...AFTERSHOCK Protect Yourself and Profit in the Next Global Financial Meltdown Kevin Ung Economics 309, Fall 2010, Section 2 Professor N. Pulchritudoff December 9, 2010 In 2006, with home values high and credit flowing, authors David Wiedemer, Robert Wiedemer, and Cindy Spitzer accurately predicted the popping of the housing bubble, the collapse of the private debt bubble, the fall of the stock market bubble, the decline of consumer spending, and the widespread pain all of this was about to inflict on the rest of our economy. How did they get it so right while others got it so wrong? The authors saw a fundamental underlying pattern that others were—and, unfortunately, are still—missing. It may seem like the worst has come and gone, but it hasn't, say the authors in this new book. Things are not going back to how they were before. In Aftershock, the authors offer the definitive look at what is still to come—and what investors must do to protect themselves. This is not merely a down market cycle, the authors explain, nor is it a typical recession. It is a multi-bubble economy that is being hit by a "Bubblequake"—and the coming Aftershock will be far more dangerous. Aftershock details the next bubbles about to burst, including the Dollar Bubble and the Government Debt Bubble, while there's still time to protect your assets and position yourself to survive and thrive in this dangerous, yet potentially profitable new environment. They offer specific advice on how to profit...
Words: 1915 - Pages: 8
...Why factor that cause the collapse of the USSR? On Christmas Day on 1991,Mikhail Gorbachev resigned as the president of USSR and announced that USSR from then on was not going to existed anymore. Except the US president Reagan, very few people predict the collapse would happened. Evidences prove that the break-up of the USSR was intended and also out of Gorbachev’s expectations. After Brezhnev died. There were lots of problems left to Gorbachev. There were mainly two problems: Economy crippling and severe relationship with the US and eastern European countries.Gorbachev actually had a specific goal to improve USSR’s development by using Perestroika and Glasnost.However, those two police actually accelerated the coming of the fall. with an unintended consequences.However,there are also historian argues conversely that actually it is an intended result that the long-term economics crippling and stagnation caused the financial sustainability of USSR which directly influence people’s life situation and the USSR development. One of the Gorbachev’s policy Perestroika which was reconstruction on economy was one of the factor leads to fall of USSR which wasn't seen as a stimulant of the collapse by Gorbachev. By that time USSR saw its economic crippling. Gorbachev set up goals for ending the economic stagnation and improving the economy in USSR.Perestroika allowed more independent actions from various ministries and introduced market autonomy reforms.The goal of the...
Words: 1039 - Pages: 5
...During the first few years of Gorbachev’s leadership, the focus of the regime had been on the economic and then political reform. Although there had been some concerns about nationalist resurgence, few predicted it would escalate and lead to the collapse of the Soviet Union. Gorbachev’s speech in 1986 stated that there was no longer any nationalities issue within the USSR as everyone was dedicated towards his reforms regardless of identity. This can be argued with the collapse of the USSR as it was brought on by movements within Lithuania, Ukraine, Georgia and Russia. However, the collapse of the USSR can also be argued by looking at the failure of Gorbachev’s economic reforms and political stagnation. The failure of acceleration and the reforms within the economy had an impact in the Republics where people began to question whether Gorbachev was committed towards the reforms as was required to to reinvigorate the economy. The reforms of Uskoreniye that was believed to be the gradualist approach to help to invigorate the economy failed. His estimates of national income were short by 2% and the initial measures of perestroika were having no effect. He blamed poor economic advice and the Republics were obstructing change, and this led to societal stagnation as the USSR began to experience shortages of food and higher prices for goods. By the summer of 1990, it was clear there was a major crisis in the economy. Most reformers now accepted that tinkering of the economy was over...
