. More than 1000 professionals responded to this survey.
Corp-Corp_Returning to India
Powered By: iCharts | create, share, and embed interactive charts online

In April, Corp-Corp conducted a survey among 1,000 Indian IT professionals. The results show more than half of the Indian IT professionals are planning to return to India.
The results show that the much  vaunted ..or the much maligned ( depending on  who and what your  cause is ) approx 50.1% of the respondents said that they will be returning to India soon. 6.4% of the IT professionals have already returned to India while 43% do not plan to return.
They cite that the primary reason (51%) for their return is rejoin with their family members in India. 26% feel that better opportunities are in India. Surprisingly, only 3% says they are returning due to job loss.
One Point to Ponder is an obvious fact .. Why do Indians not excel in their Home Country ... while they  seem to thrive as an hard working, close knit  community overseas. Is it lack of " the right education system ? lack of opportunity ,( too many people to compete with ) lack of ' a  Rewarding and performance driven culture ? or  " is it due to the fact that in India" You  are not encouraged to ask too many questions  .. its an culture that " does not encourage  you to be a "maverick" .. or is it just : a combination of  all . I would love to  know..

February 25, 2011

The Making of the Financial Crisis : Video Infographic

This infographic, The Crisis of Credit Visualized, has been around for a while now, and it very cleverly explains how the financial crisis happen. Watch the video from Jonathan Jarvis, an interaction and media designer, that is split into two for YouTube.

The  Financial Crisis  was triggered by a liquidity shortfall in the United States banking system, and has resulted in the collapse of large financial institutions, the bailout of banks by national governments, and downturns in stock markets around the world. In many areas, the housing market has also suffered, resulting in numerous evictions, foreclosures and prolonged vacancies. It contributed to the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity

The  collapse of the US sub-prime mortgage market and the reversal of the housing boom in other industrialized economies have had a ripple effect around the world. Furthermore, other weaknesses in the global financial system have surfaced. Some financial products and instruments have become so complex and twisted, that as things start to unravel, trust in the whole system started to fail.

Financial Crisis Vs Bailout Plan : Visual Guide

Infographic on financial Crisis source Mint

The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007 and into 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.

Almost overnight, the talking heads went from perpetuating the euphoria of investors to rushing to pronounce the economy dead. Last year, when lenders started dropping like flies as foreclosures rose and margins were called, the problems of Wall Street became more and more apparent, and lending guidelines were tightened to the point that many individuals were stuck in their time-bomb loans, and thus began a vicious cycle. But what led to this? Here is a visual guide to help you understand the events leading up to the bailout.

March 18, 2008

JP Morgan Chase Buys Bears Stearns Wreckage

The year 2008 is indeed been the worst time globally to invest in stockmarkets. It also seems the worst times for those who have invested heavily in stocks for the last few years.

Troubles have poured in from one end to another with wild volatility in share prices all across the world,the rising world oil prices,the sub prime crisis and fears of recession in the United States.

Rounding it all off was the collapse of an 85 year old well know financial bank Bear Stearns (BSC). By Mar. 17, as JPMorgan Chase (JPM) bought up the wreckage of the once-proud firm at a rock-bottom price, a concerned Federal Reserve jumped into action to prevent that crisis from sinking the entire financial system.

The problems at Bear Stearns are linked not just to bad investments, but to the broad, deep decline in U.S. home prices. The damage from the U.S. housing crisis could be severe.

Many investors were hurt by the popping of the tech bubble in 2000 and 2001, but housing affects far more Americans, says Scott Armiger, who manages $1.7 billion at Christiana Bank & Trust Co. in Delaware. "It touches more lives."

Investors might be prepared for a mild slowdown in the U.S., but a deep, global recession would heighten the already considerable levels of pain in the market.

The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., which was one of the largest global investment banks and securities trading and brokerage firms in the world. The firm's main businesses included capital markets (equities and fixed income), investment banking, wealth management, and prime brokerage clearing services.

Following a March 14, 2008 announcement that the firm required emergency financing from the Federal Reserve Bank of New York and JPMorgan Chase in order to avoid insolvency, Bear Stearns suffered a huge decline in value with its market capitalization dropping by 47%. On March 16, the firm agreed to be acquired by JPMorgan Chase for $236 million (approximately $2 per share, down from Friday, March 14 close of $30 a share). Among Bear Stearns' assets most desired by JPMorgan are its prime brokerage unit and the firm's midtown Manhattan office tower.

From 2005 through 2007, Bear Stearns was recognized as the "Most Admired" securities firm in Fortune’s "America's Most Admired Companies" survey, and second overall in the security firm section.

On March 14, 2008, the Associated Press reported that JPMorgan Chase, in conjunction with the Federal Reserve Bank of New York, would provide temporary funding to Bears Stearns because "its liquidity significantly deteriorated over the past day and the temporary funding will help it continue operating normally." The article further quoted Bear Stearns as indicating "there is no guarantee any permanent strategic alternatives will be successful." JPMorgan Chase will provide funding as necessary for up to 28 days and will also assist Bear Stearns in finding permanent financing.

Market reaction to the arrangement with JPMorgan Chase was extremely negative with Bear Stearns stock down more than 91% over the next two trading sessions. This led some market observers to question whether Bear Stearns could remain an independent bank. Standard & Poor's lowered the counterparty risk rating of Bear Stearns three notches to "BBB" from "A" and warned that other cuts may be warranted. While S&P expected Bear Stearns will solve its funding problems, they warned, "...we consider it [the arrangement with JPMorgan Chase] a short term solution to a longer term issue that does not entirely affect Bear's confidence crisis."

On March 16, 2008, JP Morgan Chase Bank announced plans to purchase the troubled organization for approximately $2 per share or approximately $240 million. The exact terms of the transaction are JPMorgan Chase will exchange 0.05473 shares of its stock for each share of Bear Stearns. To illustrate the severity of Bear's financial condition, the sale price is only 2.4% of the bank's book value and only 1% of its market value only 16 days prior to the sale. The real estate value of the bank's Manhattan headquarters alone is about $1.2 billion. This implies that some of Bear's businesses are worthless or generate outsized losses.

Additionally, in a rare move, the Federal Reserve agreed to fund up to $30 billion of Bear's less liquid assets. It is thought that there will be mass layoffs at Bear Stearns entities.The transaction is a fast-track deal, that has already received the approval of both boards. JPMorgan is expected to close its purchase by the end of June 2008, pending shareholder approval.

This action by JPMorgan Chase further underscores the magnitude and severity of the credit crisis in the United States. David Goldman, former head of debt research at Bank of America, stated that "for Bear's stock price to go to effectively zero, contrary to market expectations, tells us that something is systemically very wrong and we're at a very dangerous moment