World has become too small and flat with the support of innovations in the data exchange and telecommunication fields. Constant up gradation and sophistication in the technologies renders a newly invented technology as obsolete. Acceptance of free markets concept by countries all over the world has generated Global Markets. Large scale economic reforms carried out during the last decade all over the globe have led to a trouble-free way for International Trade. International traders have started looking out to couple of countries instead of restricting to a small list of popular countries for sourcing their global requirements. More and more countries are offering attractions in the form of cost saving in addition to efficient services. Participants of International Trade have well recognized that Global Markets are definitely worth exploring whether it is for raw or finished material or finished product. Read More

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There is a globally accepted fact that the mention of China export product evinces not just low cost but also quality, a lethal combination any global sourcing and multinational purchasing manager would be happy to accept. If you look at it, the only reason for China export product quality is nothing but a combination of cheap labor force and refined training. Read More

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The Cardiovascular Market Outlook to 2015 provides comprehensive coverage of the cardiovascular market, incorporating a disease overview and detailed epidemiological analyses of the major indications. This report makes a wide-ranging assessment of the marketed product portfolio, R&D pipeline, market share data, sales forecast and competitive landscape for the major players. Furthermore, it highlights the key market and R&D trends that may influence treatment sales; with a thorough analysis of the competitive dynamics of leading brands within each indication, in order to enable the reader to identify growing brands, key drug classes and leading players through 2015. The cardiovascular market may be segmented into numerous subcategories, including antihypertensives, antidyslipidemics, antithrombotics, cardiac therapies and other cardiovascular agents. While established treatments are currently available for each of these therapeutic subcategories, these markets are large and significant unmet medical needs still exists. Among the various cardiovascular indications, dyslipidemia had the highest prevalence in 2009, with approximately 333m people affected by the condition. The global cardiovascular market is quite dynamic and has remained a leading therapy area in the global pharmaceutical market. The seven major markets (7MM) captured a significant market share of the global cardiovascular market and also recorded a moderate Y-o-Y growth in 2009. The US continued to be a dominant market and registered a Y-o-Y increase in 2009, mainly attributed to the performance of key categories such as statins and beta blockers. In terms of pipeline developments, the thrombosis market has witnessed a lot of activity, with promising new drugs such as Sanofi-Aventis” Multaq (launched in the US in 2009), J&J/Bayer”s Xarelto (launched in 2008), Pfizer/BMS”s apixaban (under registration), Eli Lilly/Daiichi Sankyo”s Effient (approved in 2009) and Boehringer Ingelheim”s Pradaxa (launched in 2008). These oral drugs are expected to widen the thrombosis market significantly, while also extending the prescription period. Additionally, these new generation drugs are set to undermine Lovenox”s (Sanofi-Aventis) monopoly in the thrombosis market. Key features of this report• Epidemiological analysis and forecast prevalence of the major cardiovascular indications such as hypertension, dyslipidemia and stroke over the period 2009–15. • Forecasts and analysis of the major products in the cardiovascular market over the period 2009-15 spread across the major indications and classes of treatments. • Overview of key events in the global cardiovascular market that have impacted treatment trends and sales potential across the major cardiovascular indications. • Strategic and growth analysis of leading pharmaceutical corporations based on sales focus by drug class, currently marketed products and R&D product portfolios. • Detailed analysis across major classes of cardiovascular treatments including antihypertensives, antidyslipidemics, antithrombotics, cardiac therapies and other cardiovascular agents. Scope of this report• Quantify patient potential, assess treatment trends and sales patterns across the major cardiovascular disorder indications in the US, Japan and top 5 EU markets. • Discover which indications have the greatest potential to provide franchise growth and understand the growth drivers of the major classes such as antihypertensives, antidyslipidemics, antithrombotics, cardiac therapies and other cardiovascular agents. • Compare the franchises of top pharmaceutical marketers across major indications, and evaluate how market share of leading companies, such as Pfizer, Sanofi-Aventis, Novartis, Merck, AstraZeneca and BMS will change over the next 5 years. • Quick and comprehensive understanding of how recent events are affecting the performance of major products, and how leading players are confronting competitive challenges in the cardiovascular marketplace. • Gain up-to-date competitive intelligence across the cardiovascular portfolio and understand the major issues affecting key pharmaceutical marketers and product development. Key Market Issues• Angiotensin receptor blockers may cause increased cancer risk: In June 2010, the Lancet Oncololgy journal published a meta-analysis study which indicated that ARBs (angtiotensin receptor blockers) have an increased cancer risk. The study involved 61,590 patients from five clinical trials and the results demonstrated that ARBs increased the relative risk of new cancer occurrence by 7. 2% versus 6% in control groups• Crestor”s patent upheld in the US: AstraZeneca’s blockbuster antidyslipidemic Crestor, the biggest growth driver within cholesterol lowering drugs received a boost after its patent was upheld by a US district court in June 2010, following a four month trial which began in February same year. Crestor is currently the only branded statin in the US market which is witnessing positive growth and this judgement is expected to improve its prospects through the forecast period. • Plavix boxed warning for poor metabolizers: Sanofi-Aventis’/BMS’ Plavix, received a boxed warning to its US label in March 2010, indicating a warning about the diminished effectiveness of the drug in patients with a variant of the CYP2C1P liver enzyme leading to reduced formation of the active metabolite. Sanofi-Aventis conducted a study in 40 subjects, with 10 each in the four metabolizer types and found that the poor metabolizers had notably lower levels of Plavix and anti-platelets. This patient pool termed as poor metabolizers includes approximately 14% of Chinese, 4% of blacks and 2% of caucasians. • Apixaban”s Phase III AVERROES trial halted: In June 2010, BMS halted its Phase III AVERROES trial in vitamin K antagonist intolerant patients with atrial fibrillation. Interim data from the trial revealed that the drug reduced stroke and systemic embolism in comparison with aspirin, in addition to demonstrating sufficient safety prompting the company to take this decision. Apixaban has already been filed in the EU for prevention of VTE in adults who are undergoing elective hip or knee replacement therapies. Key findings from this report• The global cardiovascular market was valued over $120bn in sales in 2009. The US continued to be the single largest market which was mainly attributed to increasing generic presence and market maturity in several key therapeutic categories. However, Business Insights anticipates the market to decline through 2015 due to the impending patent expiries of several leading drugs. • Antihypertensives remained the largest selling therapeutic sub-category in 2009 led by Novartis”s Diovan. Pfizer”s Norvasc, which was the leading antihypertensive till 2007, has been noting a steady decline and losing market share to Diovan since 2008. • ARBs continued to be the most prescribed antihypertensives in 2009 although their sales are likely to be clipped by the appearance of Cozaar generics in 2010. ACE inhibitors have been declining due to genericization and competition from ARBs such as the Diovan franchise and Blopress. • Antidyslipidemics formed the second largest segment of the cardiovascular market in 2009. This category was dominated by statins with only a small presence of other drug classes. Key questions answered• What will be the major growth indications and the accompanying growth drivers in the cardiovascular arena over the period 2009–15?• What are the current trends within the major therapy areas such as antihypertensives, antidyslipidemics, antithrombotics, cardiac therapies and other cardiovascular agents across the seven major markets, and Brazil, Russia, India and China (BRIC)?• How have recent launches from companies such as Pfizer, Sanofi-Aventis, Novartis, Merck, AstraZeneca and BMS performed in the market place?• What are the most promising compounds currently in clinical development for major cardiovascular indications, and what is the forecast commercial potential of these products through 2015?• How significant is the threat of generics to the overall performance of the global cardiovascular market?CompaniesandMarkets. com provides a wide range of research reports, industry statistics and competitive intelligence on the markets of the industrial sector. Topics covered include pharmaceuticals, biopharma, medical devices, vaccines, drug pipeline analysis, life sciences, biotech, partnering agreements, alliances and many other pharmaceutical and healthcare markets.