Words: 1051 - Pages: 5
...Wall Street Financial Crisis Student’s Name Institution Date Paper Draft Introduction Background of the crisis. The effects and impact of the financial crisis. Results of preliminary reports. Sociological perspective of financial crisis The aspect of sociology in financial crises Senate’s investigative report The key players and their roles Why the workers remained unknowing The sociological explanation of the unpredictability of the crisis Conclusion Introduction The Financial Crisis of 2008 was described by economists, analysts and even sociologist as the worst and most devastating economic crisis since the 1930s Great Depression. It threatened a total collapse of huge financial institutions, banks bailout by governments, and major downturns in security's exchange around the world characterized this dark economic year. The housing sector in many areas in the world t also suffered, with the result being forced and unnoticed evictions (Coxe, 2005). Many people lost their jobs and there was a prolonged unemployment leading to family crisis and debts. Key businesses including banks failed and there was a huge decline in the consumer profits. The small unsecured financial institutions suffered the worst ever insolvency resulting from bank runs that characterized this period. The declines in consumer wealth were estimated in trillions of U.S. dollars. All these activities took a very short active phase, manifested as a liquidity crisis, and dated from August 9...
Words: 3596 - Pages: 15
...Shawn Mutchler Clara Gerl Comp I 01 September 2013 Unethical Mortgage Lending and the Collapse of the American Economy Living in an era of economic uncertainty is an abysmal proposition that many of us thought improbable. However, we find ourselves in the midst of the worst financial quagmire since the Great Depression of the 1920’s. Across the United States, businesses are down-sizing and even closing the doors of peripheral branches. In realizing that there is no way to return to a period of economic prosperity America once enjoyed, it is important to look at the causes of its demise. While there are myriad causes for America’s financial collapse, it is important to focus on the role of ethics, or the lack thereof, in America’s current financial dilemma. Unethical practices, particularly in mortgage lending have helped to directly contribute to the collapse of the American economy. When discussing unethical behavior and the financial collapse of America, few topics receive more attention than the mortgage lending industry, and in that industry, most of the focus falls on subprime lending. Before looking at subprime lending, however, it is central that we look at the evolution of mortgage lending. Because the approach to mortgages has changed, we must take a glance at the past methodology of mortgage lending. As recently as the past twenty years, borrowers seeking mortgage loans would go to their local banker to apply for a mortgage. This banker was oftentimes known on...
Words: 1474 - Pages: 6
...Barings bank, was founded in London, UK, in 1763 as a merchant bank. During 80’s it started to have big international success. And in 1995 it collapsed because of general manager in charge of setting up the trading operations in Singapore (Mr. Leeson). The whole story started when Mr. Leeson found out that there was an error, when one of his phone clerks sold the contracts rather than bought them. That day the loss was calculated to be 20,000 Pounds. The only thing he could do was to close the deal only in the upcoming Monday. Because of a busy day on Monday, Mr. Leeson forgot and now this was a problem that could affect not only the clerk but also him. So, he decided to hide this error permanently in an account 88888, but after some days this error could cost the firm 60,000 Pounds so this became a very serious problem that could cause Mr. Lesson troubles with his position in the company and also affect his bonuses (which until now were really high). So he decided to hide this error, and lots of others made by him or his team, which they reached the loss of almost 1 billion dollars. Why did Mr. Leeson behave that way? While reading the case, you can understand that one of Mr. Leeson’s ambitions was to become a floor trader. When he was sent to Singapore, his position was to control both settlement and floor operations and this was not a common practice for Bearings. This way he could control the firm’s operations and also in the same time work in the back office, which...
Words: 3333 - Pages: 14
...September 11th 2001 was a traumatizing day that will always be remembered by Americans. On that fateful day, two planes crashed into the World Trade Center causing both Twin Towers to fall to the ground. Terrorism has been a big fear in the American homes ever since. Terrorism still exists today and will continue to be part of this world. Many people have an idea of what happened and who did it, but we will never know for sure. There have been many conspiracy theories and many accusations throughout the years. So the question is who is responsible? On Tuesday September 11th , 2001 a series of four planes were hijacked and targeted US landmarks. Two of the planes that were hijacked were American Airlines Boeing 767 and United Airlines Flight...
