Global Financial Crisis/Economy Crisis

I was pondering a minute whether the title of the post should be a financial crisis or a economic crisis..then, I settled for both..Well, it indeed is the crisis of both finance and economy across the world. There is no dearth of headlines, articles on this subject in the newspapers and internet and probably this is also the time the folks who were the least interested are also getting interested.

One of today's businessweek article states:
Home to just 304,000 people, tiny Iceland is emerging as the biggest casualty of the global financial crisis. On Oct. 9, the government took control of the country's largest bank, Kaupthing (KAUP.ST), and halted trading on the Reykjavik stock exchange until Oct. 13. Authorities also used sweeping new emergency powers to hive off most of the domestic assets of the country's second-largest bank, Landsbanki, into a separate entity to be called "New Landsbanki" that will be fully owned by the government.

The above probably is one of the worst examples of the cascading effects of the crisis looming the world at the moment. At least for me, I cannot fathom a country declaring bankruptcy, leave aside the banks or the institutions that one is dealing with. There is lot of hue and cry about India's own bank - ICICI bank, whose stock crashed 20% today on account of some rumors.

Can we imagine something like a ICICI bank declaring itself bankrupt ? Theoretically, Yes..Practically, I'am not sure..Hopefully..NO.


Though I'am not an expert in either finance or Economy but I certainly view that there have been excesses in the last few years..Below are some examples:

20X leverages on loans, mortgages ( A fresher/1 Year exp engineer who just is landing with a job taking a house loan of 30 Lakhs )

Supply creating an virtual demand ( Banks creating an artifical demand )

60 Lakh for a 3 Bedroom Apartment.

Stock price doubling within a week ( There is no reasoning, The company is still the same )

A software Engineer having 3 offers and still not decided on the company he is going to join. He actually dumps all the three and joins a fourth company

Person having no clue about the stock market creating a demat account. ( because he hears that his neighbour has done it )

Person investing 30000 into a stock because of a 'tip'. He neither knows the industry the company is in or the company itself ..

Well, above are some of the examples that come to my mind when I read about the current crisis..I hope to add more posts on this topic..Keep reading.