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By name, global sourcing companies imply that they have got to go for multinational purchasing for obvious and oft repeated reasons such as cost controlling in order that they gain required edge over competition and tap global talent pool- an act they are masters at and are doing since long even when there was no concept of online market. Read More

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Global Anti-Obesity Treatments Market 2010-2025 how will your challenging market develop?Prevalence of obesity in the US and Europe has already reached high levels, with obesity being described as an epidemic and a “public health time-bomb”. The developing world is also showing rising prevalence of obesity, now considered a serious – even life-threatening – disorder. In this report, we predict that the anti-obesity drug market will exhibit overall growth in worldwide revenues from 2010 to 2025, with new drugs entering the market during those years. Where will the best commercial prospects lie? Our new study provides the answers that you require. ( http://www. bharatbook. com/detail. asp?id=133087&rt=Global-Anti-Obesity-Treatments-Market-2010-2025. html )Although sales have been only modest so far, anti-obesity drugs will gradually gain acceptance from prescribers, patients and payers, despite recent set-backs. Countering obesity is a high priority for many governments, with lifestyle changes alone often not providing a reliable solution. The estimated US healthcare costs for obesity are $100bn to $150bn annually, with other leading nations following those trends – most notably the UK. Our new report – Global Anti-Obesity Treatments Market 2010-2025 – shows that reliance on anti-obesity drugs is increasing, with corresponding gains to the pharmaceutical industry. Though there are therapeutic and marketing difficulties that we believe will cause the market to dip in the short term. However, the anti-obesity drug market should grow again, with stakeholders increasingly accepting improved anti-obesity drugs in years to come. Opportunities will exist for both original-branded and generic products. Comprehensive analysis of the anti-obesity pharmaceutical marketGlobal Anti-Obesity Treatments Market 2010-2025 critically examines that sector through a comprehensive review of information sources. We harness both unique primary and secondary research. This report provides unique sales forecasts, market share analyses, discussions of pipeline developments and analyses of commercial drivers and restraints, including a SWOT analysis. There are 65 tables and figures included, as well as interviews with relevant experts. The result is a comprehensive market- and industry-centred study, with detailed analyses and informed opinion to benefit your work. Why you should buy Global Anti-Obesity Treatments Market 2010-2025This report gives you the following benefits in particular:• You will receive a comprehensive analysis of the prospects for anti-obesity drugs from 2010 to 2025, including predicted revenues, growth rates and other metrics• You will receive an overall forecast for the global anti-obesity drug market from 2010 to 2025, with comprehensive discussions and other supporting information• You will find out where the market is heading – both technologically and commercially – from 2010 onwards• You will receive sales forecasts for the leading national markets from 2010 to 2025 (US, UK, Germany, France, Spain, Mexico, Brazil and South Korea), with prospects for China and India discussed• You will discover prospects for treatments in light of present concerns and setbacks• You will identify key R&D pipeline developments and up-and-coming products• You will discover the drivers, restraints, competition and opportunities influencing the anti-obesity sector• You will investigate under-met needs in obesity treatment, with both therapeutic requirements and commercial opportunities discussed• You will discover expert views from our survey.  

To know more and to buy a copy of your report feel free to visit : http://www. bharatbook. com/detail. asp?id=133087&rt=Global-Anti-Obesity-Treatments-Market-2010-2025. html OrContact us at :Bharat Book BureauTel: +91 22 27578668Fax: +91 22 27579131Email: info@bharatbook. com Website: www. bharatbook. com Blog: http://bharatbookresearch. blogspot. com Follow us on twitter: http://twitter. com/3bbharatbook


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  Massive reduction and liquid problems of credit raiting in banks (for the first time in (Northern Rock) in April and May 2007 and since 2005, the range of problems such as the results of slump in real estate, influence on devaluation bank assets and manifestation of bankruptive effect on a number of banks have reached crisis point by September 2008.

The financial sector has been seriously damaged by an unprecedented rise in prices considerably decreased after triggering the financial crisis and credit squeeze.

In the structure of consumption, forced high cost made a negative influence on the broad masses of population’s savings and accordingly on the size of investments, also it caused the rise of cost price. therefore, demands decreased because of two factors. (second one wich was partially formed by the influence of the first one is connected to the reduction of corporations winning and the slump on their bonds). In 2007 for the purpose of reduction in the price of oil, concrete non-co-ordination experiment by the central banks of separate countries, in the usage of money credit regulation in currency rates, considering taxation balance sheet. On the background of multidimensional, different priorities and difficulties, the problems were mostly revealed in the difference of interest rates. The rise in oil price, must have firstly been reflected in the USA $ purchasing capacity, but in a number of countries, all over the world, oil import (reflected on money) when in deals, it is invested in USA $, it raised the demands on USA $ currency and conditioned the devaluation on Japanese yen, euro and pound sterling. For  the beginning of reduction in oil price, financial crisis had already been  from the USA, withal president election in the USA created an atmosphere for the better future changing. Currently, the countries all over the world, cut main interest rates and accordingly the difference among them is decreasing.  

 

Securities market has significantly been damaged by the devaluation of assets of special companies, established by banks for the purpose of credit securitization. (SPV) assets include commercial debt obligations (CDO) namely, in this case, mostly mortgage credit obligations (CMO), that represent one of the varieties of obligations, provided jointly with active bond securities (ABS) and mortgage bond securities. This real pyramid, in which every following, next level securities were partially provided with lower level securities, but one of the providing means for MBS was corresponding real estate; Herewith, the partial price cut for real estate depreciate all kinds of securities.

What happened on Wall Street? Along with banks that do not count the loss of subprime loans and grants to address the causes of the financial crisis, experts have carried out on its Centers for perpetrators of so-called “quants” Wall Street and the world’s major financial centers. It is difficult to point out only one side, Current events are saying, the fishing murky water. “On the one hand, we can not blame the credit agreements with financial institutions to maintain market share through an aggressive, but only if a non-normative, rather than only those regulations, which have demanded the opportunity to have positive expectations of banks and other financial institutions, both the subjects of irresponsible and inappropriate behavior towards a fund for depositors and borrowers (VO i would be much more correct to say that they should not have done it this way there). As I am a millionaire bettors is the casino in Monte Carlo. Passed frames mitigated ; äruse (such as the normative or regulative capital ratio of risk assets ratio, the liquid requires a legislative restriction on the borders open to foreign hrungspositionen formal protection, and other arguments) do not or can not be the V & # xE4; lja appropriate new methods of risk monitoring, development and extension of credit, the balance of operations. hereby bonus, employee benefits, which are active in the recovery plan Western financial institutions (which, of course, be used, we mean not just a broker). This will increase the interest of an agent on the growth in size and grow in a conflict of interest if the organization offers, brokerage services, the growth of bonuses payment, but in reality, this is the main threat, the potential damage.

