Recession Unplugged

Hi all,

Today i am commenting on a topic which is prevalent everywhere and which is the most happening topic in recent times which affects almost everyone from business men to working class to students to home maker and even its affecting animals in a good way that now they are feeling happy as they are not the only ones getting exploited :-P.

The intensity of this recession is such that it has been taught even to nursery children to make them aware reduce cost and reduce their expenses on toys and playing material. Everyone is feeling the heat because of this black hole thing which is eating away people's peace and harmony.

In the past also we have experienced similar kind of recession and in 1930 it was even called depression because of its tenure and it lasted for some 10-11 years. We have experienced Oil crisis during 1970's and Dot com bubble in 2001 and we came out of all these crisis without learning anything. And nowadays people are predicting these recession to happen after every 7-8 years. 

And this time recession is a bit different and people are scared that it doesn't turned out to be a depression. Though a number of factors are responsible for this saga and lot many industries are getting affected by this dramatic thing but few factors stand out in making this recession a successful one.

The first thing that happened to make it work is the housing boom which happened in US economy. The Irrational Exuberance of a housing bubble created the climate in which homebuyers became eager to take on mortgages that they could not possibly afford and banks and investors were willing to make loans that couldn't be paid back. This bubble got bursted soon and this was the first nail in the coffin. and soon after lot many things happened like Investment banks bankruptcy automobile companies bankruptcy.

But as we look deep into this bankruptcy bore well,this recession is affecting all the luxurious objects and companies and people.

Lets take the case of GM motors,As they were manufacturing only luxury cars and didn't even thought of making small cars for common man,they are feeling the heat and are bankrupt now. And against this take the case of Maruti Suzuki India Limited,their sales even plummeted during recession because they made cars for common man and made small cars.

There are mainly two factors resulting in GM bankruptcy is the Oil crisis in 1970 because now people want small cars with good mileage rather than white elephants manufactured by GM and Real estate bubble. Now people don't have space to park their big cars and therefore the demand for small cars went rocket high with the Toyotas,hondas Suzukis stealing the show.

                                                     Take the case of B school students which we are more interested in,As investment bankers job was a high profiled job and can earn you lakhs in a month but that job is now a low profiled job and young talent is loosing their jobs on daily basis in investment banking because of the nature of the job. Now take the case of Commercial banking job against investment banking,banking sector is booming and jobs are not reduced and their demand will never went down.

                               Before this recession,Each and every B school graduate was getting the job whether he was skilled or not and this also resulted in a bubble where students were earning more than their expectation and skill set. Now what recession has done is that it helped in bursting this bubble and now students have to earn a job rather than take it for granted and they get their job and salary based on their skill set. This recession in a way have streamlined the society and businesses across world.

                                US which was under the impression of taking away the world in a different direction is now looking down the barrel and trying hard to streamline their economy.

So in my view,This recession in a way have streamlined different industries and helped in bursting different bubbles and helped people in realizing their worth in this world which is still having a lot of opportunities to ponder on.

I will continue my Fun quotient part in my next post. Till then keep waiting and commenting on my post.It helps me in posting without hiccups.