In the year 2005, the people of India added a new word to their dictionary. The word was
'tsunami'..! In the same manner, the people have learnt another word now.. 'Sub-prime
mortgage' is the word..! Yes..! The sub-prime mortgage crisis has shook the world and has
exposed the fallacies of the american economy and the anglo-saxon model of economy in
general. This has also brought to light, how irresponsible and short-sighted, the investment
companies were.
It also shows the consequences of incessant splurging, a characteristic of the United
states. the pity is that, the emerging economies and other producers in the world encourage
this splurging so that their products are sold..
Had every single person in America saved a portion of their income, the severity of the
crisis could have been lessened. In America, Banks look to wall street for their profits
because people enroll themselves in banks to borrow and not to save.
The worst part of it is that, due to decrease in the share prices, a lot of people have lost
their money. It is because, the share market is the investment zone for most of the
population. People should understand that wall street is just another las vegas ( dalal
street also is , for that matter).. Instead of playing roulette, people play 'trade' there..
Share markets do not and will never lead to development of the country.. In share markets,
credit changes hand. nothing else happens. Economy grows only when grain is produced or when
a car is manufactured.( I mean some commodity should be produced..).
The US government's decision of bailing out banks and other companies also sends out a clear
signal, that the government is encouraging the companies to commit this blunder once again..
It is like giving loads of cash to a gambler who has lost all his money..
We indians must learn a lot from this crisis. A few key points which the Indians should
understand:
1) DO NOT ape the west for anything and everything. Any development to brought into the
country, should be tailored to Indian needs. India shouldn't tailored according to the
development.
2) DO NOT SPLURGE. make sure you save a decent portion of your monthly income.
3) NEVER TRUST share markets. They are too risky and toooo volatile and hence cannot help us in times of need.
4) Future managers should not be short-sighted like these investment companies.
Let us hope india doesn't commit this grave error again in the name of globalisation or
development.
PS: I am an engg. student and I have no idea about terms related to economics. I have just voiced my views here. Please forgive me if I have said something wrong.I have
derived my views from the newspaper articles and also from the articles by mr.gurumurthy in
the tamil weekly 'thuglak'.
4 comments:
hi arvind..
nice post. gud to c u blogging! wid all that 'travel love' of urs, u've loads to write abt..
subprime.. yeah, its become another 'fashionable' word.
subprime was caused because d lendin companies in US didnt have a proper credit policy and they played too much wid d easy credit schemes wid out proper check.
its cause of this that companies had to lose. basically share market is not gambling.its careful analysis of d development of an economy and puttin ur faith in one company or a few.its only ur choice. if u choose well, u will b rewarded well. And i personally feel that it is an indicator of forward thinking of ppl to deal with shares. its risky- yeah. but only if u put all d eggs in one basket.(like d saying goes too much of anythin is bla bla bla..)lets try to b friends wid share market:):)
so yeah.. thght i wud put in wat i think..
gud work..
cheers!
priya
yes.. absolutely true.. realised later that this crisis doesn't show the failure of capitalism.. It merely shows the carelessness of the US investment companies in handling people's money.. btw, do I know you..? Are u preethipriya from skool..?
yup. d very same..
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