Now, let’s go back again with “quants” and their mathematical methods, that is somehow based on the exact science, but resembles sophistic resistances of high mathematics, that is e. g. connected to the correlation of two inspirational functions or to one and the same number, that is the result of again two functions correlation.

It is paradoxic, but just such details made us move from the science, constructed on elementary basis to the most complicated and the most common concepts and dichotomy of time discreteness. (The last one is universally acknowledged in philosophy). It sounds again paradoxic, but wisdom is in simplicity and according to Georgian writer Ilia Chavchavadze, there are no small and big miracles. Sophistical models, that use multileveled and multivariational methods of analysis, often lose the focus and their usage in controlling assets and obligations, creates it self the new origin of risk. Besides, most of these models are far from elementary basis and correspondingly the results of analysis are difficult to be apprehended and sometimes even unessential. It must be said that, during the last several years, the programmes of financial management are available through the internet and the providers try to advertise their products by means of difficult multidimensional scheme annotation and incomplete promo versions; amongst, there are lots of facts of amateurish creativeness. Sometimes the part of  unqualified managers follow Uindly and use these computer systems with confidence. Besides incorrect decisions and problems, we mustn’t forget the problem of villanios and indecorous act of managers and generally the staff. It is important to consider the fact of misinforming the shareholders and markets by means of asymmetric information to get the desirable aim. Recently, this kind of incident happened to Societe Generalr after it revealed that, the management had executed a series of “elaborate, fictitious transactions” in 2008, in the hope of covering this problem from other accounts and after E 5 billion fraud that had lately been informed to stock exchange and shifted the blame on employee. The fact that the sums are so large, gives an indication of just how leveraged everything is today and how volatile equality positions are – conclusions are up to the reader.

CAUSE AND EFFECTIVE ASPECTS OF CRISIS. And still, concretely, what is a main virus, that developed immunodeficite syndrome and collapsed all the economy and its vital financial system? Only separate aspects can be shown in connection with this problem and only on the basis of partially revealed diagnosis of symptoms. In accordance with, if what causes and effects of problems we connect to each-other and discuss more deeply. The rest of the aspects will be presented comperatively in a narrow sense or in other worlds, we can’t manage to reinstate the reality of cause and effective problems completely. So far, it is beyond human mind to imagine more than three-dimention complex sphere. It is theoretically proved and is implemented in the risk evaluation and computer models and system controlling. The irrelevant quality of unequal confidence of financial managers as well as ordinary people, towards the not-fully completed products of  cybernetics and also the most important post economic virtual illusions of the outgrowth of scientific-technological revolution simulational computer models of financial, or other risk taking portfolio management, radically changed the cognition of reality, attitude towards risk, future realizations and they turned into the main provocative factors in the ruling process of unnatural approaches of interrelations and scale-proportions.

It is really difficult to define for the first time, what was the reason for sacrifing the functioning of billions of dollars worth securities – global financial crisis or general economic problems. The tendency of vector in these interactions will be manifested according to what problems will be discussed and at what level or in other words, the direction of this vector is changing in the dynamics of crisis development.

The problems of credit raitings and liquidation in the bank-credit organizations were almost less before the crisis revealing, not because of the fact that credit risks were not increased, but they were simply shifted in outbalance accounts. The reason is one sided – as increased risk factor not to have been used in calculation of assets, according to the risks of regulation demands. Instead of risk hiding and debuting liabilities, for the purpose of attracting liquid money flows, the usage of security and credit derivatives are cursedly effective, though regulators’ reaction found out to be quite belated and mild.

INFLUENCE OF PRICE ALTERATION ON REAL ESTATE? On the one hand eluding the restrictions, connected to the regulatory arbitration and 10-15 year-practiced prognoses, based on economic growth tendencies, pushed the credit managers into very bold credit expansion. At the initial stage, it caused consumer’s boom, growth of prices in dwelling and economy. At the background of increased activity, corporations were trying to increase the money flow and issue securities, bonds and other obligations; together with the appearance of new corporations and complicated securities, potential investors. (among them, there are a lot of unskilled people, who most of the time buy securities through internet, not only because of their real income, but according to their interest rate, without any serious risk-analysis). The bankruptcy grew the attractiveness of debt securities as much as it was possible, as if “financial balloon” would have been “inflated” towards credit organizations and torn away the most rapidly increasing credit sector of economy from the real one. Formation of “credit balloon” is connected with the housing and dwelling space boom. The price up growth, caused by increased accessibility of mortgage credit, could have been continued until changing the situation in the real estate market, although the limited immigration to the USA and the UK cut down demands of dwelling-spaces in these huge markets. The banks were interested in increasing the costs of real estate. It can be explained by the following conditiones: mortgage credits were provided with the flats on sale and accordingly their market price defines the existence of possible losses or their size of credits in the case of default by debtors, until the term expires or before default, suitable credit letter or security, steadied by it, as the cost of assets.

Creditor’s interest against the debtor, with price growth properties, and most importantly the mortgage term, price increases in cash flow increases , part of the current fees for the debtor’s property may be the most important part of their ability to pay. increase in the price of real estate intact, according to many debtors and increase competition in the credit agencies and organizations: motivation for reducing the debtors Bonitätsprü Fung banks, credit insurance, the mortgage and conditioned stress actually made it a priority debtors’ credit risk of a trivial matter. Although this is the first and largest source of recovery of loans and monitoring body at the request of the right tool for the mortgage loans must be used only in extreme situations. But this claim is pursued by banks, but it is important not only for borrowers to repay the loan instead of the results of credit checks (especially after the appropriate medium flow), but the dependence on the insurance decision-making of the credit agreement, he , means that the possibilities of standard indices are rather high. 2-3% rise in the real sector of the economy, where the distinction between the growth in terms of assets, such as part of the loan, including lower the borrowers have made it impossible. The apartments were moved to ownership of the banks, but back to the real estate markets.

Because of increased deliveries and frequent defaults, the limit on distribution the mortgage credits, caused disastrous slump in real estate property prices. On its side it ment the decline in the maintenance of mortgage credits. Tendency of slump and deterioration of  assets quality, that also conditioned the aggravation of liquidity problem, (during this period, reduction of credit rating, quite scared the investors and hedge funds) made the banks minimize the new credit delivering process. Real estate delivery, was mostly realized by using the mortgage credits and without this, the recession of building sector has not been delayed.

Conclusions on credit markets. . Let’s form everything in details and items. All the above mentioned and other problems as well and concretely the motives of credit crisis from the primary sources of financial crisis:

1.       While crediting, it wasn’t clear for the experts, if the pretender (afterwards-debtor) would manage to generate funds-flow for covering the mortgage.

