I choosed a topic and i used to ask men in the street about their opinion in it and my topic is "The global Financial crisis" cause it is one of the hottest topics in different media that affects millions of people worldwide. “The recent market economic instability was caused by many factors which includes the market dramatic change in the ability to create new lines of credit, which dried up the flow of money and slowed down new economic growth and the buying and selling of assets”, said Am Ahmed,the man who sells water mellon in El Gomaa Market.
And he also added that “the effect of the economic crisis is apparent in incentive payment reductions and an increase in working hours at the same time as shift numbers are decreased”.
This negatively affects individuals, businesses, and “many financial institutions which were left holding assets back that had dropped precipitously in value and weren’t bringing in the amount of money needed to pay for the loans”, said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”
And he also added “This dried up their reserve cash and restricted their credit and ability to make new loans.” There were other factors as well, including the “cheap credit” which made it too easy for people to buy houses or make other investments “based on pure speculation.” Cheap credit created more money in the system and people wanted to spend that money. Unfortunately, people wanted to buy the same thing, which increased demand and caused inflation. “Private equity firms leveraged billions of dollars of debt to purchase companies and created hundreds of billions of dollars in wealth by simply shuffling paper, but not creating anything of value.” “Egypt has seen a property market boom over the last few years fuelling its national economy and stock markets. As a consequence of the global financial crisis, investments in these boom sectors are now quickly drying up; however, due to the whole world profound economic crisis the national income of different countries is consequently affected. ”, said Am Hassan, The door-keeper.
When you compare Egypt with what is now happening in the U.S. and some European countries, “the banks have excess liquidity in Egypt. The ratio of credits to deposits in the banking system is only 55% as compared to an international norm of 80%. So it’s not that they are safe, they are too safe”, said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”.
And he hopes that central bank will take seriously its responsibility to enhance lending and the incentives for the banking sector to provide credit. “Now is not the time to raise the interest rate. It is my view that inflation targeting, which has been the priority of the central bank for the last 12 months or more should shift because of our expectations. It is true that inflation was almost 20%, but don’t keep interest rates high, you have to compensate for all the people that are going bankrupt by not making credit so expensive” ,said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”.
Therefore the banking sector has a very important job to reduce the gap between the lending rate and the deposit rate, which is very large.
In the real economy, we are not yet seeing the effects of the recession. “If we make some small changes in laws and procedures, it is a signal to investors to re-root their investments. Egypt is already considered an important emerging market. So, if we play it right, if we manage this crisis right, we could come out as winners rather than losers from this upheaval”, said Um Mohamed ,the woman who sells fruits in El Gomaa Market.
Egypt is profoundly affected by the economic crisis. So hope that the economic crisis is solved so that Egypt can flourish again like previous years and consequently can flourish the national income in Egypt.
And he also added that “the effect of the economic crisis is apparent in incentive payment reductions and an increase in working hours at the same time as shift numbers are decreased”.
This negatively affects individuals, businesses, and “many financial institutions which were left holding assets back that had dropped precipitously in value and weren’t bringing in the amount of money needed to pay for the loans”, said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”
And he also added “This dried up their reserve cash and restricted their credit and ability to make new loans.” There were other factors as well, including the “cheap credit” which made it too easy for people to buy houses or make other investments “based on pure speculation.” Cheap credit created more money in the system and people wanted to spend that money. Unfortunately, people wanted to buy the same thing, which increased demand and caused inflation. “Private equity firms leveraged billions of dollars of debt to purchase companies and created hundreds of billions of dollars in wealth by simply shuffling paper, but not creating anything of value.” “Egypt has seen a property market boom over the last few years fuelling its national economy and stock markets. As a consequence of the global financial crisis, investments in these boom sectors are now quickly drying up; however, due to the whole world profound economic crisis the national income of different countries is consequently affected. ”, said Am Hassan, The door-keeper.
When you compare Egypt with what is now happening in the U.S. and some European countries, “the banks have excess liquidity in Egypt. The ratio of credits to deposits in the banking system is only 55% as compared to an international norm of 80%. So it’s not that they are safe, they are too safe”, said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”.
And he hopes that central bank will take seriously its responsibility to enhance lending and the incentives for the banking sector to provide credit. “Now is not the time to raise the interest rate. It is my view that inflation targeting, which has been the priority of the central bank for the last 12 months or more should shift because of our expectations. It is true that inflation was almost 20%, but don’t keep interest rates high, you have to compensate for all the people that are going bankrupt by not making credit so expensive” ,said Mr Samy,An Employee in the Bank who was buying bread from “El Gomaa market”.
Therefore the banking sector has a very important job to reduce the gap between the lending rate and the deposit rate, which is very large.
In the real economy, we are not yet seeing the effects of the recession. “If we make some small changes in laws and procedures, it is a signal to investors to re-root their investments. Egypt is already considered an important emerging market. So, if we play it right, if we manage this crisis right, we could come out as winners rather than losers from this upheaval”, said Um Mohamed ,the woman who sells fruits in El Gomaa Market.
Egypt is profoundly affected by the economic crisis. So hope that the economic crisis is solved so that Egypt can flourish again like previous years and consequently can flourish the national income in Egypt.
I have been thinking lately about self-talk...you know, the things you say to yourself consciously and unconsciously. The words of self-talk shape your daily experience, and determine your reality.
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