The Causes of the Financial Crisis in 2008 Essay

The Causes of the Financial Crisis in 2008 - Essay Example It played a striking role in the failure of key businesses. It also contributed to the decrease in consumer wealth estimated to be in trillions of US dollars and a downturn in economic activities that led to global recession of 2008 – 2012 and also contributed to the European sovereign – debt crisis. It led to the increase of the TED spread that reflected an increase in perceived credit risk. The TED spread is the difference between rates of interest on interbank loans and on short – term U.S government debt. The spread of TED increase is shown in the graph below: The spread (in red) increases significantly during the crisis. The spread size is usually denominated in basis points e.g. if the bill rate (T - bill) is 5.1% and ED trades at 5.5% then the TED spread is 40 basis points. The TED spread has fluctuated over time but generally has maintained the range of within 10 and 50 basis points except during the financial crisis. In general the financial crisis cause d a very big damage to the world economy and many researchers have carried out studies to explain the causes of this crisis. We try to look into some of the causes below. Imprudent mortgage lending is considered a cause to the crisis as compared to a backdrop of abundance in credit, reduced interest rates, and over the roof prices for houses, lending standard became hassle free enabling many people to engage in the purchase of houses they couldn’t afford. ... Competitive pressures contributed to the increase in the amount of subprime lending during the years preceding the crisis. Source: U.S census bureau, Harvard University. State of the nation’s housing report 2008 The graph shows the dramatic expansion of subprime lending in the U.S between 2004 and 2006. Another cause was the housing bubble where the Federal Reserve allowed housing prices to sour to an all-time high that was unsustainable. Once the bubble burst as it was bound to, it triggered the crisis. The Federal Reserve maintained interest rates artificially low, per month payments to mortgage were low too and housing prices went up. Home owners took equity loans to pay their initial mortgages and credit card debts until the home prices peaked and the house of cards started to crumble. Mortgage debts would not be increased to pay previous debts. Lack of transparency and accountability in mortgage financing also did contribute to the 2008 financial crisis. Many participants in the housing finance sector contributed to the crisis through the creation of bad mortgages and selling of bad securities with confidence that they won’t be held accountable. Lenders would sell exotic mortgages to home owners without considering the repercussions in case the mortgages failed. Similarly, a trader would sell to investors’ securities that are toxic with fear of personal responsibility in case the contracts failed. The system collapsed through the maximization of personal gains and passing of the problem down the chain from brokers, to realtors, to individuals in rating agencies, and to other market participants. The great promise of managing risk by the ‘originate – to – distribute’ model of finance failed with

PDA-Professional Development Plan Assignment Example | Topics and Well Written Essays - 500 words

PDA-Professional Development Plan - Assignment Example In my work experience, I have noted that I am poor in engaging employees mainly because I prefer doing things for myself and therefore, I fail to adequately delegate work to employees. According to Chalofsky (1998), poor engagement of employees will demoralize them, as they will feel they do not play a critical role in the organization and many of them will easily opt out of the organization if they get another opportunity elsewhere. In order to be an effective human resource manager, I will need to work on this weakness by fast mastering to trust others and then ensure that I take up a supervisory role after delegating work. The resources that I will use include guidebooks and video tutorials on achieving employee engagement and proper delegation of work. I can easily achieve this goal within a period of three months and practice at home by ensuring I delegate house chores and keep everyone engaged in managing the household. Zull (2002) would argue that I am individualistic since I am not able to transfer my skills and knowledge to others. However, for me to be a good leader I must ensure that I can training others and empower them with skills and knowledge for them to become better employees. With continued globalization, every major organization is shaping up to be a multicultural organization and therefore, future leaders must have the ability to manage a workforce that is made up of employees from diverse cultures. In order to acquire knowledge in managing employees from different cultures I will first need to understand different cultures and I can easily do this by reading books concerning other cultures. Additionally, I will have to interact with many people from different cultures in order to understand perfectly how to manage a diverse workforce. Therefore, I can only be able to achieve this goal after the