2.       It was almost possible to cover the price of purchasable house by mortgage or in other words, debtor’s participation was minimal.

3.       Interest rate could be changed into many kinds of loans or increased distinctly, that wasn’t realized by everybody else.

4.       Very often, mortgage loan was used for other purposes by debtors in order to get ready money.

5.       Many credit officers and brokerage firms pushed potential debtors and helped them to create a false profile (mask) of solvency, with the object of getting bonus, commission etc.

SUBPRIME MORTGAGE. SUBPRIME CREDITING . We have already talked about the question of debtor’s solvency in the section of cost economy and accent ensurance. We will also make remark that the analysis of debtors is quite complicated. The causing problems are the following: Rapid spread of network marketing, development of virtual economy, (when the payments and incomes, estimation of softwares are not fixed) also the difficulties in estimation of managing skills and the motive power of corporative relations of human capital conditioned and increased the frequency of inadequate decisions.

Herewith, the banks, in comparison with their rivals were trying not to bother potential debtors infrequently at request of documentation. In accordance with the share of subprime mortgage of incomplete documentation increased from 25% (2000) to 43% (2007).

Subprime crediting due to lack of savings, required the reduction of complicity demands on buying flats for  the low income debtors. The forecast for the price growth of flats, made subprime mortgage acceptable. Debtor’s participation  by using mortgage for buying the flat has reached 14% by 2000, although it has decreased to 4% since the following year and stopped at this level before revealing the crisis. This even turned into the important stimulator for the mentioned speculations.

Considering the high crediting and ensuring, accepted by giving subprime credits and credit derivatives (we mean, already existed fluctuations in real estate markets in 2001 and the tendency of slump in commercial and housing sales since 2005, also, according to the increased risks, rised expenses of nonbalanced operations of risk controlling and the slump of securities steadied by assets, due to the reduction of credit rating) compensation of market risks was developed by banks under the condition of giving credits by variable rate. If it fluctuated between 10%-23% in prime mortgage, for subprime one, amplitude and its lower bound as well were more: 50%-70%.

Generally, characteristic for RAPOC models, conseptional basis “profitableness according to the risk” is acceptable (in my opinion) on the level of crediting and in common, on the theoretical base level of investment, as the criterion of conferring priority to homogenous creditors, either for selecting one from investment project. But, it must be taken into consideration –how it will be guaranteed and how often it changes the corresponding risks of interest rate for different quantities. In case of large –sized loans, the growth of interest rate has a direct and complete influence on solvency of contragent itself. But in reality, as it seems for the people having less payment proficiency, interest demand was higher, than in the case of prime mortgage.

 

It must be said that, in case of business loans, in the form of providence (mortgage) because of the connection to the risks of the same businesses, a great share is applicable assets.

The banks were manipulating into interest rates not so often as they were analyzing the business plans and financial conditions of firms maximally. Herewith, the possibility of diversification, according to business types is higher, especially in the standpoint of supply. That is why, credit crisis and default quantities were mostly manifested in connection with mortgage obligations. Easily obtained supply, that in any case was presented by real estate during the default case, moved to the property of banks and, after they were offered to the market, that influenced on the increased supply by slump and it was difficult for them to repay the default by means of mortgage realization. At the same time, because of the practice of so called “air” selling, part of incompleted flats had not been finished by the time of default. Because of price slump, construction boom first was changed to stagnation and afterwards the recession case was revealed. In the chart, is shown the dynamic of price indexes of dwelling-houses, according to the basic level in 2000. As it is clear from the chart the pick in 2005, prices have been declining distinctly, but the number of vacant dwelling houses are increasing. Due  to the diminution of new constructions, this growth is mostly continued at the expense of confiscated flats by debtors and creditors, that makes the chart bold.

 

Owing to credits “corruption” and intensification of liquidity problems, part of the banks stopped even giving other kinds of credits or made the conditions stricter. Many banks experienced the reorganization of problem protection difficulties in regulation norms, capital and coefficient of liquidity; part of the banks bankrupted. Since the beginning of crisis in the USA, until now, the number of commercial banks has decreased about from 7280 to 700. (It is put of sense to name the exact number, as the unity process between the banks and their bankruptcy are still in progress. It became necessary to expiate the huge grants-Fannie Mae and Ginnie Mae by the Federal Reserve systems.

Extension of the credit institution is one of the most important area. Part of the “wholesale lending” is the total amount of credit to the extended segment, 60% 2004-90% in 2007. Naturally, the credit intermediaries (brokers, rather than the SG & # XFC, and interest) is less than the guarantee of repayment of credit by banks.

 

Taking credit officer’s interest (credits were issued even to the clients of less-solvency) was caused by bonus wage payment scheme, according to the  issued credits, about what, we have already mentioned above.

Competition made banks satisfy the borrowers’ interests in cash, connected to crediting; this fact and the reduction of debtor’s participation demands give the chance to borrowers to use credits aimlessly.

 

It caused the system mismanagement. (So the drawbacks of this system itself and inappropriate evaluation of its nature). 15 year old economic development, without any obstacles, made people think, that without rising the real sector of production, goods and services, enrichment were absolutely possible. Financial sector made a colossal, titanic oppress on the real sector of economy. Nowadays, only 2-3% of financial operations belong to real sector, but the rest of the funds work inside the finances. Current world economic financial crisis “from the great depression”, almost after 80 years, still confirms, that the self-flow economy develops not only within the bounds of maximal possibilities, – as it is drawn by Keens and other etatism representatives’’ (French. Etat. State) point of view, but it became the world’s highest pyramid of property differenciation, that now stands upside-down and oven one push, threatens with destruction. For the collapse of this pyramid, it was enough to break one of the connecting balance lines and such was the credit line, stretched between the building balance and banking giants, (here is not meant “credit line” defined especially from the view-point of economical terminology) that was “hung in the sky”. We will see, that construction of new houses was going on, according to the pyramid scheme, in the way that, the flats, in multistoried houses were sold, without even having the foundation under. Such interrelation, in the case of real situations is even necessary for the stimulation of economic growth, but while making prognosis, distinct kind of conservatism is necessary.

Analysts admit, that the main reason of today’s crisis, are not the problems of the USA mortgage markets. Mortgage is connected to real economy, that on its side is an essential instrument of investment demands. Mortgage liabilities in the USA complies $12-13 billion, but in the world currency markets, the size of operations combine $2 billion in a day and from here, only 4-5% of operations are in real economy and the rest of it is speculative money.

The scales of speculative operations were growing at a colossal speed -12-15% in a year. Money system, that made such an error, is impossible to exist long. It shakes the institute of private property. , that requires real, not virtual money. The first signs of crisis, as a rule, influence on banks, and only afterwards on the real sectors of economy, and after all, it moves to the financial sphere of the state and budget system. As the analysts say, today we are on the first stage of crisis.

As is known, has produced annual cost of $ 50000000000 goods and services anywhere in the world, but it is contrary to the securities to the amount of $ 1500000000000 values, such as government and private sector bonds, stocks, bonds, and so on and so forth.

