Subprime mortgage crisis

fundamental flaws that created growth and contraction. When the economy goes down , the federal reserve can set interest rates lower creating money cheaper for people to take out loans from banks at anytime in exchange to 20-30 year commitment mortgages. This allow Americans to buy households ,make business investments and others that meant more production and more available jobs. However, leading into years of long record profits at banks; They were not longer wanting to give away loans for…

hurting the very people the company had originally sought to help (O’Brien, 2010). Did Countrywide start out acting erratically and irresponsible? In 1969, Countrywide was founded by Angelo Mozilo and David Loeb with the dream of becoming the largest mortgage originator in the United States (Eastburn, 2010). By 1980, they had 40 offices in eight states with loan production that exceeded $1 billion (Eastburn, 2010). Later, in July of 2008, they sold to Bank of America for $4 billion (Ferrell,…

1. Based on the documentary, how was the global financial crisis a threat to the economic system in the US? Banks, hedge funds, insurance, brokerages, companies and mortgage lender are the largest sector of the US economy. This was 3x larger than any other industry in America. If you want a strong economy you must have financial services that are able to lend money, this depended on the strength of the global economy due the invention of Credit Default Swap which was packaged whole segments of…

My definition of a recession is when the average American struggles, because there are no jobs, and barely any money to survive off of. “The economic meaning of a recession is when the economy declines significantly for at least six months. That means there's a drop in the following five economic indicators: real GDP, income, employment, manufacturing and retail sales.” (Amadeo, 2017) A recession doesn’t usually hit very hard so that it is immediately noticeable. It can start up pretty slowly…

Red Flags: 1) The significant unusual increase in long-term assets From 2003 to 2007, we can see that Bear Stearns’s long-term assets increased $170,836 (124.96%), while its current assets increased only 16.38%. This is a red flags because long-term assets are usually funded by long-term debts or stockholders’ equity. If a company put too many assets in its long-term categories, its financial flexibility will be impaired. 2) The significant increase in current and long-term liabilities From…

The unemployment rate during the Great Depression reached a high of 24.9%! How do you solve such an issue? Well, the answer was certainly not Franklin Delano Roosevelt’s New Deal. The Great Depression was a tragedy that started on October 29, 1929, and put millions of Americans out of work. Franklin Delano Roosevelt devised a plan to solve the problems of the Great Depression; this was called the New Deal. The New Deal provided American people with a series of social and economic programs that…

I. Article Summary Daniel Marans, "Brexit Is Already Causing the U.K. Economy to Shrink," wrote about the after effects of the economy of Britain making decision of leaving the European Union. He does this by providing different eligible sources that show Britain's economy on demand for goods and services. Marans also ends with talking about one of the reason for their actions and the effects if not complying to European Union agreements that are similar to other non-European union countries.…

5.1 Liquidated Damages: • Due to the contract being sucked away in the aftermaths of Hurricane Llewelyn, it is unknown whether the contract had a liquidated damage clause. (2-718) • If it did, we would be required to determine if the liquidated damage clause caused a penalty or not on the breacher 5.2 Expectation • The goal of the expectation damage would be to put MJC where they would have been had NSH performed. To do that you must take the difference of the market price at the time when the…

Two unsuccessful mergers/acquisitions were Bank of America’s acquisition of Countrywide and the AOL and Time Warner merger. Bank of America made the decision to acquire Countrywide at what was considered a low price of $2.5 billion dollars. AOL and Time Warner merged their company together as “AOL would own 55 percent of the new company and Time Warner, 45 percent. But the new board would have an equal number of AOL and Time Warner directors” (Arango, 2010, para. 25). Both of these deals are…

The job I had accepted assumed directorship of a 50-man comprehensive information technology department with a history of perennially poor management, incoherent staff development, technologies, internal policies and procedures. However, no sooner than concluding the first day on the job, the chief operating officer had apparently gone snooping around my office only to discover an inadvertent disregard for one of their key rules - all desks must be clean before leaving. Had I been informed?…