How can financial crisis defined - Free Essay Example

Sample details Pages: 5 Words: 1383 Downloads: 7 Date added: 2017/06/26 Category Finance Essay Type Analytical essay Did you like this example? Financial crisis can be defined as a considerable decrease in economic activity extended across the economy, which lasts for a significant amount of time, visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales, we have already seen such a situation at the time of great depression earlier and now since 2007, What was different in the two crisis was the later one was the first one since globalisation, What that meant was that the crisis was no longer restricted to a particular country or region and if a giant economy is hit, the impact of that is felt throughout the world.. It was a notion that this it was the subprime mortgage crisis which caused the Global financial catastrophe; whereas in fact that was one very small part of the string which led to the meltdown of already hollow economy. The actual root cause goes way deep under. In my opinion and many who share the feeling, the real reason of the Global financial crisis was the Global macroeconomic imbalance. Now when its clearly evident that focus of economy has shifted from Industrial, which is primarily transformation from manufacturing to post-Industrialism, which consisted of service industries and ‘off shoring in the east. The fact that over 90 percent of the people employed in USA are working in service industry and the number is ever increasing clearly signifies that. This resulted in shutting down of large manufacturing firms. As a consequence, now manufacturing corporations were no longer the â€Å"central pillars† of American social culture. The shift of economy also forced the shift in the type of employment, from a long-term in manufacturing industries to short-term in service industry and thus the need for more flexible pension system arose, which could transfer the risk from the employers to the employees. According to this scheme, the terminating employee can now decide on his ow n, as how to and where to invest the monetary value of his pension benefits, after being transferred to a succeeding pension plan also known as â€Å"portable pensions†. This signifies the companys pension scheme was now shifted from â€Å"Defined-Benefits† to â€Å"Defied-contributions†. As the mutual funds provided by the financial institutions seemed to be the most profitable investing venture, this became the first choice for every employee to sow in their hard earned money. There was a drastic increase in the mutual fund market and by the year 2001 almost 52% of the households in the US owned mutual fund stocks. The owner of these financial institutions, which were mainly investment banks, owned about 40% of the US industrial assets, which fundamentally made them key owners of commercial America. At the same time these were the same financial organizations which provided pension fund facility to a large group of corporate employers. The financial orga nizations were now concentrating on the ways they could increase the shareholders value as it was sought to be the most relevant measure of the corporate performance. The corporations made it pretty obvious that their main intend was only to create value for their shareholders. Evidently the corporations changed their mission statements which reflected their intentions. In the drive of increasing shareholders value another technique of diversification was brought into being. The companies started diversification in their product lines and services to the extent they could afford, which led to larger unmanaged or outsourced corporations. Consequently the ties between the worker and the employer weakened. The decision was then taken by the FED chairman, Alan Greenspan that the assets like loans on the balance sheet, patents and credit card receivables could now be turned into securities and can be traded on markets. The financial market grew widely after this. The largest banks of Ame rica became the portals to the financial markets, corresponding to the corporate houses of the country. JP Morgan, Bank of America and Citigroup became so huge, that now they owned and managed a hefty share of the assets and deposits of the business. These banks then pounded over small local commercial banks as they were an easy prey for their acquisition. They acquired a large number of US commercial banks along with some major banks in major cities of the country. The federal activities inventory reform act of 1998 was planned and framed to encourage outsourcing in the various government departments. The aim was to amplify the effectiveness of the unit by the help of the private sector. The per annum spending on the contractors doubled by $200 billion during the presidency of Bush. The main job of the private sector in the federal government was to protect the diplomats in a foreign country and running the various government databases. The remaining manufacturing companies i n the US were mainly military contractors, yielding 85% to 90% of their revenue from the government. The businesses of hedge funds, merchant shipping, intellectual property rights were distributed in countries like Bermuda, Cayman Islands in UK, Liberia, other territories of UK and many more. The household which were now both the issuers and investors through mutual fund market were entirely dependent on the financial markets for their growth and security, resultantly the crisis damaged in a much more worst manner than it could have done in normal circumstances. Then the 1991 crisis occurred because in the 1980s economic growth was very rapid and unsustainable therefore inflation increased to over 10%. To reduce this inflation the government increased interest which resulted in lowering of spending, this increase in the rates resulted in the increased the cost of mortgage interest payments. So many people were forced to sell and thus causing a fall in house prices and lower sp ending and there was a big fall in AD. Current crisis basically revolves around the mismanagement of the finances and had the following key points, There was a shortage of finance (following the collapse of northen rock) which uncovered a vicious circle between investment sector and the â€Å"real† economy causing a cost push inflation squeezing incomes and reducing disposable income but most important was the Collapse in confidence of finance sector causing lower confidence amongst real economy The defences that UK can apply for any upcoming recessions can be learned from previous learnings of the recessions. even though there are adverse effects of the falling of the pound sterling, it also brings many positivity along with it. The decline of the UK currency will lead to quick decline in both relative unit labour costs and relative export prices. Consequently which will lead to increase in the net trade although there is a point here, the UK exporters must not raise t heir prices to save some profit margin in this scenario. The ratio of the household debt servicing is also in favour of the UK economy. Even if the debts levels rise, the interest rates should be maintained low. It is vital to fortify the strength and flexibility of the financial system. The government should take steps to decrease the probability of individual commercial and nationalised banks facing complications and even if they do manage to get themselves into trouble there should be immediate actions taken into consideration. There should be arrangements for instant reimbursements in which the consumer market can believe and have faith. Toughen the central bank of the country i.e. Bank of England and guarantee effective and well coordinated actions by the authorities. UKs economy has the capability of handling and surviving through another recession. The financial position of the company is strong and sustained as per the past standards. There is hardly any sign of a wage and price spiral forcing tighter policy. There is a huge room for rate cuts, which is caused by the continuing oil and commodity prices and the membership of the ERM ensures that there is barely any possibility for interest rate cuts final moment around. As correctly said by Stephen Roach, Morgan Stanley â€Å"The lack of monetary discipline has become a hallmark of unfettered globalization. Central banks have failed to provide a stable underpinning to world financial markets and to an increasingly asset-dependent global economy† which we have clearly seen before in 2000(equity bubble) and then in 2007(credit bubble) We can clearly infer from this that though the reforms are needed in many sectors our primary focus should be on the investment and financial sector as money is linked to everything. Don’t waste time! 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Education Of The Muslim Religion - 1547 Words

