Points to consider before applying for a personal loan

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Personal loans are popular because they are easy to avail, the lender doesn’t monitor the usage and doesn’t ask for a collateral. But don’t take a loan just because you can. Before you borrow, consider how the repayment will affect your finances.

Here are a few questions a potential borrower must ask himself before he applies for a loan.

Is it really necessary to buy now?

We may feel a compelling need to buy something but the purchase may not be necessary. Using credit cards for small transactions like daily purchases, casual shopping and dining out is fine. Customers can also earn reward points against such purchases, and the outstanding can be easily paid in full before the due date. Don’t be tempted to use your credit card to buy something you can’t afford. These unnecessary purchases can wait until you have saved up the money to buy the item with a debit card.

Can I afford the EMI?

This is a crucial question that demands an honest response. Personal loans have a rigid

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Donald Trump exploiting people President Barack Obama

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In his first major comments on Republican presidential frontrunner Donald Trump, US President Barack Obama today said that the real estate tycoon is exploiting people’s fear amid a stagnant and rapidly changing economy.

“I think somebody like Mr Trump is taking advantage of that. That’s what he’s exploiting during the course of his campaign,” Obama told National Public Radio (NPR) in an interview.

“When one combines the demographic change with all the economic stresses that people have been going through because of the financial crisis, because of technology, because of globalisation, it means that there is going to be potential anger, frustration and fear,” said the president.

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Financial Crisis

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It’s not for nothing that the word “credit” derives from the Latin creditus, “trusted.” Banks use highly rated securities as almost the equivalent of cash — whenever they need more dollars or euros, they hand the bonds over to another bank as collateral. It’s one of the basic ways they ensure they have exactly the amount of money they need to meet their obligations on any given day.

But when it came to those mortgage-backed securities in early August 2007, that simple exchange suddenly became complicated. The problem was not just that the securities were worth less than they’d been before — after all, banks can deal with losses.

Rather, it is that no one knew just how much less, and whether, if one bank had lent money to another just down the street in exchange for mortgagebacked securities, it would ever get paid back…. History has taught again and again that when banks shut down and hoard their money, so too do the economies they serve.

A banker who’s unwilling to lend to other bankers is likely also to be unwilling to lend

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Cherish and merit the elegance of gold

India is not only popular for its spices and its hot tea, but also well rich for the ornaments made at most auspicious metal like gold and diamond. In order to flourish the best heritage and to Intricate gold ornaments and exquisite craftsmanship we have to bear the ornament which is in traditional design.

Giving surprise or gift to the one who loves you or to the one you love most is really an indescribable emotion. That too when we gave them what they likes most will brinks the best glory, beam and love in to their face. As the tradition, in India we are giving the gold to gift in many hold functions and for several celebrations such as at birth of new born, at coming of age, and in marriage etc. then in temple for goddess and god we wear the gold ornament in order to groom the statue.

Glimpse about gold

There are several types of gold ornaments and metal are available in the earth. Every type is valuable and auspicious one. Some people do like to wear the pure gold only as it has ductility in nature. And when you

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Financial crisis to hit agricultural production

Amid the international financial crisis, the United Nations Food and Agricultural Organisation (FAO) has warned that falling food prices and reduced access to credit are likely to hit agricultural production, threatening global food security.

“The combination of falling agricultural prices and reduced access to credit may have a knock-on impact on agricultural production, with very serious implications for global food security,” the FAO said in its recently released Food Outlook.

The more critical and likely impact of the global meltdown will be on credit, whose non-availability is widely recognised as one of the major constraints to agricultural development in the developing countries, and the rationing of which is likely to be more serious than any interest rate effects, it said.

Taking lessons from the 1996 Asian financial crisis, the FAO suggested that countries and investors should meet their commitments on the development of agriculture in the developing countries as agriculture would act as a ‘buffer’ and help cushion greater losses incurred in other sectors of the economy.

However, the impact of the global credit crunch on the financial position of developing countries will depend not only on their growth rates but also their borrowing

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Major risks of financial crisis averted

The International Monetary Fund (IMF) said on Tuesday that Europe should avoid the major risks posed by the global financial crisis thanks to the EU’s coordinated “crisis management” measures.

“Even though the global financial crisis will cause a sharp deceleration of economic activity, the comprehensive crisis management actions being undertaken should allow Europe to avoid a worse outcome,” the IMF’s Europe director Alessandro Leipold said in Brussels.

He nevertheless called on European governments “to follow up with bold steps on their recent commitments.”

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India weathers 12 months of financial crisis

An economy is best judged not in fair weather but foul. India has successfully weathered the great financial crisis of September 2008. Indian gross domestic product (GDP) has grown around 6% in every quarter of the most difficult 12 months in recent history. Most countries suffered an outright fall in at least one quarter.

