This is not the first time that the world has witnessed a financial crisis. If we go back to history we can see that their have been instances like this before (1939 Great Depression). So whats making this financial crisis to different??
Mr Warren Buffet once said " financial instruments are a weapon of mass destruction " and that seems to have come true. There is a clear distinction between the crisis which occured before the one we are facing now. The most distinguishing factor is the scale of operations in the financial markets. There has been a tremedeous growth in the developement of the financial markets with the introduction of new financial products. However, the irony is that nobody knows that how these instruments behave in adverse market conditions. Even the best of the brains were not able to identify the crisis way ahead of time and take corrective actions. Or were they were just busy gambling !!
No matter how the things were done in terms of reporting, disclosures, accounting, the truth is that we are in the midst of a financial crisis which has taken toll on some of the historical corporates. This is bound to grow. What we are witnessing right now is just the tip of the iceberg.
However, one good thing about this is that the governments of differnet counntries have taken steps which would help them overcome this crisis. All the countries are trying hard to minimize the risk associated with it. And mostly it is a collaborative effort by mosy of the countries.
Economist state this a business cycle and nessasary for the world so that the asset prices fall in line. However what they miss out is that these business cycles leave most of the businesses out business !!
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