Sub Prime crisis
Sub Prime crisis
Sub-prime affected the state’s economy which in turn affected us hence an indirect impact.
I think the main reason for subprime crisis is the demon by the name "inflation". The global banks like Citibank, JP Morgan and many more have been badly hit by this crisis this business quarter. Citibank has given 5 billion dollar loss this time (TCS, Infosys, HCL are all 4billion dollar companies.. The loss if saved accounts for such a large concern like this.)
The people have been unable to repay back the housing loans in U.S. and no one has come forward to buy those houses in auction. This literally means the buying capacity of the people has been seriously affected.. not only in U.S.
This is happening in our country also Subprime crisis cannot be accounted to U.S alone.. It’s just that it begun there. Unemployment has been on the rise in U.S for the past one year. 70,000 job cuts in IT sector alone.
Rupee appreciation is the next contributor. Exports are the ones badly affected. Business gets affected hence back to the crisis once again.
GDP and sensex keeps fluctuating always. We can’t say that it’s because of the subprime crisis But still, when buying capacity decreases, none buys from you, hence we are back in trouble.
How can we tackle it in our country? First, Stop unnecessary vote bank politics and giving unnecessary freebies to poor people.. What will they do with gas cylinders when they don’t have rice to eat? So many useless schemes are prevailing which have to be cut.
Second, Government should try to overcome the rupee appreciation or at least bring a balance to it.
Third, U.S is not the end of the world for business. So already companies have started expanding in European countries. In fact, a couple of IT majors have more than 50 percent of their business from Europe this year.
Like it on Facebook, Tweet it or share this article on other bookmarking websites.