The global recession started in December 2007. The initial impact on India was muted: GDP growth slowed from 9% in 2007-08 to 7.8% in April-September 2008, still a very high rate. But after Wall Street collapsed in September, India’s growth plummeted to 5.8%, 5.8% and 6.1% in the next three quarters. This was a comedown. Yet, it far exceeded the World Bank’s forecast of 4% growth in 2009. It exceeded my expectations too.

Let’s compare India’s performances in the Great Recession and Asian financial crisis. In the latter, India’s GDP growth fell to just 4.5% in 1997-98, of which 1% was a boost from the Pay Commission. Today, the annual rate of growth exceeds 6%, of which 0.5% is a Pay Commission boost. That’s a big improvement.

In 1997, India’s foreign exchange reserves were strained, interest rates went sky-high, companies defaulted

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Anatomy of the financial crisis

In the 1980s and early 1990, the United States had witnessed another crisis that saw 750 savings and loan associations (S&Ls) fail. S&Ls had specialised in accepting savings deposits and making residential mortgage loans. Deregulation in the 1980s allowed them to lend to increasingly risky borrowers who defaulted once the housing boom ended. The crisis remained confined to the S&Ls, however, with government successfully rescuing the depositors for just $125 billion in public money.

In contrast, the current crisis engulfed the entire globe largely because the proliferation of financial derivatives comprising the so-called “shadow financial economy” indirectly placed the risky mortgages on the balance sheets of financial institutions around the world. Defaults in the housing market impacted all holding these derivatives.

Borrowers in the US are divided into prime and subprime with the former exhibiting low risk of default due to good credit history and the latter high risk due to past defaults or low and unsteady income. Regulations forbid commercial banks from lending to subprime borrowers. Instead, brokers and mortgage companies, often affiliated to banks and other prime lenders, lend them at rates 2 to 3 percentage points higher than in the prime market.

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Exports to Greece small marginal impact of crisis on India Nirmala Sitharaman

Government today said Greece accounts for around 0.1 per cent of India’s exports and hence the impact on it due to financial crisis there will be only marginal.

“Share of exports from India to Greece is around 0.1 per cent only, therefore direct impact on Indian exports due to economic crisis in Greece is likely to be marginal,” Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha.

However, the government is continuously monitoring the export performance of different sectors to different countries and takes need based measures from time to time, keeping in view the global financial situation and overall economic implications.

Contracting for the seventh month in a row, India’s overall exports dipped by 15.82 per cent in June to $22.28 billion due to global slowdown and dip in crude oil prices that impacted shipments of petroleum products.

Replying to a separate question, she said the interest subvention scheme for some select sectors is under consideration of government.

Replying to another query on natural rubber imports, she said prices have fallen in domestic market mainly due to declining trend international market and low growth in domestic

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MMR housing market records worst half year post global financial crisis

Housing market in Mumbai Metropolitan Region has recorded worst half-yearly performance since global financial crisis in 2008 with around 2 lakh unsold homes and weakening sales, showed a report released by Knight Frank India for the period ending June.

According to the report, last 30 months have seen a continuous fall in launches and sales across Mumbai, National Capital Region, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. Residential property market across the country is still reeling under tremendous pressure and no recovery is visible in the coming 6 months

In Mumbai, the most expensive property market in the country, saw 47% drop in new housing project launches during the first half of the year. Over the last two years, demand has slipped 30%, while launches have plummeted nearly 70%. Luxury residential market with price tag of over Rs 5 crore per apartment has also run into rough weather and has not seen any new launch in the last six months.

However, Knight Frank claimed that residential market in central Mumbai and central suburbs have seen good growth from a year ago. In MMR, builders have been foraying into locations beyond Thane for affordable housing projects.

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India exports to Greece fall 15% on debt crisis

The financial crisis in Greece has led to a 15.45 per cent fall in India’s exports to the European nation during the first quarter of this fiscal, Parliament was informed today.

Total bilateral trade between both the countries during this period fell 8.33 per cent to $124.11 million, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Rajya Sabha.

The Greek Debt crisis has impacted India’s bilateral trade with Greece,” she said.

She further said that no trickle-down effect of the crisis in India is anticipated at this stage; however, institutional mechanism is in place with Greece where steps can be discussed.

“The volume of software and engineering exports of India to Greece is not very large, hence there is negligible impact, however, there is not much impact on Eurozone,” she added.

The bilateral trade between both the countries was $488.59 million in 2014-15, an increase of about 10 per cent over the previous fiscal.

Replying to a separate question, she said exports to countries including Afghanistan, Pakistan, Indonesia, and Singapore are showing declining trend in the last three years.

