JOHN LEWIS TRADE CRISIS

As we all know, john Lewis is the biggest and most comprehensive shopping mall in UK, with a history of 138 years, during which has great performance. By now, John Lewis has opened 25 branches in whole United Kingdom, and there are 40,000 employees and 500,000 kinds of goods for sale in John Lewis. Their special offer includes fashion, cosmetics, children’s clothes and furniture, which with good quality and give a feeling of ‘home’.

As their employees said about the marketing strategy that the company is not owned by shareholders, it is also to be owned by its staff, therefore, staffs would will be more hard working due to each person has stock in John Lewis, it really arouses the enthusiasm of the staff.

In Europe countries, Christmas is the most important festival to celebrate. During that period of time, three quarters of profits are from Christmas, each shopping mall will exert the utmost effort to propagandize Christmas. Each year, before the Christmas coming, there will a lot of goods need to buy of every family, such as Christmas gifts, new furniture, clothes and so on which all meet the needs of customers. John Lewis conduct great promotion for consumers to confirm the requirements of consumers, but it is ‘never knowingly undersold’ to reduce behind the scenes.

John Lewis as a chain of department stores in Great Britain,its customers belong to the asset class, however, for almost people the prices may not be accepted by them. As a report says there is 11.6% down last year and 5% down budget, in special the home-wares in recession.

In John Lewis, the marketing task is to persuade people to spend all their money and time in the shopping mall. However, the profits seem going down, in order to save the situation. during the Christmas period, face to the competitive market, which can differentiate itself form their competitors. John Lewis will provide campaigns and produce advertisement according to the festivals and the local customs. Such as Christmas advertisement, it usually talks about a touching story which give people with resonance.

In conclusion, as a customer and a student, I like John Lewis quite well, but I well buy their goods depends on my economic ability.

1929 Great Depression

On October 1929, thousands of banks happened terrify dropping that share price plummet on the New York stock exchange. This sharply crash shocked all investors. Investors desired to know what’s going on of their stocks. The big crash seems to make shareholders in the depth of despair.

If consider the basic reasons to cause the 1929 financial crisis, here are scholars who famous for their analysis. 1. Christina Romer, chair of the council of Economic Adviser. She talks about the reasons of economic crisis, after stock disaster, a sharp fall in the number of people of consumer durable goods, for the future uncertainty of panic rise, this strike is devastating the economy.

2. Ben Bernanke, a chair of the Federal Reserve. Present a macro research to observe from the international capital system. He thought that the origin of the depression is involuntary of monetary tightening, in special problem is the gold standard, when the financial tsunami comes out, the lower speed of breaking away from gold standard countries will experience more serious monetary tightening, and then leads to hopeless recovery.

3. Milton Friedman and Anna Schwartz, who in 1976 the journal of the “American Monetary History” won the Noble prize. They think the Federal Reserve have four mistakes: First, in 1929 to raise interest rates leads the economy into recession, the stock market crashed. Second, in 1931 to raise interest rates to avoid stacks against the dollar, but have huge damage on Entity banks. Third, at the end of 1932 to raise interest again, and also result in U.S finance into recession once again. In the end, there is no effect of any lender of last resort.
Stock market is just like a zero-sum game, there are people make money and also people lose money.  Profit growth in the name of the stock market does not bring any productivity growth directly. But the stock market is not production activities, it’s productivity distribution activities, essentially by the optimal allocation can achieve productivity growth.

If in understandable languages, the stock price increase too much, it is crazy that all people who want to buy or has abilities to buy have been buying. One point that big players found there won’t have someone to take over their chips, therefore, happen to coincide to rob finally pouring a little liquidity.

The content of the book 1929 big crash, economic strength and political insight appear negative correlation. Agent of rescue operations has never been paying more attention to for a long time, even though this means to interfere with the orderly life and interests of the eyes. Someone want to do immediate interests but advocating do nothing, even if it means serious problems will happen in the future. This aspect, the threat of capitalism which they are facing to is they clearing know the bad situation, and will continue to deteriorate, however indicate that is basic “health”.  

The Relation between customers and bankers

In this episode, tells the process of financial multi-million pound mis-selling scandal. As the relationship between banks and customers are breaking down, bank should serve for this country not country serve for the bank, therefore, intensify the trust crisis between banks and society. 

After the leader of conservatives Mrs Thatcher reshape the economy, the free market revolution starts, it really brings huge convenient for customers. The bank is a finance institution which support investing and lending, and also bankers sell products to customers. Depends on Cambridge Dictionary a definition of trust that believe in a goodness of a person and won’t hurt you, or saying whether something is safe and reliable should be in a bank.

Following the free banking services, easy credit and paid their way at the centre of the nation’s economy, nine of ten adults have a credit, most of people build their trust in bank. In the UK, the dominant retail market popular with the commercial banks because of the payment system strictly controlled. However, as some bankers now admitted frankly, they abused the trust of their customers in the search for quick profits. About 60,000 small businesses in the UK become the bank mis-selling scandals’ victim, banks sold fixed-rate business loans to protect them to against interest rate changes, nevertheless, bank added a swap secretly which have an adverse impact cause to firms going bankrupt. Banks continued to sell fixed-rate loans prices at around 6%, even though from 2007 a keep falling long-term rate when banks accessed to market data.

Once a customer was signed the agreement of the bank sell these loans on to the derivatives market, where traders would buy the fixed-rate element consolidate by the customer and sell back to the bank at a much lower rate.

The society have a contradictory relationship with banks, hoping the revenue they contribute to banks and technological advances, at the same time feel disappointed at their behavior. We are looking forward this seeking quick profits, the days of abusing consumers trust ends early.