Recession In The World Since 1900s


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  • Recession In The World Since 1900s

    2. 2. What Is Recession ? <ul><li>A Recession is a contraction phase of the business cycle . </li></ul><ul><li>National Bureau of Economic Research (NBER) is the official agency in charge of declaring that the economy is in a state of recession. </li></ul><ul><li>They define recession as : </li></ul><ul><li>“ significant decline in economic activity lasting more than a few months, which is normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales ”. </li></ul>
    3. 3. Recession <ul><li>Reduction of a country's gross domestic product (GDP) </li></ul><ul><li>“ A period of reduced Economic Activity&quot; </li></ul>
    4. 4. History of recessions
    5. 5. Major Recessions <ul><li>The Great Depression 1929. </li></ul><ul><li>The late 1990s recession </li></ul><ul><li>The the early 2000s recession. </li></ul>
    6. 6. The Great Depression-1929
    7. 7. The Great Bull Market <ul><li>Great American stock exchange boom of 1928-1929. </li></ul><ul><li>Huge bubble where there were high speculations. </li></ul><ul><li>People made huge investments to make big money. </li></ul>
    8. 8. Bull Market sparked by? <ul><li>Growth in American industries </li></ul><ul><li>Technological progress </li></ul><ul><li>Increase in productivity </li></ul><ul><li>Rise in national income from 33,200 million to 79,200 million from 1914 to 1925 </li></ul><ul><li>Expectation for great future and un-boundless optimism for the market </li></ul>
    9. 9. Stock Exchange Average Rise in Share Prices 1924-1928
    10. 10. INVESTORS BELIEVES <ul><li>Investors believed profits from stocks would increase if the tariff bill was passed </li></ul><ul><li>Sparked intense speculation </li></ul><ul><li>Dow Jones Industrial Average increased by almost 35% because expected election of Hoover and his bill </li></ul>
    11. 11. This Bubble was bound to Burst!
    12. 12. The Crash of 1929 <ul><li>American economic disaster that precipitated the Great Depression which was approximately a 10 year economic slump affecting all the western industrialized countries. </li></ul>
    13. 13. General Causes of the Crash <ul><li>Rampant over speculation in market </li></ul><ul><li>People holding companies and investment trusts (which by nature creates debt) </li></ul><ul><li>Bursting of Bull Market economic bubble in August 1929 </li></ul><ul><li>Large bank loans could not be liquidated </li></ul>
    14. 14. Direct Cause of Crash of Stock Market <ul><li>After Hoover’s election certain people began to doubt if the tariff bill would help the US Economy </li></ul><ul><ul><li>Farmers, America’s trading partners, Democrats, and some Republican’s opposed the passage of new tariffs. </li></ul></ul><ul><ul><li>On October 21, 1929 Senate announces plans to limit tariff revisions </li></ul></ul><ul><ul><li>October 22, 1929 more limits set on tariff bill </li></ul></ul>
    15. 15. Investors Realized - Tariff Bill is DOOMED!!!!!!!!!!!!! <ul><li>PANIC! PANIC! PANIC! </li></ul>
    16. 16. Black Thursday <ul><li>On October 18, 1929 prices began to fall </li></ul><ul><li>Panic stuck out on October 24 “BLACK THURSDAY” after the announcements from the Senate </li></ul><ul><li>Record of 12,894,650 shares were traded </li></ul>
    17. 17. Effects of Depression on Individual <ul><li>Thousands of individual investors ruined </li></ul><ul><li>Loss of savings </li></ul><ul><li>Poverty and panic </li></ul><ul><li>Less spending and demand </li></ul><ul><li>Unemployment </li></ul><ul><li>Wages decrease </li></ul>
    18. 18. Decline in Production <ul><li>DOWNWARD SPIRAL </li></ul><ul><li>little output means less jobs </li></ul><ul><li>Manufacturing output fallen to 54% of its 1929 output. </li></ul><ul><li>25-30% of work force unemployed </li></ul><ul><li>12 -15 Million jobless </li></ul>
    19. 19. Effects of Depression on Economy <ul><li>Stock prices drop </li></ul><ul><li>Industry declines </li></ul><ul><li>Value of assets decline </li></ul><ul><li>Large number of banks failed. </li></ul><ul><li>Because of tariffs international trade market decreases. </li></ul><ul><li>Causes a world wide depression. </li></ul>
    20. 20. Early 1990s Recession <ul><li>Black Monday </li></ul><ul><li>Sharp Recession that hit hardest include “Canada, Australia, and the United Kingdom” </li></ul>
    21. 21. BLACK MONDAY <ul><li>Dow Jones Industrial Average lost 22.6% </li></ul><ul><li>considered the official beginning to the American recession. </li></ul>18 October-1987
    22. 22. 1997 mini-crash <ul><li>Started on – 27 october in Asia. </li></ul><ul><li>Named as:- Global stock market Crash </li></ul><ul><li>Sixth Biggest points loss in its 112 –year. </li></ul><ul><li>This crash halted trading on New York Stock Exchange for the first time ever. </li></ul>
    23. 23. 2008-2009 Recession <ul><li>In 2008-2009 much of the industrialized world entered into a deep  recession . </li></ul><ul><li>The recession is the worst since the  Great Depression  of the 1930s </li></ul>
    24. 24. AREA’s EFFECTED
    25. 25. Graph – Jan 2006 –Nov 2008. <ul><li>Recession due to failures of large financial institutions in the United States </li></ul>
    26. 26. PRESSENTED BY:- Sunny soni-69 Sandeep kumar – 60 Ajay kumar- 02 Amrit Jain- 07 Nishant aggrawal – 36 Vikas Tomar - 80