Financial And Control

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Financial and control

Table of Content


Discussion and Analysis5

Causes and Consequences on Indonesia7

Causes and Consequences on United States8

Domino Effect10

a) Decrease in foreign exchange reserves and potential new foreign debt11

b) Investment climate uncertain11

c) Potential layoffs12


Financial and control


The global financial crisis is a term used until recently by the world community including the people of Indonesia to refer to the financial crisis lately. However, the effect can be extended to every country, including Indonesia. If we are able to attract the root causes of this financial crisis to have broad impact for many countries, then we too can anticipate their impact and determine appropriate mitigation strategies. Still Remember Monetary Crisis or cool Krismon term? I long thought that the worst economic crisis I have ever experienced the Asian financial crisis in 1997/9. It turned out that the impact of the Asian financial crisis far less than the financial crisis engulfing the world today. During the Asian financial crisis, at least there is a 'safe heaven' or 'safe haven' for global investors, namely in the United States, Europe and Japan. Investors can sell shares and marketable debt in Indonesia, Thailand and Korea (although losses) are in crisis, and buying shares on the New York and London. Now, the safe haven country was experiencing a severe economic crisis. Investors are having trouble finding safe haven to park their funds and, since the stock market, bonds and commodities all tumbled, 'cash is king again. (Woodford, 2009, pp. 267-279)

How bad is this world financial crisis? Benchmark exists. Lehman Brothers, Bear Stearns, Merrill Lynch, AIG, Freddie Mac and Fannie Mae, the giant U.S. financial institutions, survivors face the U.S. economic recession after the terrorist attacks of 2001. They survived manghadapi world economic recession due to the OPEC oil embargo in 1973 and survived to face the two world wars. They also survived to face the world economic recession of the 1930s are often called 'the great depression ", due to U.S. financial crisis in 1929. However, they did not survive the credit crisis home purchase (mortgage) of subprime in the U.S. in 2007/2008. That is, the collapsed some of the world's largest financial institutions is an indication that the U.S. and world economic problems now are far more severe than our previous estimate. (Ark, 2008, pp. 25-44)

The panic of investors the world is getting worse. Stock markets in free fall. Since early 2008, China's stock market plunged 57%, India 52%, Indonesia 41% (before the activity is suspended), and the European zone of 37%. While the bond market slumped, the currency weakened developing countries and commodity prices fell, especially after the oil commodity speculators judged that the economic recession will reduce energy consumption of the world. In the U.S., after seeing Wall Street stock market continued to sag, Congress finally approved the financial sector rescue program (troubled asset recovery program-TARP) of U.S. $ 700 billion proposed by the government. However, because the length of political negotiations between the government and Congress, investors are disappointed to ...
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