It was an event that we hadn’t experienced before of that kind of magnitude. Arguably the industry hit the hardest during this time was the banking industry. This was because after Black Tuesday, all financial confidence went to practically nothing. Stock prices continued to plummet and the wealthy, who were in control of roughly a third of the nation’s wealth were losing money left and right because of the poor stock prices. This financial pandemonium trickled down the entire system as businesses weren’t selling anything and millions were laid off.
The Huge Short: Inside the Doomsday Machine by Michael Lewis Summary The Huge Short: Inside the Doomsday Machine by Michael Lewis is an arrival to Lewis' financial / monetary origins. In this book, Lewis investigates the share trading system accident of 2008. Lewis inspects the security market and the move into subprime contract securities that prompted the accident that really occurred over the long months in 2007 when the lodging costs all of a sudden dropped across the country. In this character driven story, Lewis looks at the gathering of individuals who saw the accident coming and either stayed silent to secure possibly huge ventures or were excessively stunned, making it impossible to talk up. The Huge Short depicts a few of the key players in the production of the credit default (CD) swap in the market that looked to wager against the collateralized debt obligation (CDO) rise and in this way finished benefitting from the money related emergency of 2007–08.
The economy plummeted and everyone felt the effects of it .The severe downfall of the American economy in the 1930’s known as the Great Depression was the result of speculation and installment buying, income maldistribution, and overproduction throughout America. After the roaring 20’s, speculation and installment buying drastically increased
Despite this, the U.S. Mint keeps churning out a billion pennies a month.” The complete waste of time and money spent producing these pennies just to be forgotten in the couch cushions is astounding. If every penny is 1.8 cents to produce than the government is giving away 800 million USD every single year. The same article says, “...10 million new useless items punched out by government workers who could be more usefully employed tracking counterfeiters.” In other words, the government isn’t only wasting money on penny production but, also a working staff. U.S. currency could be more protected if it wasn’t for the pesky penny. To sum up, if people took the time to research how the penny was affecting us as a nation we could be closer to the
Everybody was taking over there share. Tax rate was also interrupted from 72%to 28%. Now, when they started investing in money market which was a risky investment, they did not have money to cover the insurance funds. FSLIC was “ill equipped” as per the changed behavior of the thrifts. When FSLIC started to bail out in 1983, it costs FSLIC $20 billion but it had only $6 billion in reserve at that time which led to its bankruptcy.
Banks were making money off their mortgage loans they were selling off in synthetic CDO’s. These debts were actually worthless. When the housing market and Wall Street crashed, many lost their investments. These were meant to be safe investments but because of the actions of the banks, mortgage brokers and many other factors, millions lost everything. The Big Short Conclusion The Big Short is relevant to the content outlined in the SAG document for
We were known as one of the richest nations. Unfortunately things went dramatically wrong in 2008. The bank scandal came to light that they had been given companies and investor’s huge loans that the companies could not be paid back. Companies went bankrupt and we went into a recession which was worse than the one seen in the 70’s and 80’s. Emigration and unemployment escalated like we had never seen before.
The Stock Market , the Speculative Boom and the way people invest in their money. So many people didn’t realize that it took time to get rich and make money, if most Americans invest in good common stocks and all the dividend to accumulate at the end of twenty years you will have up to $80,000. Overall the Great Depression had a positive and negative effect on the American people although it broke the confidence of the American people and deeply injured agricultural and financial services it also taught people to have better mindset the way they are handling
The Great Crash generally refers to the stock market crash (in America - Wall Street) on 29 October, 1929. It started on Thursday, 23 October when just before the 3:00 pm bell rang, the stock prices instantly fell. For the following week stocks fell lower and faster and changed hands so fast, the machines that kept track of these stocks seemed unable to cope up with the activity. All along while President Herbert Hoover reassured the people of America that the nation was “on a sound and prosperous basis”, more panic spread and because the uncertainty and risk was rising, people wanted their money back. In all this frenzy the United States Securities Regulation agencies could have shut down the market but they feared that would only spread more fear and could have led to a violent display of the emotions of the public.
1. What factors in the WorldCom case support the conclusion that CEO Bernie Ebbers Knew about the financial statement fraud? What factors support his defense that he did not know about the fraud? Bernie Ebbers Knew about the financial statement fraud because he was the one who encourage others to go into financial fraud because of the stock prices were going down, which was affecting his marginal loan. For that reason, he was trying to sell his stock, but the board of Directors lent him $341 million, along with 2% interest rate.
"Great depression?" they gasped. Consumer confidence plummeted, as did consumer spending (which accounts for a stunning 2/3 of US GDP). Corporations, in a mass panic, swiftly switched into a mode of panicked layoffs and cost cutting. The banks, already spooked, continued to tighten their lending not just to consumers but to corporations and other banks as well.
This was a big mistake because I failed to recognize to diversify my stocks, meaning I should have invested in multiple different stocks. After losing a ton of money with Yum, I sold it and bought into AVG, SeaWorld, and Nike. These stocks were at great prices and I knew I could make money. Well, this was true for a couple of days, I sold the AVG stock and turned a profit, but I should have sold my Nike stock because it went down a week later. In week 2, I sold my SeaWorld stock because I made a small profit and then bought into Telsa because Telsa is predicted to make a lot of money in the long run, but since this is just a 6 week simulation, it did not do so well for me, but I still
Racial profiling has gone on for many years. It is a situation that has been called out on many different occasions. In the article “Surveillance is Necessary” by Dan White, it says “... the retail industry loses over 31.3 billion dollars every year, and shoplifting represents about one-third of that.” Then goes on to say that it is a smart business move to target those certain ethnic groups who are overrepresented in the arrest statistics when it comes to protecting merchant’s retail industries. I for one believe that it is not correct to racially profile anyone due to the harm that it may cause to the victims of this. First of all, White states that we should racially profile people because of what the statistics say.
According to Fortune, “Executives sought to drive growth by putting undue pressure on its employees to hit sales quotas, and many employees responded by fraudulently opening customer accounts. In most cases these accounts were closed before customers noticed, but in other cases consumers were hit with associated fees or took hits to their credit ratings. The bank was forced to return $2.6 million in ill-gotten fees and pay $186 million in fines to the government. But the biggest hit Wells Fargo will take is to its reputation, as the media and government officials spent much of the year slamming the bank for its fraud,” (Mathews). The victims being the unknowing customers who saw their credit ratings plummet and faced steep financial fees, that were brought about through no fault of their own.
More and more companies are using credit score checks to judge the person without any background knowledge. This process may seem flawed to most but it is something we now all have to deal with. In conclusion, credit card debt is something to not take lightly. It can happen to anyone at any given time. It may come from medical bills, unemployment, or even carelessness and the effects are devastating.