These CDOs structured with conflicts of interest inherent in their designs which allowed the big investment banks to bet against their own clients as they held short positions while the clients themselves lost a huge amount of money… How the abacus deal worked was like this: First , Goldman Sachs was told by hedge fund manager that he wanted to invest or rather go against the subprime mortgages by using the Over the counter financial derivatives such as CDOs. These securities were to shorted by the hedge fund manager. Second , the IKB was willing to insure them against or buy out the risk that Paulson was willing to short. But they fearing legal ramifications would only do so if they were selected by an outsider. Third , Goldman approaches ACA Management LLC in order to manage the
Corporation should have a first amendment right to spend as much money as they want to influence the outcome of an election. However when corporations, donate unlimited amount of money, it is to get something in return. Which leads to corruption because candidates are more likely to be drawn by the money and change their positions so that it aligns with the business, unions and only benefit the rich. That in itself goes against the first amendment because the average american can not have their free speech herd over the millions of dollars donated by
Another major risk that Macy’s encounter is the impact of company’s revenue and operating results that are depending on economic, political condition, and other developments. Assuming that federal open market committee decided to stabilized economic growth because of the unfavorable economic by controlling money supply, which can affect customers spending. The company cannot control government decision over developing economic
It is very hard to say that SOX would prevented the scandal but they would have being exposed sooner because of the Sarbanes-Oxley section and titles rules and regulation such as; Titles II the auditors partner rotation; Title III, the responsibility or reporting accurate financial corporate reports. They reported depreciation expenses of garbage trucks as a salvage values, and subjective to other assets that did not have any value. Title IV the financial disclosures of financial reports was overstated or understated in some reports to inflates a high profit margin. The Titles VIII, the alteration and destruction of records that would protect the
The main arguments against it include making the market unfair to those outside of the firm, the potential for many investors to leave the market based on their perceived disadvantage, and the rightful duty to punish all those involved with scamming others. Although reasonable, these arguments are not necessarily correct. Insider trading actually benefits the economy as a whole by making stock prices more in equilibrium to their true value, it helps minimize potential losses to individual investors who want to buy, and the immense amount of resources is not worth trying to prove something that cannot fully be enforced. Maybe there should be some type of balance between legal and illegal insider trading. By making it completely legal, enforcing insiders to report or disclose that they are insiders may help the unfair and negative connotation insider trading is associated with.
Moreover resources are more diverted to high income consumers leading to misallocation of resources. Policies for an equitable distribution by government usually conflict with the goals of more efficient economy as it is likely to inhibit the efficient operation of price system. Equitable income distribution is also likely to discourage people to work at their best capabilities leading to
Furthermore, in the last decade, an increasing number of major shareholders attempt to influence corporate behaviour by using their equity stakes in organisation to pressure the management for improved performance and increase the value of their investments. However, shareholder activism is believed to be very controversial. Some proponents of shareholder activism believe that the involvement of shareholders in the management of the company ensures that the invested capital is spend properly and that the directors do grant themselves excessive remuneration packages and focus mainly on maximisation of shareholder value. Opponents, on the other hand, often criticise a high degree of shareholder activism as they considered that active investors are mainly focused on their own short-term benefits and profits and not on the long term aims and goals of organisations (Corkery,
Even more, since a 401(k) plan is not insured, it is possible to lose money based on the investments you have invested in. Risky investments are meant to either result in a large capital gain or a large capital loss; however, remaining conservative will not guarantee you payout you desire. Therefore, it is recommended to spread out your investments to minimize the possible capital losses (Advantages and Disadvantages to 401(k) Plans, (n.d.), p. 1). Consequently, employers are able to limit employees on how much they would like to contribute; with this intention, the employee would not be able to save as much as he or she wants
After the trump administration came to power, the government has shifted towards more protectionist policies, such as Trump renegotiating the boundaries of NAFTA. Protectionism refers to the economic policies imposed by governments to restrict trade across countries to achieve a macroeconomic goal and are enforced through a variety of strategies, the most common of which is tariffs on imports. Protectionism comes with the advantage of protecting domestic industries from foreign ones and helps strengthen the industry and create jobs. On the other hand, increased protectionism in the long term weakens industry as there is no need to innovate on the part of firms and worsens its international competitiveness. Many on either spectrum of the discussion
Then, the filter that they use Sourcing Mass Media News by Herman and Chomsky argue that “the large bureaucracies of the powerful subsidize the mass media, and gain special access to the news to get the info, by their contribution to reducing the media’s costs of acquiring and producing, news. The large entities that provide this subsidy become 'routine' news sources and have privileged access to the gates. Non-routine sources must struggle for access, and may be ignored by the arbitrary decision of the
What is your understanding of NFIB’s relevance in the small business sector? The NFIB both pushes for political change affecting business sector and protects small businesses from dangerous government decisions. Corporate money and big business can often overpower the voice of organizations like the NFIB, however it is vital to have so organizations. For example, the NFIB put up a tremendous fight against the Affordable Care Act. The importance of this fight is that there are people fighting big business and trying to keep the United States glorified with small business.
Globalization has many negative effects in our world. The first problem with globalization is that international trade is exacerbating income inequalities between industrialized and nonindustrialized nations. Secondly, Global commerce is dominating the corps that want to maximize profits without a regard for the development of the country. Lastly, the countries involved with globalization lower their environmental standards in order to attract foreign business investments. In order to reform globalization, the government should change the ‘rules’ because they are unequal.
Instead, it is controlled by big corporations. How? Through the destructive force known as lobbying. According to the Senate of the United States, lobbying is “Trying to persuade legislators to propose, pass, or defeat legislation or to change existing laws” (Lobbying, Senate.gov). A lobbyist is hired by a business or organization and tries to get a legislator to vote a certain way, either through