Education of the Muslim religion and the female gender should be enforced by the government to increase tolerance and understanding of Muslim women who are harassed and discriminated against due to their religious beliefs and their gender. While gender equality has greatly evolved with the turn of the century, there are still women worldwide, especially women of color, who are being mistreated solely because of their gender. Ever since the crisis of 9/11, Muslim people have been judged and harassed; they are being seen as nothing but a stereotype to many people, and this blind hatred must end. Through education, respect and tolerance for Muslim women can be achieved with hard work, an open mind, and initiative. Discrimination against Muslim women has increased in mainly caucasian societies since the terrorist attack of 9/11. However, discrimination toward Muslim women has long been present. 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Art Essay Free Essays

Why should we make art? What is the purpose? How does it affect our culture , generation and or world? Art is an expression of oneself that is shared between people due to many did efferent personal reasons that contribute to the happiness and satisfaction felt from c aerating, viewing and pondering art. Some of these personal reasons that people have to justify the creation of art is the pleasure it provides, the creativity it gives you, the feeling of freedom, and the lifelong challenge or self growth. Art effects are culture because it helps defines era’s through t he way what kind of art was created and how the art was created. We will write a custom essay sample on Art Essay or any similar topic only for you Order Now Art provides great pleasure for those who create art because of its relaxing an true. It gives you time to yourself and time away from stressful jobs, classes and relations pips that all require a substantial amount of energy from you. It simply gives you time to be alone a ND in solitude from the world. It allows you to think deeper than just the superficial expression of he art and allows you to solve problems in other areas of your life through the simple relaxing nature of creating and viewing art. Art can give you an excess of creativity to use in other aspects of life. As you c intention to view and ponder art, you keep pushing yourself to see the art in different ways. How to cite Art Essay, Essays

The Differences Between Italy And Canada Essay free essay sample

, Research Paper The Differences between Canada and Italy Comparing Canada to Italy show s the many differences between the two states. The population, the physical size of the states, the age, clime, and the people in each state are merely some of the facets that show the differences between the two states. Even though Canada is much larger so Italy in country size, Italy has about double as many people so Canada. In fact, Italy is one of the most to a great extent populated states in the universe. Italy s population is about 57 million people, while Canada has over 30 million people. The ground that Italy has a greater population so Canada is because Italy was founded 1000s of old ages ago. Canada was merely founded a twosome hundred old ages ago. If you travel to some parts of Italy, you will detect that most of the edifices and constructions are really old and ancient compared to Canada. We will write a custom essay sample on The Differences Between Italy And Canada Essay or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Canada is more modernised with large skyscrapers and tall edifices making the sky. For illustration, Canada s chief edifice attractive force would hold to be the C.N tower. As in Italy the chief edifice attractive force is the Tower of Pisa, which is much older so any edifices in Canada. The official linguistic communication spoken in Italy is Italian. Although many other linguistic communications like French and German are spoken. In Canada, the official linguistic communication spoken is English and the 2nd linguistic communication spoken is Gallic. One difference between these states is Canada is a multicultural state, which allows you to maintain your original heritage and civilization. In Italy, you are considered an Italian and you are known as an Italian citizen. Canada does non hold an official faith like Italy does. Italy s official faith is Roman Catholic, as in Canada, faith alterations between each civilization. Italy and Canada s climes differentiate rather a spot. Italy has a typical Mediterranean clime with mild showery winters and hot dry summers. In Eastern Canada, the clime is non rather so favourable, the clime being cold and terrible in the winter, the springs being late and the summers instead abruptly. The clime is a spot milder in the Western terminal of Canada. Sing Canada gets cold winters, this could explicate why Canada is one of the best states in the universe when it comes to the athletics of hockey. Canada even has it s ain hockey conference called the CHL. The Canadian Hockey League is the universe # 8217 ; s largest hockey conference. The CHL consists of 3 conferences ; the Quebec Major Junior Hockey League, the Ontario Hockey League and the Western Hockey League. There are 54 squads in the CHL. In Italy, the most popular athletics is soccer. Italy is ranked as one of the greatest squads in the universe when it comes to soccer. Italy has it s ain association football conference which consists of 45 squads. When it comes to soccer, Italy is known to hold one of the greatest conferences in the universe. Canada is really different so many states in the universe because it is considered a multicultural state. This gives Canada an independent position around the universe. As you can see, there are many differences that can be made between Canada and Italy, particularly the clime, the geographics and the people of these two states.