Marx and Weber on the Transition to Capitalist Modernity Essay

Marx and Weber on the Transition to Capitalist Modernity - Essay Example Thus, the predicate "modern" specifies not historical time, but to the degree of development of on what it is applied. Two moments – the representation of capitalism as universal transhistorical process and the concentrated expression of the capitalistic nature not in its basis, and in its superstructure named by "spirit of capitalism", - the researchers distinguish the concept of M. Weber from similar concepts of his ideological opponent K.Marx. It is possible to be expressed so: Weber adhered to a principle of plurality of historical forms of capitalism and Marx supported the thesis of the uniqueness of capitalism. Â  The ethical additive to the former forms of capitalism allowing them to become modern capitalism, according to Weber, is a qualitative change. Between "old" capitalism what Marx has had time to find, and "new" capitalism what Weber looked at, the distance of the huge size lays. The critical descriptions of capitalism (sale of children in slavery, prostitution, criminality, merciless operation of workers, falsification of products, brutal working conditions and a life, unemployment and poverty) which we meet on pages of "Capital" by K.Marx, should concern, according to Weber’s logic, not to the modern civilized capitalism, but to the vestiges of the old, adventurous capitalism which has historically settled. Â  The main thing, that differs the approach of M. Weber from similar attempts to explain an origin and evolution of K.Marx’s capitalism, is the concept of the motivation of labor activity. Anybody from them at all has not mentioned and has not explained, why the traditional thinking and the traditional attitude to work brakes the promotion to a market economy and interferes with an increase in labor productivity.

Universal Child Care Tax Benefit Reform in Canada Assignment

Universal Child Care Tax Benefit Reform in Canada - Assignment Example This essay elucidates on the tax reform nuances, regarding increase of childcare tax benefit in Canada. This enhanced child benefits structure aims towards replacing the preceding Child Tax Credit benefits. There has been some sort of controversy regarding the eligibility of the child tax benefits. The basic guideline is that, that the major beneficiaries should be families with the minor children. To qualify for this, there has to be the aspect of completing a specified Application form. Completion of that form ensures that all the records are safely kept for the sake of subsequent analysis For the past decade, international organizations and industrialized countries have shown increased interest with regards to government involvements in child care. The concept behind this fact is that; that there is a general consideration of subsidizing child care programs. This tax measure often affects the entire citizens. However, most empirical studies put greater focus on the preschool children and the systems of the means-tested transfers. Based on the investigation, regarding the effects of the Canadian child care universal reforms on the parent’s participation in labor force; it worked towards shedding some light since a group with younger children had varying responses from their counterparts who had older children. it can be concluded that this tax measure tend promote some sense of horizontal equality in one way or the other. This mainly occurs when it comes to the gender-based issues

Why was King Leopold so Successful in suppressing information about Essay

Why was King Leopold so Successful in suppressing information about his congo ventures - Essay Example Today, the whole rubber terror created by King Leopold has been forgotten altogether, and is not discussed at all. In the book, King Leopold’s Ghost, the author Adam Hochschild refers to this fact as â€Å"the great forgetting.† The book sufficiently offers a well researched account of the brutality, greed and exploitation that Africans were offered by the King Leopold. Through this book, the author has made an attempt to revive all events of primary importance that speak of the long forgotten brutality that King Leopold displayed in Congo. Throughout the book, the concept of Leopold has been shown as larger than life. Paradoxically, the title of the book refers to the ghost of King Leopold, and not his physical being which raises many questions in the mind of the reader. The last chapter of the book named the â€Å"great forgetting† answers all of these questions and also talks about the biggest tragedy among all that have been talked about in the preceding chap ters. King Leopold made a lot of wealth from Congo and his operation made the Congolese incur a lot of cost in all respects. However, all of it suddenly came to an end after the independence of Congo in 1971. Belgium became a part of the European Union.

