Do you think we are responsible for the world economic recession?

Replies

• 

  Ashraf HZ

  Yeah, probably. I posted about that issue here:
  #-Link-Snipped-#
  
  It would be nice if everyone in this world understands how supply and demand can play an important role in the market. Its time to be less selfish on your own wants and focus on what society really needs. The boundary between needs and wants might be blurred, but nonetheless there is still a boundary.
• 

  Kaustubh Katdare

  What bothers me is, people have started saving, even more than ever before! Everyone wants to be prepared for the worse.
  
  Unless the money flows into the market; the recession won't go. It'll worsen.
• 

  Ashraf HZ

  If they are saving them in banks, it won't be a problem.. since banks use them to loan money out or invest anyway. Also, if people purchase gov bonds, it would also be okay.
  
  But.. If people are hiding their money in their own safe, then we are in trouble 😉
  
  I wouldn't blame those who's income (if they still have one) contracted more than the prices of goods have.. it wouldnt be fair to force them to buy things. But, at the same time.. since the price of most goods are falling anyway, other people should have no problem of buying them.
• 

  Kaustubh Katdare

  Banks- no. In India; people are putting money in Gold!
• 

  thisisananth

  Hmmm.. with a personal perspective we are not responsible for the economic recession. I think the insufficient regulation of the mortgage securities and the mindless selling of those repackaged debt was the main reason for the crisis. After that everyone lost confidence and is not willing to spend.
  But I dont see that much effect in India except that salary hikes have stopped 😉
• 

  kashish0711

  yes of course
  firstly we are responsible for the govt which is gonna make all the economic policies
  secondly, good students runaway to foreign countries and therefore developing their markets and leaving their own country market in shadow.
  
  these for me are the two things that affects a country the most.
• 

  sarveshgupta

  Hey according to me verything was fine until the greed of banks (international multinational gloabal giants) exceeded a level where they tried to sell and repackage the securitis the debts the loans further and lended them to others and to each others.. they dumped the world into recession.. had the regulatory boundations been as strict as they are in India the world would have been saved surely..
  
  And now what we see is a obvious ripple effect of the worsening conditions that are themselves driving the economy into more and more worse situation...
  
  how can we blame the people who have limited earnings, fear of job cuts, pressure of high loan rates, zig zag stock markets, unclear government policies, etc... man the list is too long...
  
  It is the humar fear of losing that is actually playing with the dwindling economy whose rootcause lies in the unregulated greed , incorrect steps of some of the huge global players...
  now we can only hope the economy to recover from this recession as soon as possible and try to contribute in any way we can to save our economy and inturn ourselves..
• 

  Red Hawk

  I think the people are the main reason for the current scenario.. If they had repaid their loans without cheating the government, this economic recession would never have come.. The banks have also made a huge mistake by lending money without any assurance or security.. But is it not our duty to repay our debts correctly? None of us is upto the ethics nowadays. But cant we be true to ourselves?
  
  There is no use of blaming the higher players of the globe for this economic downfall.. We all had a small role to play in this.. We all did it wrong.. So now we are facing the darkest year of the millenium.. Yet this does not mark the end of IT companies.. After all a coin has two sides.. Again the value will rise and stocks will start booming.. But for that we have to wait a few more years.. Lets wait with good hopes..
• 

  thisisananth

  I do agree with you Red Hawk. But see the banks have a mandate to increase profits. And people have a wish to have an own house. It is difficult to refuse a good offer like you need not pay for three months, and from then you need to make repayments. The bank has tempted the uncreditworthy people with these types of schemes to give them loans. They never thought if they could repay them. Its not about ethics.. May be people might wanted to repay it but they never could have enough money to repay.. They were already sub prime.. You may ask then they should have refused to take the loan in first place but is the bank first right in making the offer.. I think there were not sufficient regulations about whom you can lend and I think that is the main reason for it.
• 

  silverscorpion

  thisisananth

  The bank has tempted the uncreditworthy people with these types of schemes to give them loans. They never thought if they could repay them. Its not about ethics..I think there were not sufficient regulations about whom you can lend and I think that is the main reason for it.

  Exactly. Just what I wanted to say.
  
  

  Red Hawk

  I think the people are the main reason for the current scenario.. If they had repaid their loans without cheating the government, this economic recession would never have come.. The banks have also made a huge mistake by lending money without any assurance or security.. But is it not our duty to repay our debts correctly? None of us is upto the ethics nowadays. But cant we be true to ourselves?
  
  There is no use of blaming the higher players of the globe for this economic downfall.. We all had a small role to play in this.. We all did it wrong.. So now we are facing the darkest year of the millenium.. Yet this does not mark the end of IT companies.. After all a coin has two sides.. Again the value will rise and stocks will start booming.. But for that we have to wait a few more years.. Lets wait with good hopes..

  Well, I'm afraid I don't agree. This pitiful state of the economy is largely due to the huge investment banks and hedge funds. This doesn't happen suddenly. This recession is a gradual process that started with Reagan in the 80's. He's the one who started the deregulation of banks.
  
  That deregulation has now come to a point where banks can lend to anyone, without worrying about his credibility or his ability to repay. That's the reason for this, not we people.
  
