Recession is bad times for traders and those interested in the stock market. Things are not what they used to be. Share prices come down, investors hesitate to invest in companies and overall the economy suffers a lot in terms of growth and economic development. Industry suffers and when industrial production is less, prices go up and the consumers are faced with inflation.
Unemployment is rampant and standard of living of the people comes down drastically. The purchasing power of the people is low as they have less money in hand, which leads to excessive goods in the market which are left unpurchased. Items have to be sold at lesser prices affecting profits. Less profits means less money to invest and that in turn causes inflation eventually.
Slump market scenario during recession
The stock market fluctuations have been observed in countries all over the world. Wall Street recorded the highs and lows of various companies, some of high standing. Banks such as Bank of America, Sachs, and Morgan Stanley suffered financial losses. Big techs such Golden Sachs, Fortune 500 suffered due to the slump. The slump in banks had serious effects on the world economy. The bailing of the banks meant that the tax -payers money was being diverted from development.
Consumer credits had fallen. The International Monetary Fund forecast a global GDP that would shrink by about 1.4% in 2009 as compared to its earlier forecast of 1.3%. Leaders of several countries met at L,Aquila, Italy to discuss the problems pertaining to the global economy, world security issues and climate change.
Energy prices shot down. The dollar gained in value versus the euro but fell as far as yen was concerned. Even in UK investors were faced with financial crisis due to the recession. Here, the industrial export sector shrunk to 4% of the economy. Bank of England had to reduce its interest rates.
Even countries like China, which toes communist ideology is also a victim of recession. The Government there too k measures to help its citizens to face up to the situation. One measure was selling of secondhand goods in the market. It encouraged those who had secondhand goods for sale to sell them and purchase new items for themselves. Those who are unable to afford to purchase new items could purchase the old items. The secondhand bazaar is a way to help the consumer to purchase goods which he cannot afford at normal prices.
India has its fair share of problems. Unemployment during recession is high. People have been thrown out of jobs. No jobs mean less purchasing power. Companies had to lay off personnel in order to cut costs. Investors were hesitant to invest and getting banks loans is not all that easy.
The world at large is concerned about the overall global economy. World leaders have met at various international forums to discuss the recession effects on global economy. Countries like India are also faced with other problems such as monsoon failure. One is just hoping that situation starts to improve and the nightmare is over.