...COUNTRYWIDE FINANCIAL: THE SUBPRIME MELTDOWN I. Problem Statement After buying out Countrywide Financial and resolving the issues against former CFO David Sambol and former CEO Angelo Mozilo, what should be the next steps that Bank of America must take to salvage Countrywide Financial from onslaught of criticisms and lawsuits that already arose and would potentially arise against it? II. Analyzing Case Data In the mid-2000, season where real estate prices were booming and confidence levels were high, even clients who could have qualified for regular loans chose to take out subprime loans to finance their real estates. Just like most businesses, Countrywide did everything to expand their profitability. They gave false assurance to home buyers. So, even consumers with good credit rating get attracted to these mortgages without fully recognizing the possible consequences. The construction industry also used flipping to expand its profit. Speculators also bought existing homes with no intension of keeping them, waiting until the value increases, and selling them at a profit. High demand also caused an increase of the cost of materials. Realtors, on the other hand, were motivated to push sales through because of commissions they could earn, pushing them to take much riskier transactions. Even real estate appraisers began to inflate the value of homes to ensure that loans would go through. Without being foreseen by anyone, US economy began to slow down. People started working...
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...The debacle that is the subprime crisis is said to be one of the worst in history, and sadly, I do not think we will learn enough from it. There are many factors that contributed to this situation and I will try to focus on a few I feel are most important. I realize that this is a finance class and the focus should be on the financial institutions aspect, however, this scenario played out in the real world where there are almost infinite variables. As a 1st generation immigrant, I can appreciate the spirit of this lending; it has allowed many illegal aliens in my eastern European community to be able to purchase a house regardless of the fact that they couldn’t document income since the worked “under the table.” I know many families that were able to take advantage of this when it had initially started and are still happily in their own home, however, I know almost as many that got a 5-yr ARM loan about 5 years ago that have now lost their home. One of the things I feel could have been done differently to avoid this would have been to introduce some sort of regulation of the subprime loans; maybe place a limit to how much of your loans can be in it. I know the chances of this happening would have been very small because we live in America and everyone has the right to make money how they see fit. I also realize that the case mentions there was no precise dividing line so it was difficult to measure the fraction. However, I believe that if effort had been put forth, regulations...
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...Subprime Meltdown: American Housing and Global Financial Turmoil The real estate and financial crisis was caused by a significant rise in mortgage delinquencies and foreclosures, leaving repercussions for banks and financial markets globally. The subprime mortgage crises started to become apparent in 2007 resulting in a weakening global financial system. An estimated 80% of US mortgages held by the subprime borrowers were adjustable rate mortgages. Once housing prices reached their peak during the middle of 2006, the steep decline that followed made refinancing difficult. Adjustable rate mortgages began to reset at higher rates resulting in increasing mortgage defaults. Financial firms which held most of the securities backed with subprime mortgages were left with securities with no value. Ultimately, credit around the world tightened as the capital in many banks and US government sponsored enterprises were losing value. What caused the crises can be attributed to a number of factors; the failure of homeowners to meet their mortgage payments, the adjustable rate mortgages resetting along with the extensive lending. In 2008 the mortgage industry played a crucial role in the recession when an estimated 1.5 million homeowners defaulted on payments lending to foreclosure by 2009. As a result, the mortgage industry has restructured limiting individuals to purchase homes. From 2000-2006, home foreclosures began to rise. Thus the government began to investigate the practices...
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...ETHYL CELLULOSE Ethyl Cellulose polymers are derived from cellulose. They inert, high purity powders with no caloric value and are virtually colorless, odorless and tasteless. According to the DOW films made from ETHOCEL (a brand name of Ethyl cellulose) polymers are highly flexible and retain their flexible and retain their flexibility at temperatures well below freezing. It is excellent as a film former. Films made from it are tough, with high tensile strength and unusual degree of flexibility even at low temperatures. It yields a greater volume of film-forming solids than any other cellulose derivative. It is compatible with most common plasticizers and polymers. It yields clear films with a wider variety of plasticizers and polymers and cellulose derivatives. It is also an excellent water barrier. In films it absorbs a little moisture either on exposure to the atmosphere or after long immersion in water. The good binding qualities of it are useful in applications such as tableting and microencapsulation. Its solubility dissolves in a wide range of solvents such as aliphatic alcohols, chlorinated solvents, and natural oils. It is practically insoluble in glycerin, propylene glycol, and water. In formulating with it other polymers are used to improve gloss, rubbing properties, adhesion, and resistance to certain solvents. Generally, the percentage of modifying polymer is approximately equal to that of the ETHOXYL polymer, and the amount...