  Now you might say that, even though banks offered loans, why should people get the loans?
  Well, think of it. You're almost a pauper. Someone comes and says, hey buddy, I'll give you some money to buy a house. You can repay me whenever you wish.. Won't you get it?
  
  So, though you can blame the people, the blame should originally go to the investment banks and the hedge funds.
  And even more at blame is the deregulatory policy and the free trade of the USA.
• 

  silverscorpion

  And the funny thing is, even after all this, no particularly great effort is put to correct the situation. Instead of trying to buy out bad assets and regulate the banks, people try to cure the system by injecting more money into it. I don't understand how more liquidity can make people spend more..
• 

  Saandeep Sreerambatla

  People are correct here , they didnt do anything wrong .
  
  Banks assumed people will repay the loans some time and gave away loans to everyone who is working .
  That made the trouble , i heard there are around 20,000 homes hand overed to banks as the people who bought those houses cannot pay the loans.
  Thanks to the realization now, there are less calls from banks these days for personal loans 😀
  
  But if we think about a middle class person earning 10k per month , if he is also married then-- his life is now in vain , due to increase in costs of household items living is becoming very tuff for many people living in cities.
  
  Is there any way that the costs come under control??
• 

  Ashraf HZ

  The effects have already been cascaded to the rest of the economy.. the bad assets are a lost cause already. What the injection meant to do is ease the contraction of both demand and supply, keep large companies "alive" to ensure employment, etc. Of course, prevention would have a better option, but only "cure" is available at the point.
  
  If they had engineers to oversee economic policies and regulations, things would have been different 😉 In fact, the whole economic system needs a whole revamp.
  
  Anyway, as others would say.. recession is just part of the process, Once we get out of this trough, economy would just cycle back up to a recovery. But after a decade or two, it would be the BRIC nations who will dominate, not US or Europe 😀
• 

  kashish0711

  ash

  If they had engineers to oversee economic policies and regulations, things would have been different 😉.

  Lolz..... 😛
• 

  Munguti

  Could someone tell me how the reccession in America spread to people like us in africa. I don't uderstand it?
  Anyway the blame lies with america and its policies, had the other world economies been independent this would not have happened. Their policies ansure that if they sneeze everyone catches a cold.
• 

  shalini_goel14

  silverscorpion

  This pitiful state of the economy is largely due to the huge investment banks and hedge funds. This doesn't happen suddenly. This recession is a gradual process that started with Reagan in the 80's. He's the one who started the deregulation of banks.
  
  So, though you can blame the people, the blame should originally go to the investment banks and the hedge funds.
  And even more at blame is the deregulatory policy and the free trade of the USA.

  Good point put up but how these Investment banks get benefited? What is the use of introducing deregulation policies?
• 

  skipper

  Personally I think the crisis was engineered a lot earlier than Bush II's reign. Presidents don't have absolute power, except in a presumably limited sense - they have to get past Congress and the Senate. I think the problem began when economists and the finance industry lost sight of their actual goals.
  
  The goals, for an industry always move. It starts out as "provide something useful, a service which is important", and moves to "make money, as much as possible".
  The ideal of profit-taking replaces the ideal of being useful. Since money, per se, is actually valueless (it's a valuation, not a standing value), then "making" money isn't producing anything useful except a burden; the rich create a wealth burden, rich corporates have had this burden lifted off them after "we" let them create it for us; now "we" and several generations have this burden to carry, for the "rich".
  
  Being rich is therefore creating "wealth" by using valueless money to increase the burden on present and future tapayers, ipso facto. The legacy of greed and unbridled "money making, profit taking" means the public sees little sharing out of this "gain". The gain is all one-way, since, if you have money, you can sell it (even though it's worth nothing at all), and make more.
  
  This is the problem - we attach far too much importance to pieces of paper and metal, which are only worth what the agency that prints and mints such things, says they're worth. If you burn a $100 bill, is it still worth $100? What happens to its value?
  
  Value is trade and barter, in actuality. So we are living in a world that values worthless currency (how many $100 bills would you need to burn to stay warm for a week?) over trade and barter, which are the real value of the pieces of paper, with words like "this note is legal tender", which means you can tender it. Try tendering a Chinese $100 yuan in a K-mart sometime, it's "worthless" even though most of the goods you can buy with "money" in K-mart, are actually traded by China, for overseas value (overseas exchange).
  
  We keep looking at the temperature, and ignoring the trend, which is that money, successful though it is, is unfortunately a tool of the rich and powerful to keep "us" supplying them with what they want. The Templars started it, back before banks existed money was a curiosity for ordinary people, merchants used coinage that was stamped with a symbol of authority, an emperor or king, so that its value was guaranteed. Nowadays it's guaranteed by the ability of a country to trade with other countries, so the west will either end up trading with China almost exclusively, and one day those yuan will be tender in K-marts. Or the west will revive vital internal trade and barter systems so the yuan doesn't, nor does the dollar become a worldwide currency. Currency in that sense is the oil for the machine, when it doesn't 'flow' the machine has to slow down; you can't take the oil out or the machine won't work. However barter doesn't need currency.
  