“Exports to some Asian countries during the

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Regional responses to financial crisis

Regional responses to financial crisis

In the aftermath of the deep recession in the advanced economies as a part of the global financial and economic crisis, the Asian policymakers are beginning to recognise the importance of regional cooperation in responding to it.

It is becoming clear that even though the advanced or G-3 economies will recover from the crisis sooner or later, they may not regain their role as the key growth drivers for Asia in view of the compulsions of addressing the global imbalances.

Hence, generation of domestic demand through poverty reduction and exploitation of the potential of regional cooperation hold the key for sustaining Asia’s dynamism in the coming years.

This was the message coming out of a regional brainstorming of central bank and finance ministry officials from 17 Asia-Pacific countries organised by the United Nations’ Economic and Social Commission for the region and hosted by the Bangladesh’s central bank in Dhaka recently.

Despite its economic dynamism, the Asia-Pacific region had 582 million undernourished people — one out of six in the population — in 2007. Incorporating the poor to the mainstream is not only a desirable objective in itself but

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Punjab heading for financial crisis

Slamming the Punjab state government, former Chief Minister Capt Amarinder Singh on Friday said the state was heading for a “grave financial crisis” as the treasuries were shut and collections from stamp duties and VAT were dwindling.

“The Shiromani Akali Dal (SAD)-BJP combine government is looking at ways and means after distribution of this month’s salaries and pensions …the government is back on borrowing,” the Congress leader, who is facing charges of graft in the infamous Ludhiana City Centre (LCC) scandal, told a press conference here.

Claiming that the previous Congress government left a credit of Rs 1,200 crore when it demitted office in March this year, he said, “it is for the first time that the treasuries in the state are facing closure.”

“No developmental work is taking place in the present regime,” he noted while adding that the Punjab State Electricity Board (PSEB) is facing an acute shortfall for operating power.

“As a result of free power facility to the farmers, the PSEB is required a sum of Rs 4,680 crore for its functioning,” he said, adding that “if there is no sufficient cover in the budget then the power sector is

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Agri Gold depositors will get their money back

The 32 lakh depositors of Agri Gold group of companies will get their money back, the Committee constituted by the Andhra Pradesh government under the chairmanship of former bureaucrat K Narasimha Murthy today said.

The committee today met the Chief Minister N Chandrababu Naidu here.

Agri Gold group, which had interests in real estate, plantations, dairy, etc., shut the shop after facing financial crisis last year.

Following an agitation by the depositors, the government had set up a committee to sell off the company’s assets and repay the depositors.

Murthy told reporters that the committee had identified properties worth Rs 7,000 crore of the firm, which owes Rs 6,800 crore to depositors.

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Financial crisis hits European Union

The European Commission said the region’s economy probably entered a recession this year and will barely grow in 2009, increasing pressure on political leaders to work out a plan to combat the financial crisis at summits this month.

Economic growth in the euro area will slump to 0.1% next year, the worst performance since 1993, the Brussels-based commission said in a report. It lowered its forecast for this year to 1.2% from 1.5% in April.

Europe’s economy, which has already grappled with record oil prices and the euro’s strength this year, is now heading into 2009 mired in the credit crisis that has closed off funding to companies and sent consumer and business confidence plunging. European leaders will meet this month to try to hammer out a coordinated EU plan before a summit of world leaders hosted by president George W Bush on November 15. “The economic horizon has now significantly darkened as the European Union economy is hit by the financial crisis that deepened during the autumn,” EU Economic and Monetary Affairs Commissioner Joaquin Almunia said in the report. “We need a coordinated action at the EU level to support the economy similar to what

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Financial crisis and Asian dilemmas

When written in Chinese, the word “crisis” is composed of two characters–one represents danger, and the other represents opportunity, noted the young president who inspired a whole generation. That was then, in the halcyon days of the sixties.

Fast-forward to the here and now, and a panoply of working papers and books on the financial crisis of 2007-09 have since been authored by westerners, and which generally call for revamped regulation and broader macroeconomic oversight. The regional bias is understandable: the crisis was ‘home-grown’ in the US thanks to dodgy, mortgage-backed financial products.

But the crisis did precipitate a global recession, and there have been few Asian perspectives on the developments. Until now. A new book, which consists of a bouquet of policy-relevant essays by a leading analyst affiliated with a prominent think-tank in Penang, Malaysia, seeks to address the challenges for Asia.

The study is categorical that in boosting domestic consumption as an alternative to exports-led growth, Asian economies should not follow the ‘Anglo-Saxon model of pumping up domestic consumption through debt creation.’

It adds that Malaysia’s Gini coefficient, a measure of income inequality, at 49, is higher than that in the US.

