...The gap between rich and poor Since 2008, the investigated bank, Lehman Brothers has gone bankrupt. It was one of the most significant turning points of the economic crisis of 2008. Because of the economic crisis, the economy of the U.S. has begun to fall. Even though wealthy people lost some of their profit due to the economic crisis, it doesn’t affect a lot for their property. Poor people are most affected by the economic crisis. They have to face a lot of problems, including unemployment and low wages. The economic crisis increased a large gap between rich and poor. In the article, “The Growing Gulf Between the Rich and the Rest of Us” written by Holly Sklar, she agreed that there is a gap between the rich and the poor, and it is rising now. Her argument is strong towards the fact that poverty in America is on the rise. In addition, she mentions that while the poverty is growing, the wealthy people are also on the rise. Sklar is surely right about the gap between the rich and the poor. It is a significant issue for us to know about such inequality. During hard times, the rich still can have their benefit. However, the people who really need money cannot get any help from the rich. While economic inequality has existed over time and occurs in more nations than simply the United States. Some balanced and fair intermediary institution is required to solve the growing problem of debt and poverty in the nation. There is much evidence that proves the growing gap between the rich...
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...Running Head: Americans Should Not Use Credit Cards 1 Americans Should Not Use Credit Cards Christopher McDonald COM/156 Donna Madison-Bell, MS Running Head: Americans Should Not Use Credit Cards 2 With more Americans in financial trouble than ever before and personal debt at an all-time high, most Americans should shun credit card use. Americans are having trouble paying for their credit card purchases and they are taking on more debt than is fiscally sound based on their income. Many people are being mislead by the appealing advertising tactics of credit card companies and most don’t understand or receive the information they need to make intelligent use of their credit cards or make important personal finance decisions. In addition, today’s economy has left many people unemployed or underemployed. To compensate for their lack of income, many people are using their credit cards to pay for basic items like food and gasoline. Because they lack a substantial income, they then can’t pay the credit card companies. Still other people might lack the will power to resist buying items that they can’t afford. Instead of rationalizing that they do not have the cash for the purchase, they use a credit card and worry about it at a later date. Americans now have more personal debt and financial struggles than ever before in the nation’s history, in part because of irresponsible use of credit. A 2007 article in the magazine Mother Jones stated that Americans owe...
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...2.0 Introduction The banking industry has undergone tremendous changes after the Asian Financial Crisis in year 1997. CIMB bank, as a major player in this industry, has faced a lot of challenges from local and international. As a growing bank in that time, CIMB bank has struggled hardly to become the best financial institution in Malaysia. In recent years, the government has liberalized the banking industry, which allows more foreign financial institutions to start their business here. This has increased the level of competition within the industry and in fact, has affected the position of CIMB bank as one of the leading banks in local market. Owing to certain problems mentioned above, we have chosen CIMB bank as the topic to perform in-depth research and analysis on the organization. Our main objective is to advise the Board of Directors of CIMB bank on the impact and implications of current developments and challenges on its organization and make appropriate recommendations to ensure the continued relevance, competitiveness and growth of the organization. CIMB bank has many retail branches across the ASEAN and operates under several corporate entities such as CIMB Investment Bank, CIMB Islamic, CIMB Securities International and etc. Besides, CIMB bank business model basically covers several areas which are Consumer Banking, Insurance & Takaful, Corporate & Institutional Banking and CIMB Thai. (CIMB, 2012) The vision of the CIMB bank is to be the Premier Investment...