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...Chernobyl disaster occurred at the Chernobyl Nuclear Power Plant in Ukraine. (Wikipedia) There was an explosion and fire released a large amount of radioactive contamination into the atmosphere. (Wikipedia) Studies show that this was the worst nuclear power plant accident in history. There was a total of thirty-one deaths reported. This was a test that had gone bad. The battle to take control of the contamination took over 500,000 workers and cost 18 billion dollars. (Wikipedia) The operators were to blame after there was an investigation. Because of the explosion there will be a lot of health problems that will occur according to the studies of The Union of Concerned Scientist. The Fukushima Daiichi Disaster was a series of nuclear meltdowns, equipment failures, and releases of radioactive materials. (Wikipedia) Fukushima Daiichi Disaster was taken place on March 11, 2011. It is now recorded as the largest nuclear disaster since the Chernobyl disaster in 1986. The Fukushima Nuclear Power Plant is one the 25 largest nuclear power stations in the world.(Wikipedia) This because it has six light water, boiling water reactors that are...
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...individual needs is certainly more difficult on the micro level. The book answers the questions on whether or not this is feasible. With ‘big data’ and the efficient use of a powerful CRM database, we can group individual needs together and focus on them more efficiently than by focusing on one customer. A good example is the company I work for called TPC Wire and Cable. We focus on providing wire and cable that perform the best in the market under harsh environments. Back in 2014 we came across a nuclear facility that was in need of a temporary power solution mandated by the government. Because of the Fukoshima disaster where the nuclear plant melted down because of the tsunami that struck, they didn’t have any power to assist with the meltdown of the plant. Long story short, focusing on this individual need, our company innovated an entire product line and penetrated an entire segment. This business allowed our company to almost double in size over the course of a year. Another example could be the airplane neck pillow. This type of pillow never existed (At least in regular production) until the early 1990’s all because of a product manager focusing on one group of customer’s needs. The group of customer were a bunch of business travelers that couldn’t handle overnight flights in an uncomfortable seat. One small innovation to the modern day pillow and a huge popular product was born that came be seen around the neck at any airport across the...
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...Nuclear Energy Jackie Johnson SCI 207 Dependence of men on the environment Haleh Keshtker Jan. 29,2012 Nuclear Energy Will the Chernobyl nuclear is the large environmental disaster caused by the meltdown at the nuclear power plant near Chernobyl, Ukraine, dramatically changed the world’s opinion about using nuclear power reaction for power. But se the Chernobyl nuclear power plant was built the wooded marshlands of northern, Ukraine, approximately 80 miles north of Kiev. But see the first reactor went online in 1977, but the second in 1978, third in 1981, and the last in 1983, two more were planned for construction ( Ask.com 20th century History). See the media is comparing the threat to Chernobyl and some politicians are calling nuclear for a complete moratorium on the spread of nuclear energy. This is nothing more than sensationalist fearmonering. But see the Chernobyl disaster was caused by the absurd inefficiencies of the soviets and massive flaws in the power plants design. Here is something that is should the container be breached the Japanese government already has things in place to pour concrete over it as was don’t to contain Chernobyl. But see it is not right for Nuclear energy to work there butts off to help out in this world if Japanese government wants to power concrete over everything before they ask the rest of the world if they want that to happen. But see it is worth noting that the facility itself was fairly aged- Forty years, I read in one article-...
