Monday, December 30, 2019

Was the Financial Crisis caused by bankers or government - Free Essay Example

Sample details Pages: 6 Words: 1834 Downloads: 5 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? The aim of this essay is to try to examine who was responsible for the financial crisis of the recent years, which hit the whole worlds economy. It is reasonable to blame both the government and the banks, which together contributed to create a speculative financial system, but also the mortgage holders, who asked for loans they were not able to pay. The government lacked enough control and regulation, while the banks focused on making the biggest short-term profits they could, taking excessive risks and keeping it hidden from the investors. Don’t waste time! Our writers will create an original "Was the Financial Crisis caused by bankers or government" essay for you Create order The other main characters of the financial system-Mathematicians, Central Banks, Regulators and Rating Agencies-contributed to the crisis too, directly or indirectly, but to a smaller extent. Many words will be spent especially on the subprime crisis of 2007, which started in the US, the first of a series of successive and related crises throughout the world, which all together culminated in the so called Credit Crunch. Each country worldwide tried to find a solution to the problems created by the crisis, sustaining the economy, in order to avoid recession. A particular focus will be on the United Kingdom, one of the countries which suffered most the bad consequences of the crisis. This recently pushed the British government to introduce a package of austerity, one of the most severe plans of the last 30 years. The role of Government, Regulators and mortgage holders Most people around the world have lost their trust in bankers, and they are considered guilty by the majority. People should also think about what the governments did and what the governments did not do, during that period. US government lost control over the regulation of the banking system, trying to stimulate the economy and the overall consumption. During the boom of the housing market it focused on liquidity rather than on risk. It encouraged bankers to grant loans to almost everyone, even to people with low income and poor credit, without any security for banks to regain the money. The government prolonged the crisis by increasing the interest rate on borrowing, due to the increasing inflation of 2007. People who were finishing their introductory period of mortgage faced an even higher interest rate, being unable to pay their debt towards the bankers. It made the situation worse by providing support to certain financial institutions and their creditors but not for others in a n ad hoc fashion, acting too late, without a clear framework. This increased uncertainty and panic in the market. Furthermore government permitted financial firms to pick their preferred regulators in what became a race to the weakest supervisor. Regulators had ample power in many arenas and they chose not to use it. The Securities and Exchange Commission (SEC) for instance could have required more capital and stopped risky practices at the big investment banks, but it did not. In case after case after case, regulators continued to rate the institutions as safe even in the face of troubles, often downgrading them just before their collapse. Even households played their role: they borrowed excessively, leaving them vulnerable to financial distress or ruin if the value of their investments declined even modestly. From 2001 to 2007, US national mortgage debt almost doubled, and the amount of mortgage debt per household rose more than 63% from $91,500 to $149,500, even while wages were essentially stagnant. It is this combination of structural conditions that investment bankers were able to exploit. The role of Bankers and Rating Agencies On their side, bankers tried to make the biggest profit they could from the boom of the housing market. They were also encouraged by the government to lend money as much as they could, apparently without limits. This lack of control pushed bankers to give mortgages even if they were too expensive and with a high chance of default. In order to be able to sell more mortgages, mortgage companies bundled the debt into consolidation packages and sold the debt on to other finance companies, like banks. In practice they borrowed money to be able in turn to lend mortgages. Bankers sold these mortgage debts to financial intermediaries, in order to spread the risk; as a consequence rating agencies gave these mortgages a low risk rating, being unable to really understand the level of risk they carried, since the bundles passed from lenders to lenders. To make it worse, many mortgages had an introductory period of one or two years of very low interest rates, at the end of which, interest rates increased a lot. People, who were initially able to pay, found themselves no more able to, defaulting. The 2007 economic scenario was not helpful at all: inflation was increasing and the government had to persuade the bankers to increase the interest rates because of it. Householders faced lower income because of rising health care costs, rising oil prices and rising food prices. As a consequence there was a rise in mortgage defaults, since many householders could not afford to pay. This situation signalled the end of the housing boom in the US and house prices started to fall; the increasing number of defaults caused many US mortgage companies to go bankrupt. Also many banks in Europe and UK lost billions of pounds in the bad mortgage debt they had bought off US mortgage companies. Banks wrote off large losses and this made them reluctant