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...The Subprime Mortgage Crisis and What to Do about It A Review of the Literature The fuse for the subprime financial shock was set early in this decade, following the tech-stock bust, September 11th, and the invasions of Afghanistan and Iraq. The subprime mortgage crisis is a historic turning point in our economy and our culture. The disruption in our credit markets is already of historic proportions and will have important economic impacts. More importantly, this crisis has set in motion fundamental societal changes – changes that affect our consumer habits, our values, our confidence to the future, and our psychological status. After this financial crisis, our economic went downturns and worsen now. When we talk about or hear about the subprime mortgage crisis, to fully understand the crisis help us to avoid the crisis happening again in the future. This literature review considers different opinions of the subprime mortgage crisis by responding to the following questions: 1. What are subprime mortgages? 2. How did the subprime mortgage crisis happen? 3. What are the causes of the subprime mortgage crisis? 4. Was the subprime mortgage crisis in the U.S. totally unexpected? 5. What to do to avoid it happening again in the future? By answering these questions, we can have understandings of the subprime mortgage crisis and find out the solutions to the crisis. When Americans taking advantage of the easy credit conditions, we take for granted the problems behind the credit...
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...Bank PLC, founded in 1987 and opened for business a year later; being one of the most admired banks in Sri Lanka and a leading innovator of banking services in the country, the fifth largest Bank in Sri Lanka and part of the mighty Ceylinco Group. The goal of the founding chairman, Dr. Lalith Kotelawela was to offer customers a more welcoming, customer friendly and service-oriented alternative to the traditional banking environment that was generally perceived to be formal, regimented and austere. The Bank quickly differentiated itself from other institutions in the market with a range of innovative services and attractive products including extended weekday banking hours as well as Saturday service, several bonus interest options and Cash-card access to non-resident foreign currency accounts that were often used by Sri Lankan expatriates to transfer funds to their dependents. Customers who had always been waiting for better interest returns for their deposits and with their trust to the public image of Dr. Kotelawela wasted no time and became customers of this newly established financial institution. Seylan soon became a well known brand in the industry with rapid growth and paying the highest interest returns to depositors. As per the company’s ‘The Case Study’ (2009) report, in its first partial year of operations, Seylan reported an after tax profit of Rs. 11.3 Million ending at 31st December 1988. Over the next 17 years, the Bank grew at an unprecedented pace, with assets...
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...Andrew Walden Crisis Management Professor Clark Bailey Planning for a Crisis Having a crisis management plan is invaluable when a crisis actually occurs. Whether it be a crisis at home or at work, if you are not prepared with some sort of plan of action, the results could be far worse than the crisis itself. Knowing that crises are inevitable is also a valuable thought. Prevention, communication, leadership and legalistic are all key element that make up a good crisis managemnt plan. I will be discussing many possible crisis that could occur at my home or workplace. When I began analyzing my household in order to determine the possible crises that could occur at my home I realized that my family and I are very ill prepared. As I began trying to compile a list of possible crises I realized that the possibilities were basically endless, so I decided to focus on the most probable crises that may occur. The major crises I came up with are: A house fire, a home invasion, a gas leak, or a chemical leak from a nearby chemical plant. First I will go over my crisis management plan for a fire. As far as prevention is concerned, I would make sure that all of the smoke detectors had batters and were in working condition. Next I would make sure that there were at least two fire extinguishers that are accessible and in working condition. I would also have at least two escape plans. Plan B would be an escape route if someone was trapped upstairs, and plan A would...
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...I. Credit card companies should not be on campus marketing to college students College kids and credit cards have been news lately, following a June 1999 report by the Consumer Federation of America (CFA) that blasted card issuers for luring unsuspecting students into debts. Sociologist Robert Manning, the author of the CFA study, was quoted in a Reuter’s story as saying: “The unrestricted marketing of credit cards on college campuses is so aggressive that it now poses a greater threat than alcohol or sexually transmitted diseases.” Most news stories took cues from Manning and touted the risks of credit cards on cash for students. By National On-Campus Reports, 6/15/2005, Vol. 33 Issue 12, p 34-35. II. Credit card companies target college students into applying. The now commons practice of card companies’ offering students credit cards is being portrayed as a way to lure students into an addiction to pilling on debt they can’t handle. Banks have become more aggressive and creative on luring college students to apply for credit credit cards. College students have been targets to banks for years because he or she does not have any financial obligations. Most of the nation's major credit card issuers are aggressively marketing unsecured credit to students (in their own name) through advertising, direct mail promotions and on-cam-pus recruitment, with giveaways like compact disks, mugs, candy bars, calculators, sunglasses, credit card-sponsored concerts, discounts on airfares...
