Recession is a term associated with financial crisis that will affect the economy adversely. This monster spreads like an epidemic affecting many countries around the world and may continue for a longer period of time than that is expected.

This time recession began its journey with the housing bubble burst in US. It was triggered by people who are unable to pay their expensive housing loans in time and banks who lent money without detailed verification.  Banks had to suffer huge loss by auctioning these houses at a lower rate.  Many people lost their dwelling place all of a sudden. Now this huge crisis caused reputed banks to go bankrupt all of a sudden and damage was very severe. Spending pattern of people fell sharply causing a sudden fall in Crude oil and reflected in decrease in price of other commodities also.

Following the sudden turn of events in the US housing markets, financial markets in US and around the world reacted sharply. A negative sentiment began to grow among investor community to book loss in share market by selling shares at a much lower rate. This again stimulated the downward trend of the economy and will continue for sometime.

This monster is here to stay for some years to come and strict measures will be taken by Governments to overcome recession. Overcoming this gruesome situation is not easy for common people as they are affected worst. Scarcity of food, good living conditions and job losses will become the norm of the day. Everyday we hear the news that recession is spreading its wings far and wide and nothing can be predicted about today’s economy unless you know all the intricacies that are behind world economy. It is not an easy task to study, analyze the global economy compared to the economy of a particular country.