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...The Health of Future Generations Starts Today James C. Studaway The Health of Future Generations Starts Today “Do you love me? Do you care for what has taken me a lifetime to create for you? Don’t you see the benefits in what I’ve created for your families? Then, why aren't you caring for me? Why do you hurt me so?” No, these aren't the weeping of a heartbroken, young lover. They are Mother Nature’s heart-filled pleas to the citizens of Planet Earth. These are questions we must ask ourselves as guardians, shepherds, and stewards. Mankind’s everyday choices have corrupted nature’s bounty and created a dark pathway for many generations to come. Many feel nature’s tomorrow will take care of itself; there’s no need to fight for it today. However, the health of future generations resides in the hands of what our lifestyles are today and in our conscious efforts to fight environmental poisons and pollutants like carbon-dioxide, pesticides, fossil fuels, environmental and nuclear wastes because tomorrow is not promised (Göpel, 2011). History has a long list of bad choices which seemed to benefit initially; but, only started environmental conditions to fall like dominoes. The age of the Industrial Revolution in America was a major contributor to the lack of environmental responsibility and the care for our country’s water, soil, air, natural habitats, and animal protection. Unfortunately, the general populous felt the needs and benefits of the improvements outweighed the possible...
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...Benji Smith The Problem at Reactor Number Three There are many dangerous effects of an overheated nuclear reactor. It can lead to a huge nuclear meltdown such as the Chernobyl disaster in Ukraine, killing thousands and affecting millions. It can also have a much more minimal effect, still being very serious. A minimal overheating of reactor number three is exactly what happened at the Oconee Power Plant last Tuesday. This report will reveal the causes for this disaster. While not trying to blame anything or anyone for this occurrence, it is important to know how it occurred. Nuclear power plants run at excessively high temperatures. For this reason they are built close to a body of water which is used to cool down the blazing reactors. The Oconee plant is built beside the deep waters of Lake Keowee. This fall was preceded by drought with extremely high temperatures. This lack in rainfall accompanied by the above-average temperatures lowered the water level in Lake Keowee by twenty-five feet and raised the average temperature of the water by eleven degrees Fahrenheit. While the low level and high temperature of the water could not, by itself, allow the reactor to overheat, it did force the water cooling pumps to work harder and slower. This did not provide for the preferable amount or temperature of water to flow. The radio-active uranium used to create electricity is where the heat of a nuclear reactor comes from. The more uranium present leads to more heat to be dealt...
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...BEEP!! WARNING!! WARNING!! As Jeff turned on the radio, he heard the blaring voice of an announcer. There is a core meltdown of reactor 4 at Chernobyl. Explosion of the nuclear power plant eminent!! All citizens of Pripyat evacuate immediately!! Jeff just had time to react to these words when he heard a sudden explosion. BOOM!! Quickly, Jeff ran down the stairs of the apartment and saw many people groggily getting up to see what had happened. Seeing so many people in dangers path, Jeff quickly pulled the fire alarm. “Great,” Jeff thought “Saved a bunch of people.” Jeff then ran to his car, put the key into the ignition and drove as quickly as he could, caring only about his own safety. After driving for a few minutes Jeff’s car glided to a halt in the middle of the highway. Jeff had forgotten that he had no more gas. As Jeff ran away from his car the air became more and more hazy. Radiation was everywhere. Jeff stumbled to a halt and fell to the ground. It became harder and harder to breathe. “No,” thought Jeff. Then he passed out. 1min 24sec According to the Nuclear Energy Institute, there are currently 442 active nuclear power reactors worldwide. Of all of the reactors worldwide, 14 of them have been classified as accidents where the public has been exposed to large amounts of radiation. The most devastating of these incidents was the core meltdown of reactor 4 at Chernobyl, better known as the Chernobyl disaster. Today I am going to tell you 3 things about Chernobyl...
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...Three Mile Island nuclear reactor meltdown accident is one of the most notable commercial nuclear power station reactor accidents to have occurred in the United States (Walker, 2004). Metropolitan Edison Co. operated the plant. On 28th March 1978, one of the nuclear reactors in the plant (TMI-2) suffered a partial meltdown, resulting in the emission of mild radioactive elements into the environment (Walker, 2004). What ensued was legal action by PANE, trying to stop the reopening of the nuclear plant stating that it would result to “severe psychological trauma to residents of nearby towns” (Gary & Rosen, 2003). The reopening of the plant would have had significant effects on the area resident’s psychological health, wellbeing, and the area community’s cohesiveness and stability. Reopening the plant would have led to the area residents having to live with trauma and fear. Immediately after the incident, the federal government ordered the evacuation of all children and pregnant women from within a 5 mile radius of the Three Mile Island Facility. A day later, the federal government increased the radius to 20 miles (Osif, Baratta & Conkling, 2004). More than 140,000 people had to vacate their homes temporarily because of the incident. This had an impact on the area resident’s state of psychological health. Even after they had moved back from the voluntary evacuation, they had to live in constant fear that there might be another nuclear meltdown. They also had feared that the radioactive...