Why grey wolves should not be on the Endangered Species list Research Paper

Why grey wolves should not be on the Endangered Species list - Research Paper Example At present, the grey wolves’ populations are reported to be present in increasingly healthy numbers in the northern parts of Michigan and Wisconsin, the western part of Montana, the northern parts of Idaho and Oregon, and in Yellowstone, Wyoming. This is a small area of what once was the grey wolves’ habitat consisting of about 67 percent of the United States. They are bushy-tailed carnivorous canines that vary in color from brown to black to white, have life spans of anywhere from eight to 15 years, and resemble German shepherds. The data shows that populations have since bounced back from endangered levels, and there is a case to be made that due to the success of efforts to conserve the remaining grey wolves populations, that there is no longer a need to continue to put them among the endangered species list (Levy; National Wildlife Federation). II. Discussion The basis of the endangered species list is what is known as the ESA Law of 1973, or the Endangered Species Act. It was under this law that the grey wolf was put in the endangered list, and subjected to proactive measures to revive populations, including the enactment of protections on the federal programs and the execution of programs to reintroduce the species in traditional habitats. The reality is that the program has been a success, as deemed by the federal government after surveying the populations of grey wolves and finding that in six states, the numbers have grown to such an extent that they could be removed from the endangered species list. Aside from the return to healthy levels of the grey wolf in those six states where it has been removed from the endangered species list, the Fish and Wildlife Service FWS also began to argue that the original assessment of the habitats of the grey wolf included areas that were not natural habitats after all. Therefore, the protection given to them in many states were not warranted. The further argument is that by removing the grey wolf from t he endangered list, the authorities can then focus its conservation efforts on a cousin of the grey wolf, which is the Mexican wolf, deemed to be also reaching critical numbers and needing protection (Woolston). The idea moreover is that by removing the grey wolf from the endangered list, individual states like Oregon could begin the process of managing the populations on their own, sans the benefit of the protection, in line with the way the states also manage the populations of other thriving species. In this light, the move by the FWS to have the grey wolf delisted is something that makes sense, and has the support of states like Oregon. To put it another way, that the plan to delist the grey wolf has the support and backing of states that have native grey wolf populations, and who have a stake in making sure that the state ecologies thrive and remain balanced, means that the move to remove the grey wolf from the endangered list is sound (Environment News Service). The indication s, moreover, is that once delisted, states become very prudent with regard to granting licenses and quotas for hunting grey wolves, ensuring that the numbers are well-managed. This is true for instance in states like Wyoming, which have been very careful to prune quotas and not overkill grey wolves populations, which have returned to healthy numbers in the state as well (Guerin). There is also the argument from the point of view of the return to healthy numbers of the grey wolves beginning to pose problems to the ecology and to the other wildlife in the affected states, while also becoming a

From the book Complete Office Handbook Third Edition for todays office Essay

From the book Complete Office Handbook Third Edition for todays office by susan jaderstrom chapter 2 - Essay Example Career advancement is quite relative. Darrel (2010) explains that â€Å"advancement means climbing the corporate ladder until you reach the executive suite.† People wish for advancement to improve their professional standing. It is however necessary to emphasize that the level one may want to reach is relative. Career advancement is not an automatic phenomenon in the corporate world. It actually takes the application of laid down strategies. It also take procedures to attain career advancement. One needs constant professional upgrading to be able to climb higher on the corporate ladder. Jaderstrom et al (2002) note that employers are giving premium to the professional competence rather than academic competence. This is indeed in the right sense. This is because the office is a place for the exhibition of one’s professionalism. Professionals who want to better their corporate standing must upgrade themselves. Those who want to secure their careers must do same. Professional seminars, workshops and furthering of one’s education improve career advancement. Jaderstrom et al (2002) laments that some employees only want to be ‘gainers’ not ‘losers’. Such employees only look at what their jobs can offer them. They do not think of what they can offer their companies. Employees must show positive organizational belongingness. Some of these are commitment, punctuality, promptness and organizational ethics. Showing this belongingness will improve their chances of building their career advancement. Such employees will not to fumble when they eventually take higher positions. If you do not know where you are going, any road leads you there. This axiom emphasizes the need for career people to have goals. One must have a goal of where one wants to reach. This must be marked with time. This is a good way of ensuring career advancement. For example an employee must know where to be by a certain time. This way, such an employee