CARS IN EMERGING MARKETS
A global love affair
Nov 13th 2008From The Economist print edition
Emerging markets are the car industry’s big hope. But it won’t be an easy ride, says Matthew Symonds



The latest car suveys show that the American makes of cars have been declining while that of India, Brazil, china and Russia are increasing. The makes in the US that seem to be decling lately because of the recession have started merging with other car brands inorder to save their company. While this sales have been declining, the car sales in India and Africa are going high despite the recession in the US. This is because the people in the US take up loans to pay for their cars but the car dealer in the India and Africa only allow very small car loans. So the people have to save up and pay for the car before they get it. The big number of loans taken by US companies are too high now and some are thinking about bailling out. The only way they can save their brand and companies is by merging with other companies.





The Car Market



The fact that the US's recession has caused a big fall on the market showed that the car industry was likely to hit rock bottom for cars are grouped a as part luxury goods. The decline in the US care market seems to be providing new market for car companies such as the BRIC to sell more. The recent research shows that the Bric will be selling more that 30% its normal sales because to the decline in the US makes. The Brics who had the worst care sales in 1992 seems to proving otherwise because of where it is located. Being located in India and parts of Africa, it does not does not give big car debts like the makes in America do. Many of its customers do not have debts from them and the ones who do are very little. The joining of the car companies joining will create a monopoly in the market. This may effect car prizes, since they wont have any competititors in the market after the merging. The government may have to come in and regulate the car prizes since the car companies will be trying to make up for the loses that they are making now that the recession is taking place. The government should watch the car companies as they are going through this period to protect the pockets of the people who need cars.

Vancouver Sun, Friday, October 10, 2008
Forget panic- people are mad about the meltdown

According to Daphne Bramham, of The Vancouver Sun, Wall Streeter's greed is at the root to the economic meltdown going on. All the banks in Iceland are now government owned but it does not prevent the country from going bankrupt, but the people's greed cant be ignored either. Average Americans, thought it was possible to get mortgages with very low interest rates. Unlike the wall streeters, though, they are paying for their foolishness with bankruptcy, joblessness and possible homelessness. The government has then used their money to bail the banks out but the CEOs seem to enjoying their lives for the AIG’s executives just spent 223,000 in bills for a spa treatment. Should the government save the collapsing banking systems?


The government to the rescue

The banks had provided people with loans that would require them to pay the banks back with low interest rates thinking that they could handle it. As it turns out they can’t handle it and now it is causing the economic meltdown that people are facing. the fact that the banks are short of money means that small business owners wont be getting any more money to expand their businesses and there for wont be spending their money or buy a house because they are saving up for future expected crisis that have been foreshadowed. this is making the economy worse because if the small business owner who is the average Joe is not spending his money then the banks are not getting any money meaning that money I snot circulating. The government has then decided to put the taxpayer's money to bail out the banks to allow the circulation of money to go on. If the banks have money, they will be able to give loans to the average Joe to increase his business and maybe buy a house in the near future and increase his spending. The only way the economy is ever going to be the same is if the government saves the collapsing banking systems to ensure that the circulation of money is being completed but it should also monitor the way the money is being used.

Not beyond crisis management

Article from The Economist print Edition

Bold I deas for solving America's finacial mess

With the financial crisis going on in the Americans tacticians and strategists are deciding in each case whether taxpayers should bail out their distressed bank, firm or country. So far the government has been focing on crisis containment. The tacticians in the government have put a lot of taxpayers’ money on the line by taking over big business.

On the other hand the strategist are saying that it is time for America to shift to a more systematic approach, Barney Frank, the leading Democrat on financial matters in the House of Representatives ahs Paul Volcker, a former chairman of the Fed, as well as the editorial pages of Wall Street Journal have suggested that Congress should create a new agency to deal with the mess. The question is should congress create an agency to deal with the matter or should they continue with the containment approach.

Crisis management

Americans are focusing on the Resolution Trust Corporation (RTC) which is a government body that was set up in 1989 to deal with the fallout of the savings and loan bankruptcies. The corporation was formed when the mortgage lenders failed. It bankrupted the Federal Savings and Loan Insurance Corporation who were the federal insurer of the mortgage companies.

The difference with the financial problem that they had in the 1980s and now is that this is an ongoing problem and the one with the mortgages was an aftermath of a financial problem. The Americans should continue with the crisis containment method to keep their economy from falling apart.The government should give emergency loans to the failing banks. They should also allow the the banks to hold less capital that is normaly required or make their rules easier in a way.

Even though the study show that most of the economies that have used this method have ended up increasing the overall bill from a crisis oftenly but by doing this they might save the taxpayers' money instead of pumping money into government corporations that will be will require a lot of money and then end up being pushed around by politicians.

Americans should not rely on RTC to come and clean the mess the fiancial crisis will cause instead they should focus on the way to contain this finacial crisis from going any farther than it has, and building corporations that will take time to establish wont help the fiancial crisis because the more time the dely the finacial crisis the more damage it is going to cause.

Report by Yasser B.