Econ Crisis

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In modern world, financial crisis at world level can be traced back to 1920’s, when economic depression of 1929 occurred. It is said that history repeats itself. Today’s world financial crisis which started with mortgage crisis is only one aspect of history. Crisis began with sub-prime lending crisis and whole financial system was engulfed. Sub-prime crisis refers to the crisis faced by the mortgage companies that were in loaning business that due to adverse situations ran in trouble. As a result the number of defaulters increased resulting in huge bad debts for the mortgagee companies. Several of world’s best managed financial institutions went bankrupt and rests are dying for bail out. The world demand cycle is heading south and…show more content…
To be more precise the investments from eh developed countries with their investment in the emerging of developing countries are from the big Trans national corporations that have stronger foothold in world capital markets. Thus any kind of investment either through opening of wholly foreign investment venture or joint ventures with domestic companies of the developing nations help in greater valuation of the companies world stock market increasing overall capitalization. However, there is a significant difference between the composition of financial capital assets between the more natured economics and some of the nascent economics. While the increasing in financial assets is more due to increases in banking deposits representing an immature financial system in emerging economies such as China. The largest contributor of increasing financial assets in natured economies especially like UK and US is the increasing role of equities of and securities and other corporate bonds. Nevertheless the fact cannot be undermined that in more recent times, the issuances of bonds and securities in emerging markets have seen a surge in financial capital. USA has played a major role in financial capital market deepening both within the country and outside the country i.e. the world financial capital assets was $56.1 trillion for the country that accounts for nearly one-third of the global total. Also the US foreign investments in
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