 

Central banks from the other countries, with assistance of world’s financial system, began milliards of dollars in flow. At the distinct stage, it helped the situation, but temporarily. According to some analysts, it is impossible to fill this $1,5 quadrillion cursed hole, and even the total money reserves of the USA and Euro-zone central banks won’t be enough, moreover, pseudo-money, that is called securities can’t be transformed into cash.

What should we do?! According to the analysts. In order the world not to be found at the edge of world catastrophe, they should work in two directives: Continue real economic crediting, even if only today’s existing level be maintained.

The first direction is quite difficult, but necessary. Every day new information is born about “economic catastrophe” and the reason of it is credit freezing.

I just want financial structures, financial cooperation with the owners. While the destruction of the crises Everybody’s capital. From the perspective of experts, is one way to survive in the economy as much capital as possible in the economy. The amount of recapitalization should be more frequent and more severe, and the country should be able to control almost all the men and the main part of the country’s financial system, but only temporarily. Later, when the situation returns to its usual rules, started its disestablishment. Experts example is Switzerland, where the successful fightback after the early 1990s, its shares back to banks.

Because of the crisis, in a number of countries, complete or partial nationalization of took place. Lately, Great Britain put £50 billion (about £64 billion) on the recapitalization of Britain’s big banks. Great share, from this money -£37 billion is for the following banks: Royal Bank of Scotland HBOS and Lloyds TBS. In return for this, it is being planned to give shares from Royal Bank of Scotland and HBOS transfer control packet to the state. It is supposed that the temporary nationalization of banks will last more.

As we’ve mentioned above, we are only at the initial stage of crisis, but economist’s forethoughts are realizing and after New Year, that will collapse many well-known banks, industries, laboratories, universities, and after all the people’s future.

Somehow bank sphere, although temporarily sighed, but still real sectors of economy stayed without money. Banks don’t issue money any more. This terrible tendency will cause a huge problem not only for the real sectors of economy, but also for separate countries. Many countries live on the credits of financial institute and if the situation doesn’t change, a number of countries such as Pakistan, Argentina, Mexico, Hungary, the Ukraine ad others are against the danger of default. Furthermore, at the end of 2008, Iceland itself was at the edge of risk realization factor and the British Financial Institute were blamed for this.

“Fighting” methods of against crisis. Different methods of treatment are used in different countries against economic crisis.

In this or that sphere of economy, fighting against crisis, accordingly can devided into three models:

I. When the total sums inflow in the financial field, or the very case, that America did. It put $2,3 billion on assisting banks, but for supporting the real economy-10 times less.

Goverments of Canada, Ireland, The Netherlands and Sweden are also following this principle.

Method, which is the second model, when the government refers to all efforts to be a real economy. the only elected socialist China. The Office of the investments in infrastructure, agriculture and social sectors.

According to the analysts at the company Merrill Lynch, just this was the reason that the Chinese market is still in the center of attention for investors.

Some countries try to give the equel hand of assistance to financial sector as well as real economy. This model was only used, after the bad example of the USA. How many countries believe that only with the help of financial sphere, crisis would not be got over. Such countries are: Germany, France, Italy, Sweden and Japan.

 

The leaders of European Union, declared the assistance of $200 billion to member countries still in November. On 12 December, just this antirecessionary plan was proved in Brussels. According to the plan each member country will assign about 1,5% of money from their total income. € 30 billion from €200 billion will be assigned by investment bank. It is underlined in declaration, that according to the viewpoint of European Union countries, in the separate sectors of economy, taxation rates and extra value in taxations can be cut. According to the agreement, of European Union won’t let any big financial organizations be bankrupt. Because of maintaining the creditworthiness of banks the government plans to buy their shares. In short, for stimulating the economic growth, European Union will take deep co-ordinated measures.

According to experts, the world’s leading state have already spent in all $9,4 billion for antirecessionary measures.

Any kind of funds that will be used for the growth of economy is acceptable. Those expenses, which are used for social programmes and economic activities by states, it is possible to be a very heavy burden, bur the expenses, that will be assigned in the future because of today’s inactivity, will be much bigger burden, than the savings themselves.

 

Economic Doctor of Science Professor

Lamara Qoqiauri


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  Massive reduction and liquid problems of credit raiting in banks (for the first time in (Northern Rock) in April and May 2007 and since 2005, the range of problems such as the results of slump in real estate, influence on devaluation bank assets and manifestation of bankruptive effect on a number of banks have reached crisis point by September 2008.

Financial sector was considerably damaged by unprecedented growth of prices that significantly declined after eliciting financial crisis and credit restriction.

In the structure of consumption, forced high cost made a negative influence on the broad masses of population’s savings and accordingly on the size of investments, also it caused the rise of cost price. therefore, demands decreased because of two factors. (second one wich was partially formed by the influence of the first one is connected to the reduction of corporations winning and the slump on their bonds). In 2007 for the purpose of reduction in the price of oil, concrete non-co-ordination experiment by the central banks of separate countries, in the usage of money credit regulation in currency rates, considering taxation balance sheet. On the background of multidimensional, different priorities and difficulties, the problems were mostly revealed in the difference of interest rates. The rise in oil price, must have firstly been reflected in the USA $ purchasing capacity, but in a number of countries, all over the world, oil import (reflected on money) when in deals, it is invested in USA $, it raised the demands on USA $ currency and conditioned the devaluation on Japanese yen, euro and pound sterling. For  the beginning of reduction in oil price, financial crisis had already been  from the USA, withal president election in the USA created an atmosphere for the better future changing. Currently, the countries all over the world, cut main interest rates and accordingly the difference among them is decreasing.  

 

Securities market has significantly been damaged by the devaluation of assets of special companies, established by banks for the purpose of credit securitization. (SPV) assets include commercial debt obligations (CDO) namely, in this case, mostly mortgage credit obligations (CMO), that represent one of the varieties of obligations, provided jointly with active bond securities (ABS) and mortgage bond securities. This real pyramid, in which every following, next level securities were partially provided with lower level securities, but one of the providing means for MBS was corresponding real estate; Herewith, the partial price cut for real estate depreciate all kinds of securities.

WHAT IS HAPPENING IN WALL-STREET? Together with banks, those who can’t cope with the loss counting caused by  subprime credits and giving bonuses to are blamed by the experts of financial centres for crisis, the offenders are so called “quants” in Wall Street and the world’s main financial centres. It is difficult to judge the point from only one side, current events are adequate to the saying “fish in troubled water”. On the one hand we can’t blame financial institute for aggressive crediting to maintain the market share, if it is prompted by positive expectation, but only in the case of legal-regulative normatives; just these regulations must not have given the opportunity to the banks and other financial subjects to behave so irresponsibly and indecorously towards the depositors and debtors’ funds (or it would be much more correct to say that, they shouldn’t have done it in this way). As the millionaire punters do, in the casinos of Monte Carlo. Existed frames of regulation (such as regulative normatives, namely, in the ratio of risk assets to the capital coefficients, liquid normatives of reserve demands, limits of open currency positions and others from the arguments of formal protection) do not or cannot correspond to the new methods of risk controlling, development of credit derivatives and expansion of out balance operations. Herewith, the bonus compensation, of employees, that is actively used as a repayment scheme by western financial institutes (obviously, we do not mean only brokerage houses). This increases the interest of agents in the growth of deals in size and also will rise the interest conflict, when operation offers the agent, the growth of bonus payments, but in reality it threatens the principal with potential loss.