to make further lending available. As a result it became very difficult to raise funds and borrow money worldwide; the cost of interbank lending increased a lot and the market dried up. The situation was slightly different in the UK. The mortgage lending had more controls than in the US, but the crisis hit a lot of English banks. The reason is that many banks, like Northern Rock which was the first to go bankrupt, had a high percentage of loans financed through reselling in the capital markets; when the subprime crisis hit the economy, they were unable to raise funds from it. In addition, many UK banks bought the bundles of the bad mortgages debt from US companies, directly or indirectly. Therefore when US mortgage defaults rose, many UK banks lost money. Many banks were left with a shortfall and had to ask the Bank of England for emergency funds, causing customers to worry and start withdrawing their savings. Banks tried to write off bad debts improving their balance sheets by lending less and encouraging customers to save more. As a result even UK mortgages became more expensive and lots of them, especially the riskiest, were removed from the market. At the same time, world stock markets continued to fall in value; investors rushed to sell so-called toxic assets, moving their money into safe areas such as commodities and bonds. This contributed to make the credit less easily available and more expensive; as a result consumer spending declined further, resulting in increasing unemployment as companies became unable to sustain their payrolls. Consequences and future tasks What started as a problem of private-sector debt has become a problem of public-sector debt; we have to look at the financial conditions that preceded the crisis, which is a result of the credit-driven growth: abundance and excess of cheap money that was being lent without regards to borrowers ability to repay. The banks have since become more conservative; in order to get a loan you need proof of your income and you need to have a deposit. Politicians are now attacking the banks for not lending enough: the custodians of capital are much more careful about where they use their money, and this is going to be very awkward for the economy. Looking in particular to the British governments reaction, the measures it is going to take have few precedents in the latter half of the last century: a budget which focuses on cutting 82 billion pounds in this legislature possibly before 2015. The fear is to fall in the same situation Greece and Ireland are experiencing, but many economists worry that this excessive austerity could lead to recession. The governments plan is to cut on an average of 19% the public expenditure. The outlook is a reduction of 500,000 jobs in the public sector, the rise of the pensionable age, the trim of credit allowances for well-off families, the incentive for the unemployed to find a job. The effect of this will downsize the British welfare, which would be intolerable to sustain. As a consequence many economists think that, since many families are going to experience a reduction in their income, these will bear on the consumption. Data from September 2010 show that British people have drastically reduced their spending, aware that they will need to save more. New banking regulations are being introduced at different speeds in the main economies. UK is among the quickest countries introducing bank levy, while crucial changes are being demanded by international banking regulators (based in Basle), which require banks to hold more capital in orde r to prevent losses, increase transparency and defer bonuses. Nowadays two key issues remain to be addressed: first the structure of banking-especially investment banking-and secondly international cooperation: the 2007-2008 crisis was an international one. Even those European banks which did not have any direct exposure to the US sub-prime mortgage crisis were caught-up in its effects on the global financing market; there is a need to coordinate policy, both macro and regulatory. Conclusion To sum up, both the government and the bankers contributed to create a speculative financial system which worked as a framework for the crisis. This was the result of human action and inaction: lack of control, regulation and severe parameters to follow ended up creating a bubble that burst as the overall system allowed it to happen. On one hand the government insisted on pervasive permissiveness, inducing banks to give loans to everyone, in order to make the economy work well; on the other bankers wanted to get the highest possible profits, hiding the bundles of debt and contributing for instance to confusing rating agencies. Firms and investors blindly relied on them as their arbiters of risk. As a consequence these agencies helped the market soar and then fall down. Without their active partecipation, the market for mortgages could not have been what it became. Bankers also ignored and failed to question, manage and understand the evolving risks in the system. There were warning signs of the crisis, despite many people said that it was unpredictable, but they were ignored and discounted: financial institutions made, bought, and sold mortgage securities they never did care to examine, or knew to be defective. Last but not least, ordinary people played their crucial role, integral to the consumer society. Since we love to own all the products we like, which make our life easier and give us satisfaction, many investors borrowed money without a clear limit in mind, consciousness about not being able to pay back the whole loan, or part of it; in this way we contributed to the spread of the risk and to the worsening of the situation. Umberto Botto ID 19026296

