Macroeconomics. US markets Essay Example | Topics and Well Written Essays - 1250 words

Macroeconomics. US markets - Essay ExampleGiven all of these statistics and the facts that the USA is the land of opportunity, how is it possible to witness in our lifetime, an economic period rarely ever so seen before, both in the US and the world All of this has led the big companies of America and of around the world to counter these crises by change magnitude the shareholders measure and increasing the investors drive. This will enable these companies to stop the spiral where no investment and severity of the crises are going to lead the world to bigger problems. By providing incentives to shareholders in legal injury of shareholders value and increasing the investors drive, some money is going to be pumped into the scrimping that will have the convalescing effect on the injured economy of the world. (Allbusiness, 2010).Shareholders value is a broad term depicting more than what is being shown in the monetary statements of a business. In the earlier years, many heap used financial results of a company as a measure of Shareholders value. However, this approach had plenty of loopholes and due the fact that there was no widely acknowledged definition of shareholders value. umpteen people changed the way they used to measure the shareholders value. ... This crisis continued till 2008, matured and gnawed the world economy. Many arguments were given about how this financial crunch started. Many people argued that it was started by the booming oil prices, whereas other people stated that this crisis is a result of poor economic policies of IMF and World Bank which overheated the global economy and resulted in the financial crunch. Whatever the reason of this crisis, one butt end almost be sure that this crisis has affected subprime mortgages, declining house prices and caused investor bankruptcy. Although global financial crisis result in more problem than those stated above. How is this related to shareholders value and investors drive First of all inve stors usually invest in a company where they see they can earn reasonable return on their investments. However, due to reckless lending by banks and other financial institutions (DFIs), many potential investors in the banking sector became upturned about their returns. They predicted that these lending by the banks are risky and hence they could lose a big deal of money if they invest in the banking sector. Hence, they decided not to invest in this sector. Many organizational psychologists predicted that this is a result of value delivery system which was very low in the banking system at that time. In other words, potentials investors could see more harm if they invest than if they do not. The reasons behind this behavior of the investors were that they see little or no drive to invest. As a result, there was a shortage of investments in the banking sectors. The banking firms who had lent the money found themselves in the liquidity crises and many of these institutions filed bankr uptcy.