Now, let’s go back again with “quants” and their mathematical methods, that is somehow based on the exact science, but resembles sophistic resistances of high mathematics, that is e. g. connected to the correlation of two inspirational functions or to one and the same number, that is the result of again two functions correlation.

It is paradoxic, but just such details made us move from the science, constructed on elementary basis to the most complicated and the most common concepts and dichotomy of time discreteness. (The last one is universally acknowledged in philosophy). It sounds again paradoxic, but wisdom is in simplicity and according to Georgian writer Ilia Chavchavadze, there are no small and big miracles. Sophistical models, that use multileveled and multivariational methods of analysis, often lose the focus and their usage in controlling assets and obligations, creates it self the new origin of risk. Besides, most of these models are far from elementary basis and correspondingly the results of analysis are difficult to be apprehended and sometimes even unessential. It must be said that, during the last several years, the programmes of financial management are available through the internet and the providers try to advertise their products by means of difficult multidimensional scheme annotation and incomplete promo versions; amongst, there are lots of facts of amateurish creativeness. Sometimes the part of  unqualified managers follow Uindly and use these computer systems with confidence. Besides incorrect decisions and problems, we mustn’t forget the problem of villanios and indecorous act of managers and generally the staff. It is important to consider the fact of misinforming the shareholders and markets by means of asymmetric information to get the desirable aim. Recently, this kind of incident happened to Societe Generalr after it revealed that, the management had executed a series of “elaborate, fictitious transactions” in 2008, in the hope of covering this problem from other accounts and after E 5 billion fraud that had lately been informed to stock exchange and shifted the blame on employee. The fact that the sums are so large, gives an indication of just how leveraged everything is today and how volatile equality positions are – conclusions are up to the reader.

CAUSE AND EFFECTIVE ASPECTS OF CRISIS. And still, concretely, what is a main virus, that developed immunodeficite syndrome and collapsed all the economy and its vital financial system? Only separate aspects can be shown in connection with this problem and only on the basis of partially revealed diagnosis of symptoms. In accordance with, if what causes and effects of problems we connect to each-other and discuss more deeply. The rest of the aspects will be presented comperatively in a narrow sense or in other worlds, we can’t manage to reinstate the reality of cause and effective problems completely. So far, it is beyond human mind to imagine more than three-dimention complex sphere. It is theoretically proved and is implemented in the risk evaluation and computer models and system controlling. The irrelevant quality of unequal confidence of financial managers as well as ordinary people, towards the not-fully completed products of  cybernetics and also the most important post economic virtual illusions of the outgrowth of scientific-technological revolution simulational computer models of financial, or other risk taking portfolio management, radically changed the cognition of reality, attitude towards risk, future realizations and they turned into the main provocative factors in the ruling process of unnatural approaches of interrelations and scale-proportions.

It is really difficult to define for the first time, what was the reason for sacrifing the functioning of billions of dollars worth securities – global financial crisis or general economic problems. The tendency of vector in these interactions will be manifested according to what problems will be discussed and at what level or in other words, the direction of this vector is changing in the dynamics of crisis development.

The problems of credit raitings and liquidation in the bank-credit organizations were almost less before the crisis revealing, not because of the fact that credit risks were not increased, but they were simply shifted in outbalance accounts. The reason is one sided – as increased risk factor not to have been used in calculation of assets, according to the risks of regulation demands. Instead of risk hiding and debuting liabilities, for the purpose of attracting liquid money flows, the usage of security and credit derivatives are cursedly effective, though regulators’ reaction found out to be quite belated and mild.

INFLUENCE OF PRICE ALTERATION ON REAL ESTATE? On the one hand eluding the restrictions, connected to the regulatory arbitration and 10-15 year-practiced prognoses, based on economic growth tendencies, pushed the credit managers into very bold credit expansion. At the initial stage, it caused consumer’s boom, growth of prices in dwelling and economy. At the background of increased activity, corporations were trying to increase the money flow and issue securities, bonds and other obligations; together with the appearance of new corporations and complicated securities, potential investors. (among them, there are a lot of unskilled people, who most of the time buy securities through internet, not only because of their real income, but according to their interest rate, without any serious risk-analysis). The bankruptcy grew the attractiveness of debt securities as much as it was possible, as if “financial balloon” would have been “inflated” towards credit organizations and torn away the most rapidly increasing credit sector of economy from the real one. Formation of “credit balloon” is connected with the housing and dwelling space boom. The price up growth, caused by increased accessibility of mortgage credit, could have been continued until changing the situation in the real estate market, although the limited immigration to the USA and the UK cut down demands of dwelling-spaces in these huge markets. The banks were interested in increasing the costs of real estate. It can be explained by the following conditiones: mortgage credits were provided with the flats on sale and accordingly their market price defines the existence of possible losses or their size of credits in the case of default by debtors, until the term expires or before default, suitable credit letter or security, steadied by it, as the cost of assets.

Creditor’s interest, connected with the price growth of real estate is against the debtor and that is the most essential during the period of mortgage, price growing in funds flow increases the share of expenses: Debtor’s funds flow is the most important component of its solvency. Undisturbed up growth of price on real estate, accordingly a great number of debtors and reinforcement of  competition among credit organizations: motivation of cutting down the expenses of debtors’ credit analysis by banks, conditioned mortgaging credit insurance to be accented and in fact, this priority made debtors credit analysis into a minor importance question. Though it must be the first and uppermost source of covering the loans and according to the request of prudential law, mortgage as a means of covering loans must be used only in the extreme situations. Yet, this request is followed by banks, still, the important is not only loan repayment by debtors, instead of the results of credit analysis (especially, according to the corresponding funds-flow) but dependence on insurance while taking decision about credit, means that the possibilities of default indices are quite high. Rising by 2-3% in the real sector of economy, in the conditions of property differentiation growth, for the part of such outnumbered debtors credit covering has turned out impossible. The flats, had been moved in the property of banks, still returned back to the real estate markets.

Because of increased deliveries and frequent defaults, the limit on distribution the mortgage credits, caused disastrous slump in real estate property prices. On its side it ment the decline in the maintenance of mortgage credits. Tendency of slump and deterioration of  assets quality, that also conditioned the aggravation of liquidity problem, (during this period, reduction of credit rating, quite scared the investors and hedge funds) made the banks minimize the new credit delivering process. Real estate delivery, was mostly realized by using the mortgage credits and without this, the recession of building sector has not been delayed.

Conclusions on credit markets. . Let’s form everything in details and items. All the above mentioned and other problems as well and concretely the motives of credit crisis from the primary sources of financial crisis:

1.       While crediting, it wasn’t clear for the experts, if the pretender (afterwards-debtor) would manage to generate funds-flow for covering the mortgage.