  If money is the true medium of exchange, how did someone end up in a house, after trading a paper clip on e-bay? This example shows that value is entirely subjective - if the paper clip owner hadn't traded their way into a house but simply accepted a cash offer they would have "worthless" money (unless you could maybe trade a paper clip for 10c, then the 10c for a dollar, and so on).
  Value is in the eye of the beholder. money's value is in the words written on it.
• 

  Kaustubh Katdare

  Excellent post, Skipper 😀.
  
  

  Value is in the eye of the beholder. money's value is in the words written on it.

  Awesome!
• 

  sandymiss

  Thanks for the suggestion, I wish it had worked.
  
  
  The domain name creditauto.net is for sale
• 

  EDDY

  HI everyone there. In my pt of view we have to cure the problems like huge gap b/w rich n poor n poverty to eradicate this prblm completely frm india and them aware of the present situation..i ma sure many of our politician even dont know the proper meaning of recession,so expecting a helping hand frm those is just useless so ew on our part have to handle this problem like by-PAYING OUR TAX ON TIME N INEVEST MORE-2 IN GOVT FUNDS
• 

  Prasad Ajinkya

  Here's a drastic new opinion (and I know that I am going to get flamed for this, but let it come). The recession is there partly because of us - and job hopping people like us. This is how it works.
  
  Software engineer A joins big IT company. Salary package - 3.4 lakhs.
  A works for 1 year, learns nothing more than simple SDLC compliance and shifts to another big IT company. Salary package - 5 lakhs
  2 more years, now can talk to clients or offshore team. Joins another firm. Salary package - 7-8 lakhs.
  
  The software engineer hasnt added much value to himself, and he is essentially doing the same thing that he was doing the last 3-4 years, and his salary has doubled!! When I joined as a programmer, my salary was 1.8 lakhs. Now the entry level salary has doubled ... whats the additional value that the programmer is delivering? No additional value. Who bears that additional cost then??
  
  The big IT company?? No, they simply bill it to the client (with the same margins). Who do you think is the client? Its those big hulking forieng multi-nationals who have toppled.
  
  Now who do you think is responsible for the recession??
• 

  Mayur Pathak

  kidakaka

  Here's a drastic new opinion (and I know that I am going to get flamed for this, but let it come). The recession is there partly because of us - and job hopping people like us. This is how it works.
  
  Software engineer A joins big IT company. Salary package - 3.4 lakhs.
  A works for 1 year, learns nothing more than simple SDLC compliance and shifts to another big IT company. Salary package - 5 lakhs
  2 more years, now can talk to clients or offshore team. Joins another firm. Salary package - 7-8 lakhs.
  
  The software engineer hasnt added much value to himself, and he is essentially doing the same thing that he was doing the last 3-4 years, and his salary has doubled!! When I joined as a programmer, my salary was 1.8 lakhs. Now the entry level salary has doubled ... whats the additional value that the programmer is delivering? No additional value. Who bears that additional cost then??
  
  The big IT company?? No, they simply bill it to the client (with the same margins). Who do you think is the client? Its those big hulking forieng multi-nationals who have toppled.
  
  Now who do you think is responsible for the recession??

  This is as good as whether the hen came first or the egg. 😛
  I think this can be one of the trigger for the chain reaction of falling of the big companies. But not exactly... It has all got to do with one man's greed, may it be the software engineer or may it be the Chairman of the MNC investment bank.
• 

  Prasad Ajinkya

  mayurpathak

  This is as good as whether the hen came first or the egg. 😛
  I think this can be one of the trigger for the chain reaction of falling of the big companies. But not exactly... It has all got to do with one man's greed, may it be the software engineer or may it be the Chairman of the MNC investment bank.

  Correct!! It's all about greed. It's about greed and not creating enough value to offset that greed. I can demand more money, as long as I am creating more value. A chairman of the MNC investment bank can demand more money, as long as he is earning much more for the client, for all the clients. If he doesnt, then thats the failing point. A software engineer can demand more money if he can bring more value (by value, it could mean - improving the system, architecting a new solution, developing cutting edge technologies, making new software products, etc). If that software engineer does not add any value, then thats just more cost ... and an unnecessary cost - no wonder they are being fired left right and center.
• 

  jhbalaji

  Yeah indeed every one is responsible mate...
• 

  Ashraf HZ

  I suppose we can concur, especially with CEan's posts regarding banking, monetary value and employment, that human greed is the culprit as Mayur said. Sure, we could have been influenced by modernity of lifestyles and convenience to inflate the "value" of goods, as well as blurring the divisions of needs and wants from the power of marketing. However, unless we are mindless drones, we do have the power of choice.
  
  So, what are we going to do about it? Let the economy keep on cycling?
• 

  Bernardcraig20

  As a person who is very much concern about our economic status, I always find ways to keep updates about it. So, thank you for letting me know about this. I am looking forward to hearing more from you regarding this important matters.
• 

  callyD

  I think the bankers, investment people, mortgage companies and people who were loaning billions of dollars in money and selling property to people who could not afford it. And of course people who bought and invested and spent over their heads.