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...brought about by one's own actions. With statics showing that the American public holds the bulk of the seventeen trillion dollar, deficits (The Debt to…); and that only 32 percent of Americans actually budget (Jacobe), one can come to believe this is true. That it is the public’s fault for not budgeting. For this reason, it is necessary that we diligently research and investigate past and present evidence to educate ourselves on the national debt crisis, so that we could shed some light on the root cause. First all, we will need to understand eccentric statistics on how many Americans are actually affected by debt today. According to Michael A. Fletcher of The Washingstonpost.com, three out five workers’ mortgages, credit card balances and installment loans are outpacing the amount of money they are able to save for retirement. In addition, Bill Fay of Debt.org acknowledges, that the more than 160 million Americans with credit cards have an average of three credit cards each, and on average, each household with a credit card carries more than $15,000 in credit...
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...Article: Homepage (credit cards) Description: Credit Card is substitute of cash and by having best credit card one can get different benefits. As the world is advancing new technologies are introduced in the market. These technologies are made to make our life easier and simpler. These technologies are also helping in our spending life style. Like nowadays plastic money (credit card) is gaining fame because most of the people don’t want to carry huge amount of money along with them and they prefer credit cards. Credit card is used as a mode of payment which can be used as substitute cash in the trade of commodities. It is a small plastic card, generally 3(1/8) inches by 2(1/8) inches in size, with a small electronic chip given to consumers of the system. The card holds credentials information like an image or signature, and person name to charge for services, the charges for which he will be payable periodically. A credit card is not like debit cards as in debit card money is not deducted from the client’s account after each transaction. In the case of credit cards, the issuers give loan to the punter and the consumer revolves their balance at the cost of having interest charged. Today, automated teller machines (ATMs), bank and Internet computers and store readers are used to interpret the information which is present on the card and are accepted as means of payment in many restaurants, internet businesses, stores, hotels and shopping malls. These cards are issued by financial...
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...requirement Jing He ID: 107302852 The causes of subprime crisis during 2007-2008 In America, according to the borrower’s credit rating, housing mortgage loan can be divide into prime, alt-a and subprime loan. Subprime mortgage loan is one of the important bank businesses. It is a high return but also high risk industry. Basically the loan is related to customers’ credit and reimbursement ability. Bank credit reports include the name, employment, credit, loan history and collection records; A FICO score is a number represents how credit worthy you are which is based on factors such as the amount of money you earn, how much debt you hold, your record of paying back past debts…the higher the score the better your credit. It provides the analytics and completed history credit, helps financial institution to make decision; it’s a measure of credit risk. These are the measurements whether offer the loan or not, if analysis shows not good, then banks would refuse the request. This is the prime loan, but the subprime mortgage loan offers loan to someone who don’t have good credit, or lower reimbursement ability. This is a potential risk of this industry. Compare to the normal loan, it has high interest rate, so the repayment pressure is really high to someone has not such good credit, but to the bank, if lenders repay the loan, they would earn high interest return. The origin cause was the booming in real estate. The house price increase rapidly in last few years. The price in 2006...
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...be made. Technology has advanced us to the point where physical cash is hardly ever necessary and the majority of people just use a card. These advances have increased the speed and efficiency in which a purchase can be made but also in contrast how easy it is to overspend. Cash is still the optimal way to purchase because it is inconvenient. Since the dawn of the credit card in the mid nineteen-eighties, modern society has been in a frenzy using them. The concept felt so exclusive and futuristic that everybody decided that they simply had to have one. The credit card made spending such a streamlined process it effectively eliminating the guilty feeling one gets when buying something. That guilty feeling is the key to spending responsibly without it is incredibly hard not to overspend. An emotional connection with your money is needed and using cash stimulates that connection. Now that the credit card has become so widely accepted debt has also been befriended by society at large. More and more debt has become a growing force in the world. Credit cards have made buying beyond your means the social norm. Now more than ever people will buy the better car or the bigger house all in the name of elevating their personal status. This philosophy on spending has lead the United States straight into a time of economic crisis. Spending with cash with small and large purchases helps one be more responsible with money. There is something about...
