Join the mailing list

Click here to read our privacy policy

 

Subscribe to emel's RSS Feed Subscribe to emel's RSS Feed

 

Bateel Skycraper

 

The Credit Crunch

The Credit Crunch

Issue 64 January 2010

What caused the Greatest Economic Crisis in History?  

 

A year after the biggest financial crisis the world has ever faced, Dubai’s recent debt default is a reminder that the aftershocks still haven’t passed. Talha Ghannam investigates cause behind the greatest economic crash in history.

 

Unlike previous crises, the premise upon which the economy stands has been shaken with every institution and country affected either directly or indirectly. The cause; a financial system built upon risk, interest and greed, driving people to make the  decisions on investments driven by self gain in the short run. 

Over the last few decades, the world financial system has developed a series of complex financial tools; derivatives, CDIs (Credit Default Swaps) and short selling to name a few. The aim: to minimise investment risk, allow for easier trading and bring greater profits to investors. However, these have also had an adverse side effect, building a market of “speculation”, relying on the prices of shares rather than the quality of the companies that run them.

This has led to many “bubbles” over the last century as people became blinded by rising prices and failed to see the falling demand for the good. This occurred most famously in the Great Depression of the 1930s, but has repeated many times since then such as the Asian Financial crisis in 1998 and the “dot-com” bubble in 2000. These are described as “boom and bust” periods in the economy, something politicians and financier have long tried to eliminate. 

 

To read the rest of this feature, get your latest issue of emel magazine>

 

1) Delivered to your door for only £3.50 with FREE Postage and Packaging

 

You can get your latest issue of emel with FREE Postage & Packaging.

Click here for terms and conditions

 

Call us on 020 7328 7300 or email info@emel.com.

  

2) Find your Local Stockist

 

Your latest issue of emel is also available in stores nationwide including WHSmith and Borders. 

Find your nearest stockist>

  

3) Subscribe for one year - now only £29.95

 

You can subscribe for only £29.95 (that's 50% off the standard UK subscription price) and get 12 issues delivered straight to your door, every month..

Call us on 020 7328 7300 or email info@emel.com




Bookmark this

digg
Add to DIGG
delicious
Add to del.icio.us
StumbleUpon
Stumble this
facebook
Share on Facebook

Share this

email
Send to a Friend
Link to this

Printer Friendly

print
Print in plain text

Comments

0 Comments

 

Leave a comment

 

Sign in or Register to leave a comment