what this reccession is all about.
Its only a part business cycle in which sentiment of consumers, which is the most vital factor is weak.
Each company's existence is based on its customers and if there is no demand for company's products or services from them or low demand then obviously co's balance sheet will be affected booking lower profits in consequence of which people working with the very company bear bonus cut or salary cut or even retrenchment.
Now since this happens across all sectors people's incomes are down and because they are consumers too they will reduce their budgets too and further less consumption means lesser demand. Its a very cruel viscous cycle interconnected, if one spike is out the wheel doesn't move.
All the more important thing that has surfaced in this kind of slowdown , slowdown it is because its still not reccession in india, china; that jobs in the public sector are looked after for now . Its a long 10-15 years of cool growth in the developing counties that was driving the world economy and people looked for private jobs to get handsome salary , perks , promotions, now it looks different though not so alarmingly but now collapse of lenders made it so bad this time.
It all started with inflation reaching 11% in India, 9% in China, 19% in Russia due to hugh hike in fuel prices all over the world.
and fuel is such a commodity that affects the prices of others commodities also. Now panicked public got their budget plans haywire and took drastic measures such as cut in usage all non essential items and cut down in their demand.
It happpened so fast that after reaching 145$ a barrel crude came down to 40$ a barrel.
Well in the recent news the time for the disaster to be caused by global warming has been averted by another 10 years thanks to reccession. low demand low use low pollution. A good f****ing thing coming out this whole scenario.
Lets see how it will last long ....