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In India it the family while in the west it’s business

Peter Leach: Family enterprises have shown globally that they are a more resilient, robust and sustainable form of ownership… than banks, hedge funds and financial institutions. It took the financial crisis for the financial community to realise the resilience of family business as they were always treated as nepotistic and not serious about governance.

ET: What are the main differences between a family run business in India and those in Europe and the US?

Peter Leach: In India, there is a cultural hierarchy that is much stronger because the word family (represents) a lot more than in the West. As a unit, the family creates stronger glue in India. One of the biggest differences between India and the West if you were to look at what is the glue — in India it’s the family while in the West it’s the business.

When a business is in transition, things become sensitive.

ET: What are these things, decisions?

Peter Leach: When a business is in transition, sometimes the decision-making process will slow down and that can be bad for the business because it creates some uncertainty. It can cause wobbles in the marketplace

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What caused the financial crisis

he US $ 700 bailout package proposed by the US government is one of the most extensive government interventions in the financial markets since the great depression. The bailout plan is similar to the1933 Home Owners’ Loan Corporation of the post-depression era. Way back in 1933 it helped in stopping foreclosures and refinance defaulting mortgages , and increasing liquidity . That a similar proposal is being considered indicates the extent of damage caused to the banking and financial services systems all over the world.

Excessive leverage

But how did the banks and investment banks create this crisis? Let’s cut through the financial jargon and understand in simple words how this problem was created in the first place. The root cause for the current crisis seems to be the excessive use of leverage.

To take an example, a company with a net worth of US$ 25 billion borrowed 26 times its net worth and creates leveraged funds of US$ 650 billion to invest or lend them. When a small portion of the company’s investments turns bad, as is the norm for the industry, the company’s capital is under threat. To put things in perspective a 3.8

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Managing global financial crisis

The present global financial crisis has been attributed to the subprime mortgages which originated in the US housing mortgage sector few years back. During the booming housing market, when low interest rates were prevailing and the housing prices were continuously increasing, offering financial assistance to subprime borrowers was considered a lucrative proposition by some banks/financial institutions ignoring the inherent risk involved in such activities.

The situation got complicated when some investment banks innovated some complex financial instruments based on the underlying subprime mortgages and marketed these instruments to investors across the globe. However the situation changed dramatically when the property prices started falling sharply leading to significant rise in default in mortgage loans and foreclosures.

One of the latest international surveys reveals that the top three reasons for this financial crisis are inadequate risk management practices at banks, increased complexity of financial instruments and speculation of financial market.

However, in my opinion there are four systemic issues involved behind this crisis. (i) The entire financial risk analysis was mainly based on an unrealistic assumption that property prices will not fall drastically, rather it would continue to rise. (ii) Too much greed and unrealistic expectations of

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oil may get cheaper than beer

The US is racing towards a sub $1 per gallon gas (Rs 67 for 3.78 litres of petrol), returning vehicle fuel to a status as the least expensive liquid in the country — cheaper than milk, orange juice, beer, or bottled water.

Two gas stations in Michigan were reported selling gas at less than 50 cents a gallon in a promotional event this week. But, while that might be a marketing anomaly, gas prices are averaging south of $1.50 per gallon (approx. Rs 26/liter) in much of the country. Following the US rapprochement with Iran, crude prices are expected to plunge even further than the $25 a barrel it is now hovering around. Some experts are talking of oil prices crashing to below $10 a barrel, a level unseen since November 2001.

That will almost certainly take gas prices below $1 a gallon, a retail price last seen in the late 1990s.

In early January, Morgan Stanley warned that the superstrong US dollar could drive crude oil to $20 a barrel. The Royal Bank of Scotland topped that, saying $16 is on the horizon. Standard Chartered went even further with a new research report projecting

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China economic troubles unlikely to lead to rerun of 2008 financial crisis

hina’s economic troubles are unlikely to lead to the kind of financial crisis that gripped the world in 2008, Nouriel Roubini said at the summit.

But a weak rupee could fuel inflation and slow the pace of interest rate cuts by Reserve Bank of India. Financial markets may be overreacting to events in China, but data from the country could be positive, he said.

“The landing of China could be bumpy. If China is only bumpy, the global recession is going to be limited,” Roubini said.

“There’s a glut of capacity in China. A lot of it is getting dumped.”

Roubini, known as ‘Dr Doom’ for his negative commentary about the global economy much before Lehman Brothers collapsed, doesn’t seem to have such a dark view this time around.

That’s in contrast with investors such as George Soros, who have predicted a hard landing in China and severe consequences for financial markets.

Global markets have swooned since the beginning of the year and many have entered a bear phase, falling more than 20% from their peaks. India has also flirted with a bear market. “Even in India, the stock market has fallen,”

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