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What is US Rating? How it effects the IT Companies?

What is US Rating? I am reading the news from the friday that

The United States lost its top-tier AAA credit rating from Standard & Poor's on Friday in an unprecedented blow to the world's largest economy in the wake of a political battle that took the country to the brink of default.
What happened with that? Could any one explain in detail? Seems lots of IT companies shares are in huge losses. Just one day loss in the Stock Markets result in 1,00,000 crores loss for Indian Investors. It seems definitely it going to effect the IT Industry again 😔

Got the news that lot of US based companies delayed their Offer letters 😔
Kaustubh Katdare
Kaustubh Katdare • Aug 8, 2011
Related thought: ...shows how dependent Indian IT companies are on 'outsourcing'. Isn't it high time that they produce their own stuff than relying on outsourced jobs?
X-Engineer
X-Engineer • Aug 8, 2011
Seriously to say..I am not getting the flow.

Stock Markets..Down...??Leading to downgrade of IT Companies???How??Shares ???Stock market???

Can anyone explain
Kaustubh Katdare
Kaustubh Katdare • Aug 9, 2011
Okay, here's what I understand by reading some stuff online -

Because of US's trade and operations in other countries, the state of US economy affects economies of several countries in the world. It's like, US gets cold and other countries sneeze. Because of the continuously piling debt, and apparently no clear way for the US government to get out of it, US economy isn't strong anymore as it should be. Now, the ups and downs of the economic state of a country has direct effects on the stock market. If the stock value of a company listed in US falls, it directly affects company's spending power.

Now consider Indian IT companies (which I believe is your point of interest). Indian IT companies do not 'produce' anything unlike Microsoft, Google etc. They have to rely on US companies to outsource work to them. Since every dollar trades for ~45 rupees, Indian IT companies do just fine. It's a win-win situation. US company saves money and Indian IT company makes huge money (relatively). But if the US company decides not to outsource - then Indian IT companies are in big trouble. Because suddently, there's no one to give them work to execute.

Then follow layoffs because Indian IT companies aren't able to afford salaries of employees and recruit new candidates. Think about it - it will be more clear.

I'll write about AAA+ credit rating later.
X-Engineer
X-Engineer • Aug 9, 2011
Because of the continuously piling debt,
US in debt..???from where??which country...Then of course that country will be the powerfull???Is it like that ...from my understanding
durga ch
durga ch • Aug 9, 2011
X-Engineer
US in debt..???from where??which country...Then of course that country will be the powerfull???Is it like that ...from my understanding
The U.S ows around 4.6 billions and half of it to China.


On the other note my mom's worried Gold prices are increasing, she watches news these days to understand why gold prices are increasing and she told me this -" World Back gives loans only to those countries which show gold reserves, US is byuing GOLD from INDIA, hence 10 grms gold in 2006 was 8000Rs and 10 grams gold in 2011 is 25000 rs ".

I second Biggie here, I think its a easy way out for everyone of us to just get into IT , do slavery for other countries, talk about customer satisfaction,, blah blah blah inturn be called as 'cheap labour' though we put maximum efforts :-s.

But again what is the way out (except for people to start something innovative of their own)
durga ch
durga ch • Aug 9, 2011
by the way- the rating is not exclusive to US, its rating given to coutries, like for INDIA its BB- (sigh!) , US has just been downgraded from AAA+ to AA+ . The economic condition is not too good (I know I know, there are mnay poeple under poverty line in INDIA, to be precise around 40%), but you dont expect 1 in 7 people to be on food coupons (200$ worth) provided by US gov in US atleast.e see that country as a big brother and rich and prosperous nation.



PS:News Courtesy : My Mother 😁
Manish Goyal
Manish Goyal • Aug 9, 2011
sahithi pallavi
What is US Rating? I am reading the news from the friday that



What happened with that? Could any one explain in detail? Seems lots of IT companies shares are in huge losses. Just one day loss in the Stock Markets result in 1,00,000 crores loss for Indian Investors. It seems definitely it going to effect the IT Industry again 😔

Got the news that lot of US based companies delayed their Offer letters 😔
I am not sure , but i think this relation may answer

Progress of Indian IT companies is directly proportional to value of dollar

Correct me if i am wrong
Kaustubh Katdare
Kaustubh Katdare • Aug 9, 2011
Okay, we never care to understand how money works. That's because the subject of money is always made complicated. Why is US in debt? Because our monetary system is a big fraud! The main culprits are the 'central banks' supported by greedy corporations of the world. Every single dollar printed comes with a debt associated with it. That is when the federal reserve asks the money printing press to 'print money', it does not give it to government 'free of cost'. It will attach some debt to it. That is, every dollar printed has debt associated with it! Now, where will the money to pay the debt come from? Think about it!

I'm even believing that US government has orchestrated this virtual recession so that OBAMA emerges as a hero by 'pulling' America out of this financial crisis.
Kaustubh Katdare
Kaustubh Katdare • Aug 9, 2011
durga
by the way- the rating is not exclusive to US, its rating given to coutries, like for INDIA its BB- (sigh!) , US has just been downgraded from AAA+ to AA+ . The economic condition is not too good (I know I know, there are mnay poeple under poverty line in INDIA, to be precise around 40%), but you dont expect 1 in 7 people to be on food coupons (200$ worth) provided by US gov in US atleast.e see that country as a big brother and rich and prosperous nation.



PS:News Courtesy : My Mother 😁
I wrote about the great Indian scandal under the name of 'globalization' by India's PM - Man Mohan Singh. The facts are differet. Around 85% of the Indian population is 'poor'. A third of that number has less than Rs. 5/- per day. Thanks to the multinationals that have entered the country because of the 'free economy'. Local businesses have doomed and the unemployment is at all time high.
Adivy
Adivy • Aug 9, 2011
The_Big_K
Related thought: ...shows how dependent Indian IT companies are on 'outsourcing'. Isn't it high time that they produce their own stuff than relying on outsourced jobs?
What does 'outsourcing' really mean?I have been coming around the words like Business process outsourcing etc alot but dont know the correct meaning.
ISHAN TOPRE
ISHAN TOPRE • Aug 9, 2011
I would like to say only two lines.

1. Indian Prime minister is good economist. (He is also good as a person but being *good* is not an excuse of being ineffective as a prime minister 😐) You can say anything bad about his regime, but not about the reforms he introduced in 1990s. He puled India out of crisis. We need to acknowledge that. Globalization like many things of course comes with cost.

2. I think an economic downturn for America will be good for any IT industry as most of the work is outsourced there. American management won't have money to pay their people so naturally more work will be out sourced here. Countries would face heat in other forms indirectly.

P.S: Every thing is good as well as bad. Now can we concentrate on AAA+ and AA+ rating? 😐
Kaustubh Katdare
Kaustubh Katdare • Aug 9, 2011
Adivy
What does 'outsourcing' really mean?I have been coming around the words like Business process outsourcing etc alot but dont know the correct meaning.
Outsourcing isn't a complicated term. It's like you outsource your house-cleaning work to the maid. Big corporations send their lower priority work to Indians because they work for cheap.

ishutopre
I would like to say only two lines.

1. Indian Prime minister is good economist. (He is also good as a person but being *good* is not an excuse of being ineffective as a prime minister 😐) You can say anything bad about his regime, but not about the reforms he introduced in 1990s. He puled India out of crisis. We need to acknowledge that. Globalization like many things of course comes with cost.
Indian PM is not at all good human being. Details on my personal blog: The Great Indian MMS Scandal
Sensex gains over 300 points, The Companies are on the profit way today 😀

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