Words: 410 - Pages: 2
...and strong growth in commodity-exporting economies including Australia. (maybe because of 1997-1998 Asian financial crisis) In the coming decade, Asian economies are likely to continue their ascendancy, albeit at a slower pace, which should eventually decouple Asia from the advanced economies. With increasing domestic cost pressures, Asia may also become a new source of global inflation. Asia’s exports of capital to advanced economies may shrink as the region rebalances and outflows should focus more on portfolio investment and foreign direct investment (FDI). In the coming decade, a potential crisis in a major Asian economy such as China could trigger the next global recession. SUMMARY: History: more than 1000 years before the industrial revolution, the combined share of China and India in the world economy was routinely greater than 50% (but whether they will assert influences on the world economy depends on assumption of sustainability) 1993: the East Asian miracle, HPAEs (world bank 1993), no China India 1997-1998 Asian financial crisis (triggered by the withdrawal of foreign capital from the region, however, excessive borrowing, overheating economies and declining investment returns in previous years had already laid the foundations) 1999, 2000: most Asian countries recovered 2008 GFC may accelerate the shift of global economic gravity toward Asia and probably reinforced the prediction of a new Asian century: during GFC, China &India stay 9% growth rate, and...
Words: 1579 - Pages: 7
...This essay seeks to discuss the major factors that led to intra-state conflict in Rwanda that ultimately resulted in the April 1994 genocide. My discussion will start by giving a historical background to the nature of relations that existed between the two ethnic groups during the colonial era. It is during this era that seeds of hate between the two ethnic groups were perpetrated. My discussion will then focus on how events in the post-colonial era unfolded resulting in the genocide activities. Before going into the detailed discussion, there is need to define the terms intra-state conflict and genocide. Intra-state conflict is the occurrence of armed conflict within rather than between states. These conflicts involve ethnic or religious groups fighting against each other or against the government to secure autonomy, independence or well-being. Intra-state conflicts are therefore mostly referred to as ethnic or civil conflicts. These conflicts usually break out when one group-ethnic, religious or social feels disadvantaged or exploited by another group in the same state and tries to change that through violence. According to Aldelman (2005), the Rwanda 1994 genocide was the most appalling case of mass murder the world has witnessed since the Second World War. The genocide resulted from the deliberate choice of a modern elite to foster hatred and fear to keep itself in power. According to Shah, (2006), this was a case of the majority Hutu who comprised 85% of the population turning...
Words: 2009 - Pages: 9
...The Impact of the Global Economic Crisis on the Arab World The Arab countries had experienced rapid changes in their economic fortunes in the year 2008. During the first half of 2008, oil, natural gas, and other commodity prices continued to rise rapidly, leading to huge gains. At the same time, they had to cope with rapidly rising food and raw material prices that threatened their economies and social stability. By July, the effects of the financial crisis and expectations of much lower global growth caused a collapse in oil prices. As a result, Arab oil exporters experienced a fall in hydrocarbon receipts, deterioration in their terms of trade, and declining surpluses on their balance of payments. Between July and December, the Organization of the Petroleum Exporting Countries (OPEC) basket price of oil fell by 70 percent from a peak of just over $130 per barrel to under $40 per barrel. In September 2008, with the collapse of Lehman Brothers and the turmoil on Wall Street, stock markets all over the world fell, including those in the Middle East. Arab banks were not overly exposed to the U.S. mortgage or derivatives markets, but sovereign wealth funds and other holders of equities suffered large losses. The stock markets in the region suffered along with others around the world. In the twelve-month period ending in February 2009, the Saudi stock market fell by 49 percent, Dubai's by 72 percent, and Egypt's by 61 percent. These losses have reduced consumption and discouraged...
Words: 751 - Pages: 4
...UNIVERSITY OF DAR ES SALAAM COLLEGE OF NATURAL AND APPLIED SCIENCES (CoNAS) DEPARTMENT OF AQUATIC SCIENCE AND FISHERIES (DASF) FISHERIES MANAGEMENT AND CONSERVATION; AF 305 NAME OF STUDENT: NZOWA DENIS C. REGISTRATION NUMBER; 2010-04-04726. DEGREE PROGRAMME; BSC. IN AESC. COURSE INSTRUCTOR; DR. NDARO SUBMISSION; 19th APRIL 2013. ASSIGNMENT 3. Owing to the likelihood of occurrence of fishery collapse in near future, a fishery authority decided to carry out downsizing for the fishing company. Discuss the effects of such step on the welfare of the fishery community in the area. INTRODUCTION Downsizing refers to the permanent reduction of a company's workforce and is generally associated with corporate reorganization, or creating a "leaner, meaner" company. Downsizings such as these are also commonly called reorganizing, reengineering, restructuring, or rightsizing. Regardless of the label applied, however, downsizing essentially refers to layoffs that may or may not be accompanied by systematic restructuring programs, such as staff reductions, departmental consolidations, plant or office closings, or other forms of reducing payroll expenses. In essence...
