Comparison between 1929-1933 crisis and 2008-2010 crisis
Being aware of the fact that a company is the result of various factors, and one of the most important factors is the environment in which the company functions we will make a short analysis of two compared periods. The economic crisis from 1929-1933:
The crisis started in 1929 in USA, and manifested in its initial phase as the crash from the Wall Street. Two moments that have marked the evolution of this crisis were the black Thursday(24.10.1929) when the fellow trend transformed from an ascending one into a decreasing one and the second one was the black Tuesday when all the grow up of the stock market from the last year was stopped. The stock market crisis created a financial crisis, a lot of banks going bankrupt, the industrial production decreased fast and the unemployment increased. This crisis is considered an overproduction one, the overproduction being one of the most important factors that generated it. In Romania the crisis was similar to the one from US the country being in a modernization process, the population especially the peasants who had loans for the agriculture modernization could not pay them anymore. In Romania the appearance of the crisis is a consequence of the national economic system connections with the worldwide economy. The effects in Romania manifested like a powerful decrease of the production in the metallurgical industry (iron, steel, etc), mining industry (coal, salt, etc) and agricultural industry. The banking system was faced with some major bankruptcies like: the bankruptcy of The General Bank of the Romanian Country, the Bercovits Bank and Marmorosch Blank Bank. At the level of the population the crisis consisted in collective redundancies, decreases of the purchasing power and of its general poverty. The state budget remained deficit for 3 consecutive years and the state tried to cover it by rising the taxation and taking recovery credits. The economic crisis from 2007-2010:
Like the first crisis the actual one started also in US at the beginning of 2007, and the first steps of it are: February 2007 rises the number of clients that don’t pay their “sub-prime” type loans (mortgages with high risk), causing the first bankruptcies of the specialized banking institutions; august 2007 significant decreases of the stock market, despite of the injection of liquidities in the markets made by the central Banks. There were registered banking bankruptcies, nationalization of the important financial institutions. The effects manifested under the shape of the economic activity decrease, of the rising of the bankruptcies and of the rate of unemployment. In Romania the crisis manifested starting with the forth trimester of the year 2008, under the shape of the liquidities crisis at the financial level which generated the loans and bankruptcies adjustment, the growth of the unemployment rate, decrease of the buying power of the population and of the excessive deficit of the consolidated budget of the state for whose cover were used unprecedented loans in the history of the country.
Nowadays for example the occidental countries are collaborating for the diminishing of the crisis effects on the financial markets, while in 1930’s there wasn’t a consulting, informing and cooperation mechanism. In the 1930’s the political persons didn’t think about saving the banks by using the injection of liquidities like they are doing now. In conclusion we can say that comparing the two crises we observe that in today’s crisis the companies are confronting with almost the same difficulties like in the 1929 crisis: • compression of the sales markets as a consequence of the consumption decrease; • the extreme difficult access to the financing resources as an effect of the liquidities reduction; • the high risk of not receiving the trade receivables generated of the growing bankruptcies...
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