The Effects of a Slumping Economy

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  • Topic: JPMorgan Chase, Investment, Washington Mutual
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  • Published : December 11, 2012
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The Effects of a Slumping Economy
Jennifer Crawford
MGT 435
April 6th, 2009

The Effects of a Slumping Economy

The Non-Effectiveness of some corporate decisions may have led us into this financial decline that we are seeing today. Not all decisions that are made in the business field are good ones. Some of those decisions can put the financial standing of a company in jeopardy or even push it right down the tubes.

The economic struggle that our country is experiencing is not something that just happened overnight. It takes some time for problems to escalate to a level that has now been reached. We have not seen times this bad since the great depression of the 1920s. Another historic time of depression is well underway. We are now seeing businesses close their doors, windows being boarded up, for sale or for lease signs in many shopping centers, and final close-out signs on every corner, so it seems. Businesses are going under due to such a decline in sales. With major businesses closing, that means loss of jobs and loss of income for individuals and families. And due to all of these circumstances, people can not afford to shop. They just can’t afford to buy anything extra. Allot of these people are struggling day to day, just to make ends meet in order to keep a roof over their heads and their families fed. And speaking of such, even the grocery industry has seen significant decline in sales. Some people can’t even afford to buy groceries. And when people are hungry and don’t have the means to support themselves anymore, they sometimes turn to criminal activities, so our crime rate is also on the rise.

These current events are not only affecting our United States of America, it has an effect worldwide. It affects the entire financial market and market place. Countries such as China and Japan are also experiencing decreased sales and loss of jobs as well. How can this down spiraling sequence of events be stopped? How can we right a wrong turn in these turbulent times? There are hundreds, maybe even thousands of financial analysts and experts that are studying these economic dire straits. They pick apart and dissect each and every part of what may have gone wrong and where they think we are headed. They have many different views on how this all started and what the exact cause may be. In one interview with Bloomberg Television, the following came to light: “This is a systemic financial crisis, there is no end to it,” stated by Nouriel Roubini, a professor of Economics and International Business at New York University. “It's a vicious circle between a contracting economy and greater credit and financial losses feeding on the economy”. Regular readers of this blog are familiar with Mr. Roubini’s views. He also stated, “here is a summary and significant extended update of my views that this will turn out to be the worst financial crisis since the Great Depression and the worst US recession in decades…” (http://www.rgemonitor.com/roubini-monitor). On yet another website, comes more information of the same magnitude, “It’s official: The United States financial crisis has reverberated around the world. Wall Street’s supernova imploded into a black hole, swallowing up the national economy, then destabilizing most locations reachable by commercial jet. That is to say, everything, everywhere”, (http://www.businesspundit.com/). So with these types of reports being given by most of the financial gurus out there, it seems to be the general consensus of our economic condition. Let’s take a look at where we seem to be hit the hardest and what affects our economic standing on a daily basis, just as normal everyday citizens. Let’s look at our Banks and Financial Investment companies. During this crisis, these institutions have a huge responsibility to the general public to keep their monies safe. We have entrusted them to invest for us and...
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