The Refinancing of Shanghai General Motors

SUBMITTED TO SUBMITTED BY

Prof. ASHOK BHANSALI NIKHIL KUMAR OJHA

PGPBM (2010-12)

ISB&M; NOIDA

Introduction:-

The recession of 2008, also known as Great Recession, was a severe economic recession that began in the United States of America in December 2007 .According to U.S. National Bureau of Economic Research and conventional definitions in economics the recession has ended in June 2009 but many economist are of view that it’s still ongoing. The reasons for their view are high unemployment in many countries, various bailout packages given to countries to overcome recession. The great recession has affected the world economy, with higher detriment in few than others.

Reasons of recession:-

The fall in housing prices has slowed construction and the high gas prices slowed consumption of other goods so the economy was slowing down. The fall in housing prices also resulted in banks holding mortgages greater than the market values of the house especially ones purchased with low down payment (sub prime). This meant when people moved or could not pay, they could not sell and pay off the mortgage, so banks lost money because of the higher than expected foreclosure rates. This further hurt the economy because it reduced the credit available, and the expectation of a severe recession and declining profits caused the stock market to crash, and also caused commodity prices to fall because of the decrease in demand. The dependency of other countries on USA then helped recession to spread in other parts...