Sunday, December 22, 2019

Research Supported Analyses of Poems - 1374 Words

â€Å"Ode to the Chameleon† by Yusef Komunyakaa utilizes metaphors and allusion to convey and enhance the meaning of his poem. A common subject among his poems is what it was like to be an african-american man fighting alongside white men in the Vietnam War. A very powerful metaphor used in lines 3 - 5 is, â€Å"You are a glimpse/of a rainbow, your eyes an iota/of amber† (Komunyakaa 3-5). Komunyakaa is comparing a chameleon to a faint rainbow or a small amount of amber, both of which are fairly special. Prior to reading the poem, someone may have never thought of a chameleon as being similar to a rainbow or a piece of amber. But, the poem brings chameleons into a new light; they are hard to spot, and when spotted, are unforgettable. The entire poem†¦show more content†¦In these lines, he demonstrates that racelessness was present in the past, and is something that society strives for, something for the future. But, racial acceptance is not in the present. He be lieves that no matter how hard people try to become â€Å"color blind,† they will never succeed. Racism will always haunt human civilization; it is about as terminable as aging or poverty (Salas). The poem uses metaphors that compare the ‘chameleon’ to rare things to give the reader an idea of how uncommon a person is who essentially sees no race really is. Another goal of the poem is to help the reader cross a racial divide, to show that people who look different are not really that different at all (Salas). â€Å"Its not what you look at that matters, its what you see.† The message Henry David Thoreau conveys is looking is not seeing, a theme that is very evident in Facing It. By getting in touch with the reader’s senses, he allows them to empathize and really feel what it was like to be in his shoes. A war is hardly something that can be understood by reading black and white words on a page. In order to truly comprehend the war experience, one must see and feel what is was like to be on the battlefield. Throughout the work, Komunyakaa references the reflective surface of the memorial. He does this in order to show the reader that the monument is not just names on a dark stone, but a representation of thousands ofShow MoreRelatedEssay on A History of the World in 6 Glasses899 Words   |  4 Pagesviews throughout human history. Standage clearly favors the subject written about and offers no information or analysis to disprove the thesis of the novel. Tom Standage is an au thor of 3 other novels, which are also historic analyses, which support his information and research provided in this book. Standage’s professional background gives novel its authority. A History of the World in 6 Glasses is broken down into six sections, one for each drink, the first of which is beer. 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Saturday, December 14, 2019

My Extended Family Free Essays

It seems like yesterday all the kids where little and needed me all the time. Now Francesca is married, with children, Kaitlin is living on her own with her daughter, and JJ and April live with them. I feel like it was only the other day we were all crowding around the dinner table having a nice family meal, while John their father was off who knows where, drunk, high, spending money he didn’t really have to even spend. We will write a custom essay sample on My Extended Family or any similar topic only for you Order Now I stop and think how these kids ever made it all these years before without us. Us being myself and their uncle Scott, we had been together five years by then and I knew this was the beginning of something wonderful. If only I had known how much it would affect and change my life and theirs. I guess it happened gradually, the kids coming over for dinner, needing winter clothes, taking showers at my house and I always wondered where their father was. Then I found out, John was an alcoholic, drug addict who somehow had custody of these wonderful kids. I guess, I should have known how bad it was by how the kids acted but I didn’t. I hadn’t known abuse like that, I was from a place where we had parents and had dinner together, not 14 year old Frankie (Francesca) going into the bar and dragging her father out, which ended up being the event that finally caused me to go and file for full custody of these kids. It was the best choice I could have ever made. I remember filing the papers and thinking , I am either going to get an irate phone call from John acting like he cares, telling me I will never win, or he will say nothing and I will end up with these wonderful kids as my own. As I sat there in the court building filing the papers it occurred to me just how much help and love and parenting these kids where going to need and how happy I was to do it. But I should of known that the happiness was not going to last. It appeared to be a normal day August 18, 2009, the kids had just finished dinner, the older girls where going out and I just settled down after putting my boys to bed when the phone rang. It was Patty, the kid’s grandma and the other rock in their lives. She was hysterical, something was wrong with grandpa and Scott had to get over there right away. I remember calling the kids and telling them to come home, anxiously awaiting word on grandpa’s condition, when I received the worst call ever. I know I turned around at the eyes of these kids who had endured so much already. Ready to crush there world as they knew, if only I had known what was to come, perhaps I could of , nothing, there was nothing I could of done and I need to deal with that. I looked at them and said, â€Å"Grandpa, didn’t make it, I am so sorry guys,† everyone just broke down, not sure what to say or do I did what I thought I could which was just be there, holding them as tight as I could. The rest of the next week was a blur. I thought it could not get any worse for these kids, thinking back to how their mother left all those years ago, never looking back, JJ was only 3 years old then now turning 13 almost a man, I thought, how much more can these kids suffer. If only I had known. It’s been about a week since Grandpa had passed, no one was really grieving the stress was so high, and of course it made John do more drugs, drink more alcohol and be less of a parent than he was before. Then the final blow came or what I presumed to be the final blow. It was just over a week after grandpa passed, when the phone rang, a little after midnight, it was John, Patty, who was the kid’s grandma and wife of grandpa, had a stroke and had passed. It was like what, no way, how much can this family handle at one time. I remember thinking these kids are never going to be able to handle this, how as a family can we overcome this too. Who was going to help me the way she did with the kids, yes they lived with me but she was my rock. Now my rock was gone, my family never really supported what I was doing anyway so now , it was just me and Scott fighting to keep together a family that so desperately needed it. To lose both their grandparents less than two weeks apart, to lose my mother in law and father in law that way was so hard to handle for me as an adult. Let alone these kids who I know have gone through so much. We made it through though it was hard, tough, a mountain to climb, but we did it, and we came out better and stronger than before. Things were finally looking up for all of us. John was finally trying to get his life on track, maybe too late in my eyes, but it was the effort that counted right. Now it’s been a year since Grandpa and Grandma had passed, the kids where doing great, Frankie just graduated college, JJ and April with the best attendance and averages they have ever had. John working on a relationship with the kids, of course he fail like I knew he would, his effort was a joke in my eyes but to the kids it was what they could get. Of course they loved him he was there â€Å"father† but I just didn’t want to see them get hurt anymore than they already where by him and life. He gets arrested for Felony assault on two woman that where doing nothing but having a good time. I heard the charges and new, no matter what this was finally what was best for all of us. The trial and everything else seemed to fly by, b before we knew it john was being sentenced to five years in prison and we all felt like we could finally just be a family. It was a relief to know he could no longer hurt or guilt any of them into feeling sorry for him anymore. Now, its two years later, and I see, how beautiful these kids are, how great of parents they are and I know that’s because of what I had the courage to do, to love these kids no matter what and be there for them, when everyone else failed them. I would like to say I changed them, but in all actuality they changed me, into the mother I am today. I would not change any of it for a second. Those kids are my family and like my sons and daughters and they always will be. They are forever my extended wonderful, goofy, silly never change anything family. How to cite My Extended Family, Essay examples

