Notes on the Global Financial Crisis - 829 Words

1. The global financial crisis did not reduce my income, but I think that if I did see reduced income, I would either cut back on discretionary purchases or I would buy cheaper brands. Certainly with things that I have to buy, like food or toiletries, cheaper brands are usually purchased. This contrasts with products that are completely discretionary, where my consumption might be severely curtailed or cut back entirely. The reason for this is simple. When there is less money to go around, and there is a decreased optimism about future income, one must align purchases with the financial situation. Using debt to maintain spending levels is a bad idea when there is an economic crisis that reduces ones expectation of future income. Thus my own spending habits do change when my income levels go up or down, and the same is true for most people, so that in an economic crisis more people are reducing their spending than are increasing it. 2. I believe that many luxury brands will escape the economic crisis without seeing much decline in sales. Global luxury brands like LVMH and Tiffany did not see sales declines (Perocchi, 2011), and this in large part because their customer bases have not experienced the downturn, which mostly affected people in the lower middle classes (Kirkup, 2010). In addition, these brands are often globally diversified, so a slump in sales in one region can be offset by gains in other regions that are less affected by the crisis. As such, those globalShow MoreRelatedNotes On The Global Financial Crisis1614 Words   |  7 Pageseither hedge risks or to open speculative positions. 1. Introduction The latest global financial crisis, starting from the United States since 2007, has pushed the financial derivatives to be a hot spot. The publics usually believe that the inappropriate application of derivatives should be to blame for this, which is totally wrong. It is apparent that there is no single financial crisis resulting from only a kind of financial product. Whatever the instrument is, including credit derivatives and basicRead MoreNotes On The Global Financial Crisis Essay1431 Words   |  6 Pages Abstract The recent turmoil in the global financial market has given rise to an argument on what policy measure or controls should be imposed to curb excess stock price volatility. One such restrictions were placed on short selling to reduce speculative trading.The aim of the present paper is to consider the impact of the measures placed on short selling following the 2008 global financial crisis. This report assesses the success of the interim measures in achieving these objectivesRead MoreAccounting Fraud721 Words   |  3 Pagesoutline in NOTE form. Submit this completed outline on Monday WK 4 together with your articles (4 or 5), a reference list notes on your articles that will be used as support for your arguments/points. 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