What are the lessons that we learnt from the Global economic meltdown??

Acording to me a lesson well learnt is that lending requires superior skills in assessing and monitoring the creditworthiness of borrowers on a regular basis. The realisation that one cannot reduce the credit risks of a pool of debt obligations only by slicing them into segments with different risk characteristics is certainly a key takeaway from the crisis. Emerging facts on the ground relating to the borrowers and the broad economy need to be factored into credit assessments and this cannot be entirely substituted by an abject reliance on credit rating agencies. Surely people learned this in a hard way so the assesment made here should be really good and not just average basis, the creditworthiness of borrowers should be monitored regularly.

The lessons from the crisis have of course been learnt by investors and creditors largely but more importantly, the understanding of macro economics and the dynamics of world have undergone a drastic  change over the last couple of years. For nation states, the notion that the issuer country of a widely accepted global currency like the US dollar is somehow largely exempt from the normal laws of economics has been demystified according to me.

Another take away from the crisis years is that irrespective of the most rigorous risk management techniques, prudential limits to financial leverage need to be respected even in the case of the mega investment banks that appeared to be exceptions for several years before the crisis hit us, the concept of “too big to fail” has eventually ended up in some cases as “too big to save” resulting in the bankruptcy of some of the largest global investment banks and automobile companies.

When we look back at what happened one feels all these could have been avoided or could have been mitigated if the Academic fraternity who acted thoughtlessly proactive forecasting a disuruption 4 to 5 years before the actual events which I feel trigered the ill-fated price disuruptions in assets which led to defaults which led to bank failures due to credit crunch and market meltdown. I think it is the untimely interferenece of over zelous Journalists who ultimately started the events.

Then again I might sound little radical I feel the Academic researchers calling an expansion of the economy and it's side effects as a bubble is little slopy research. They should have gone little further and and found out the exact reasons and modeled them and probably studied them furhther instead of stoping at an early stage. I feel the name 'bubble' should be completely deleted from economic jargon so that it won't create undesired phsychological effects like panics in the markets and the economy when things look normal.

I also strongly feel calling well trained and skilled people should not be coined greedy without analysing the true nature of events which tantamount to iresponsible and shortsighted manifestation in a world where self imporvement in ones position of course by legal means is considered as a desirable and necesary virtue of economic Agents. 

I also feel the evelutionary theoretical idea of mean reversion much highly talked about now is nothing other than systems taking rest after long periods of work they do which might be even much more benign than coining wrong names and pricking something that is only in ones imagination but may not be a reality and undergoing self inflicted pain and suffering for millions with economic loss everywhre.

Because of global economic meltdown the good things which we learned a lot like, do not invest  only in stock and design your porfolio in such a manner that it seems to be like only focus on some particular sectors, also focusing your lending process.

 So, After all those loophoales if we considering than the answer is the only on is applying conservative investment strategy.

The link below gives the views of American professionals what they learned,

http://www.onwallstreet.com/fp_issues/2009_9/what-we-learned-from-the-market-collapse-2663727-1.html?ET=onwallstreet:e718:1992298a:&st=email

there is always a opportunity in adversity.

it opened up the eyes of so many in government that business is not just about taxing it is about nuturing them.supporting the business.just see americas cash for clunker project.

business is all about employing people.

business needs to be cared and you need to support them to grow create mega plans and plants and keep increasing employment opportunity.

govenrments all over the world realised the importance of business and stability.it is important to manage liquidity,it is important to have good bankrupty laws.

it is important to have timely support by governement if they want to support employment growth.

We had an over-leveraged and glutonous financial system that walked straight into the arms of an over-zealous media machine that mezmerized the world by confronting us with the prospect of our worst fears being realised; creating the perfect 'buzz' conditions for generating huge audiences that pushed, prodded and cajoled sentiment to a tipping point called 'scenario fulfillment'. Now that the light appears to be visible at the end of the tunnel... many, I suspect too many, will be looking around and back, and saying "hey, that wasn't so bad". We still have, an over-leveraged and glutonous financial system that has learned very little except to make more effort to avoid the media bear-hug in future.  We learned very little about business, but a whole heap of things about human nature.

Dear all,

Everyone must possess knowledge of Economics is a need of human being, which is not yet made compulsory by any Government .

Our government consists of stalwart parliamentarians  and economists, but lack of affinity with people by them is the only cause of failure in today's situation of crisis.

As human being is well aware of the causes of violation of natural rules, it is solely responsible for the recession which is created by it only.

We must give prime importance to economics in all spere is the only lesson from the Global economic meltdown.

In the universe every living/non-living thing has a particular life, it has limit and what ever is goving to happen is dependent on nature and is inevitable, therefore rest is subsidiary.

Actually the Indian industry is not affected if compared with America and Europe except IT. From America and Europe we should learn how the credit limts to be used. One should learn that, maintain some basic standard procedures to be implemented in money matters (lending) is whatever may be the situation.

Recission the word itself is scary. The lessons are many from global economic meltdown, first and important lesson is spend less save more. second lesson seek proper financial planners advice and plan your financial needs instead getting into wealth management where individuals lost and loosing instead of wealth managing its detorietering. Make the best of available.

The global economic system is fragile because the infrastructure upon which it was built was not designed to shoulder the amount of risk exposure that has come to prevail in the market.