Friday, December 6, 2019

Protocol to Treat Diabetic Ketoacidosis-Free-Samples for Students

Question: Discuss about the Diabetic Ketoacidosis. Answer: Diabetes ketoacidosis: Diabetic ketoacidosis (DKA) is the potential fatal hyperglycemic condition that occurs in the patients affected with Type 1 diabetes. The signs and symptoms of DKA includes vomiting, abdominal pain, increased urination, loss of consciousness and breath odor (Evans et al., 2014). This particular disease is more frequent in the children, and as prevention is the best method for managing this particular disease, the parents need to be acutely aware of the disease in general and the preventative techniques. Hence the target audience selected for this particular assignment is the parents of type 1 diabetic children with high risk of developing DKA. Target Audience and the Learning Resource: The importance of patient education is paramount in treatment planning or informing the patients who are on the verge of developing that particular disease. The target audience in this case is the parents, educating the parents about the consequences of DKA and how to implement the preventative measures can reduce the probability of juvenile diabetics to a large proportion. However, patient education is a diverse context and there are different tools that can be utilized, for this assignment the learning resource chosen is the educational learning theory. Implementation of the Learning Resource: Learning theory can be explained as a framework that helps in absorption, processing and retention of a particular information relayed to the recipient. This is a step by step mechanism that can help the health care professionals educate the patient and their families about the life threatening consequences of developing DKA. The learning theory focuses on two major learning processes, auditory and visual learning; and both the techniques are equally helpful in educating the target audience selected (Bastable, 2016). The visual learning can focus on presentations, flyers and handouts explaining in detail the preventative measures that can be incorporated so that the probability of juvenile diabetic children developing DKA can be avoided like regular monitoring of the blood sugar and ketone levels, rigorous diet plan, etc. Other than that, as a vital part of the learning resource the auditory learning has a huge emphasis on the education procedure. The target audience needs to be educ ated verbally explaining to them each and every detail of the preventative measures in excruciating detail to the parents in person with preferably demonstrative sessions (Bastable, 2016). Symptoms of DKA should also be included in the learning program to ensure that the parents recognize the early signs and act accordingly. References: Evans, K. J., Thompson, J., Spratt, S. E., Lien, L. F., Vorderstrasse, A. (2014). The implementation and evaluation of an evidence-based protocol to treat diabetic ketoacidosis: a quality improvement study.Advanced emergency nursing journal,36(2), 189-198.Joshi, K. K., Bastable, S. B. (2016). Essentials of patient education. Jones Bartlett Publishers.