2.       It was almost possible to cover the price of purchasable house by mortgage or in other words, debtor’s participation was minimal.

3.       Interest rate could be changed into many kinds of loans or increased distinctly, that wasn’t realized by everybody else.

4.       Very often, mortgage loan was used for other purposes by debtors in order to get ready money.

5th Many loan officers and brokerage firms shifted to potential borrowers and helping them to create a profile (mask) the solvency, etc. in order to obtain bonuses, commissions

SUBPRIME MORTGAGE. SUBPRIME CREDITING . We have already talked about the question of debtor’s solvency in the section of cost economy and accent ensurance. We will also make remark that the analysis of debtors is quite complicated. The causing problems are the following: Rapid spread of network marketing, development of virtual economy, (when the payments and incomes, estimation of softwares are not fixed) also the difficulties in estimation of managing skills and the motive power of corporative relations of human capital conditioned and increased the frequency of inadequate decisions.

Herewith, the banks, in comparison with their rivals were trying not to bother potential debtors infrequently at request of documentation. In accordance with the share of subprime mortgage of incomplete documentation increased from 25% (2000) to 43% (2007).

Subprime crediting due to lack of savings, required the reduction of complicity demands on buying flats for  the low income debtors. The forecast for the price growth of flats, made subprime mortgage acceptable. Debtor’s participation  by using mortgage for buying the flat has reached 14% by 2000, although it has decreased to 4% since the following year and stopped at this level before revealing the crisis. This even turned into the important stimulator for the mentioned speculations.

Considering the high crediting and ensuring, accepted by giving subprime credits and credit derivatives (we mean, already existed fluctuations in real estate markets in 2001 and the tendency of slump in commercial and housing sales since 2005, also, according to the increased risks, rised expenses of nonbalanced operations of risk controlling and the slump of securities steadied by assets, due to the reduction of credit rating) compensation of market risks was developed by banks under the condition of giving credits by variable rate. If it fluctuated between 10%-23% in prime mortgage, for subprime one, amplitude and its lower bound as well were more: 50%-70%.

Generally, characteristic for RAPOC models, conseptional basis “profitableness according to the risk” is acceptable (in my opinion) on the level of crediting and in common, on the theoretical base level of investment, as the criterion of conferring priority to homogenous creditors, either for selecting one from investment project. But, it must be taken into consideration –how it will be guaranteed and how often it changes the corresponding risks of interest rate for different quantities. In case of large –sized loans, the growth of interest rate has a direct and complete influence on solvency of contragent itself. But in reality, as it seems for the people having less payment proficiency, interest demand was higher, than in the case of prime mortgage.

 

It must be said that it is a form of corporate loans in Providence (mortgage), because the connection is a risk of the same company, a large part of the property.

The banks were manipulating into interest rates not so often as they were analyzing the business plans and financial conditions of firms maximally. Herewith, the possibility of diversification, according to business types is higher, especially in the standpoint of supply. That is why, credit crisis and default quantities were mostly manifested in connection with mortgage obligations. Easily obtained supply, that in any case was presented by real estate during the default case, moved to the property of banks and, after they were offered to the market, that influenced on the increased supply by slump and it was difficult for them to repay the default by means of mortgage realization. At the same time, because of the practice of so called “air” selling, part of incompleted flats had not been finished by the time of default. Because of price slump, construction boom first was changed to stagnation and afterwards the recession case was revealed. In the chart, is shown the dynamic of price indexes of dwelling-houses, according to the basic level in 2000. As it is clear from the chart the pick in 2005, prices have been declining distinctly, but the number of vacant dwelling houses are increasing. Due  to the diminution of new constructions, this growth is mostly continued at the expense of confiscated flats by debtors and creditors, that makes the chart bold.

 

Owing to credits “corruption” and intensification of liquidity problems, part of the banks stopped even giving other kinds of credits or made the conditions stricter. Many banks experienced the reorganization of problem protection difficulties in regulation norms, capital and coefficient of liquidity; part of the banks bankrupted. Since the beginning of crisis in the USA, until now, the number of commercial banks has decreased about from 7280 to 700. (It is put of sense to name the exact number, as the unity process between the banks and their bankruptcy are still in progress. It became necessary to expiate the huge grants-Fannie Mae and Ginnie Mae by the Federal Reserve systems.

Broadening of broker’s loans is one of the most important surroundings. The share of so called “wholesale loans” in the total credit size widened from 60% segment in 2004 to 90% in 2007. It is natural that credit mediators (but only brokers not dealers) are less interested in guaranteeing credit refunds than banks.

 

Taking credit officer’s interest (credits were issued even to the clients of less-solvency) was caused by bonus wage payment scheme, according to the  issued credits, about what, we have already mentioned above.

Competition made banks satisfy the borrowers’ interests in cash, connected to crediting; this fact and the reduction of debtor’s participation demands give the chance to borrowers to use credits aimlessly.

 

It caused the system mismanagement. (So the drawbacks of this system itself and inappropriate evaluation of its nature). 15 year old economic development, without any obstacles, made people think, that without rising the real sector of production, goods and services, enrichment were absolutely possible. Financial sector made a colossal, titanic oppress on the real sector of economy. Nowadays, only 2-3% of financial operations belong to real sector, but the rest of the funds work inside the finances. Current world economic financial crisis “from the great depression”, almost after 80 years, still confirms, that the self-flow economy develops not only within the bounds of maximal possibilities, – as it is drawn by Keens and other etatism representatives’’ (French. Etat. State) point of view, but it became the world’s highest pyramid of property differenciation, that now stands upside-down and oven one push, threatens with destruction. For the collapse of this pyramid, it was enough to break one of the connecting balance lines and such was the credit line, stretched between the building balance and banking giants, (here is not meant “credit line” defined especially from the view-point of economical terminology) that was “hung in the sky”. We will see, that construction of new houses was going on, according to the pyramid scheme, in the way that, the flats, in multistoried houses were sold, without even having the foundation under. Such interrelation, in the case of real situations is even necessary for the stimulation of economic growth, but while making prognosis, distinct kind of conservatism is necessary.

Analysts admit, that the main reason of today’s crisis, are not the problems of the USA mortgage markets. Mortgage is connected to real economy, that on its side is an essential instrument of investment demands. Mortgage liabilities in the USA complies $12-13 billion, but in the world currency markets, the size of operations combine $2 billion in a day and from here, only 4-5% of operations are in real economy and the rest of it is speculative money.

The scales of speculative operations were growing at a colossal speed -12-15% in a year. Money system, that made such an error, is impossible to exist long. It shakes the institute of private property. , that requires real, not virtual money. The first signs of crisis, as a rule, influence on banks, and only afterwards on the real sectors of economy, and after all, it moves to the financial sphere of the state and budget system. As the analysts say, today we are on the first stage of crisis.

As it is known, annually $50 billion cost of goods and services are produced all over the world, just this sum of money is contradicted the securities of $1,5 quadrillion value; such as, state and private bonds, shares, bills and so on and so forth.