Words: 1200 - Pages: 5
...deep that it is without precedent in modern history” (Dudley 101). That quote means that the country was in a depression so deep, that there was no coming out of it prosperously, without actively fixing what was broken. On the opposing side of the new deal, believing that the New Deal would destroy America, was Herbert Hoover (Dudley 104). Herbert Hoover was president during the early years of the Great...
Words: 578 - Pages: 3
...“Hyper inflation is both a monetary and fiscal phenomenon” In economics, hyperinflation occurs when a country experiences very high and usually accelerating rates of monetary and price inflation, causing the population to minimize their holdings of money. Under such conditions, the general price level within an economy increases rapidly as the official currency quickly loses real value. Meanwhile, the real value of economic items generally stays the same with respect to one another, and remains relatively stable in terms of foreign currencies. This includes the economic items that generally constitute the government's expenses. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless. Hyperinflation is often associated with wars, their aftermath, socio-political upheavals, or other crises that make it difficult for the government to tax the population, as a sudden and sharp decrease in tax revenue coupled with a strong effort to maintain the status quo can be a direct trigger of hyperinflation. When associated with depressions, hyperinflation often occurs when there is a large increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Left unchecked this causes prices to increase, as the currency loses its...
Words: 1477 - Pages: 6
...The statement ‘everything depends on the psychology of investors’ is useful in explaining the AFC. It started with Thailand, where the overvalued baht was pegged to the US dollar. An appreciation of the USD put strain on the Thai government’s position to maintain the peg, and coupled with Thailand’s current account deficit, investors and currency speculators suspected an imminent devaluation. The loss of investor confidence and speculation led them to dispose of their baht for the USD, and the baht further depressed in value. By this time, the Thai government was no longer able to maintain the overvalued baht, and international capital flew out of the country, compounding the decline of stock and property market indices. The government was forced to release the peg, which triggered off the AFC. The loss of investor confidence was like a contagion that spread over the region- many investors did not just invest in one country, but in multiple countries in SEA, and the situation in Thailand had them pulling out of investments in the other countries as well when they re-assessed the risk factors in Thailand’s neighbouring countries and saw similar symptoms afflicting them. Indonesia was the next to be hit by speculative runs after Thailand. Thailand suffered from a -54.6% rate of change in the value of its baht against the USD, but Indonesia suffered the wildest fluctuation in the value of the rupiah, with a -83.6% rate of change. This contagious loss of confidence and panic effect...
Words: 1405 - Pages: 6
...In the spring of 2008, the world was hit by the worst Financial Crisis since World War 2. The crisis began during the Reagan administration and concluded a couple decades later with the collapse of the housing bubble. Behavioral Finance defines the term “bubble” as an event occurring before a market crash due to overvalued market prices (Ricciardi 2000). The housing bubble, which grew alongside the stock bubble in the mid 90’s, eventually burst, and a financial meltdown ensued. Initially, one bank was crippled and two of the worlds’ largest mortgage investors followed, plummeting our country deeper into debt. In this paper, I will discuss the days leading up to the housing bubble, causes of the bubble, the grim days after the bubble burst and the solutions which quelled the global crisis. The crisis began during the Reagan administration when free market believers, such as Alan Greenspan, were in power. As chairman of the Federal Reserve, Greenspan believed that any problem in the market would work itself out, and paid little attention to regulations and fraud. After Clinton was elected to office, Greenspan would team up with Robert Rubin, the assistant to Clinton on economic policy and Larry Summers, Rubins top deputy. While power shifted in New York, Washington started to look into over the counter derivatives. Washington would hire Brooksley Born, a long time securities lawyer with ties to the Clintons, of the Commodities Futures Trading Commission to step in and look over...
Words: 1345 - Pages: 6