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...companies responded innovatively as well as what this can mean for us as future business people. 3 Well, most of us were about to enter the university when we‘ve been looking at the images of the disaster coming from Japan. A nine magnitude earthquake followed by a devastating tsunami had as a result tons of debris, thousands of hectares of farmland devastated, a huge cost in direct material damage, a much more serious environmental disaster caused by the meltdown at Fukushima nuclear plant BUT the most shocking figures are the thousands of people that have been evacuated and most of all the nineteen thousands of people being killed by the tsunami. 4 Well, most of us were about to enter the university when we‘ve been looking at the images of the disaster coming from Japan. A nine magnitude earthquake followed by a devastating tsunami had as a result tons of debris, thousands of hectares of farmland devastated, a huge cost in direct material damage, a much more serious environmental disaster caused by the meltdown at Fukushima nuclear plant BUT the most shocking figures are the thousands of people that have been evacuated and...
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...little scare about the prospect of sharing a living space and they really do not know if making a lifelong commitment and living together with another person will be positive or not. In fact loving someone in close quarters is never easy! Don’t worry; it’s only natural to be a bit nervous when thinking about the prospect. Here are three aspects to take into consideration when planning to move together: One of the biggest fuels for arguments in a relationship is money. Another one is how the regular household maintenance will be handled. Communication and compromise will lead to a lot less stress in your new adventure together. When you live with your couple or significant other, arguments over money matters can get heated to a nuclear meltdown faster than you can say Chernobyl. Make sure the two of you work together to come up with a plan of how your finances will be handled. Some financial experts recommend not combining your checking accounts or getting a joint checking account when you first begin living together; even they say that people need marriage contracts, but that choice is really up to you. Either way, you must figure out who is going to be responsible for paying the bills, or how the bill paying duties are going to be separated. You can go about household maintenance by splitting up the chores. If you are particular about how the laundry is done, then you could take that task while your partner could be put in charge of dishes or something else they don’t mind...
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...The Chernobyl Disaster What effects did the Chernobyl disaster have in the world? The Chernobyl nuclear disaster has had some good and bad effects on the world. Have you ever heard of the Chernobyl nuclear disaster before today? My thesis is that Chernobyl has had good and bad effects on the world. The Chernobyl nuclear disaster happened on April 26, 1986, in the No.4 light water graphite moderated reactor at the Chernobyl Nuclear Power Plant near Pripyat, in what was then part of the Ukrainian Soviet Socialist Republic of the Soviet Union (USSR). The event occurred during a late-night safety test which simulated a station blackout power-failure and in which safety systems were deliberately turned off. A combination of inherent reactor design flaws and the reactor operators arranging the core in a manner contrary to the checklist for the test eventually resulted in uncontrolled reaction conditions. Water flashed into the steam generating a destructive steam explosion and a subsequent open-air graphite fire Plant operators made several mistakes, creating a poisonous and unstable environment in the reactor core. The accident caused a lot of sadness for a lot of families and friends of the ones who died in it. Two Chernobyl plant workers died on the night of the accident, and 28 people died within a few weeks as a result of acute radiation poisoning. The total death toll was cancer from the accident is projected to reach 4,000 for people exposed to high doses of radiation, and another...
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...Subprime Special The term "subprime" refers to the credit status of the borrower, which is being less than ideal. Subprime lending is a general term that refers to the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. According to the U.S. Department of Treasury guidelines issued in 2001, "Subprime borrowers typically have weakened credit histories that include payment delinquencies, and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories." Subprime lending is also called B-Paper, near-prime, or second chance lending. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime lending crisis, which began in the United States has become a financial contagion and has led to a restriction on the availability of credit in world financial markets. Hundreds of thousands of borrowers have been forced to default and several major subprime lenders have filed for bankruptcy. Types of subprime lending Subprime mortgages Subprime mortgage loans are riskier loans in that they are made to...
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