 

Central banks from the other countries, with assistance of world’s financial system, began milliards of dollars in flow. At the distinct stage, it helped the situation, but temporarily. According to some analysts, it is impossible to fill this $1,5 quadrillion cursed hole, and even the total money reserves of the USA and Euro-zone central banks won’t be enough, moreover, pseudo-money, that is called securities can’t be transformed into cash.

What should we do?! According to the analysts. In order the world not to be found at the edge of world catastrophe, they should work in two directives: Continue real economic crediting, even if only today’s existing level be maintained.

The first way is quite difficult, but necessary. Every day new information about “economic disaster” and the reason why he was born in a credit freeze.

I just want financial structures, financial cooperation with the owners. While the destruction of the crises Everybody’s capital. From the perspective of experts, is one way to survive in the economy as much capital as possible in the economy. The amount of recapitalization should be more frequent and more severe, and the country should be able to control almost all the men and the main part of the country’s financial system, but only temporarily. Later, when the situation returns to its usual rules, started its disestablishment. Experts example is Switzerland, where the successful fightback after the early 1990s, its shares back to banks.

Because of the crisis, in a number of countries, complete or partial nationalization of took place. Lately, Great Britain put £50 billion (about £64 billion) on the recapitalization of Britain’s big banks. Great share, from this money -£37 billion is for the following banks: Royal Bank of Scotland HBOS and Lloyds TBS. In return for this, it is being planned to give shares from Royal Bank of Scotland and HBOS transfer control packet to the state. It is supposed that the temporary nationalization of banks will last more.

As we’ve mentioned above, we are only at the initial stage of crisis, but economist’s forethoughts are realizing and after New Year, that will collapse many well-known banks, industries, laboratories, universities, and after all the people’s future.

Somehow bank sphere, although temporarily sighed, but still real sectors of economy stayed without money. Banks don’t issue money any more. This terrible tendency will cause a huge problem not only for the real sectors of economy, but also for separate countries. Many countries live on the credits of financial institute and if the situation doesn’t change, a number of countries such as Pakistan, Argentina, Mexico, Hungary, the Ukraine ad others are against the danger of default. Furthermore, at the end of 2008, Iceland itself was at the edge of risk realization factor and the British Financial Institute were blamed for this.

“Fighting” methods of against crisis. Different methods of treatment are used in different countries against economic crisis.

In this or that sphere of economy, fighting against crisis, accordingly can devided into three models:

I. When the total sums inflow in the financial field, or the very case, that America did. It put $2,3 billion on assisting banks, but for supporting the real economy-10 times less.

Goverments of Canada, Ireland, The Netherlands and Sweden are also following this principle.

Method can be considered as the second model, when the government refers all its efforts towards the real sectors of economy. Just this way Socialist China was chosen. Its authority made an investment in infrastructure, agriculture and social fields.

According to the analysts at the company Merrill Lynch, just this was the reason that the Chinese market is still in the center of attention for investors.

Some countries are trying to give a hand equel help the financial sector and real economy. This model was only a bad example of the United States. How many countries do not believe that only the finance field with the assistance of the crisis could have been. These countries are: Germany, France, Italy, Sweden and Japan.

 

The leaders of European Union, declared the assistance of $200 billion to member countries still in November. On 12 December, just this antirecessionary plan was proved in Brussels. According to the plan each member country will assign about 1,5% of money from their total income. € 30 billion from €200 billion will be assigned by investment bank. It is underlined in declaration, that according to the viewpoint of European Union countries, in the separate sectors of economy, taxation rates and extra value in taxations can be cut. According to the agreement, of European Union won’t let any big financial organizations be bankrupt. Because of maintaining the creditworthiness of banks the government plans to buy their shares. In short, for stimulating the economic growth, European Union will take deep co-ordinated measures.

According to experts, the world’s leading state have already spent in all $9,4 billion for antirecessionary measures.

Any kind of funds that will be used for the growth of economy is acceptable. Those expenses, which are used for social programmes and economic activities by states, it is possible to be a very heavy burden, bur the expenses, that will be assigned in the future because of today’s inactivity, will be much bigger burden, than the savings themselves.

 

Professor of Economics Doctor

Lamara Qoqiauri


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In today’s society we move at an incredibly fast pace and with this fast pace comes a continually evolving environment. When we consider the wide-spread integration of high level technology globally, the best may be yet to come. There are numerous reasons why we may want to consider expanding our operations globally; increased sales, access to new resources and markets, and potential productivity cost efficiency improvements. As the world continues to grow, new businesses will continue to be created; these businesses are being created by new breeds of entrepreneurs. These entrepreneurs were born into a world of global business, they see the opportunities and they are not afraid to step forward.

Let’s talk about how we can move forward, let’s talk about resources for a minute. Companies need certain resources to carry out their business activities, this creates a situation where they must constantly monitor and take into consideration the cost of acquiring these needs. In order to keep total product cost levels acceptable, certain built in monitors must be developed. However if there is a more cost efficient and high-quality production option, it should be considered. This is happening around the world now globally, some throw the word ‘outsourcing’ around, and others say they are merging business communities. Regardless, it has created all sorts of new business angles and opportunities for growth and expansion into new markets.

Since the cultures, politics, economics, and laws are not the same in all countries, there can be different barriers to entry in certain regions. We must rely on research based upon the local demographic & economics of the region, and conduct our analysis accordingly. Some barriers may be modifications of products/services for local preferences. In addition, cultural elements play a large role in determining what products are appealing and accepted amongst the local target market.

Government regulations, government stability, and overall corruption are factors that must always be considered when pursuing business in an unfamiliar foreign land, just as it would be domestically. Some governments take a hard line position on new products or forms of commerce being conducted in their country, while other countries are very receptive and offer incentives for doing business in their countries. There are numerous consulting agencies, such as Motivated Entrepreneur Consulting that can assist us in locating individuals who have specific data on any existing as well as emerging markets.

When determining our entry, we should consider numerous variables. ‘Market Size’ gives us a picture of the size of the overall economy, mixed with a comparison of the ‘Growth Rate’ for that specific market, it can be very useful in determining when markets are shrinking or growing. ‘Commercial Infrastructure’ looks at the channels of distribution that exist in the territory as well as the physical feasibility of conducting business in that area, such as paved roads, phone lines, etc.

Once we have done our research and decided our business is going global, the possibilities begin, let’s review and cover the basics. As in any new business we may start, we need to begin networking and assembling our list of needed resources, contacts, and potential clients. We need to determine the best ways to utilize those contacts and start going after our target market. Thanks to the Internet this has become much easier for us to do now. However, beware of Internet scams which are occurring more often these days. A great source of online market information is Lexis-Nexis news reports from around the world.

Marketing our products/services can be difficult anywhere, let alone in a foreign market. Consulting a professional who can guide us in each market we choose to enter will be most efficient. We need to determine how our product/service will enter the market utilizing its strength or minimizing its weaknesses. Going global is a good thing, and the opportunities continue to increase as technology continues to evolve. With the right product/service, there are numerous opportunities waiting to be seized. As long as we do the proper research and put in the necessary time and effort, the rewards should be great. read more information about article business click here


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