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...The Business Environment Monica Thompson Prof Marilyn Fitzpatrick BUS 100 May 6, 2013 Author Note This report is written and submitted as an assignment for BUS100 (Intro to Business) class by Professor Marilyn Fitzpatrick in the spring semester of 2013 Abstract Business is any activity that provides goods and services in an effort to earn a profit. This paper will discuss the role business and the different affects business has on society today. The roles of for-profit and nonprofit organizations will be compared and contrasted. This paper examines the impact of the current fiscal and monetary policies on the economy. A selected product or service will have a strategy for accessing global markets outlined. In the world of business, there are certain constants that exist throughout. One the most important factors being the overall environment itself. The term Business Environment is pretty self-explanatory, and means exactly what it sounds like. The Business Environment is simply a set of different conditions and variable that dictates the nature of the current business environment. The role of business becomes an important factor in determining the flow of this current environment. Business, whether it is large or small scale, is the heartbeat of any economy. Companies that primarily focus on profit margins and financial rewards differ from those that business models consist of mission statements usually geared toward promoting the “greater good”. For-profit...
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...What role dir moral hazard play in the United States financial crisis? Sub-prime lending People with no credit worth background could become credits easily all of the sudden. Reinvestment Act (passed in 1977, but revised in 1995 and amended in 2005) ( REFERENCE NIGEL) wants to make Hispanics and blacks more able to get credits, however the act missed the control function Moral hazard: Crazy loans. Interest only plans Everyone knew that they were unlikely to be ever paid back. Merrill lynch $55billion worth of securities on these books. “Home mortgages were purchased from banks and other lenders by Wall Street firms that packaged and divided them into different categories – based on the ability of borrowers to repay (see Foster & Magdoff, 2009, p. 94). They then were sold as investments” the riskier they are the more yield they generate. Lenders were happy because by selling to a bank they could make new loans. Banks were happy because of high volumes. Banks increase pressure on lenders to sell more morgages. Vicious cycle. Large sectors of the American industry outsourced companys to countries were labour is cheaper -> US many people unemployed -> less disposable income. At the same time government home ownership = American dream ← Credit default swap. o Packaging mortgages into a bond which then is sold to investors. Investors did not have to understand mortgages. Since this was rated by agencies such as standard & Poors, Moody’s triple A rating ...
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...delinquencies i.e. non-payment of the mortgage, 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." This is when the borrowers have a poor credit history that is they are bad borrowers. Subprime lending is also called B-Paper, near-prime, or second chance lending, as the borrowing is done to customers with a poor credit history or no credit history without any security in return of the money 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 lenders To access this increasing market, lenders often take on risks associated with lending to people with poor credit ratings or limited credit histories. Subprime loans are considered to carry a far greater risk for the lender due to the aforementioned credit risk characteristics of the typical subprime borrower. Lenders use a variety of methods to offset these risks. In the case of many subprime loans, this risk is offset with a higher interest rate or various credit...
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...credit score actually is and what it can do for you. Your credit score determines just about everything when it comes to what you can and can't purchase and the interest rates associated with those purchases. Credit scores can also affect other areas of your life, such as what you pay for insurance, whether or not you are granted that job you want so badly and whether or not you can buy a house. Therefore, learning some credit basics can have a big impact on how you use your credit and ultimately your credit score. What Is A Credit Score? A credit score is a three digit number which is based on your credit report. It's used to determine creditworthiness...
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