Sorry To All You Soon To Be Graduated!

Tough news for the college bound.

Fashion Industry In The Recessoin

Here is an interview with Michael Kors about how he thinks the recession is affecting the fashion industry.

East Hampton Star

This is an article about how the economy is affecting East Hampton. I think its interesting to look at our issues at a smaller level.

More on Private Equity

Yet another horror story about Private Equity Capital. Same story of a famous family run business saddled with unwanted debt in a small town setting. Please READ and COMMENT!!

Goldman Sachs NY Times

A central location to find any Goldman Sachs related article ever published in the New York Times. I really like the way NY Times Online does this for a lot of topics.

"How to Find Money for College in a Recession"

Some helpful info

"Study Cites Dire Economic Impact of Poor Schools "

This article is very interesting

Homework 10/5 Flipped!

The lead article in today's New York Times about the practices of Private Equity Firms. Please read and we will watch the videos in class on Tuesday.

Goldman Sachs

A pretty scathing article from Matt Taibbi, a very liberal journalist for Rolling Stone Magazine. He basically claims that Goldman Sachs engineered every major market manipulation since the Great Depression.

Shifting power in currency

In this article Robert Zoellick, the world back president says that because of the financial crisis, the role of dollar as the world's reserve currency may diminish.

Recession in the Fashion World

Here is an article talking about how the fashion world will fare in this recession it can be found here.

Sad but True

This is not a joke. Do not miss the prize for economics and for mathematics. Keep posting!

Fashion In The Recession

My article about Fashion In The Recession can be found here.

The president of Gucci, Gilles Bensimon is convinced that the recession will ruin the fashion industry.

Defense Earmarks

In the last election cycle, a major issue was the prevalence of "earmarks." These handouts were written into bills by members of congress to appropriate money for their district. Many of these earmarks were related to defense spending. The defense industry is spread out across the country so that it is in virtually every Representative's interest to keep the money flowing. A lot of projects that the DoD wants to cancel are instead extended to keep jobs in these congressional districts. This year, when the DoD recommended canceling the F-22 Raptor program, congressman from districts where production takes place were outraged. They managed to negotiate the cancellation to keep an order for a few more frames.

micro-finance, how the economic crisis is affecting...

How is the financial crisis impacting microfinance institutions (MFIs) and their clients? What can the microfinance industry do? These were the questions addressed at the virtual conference hosted by CGAP between Nov 18-20. There were 600 MFI managers, central bankers, investors, and advisers from 34 countries and the150 entries submitted by these participants provided a vivid and powerful picture of what is going on. According to the summary sent out by Elizabeth Littlefield, Director and CEO of CGAP,

"The dominos of the crisis-credit crunch, inflation, currency dislocations and global recession- are hitting microfinance in very different ways, depending on location, funding structure, financial state and the economic health of their clients. While many places seem unaffected today, there is little doubt that there will be impact: integration of microfinance into the mainstream does have costs."

Other salient points from the summary report were;

-deposit taking MFIs are well-insulated from the crisis

-immediate concern is how the global liquidity contraction will affect the cost & availabilty of funding to non-deposit taking MFIs

-institutional investors in microfinance are not seeing significant redemptions but they do expect fundraising to become more difficult in the coming months

-advice to MFIs included: increase reserves, cut back on growth and focus on portfolio quality, make sure loan officers are informed and attentive to client needs and communicate early and often with lenders and investors

-concerns about overreaction by policymakers

-amid the anxiety some optimism...as some markets had become overheated so slower growth, tighter credit more conservative policies, better products and even consolidation of weaker institutions may be beneficial in the long run

I logged in during the 3 day conference and one positive impression was how the industry of microfinance (the players) continue to be willing and passionate to share and give information for the improvement of the whole industry, an attitude that the mainstream should learn from microfinance.

notes:

- this is interesting because it explains how the recession can affect micro-finance. for example, it could be based of the location, the formula that a micro-finance company fines their investments, and also has to do with the health of their clients. it also explains how the recession will make funding more and more difficult for the people in need. advice is also given in this articles. some examples are for micro -finance companies to cut back on growth.

website: http://www.microfinance.ws/weblog/2008/12/impact_of_financial_crisis_on.html

Community Colleges

Here is an article where Obama tells us about his plan to increase community colleges, because of the unemployment rate.

Forks WA - Twilight, and Real Life.

This article is about the real life town of Forks, WA, made famous by the fictitious series "Twilight". This is one town where the recession is in no way hurting the economy. This is a lengthy article full of fluff, so here is a shortened version. It's on google docs. Click here.


(The full article can be found here, if anyone wants to read it.)



Emily Watson (Entertainment in the Recession)

“Is a College Education Worth the Debt?”

http://www.nytimes.com/2009/09/27/magazine/27fob-wwln-t.html?_r=1&scp=2&sq=recession%20impact%20on%20education&st=cse

Reminder

You need to be posting either an article and/or comments every day. If you have not finished the articles posted today in class please do so for homework. We will talk more about Friedman in class tomorrow.

Sports in The Recession

This article can be found here and is about sports no longer being recession proof and the affect of the recession on certain professional sports leagues.

Homework 10/1 More Free Market

Please read these two articles in class. The first is about the history of economics as a field of study. The second is an article about Milton Friedman, the main prophet of the modern free market. Take notes and be prepared to debate the historical perspective between free markets and regulated economies.

Banks

Since the beginning of 2008, there have been about 120 banks that have closed according to the FDIC(Federal Deposit Insurance Corporation). The reason for most of these banks failing is due to the fact that over the past few years they have made very very risky loans. We've talked about this a little bit in class, but i'll go into a little bit more detail here.

One of the large ways that a bank makes it's profit is by giving out loans. Generally, the way that loans are given out is by a person going to the bank and talking to one of the bank's representative and the representative will ask them all kinds of questions like what do they need the loan for, how much money they make in a year, etc. in order to find out if they can pay them back. In the past, only those who could pay the bank back were given out loans. However recently (in the past decade), banks have realized that they can make much more profit if they give out more loans, which is a pretty simple concept. But the way they choose to give out more loans is by giving them to those who might not be able to pay them back, to people who add unnecessary risk to the bank and then many banks choose to sell off these loans to other investors for huge amounts of profit.

In our economy, people take risks all the time. They will take a risk on opening up a store, putting money in the stock market, or investing in a house. But what with these risks, they won't directly effect the economy in a disastrous way like the banks did which is what makes the risks they took "unnecessary". Anyway, then people began to default on their loans for a multitude of reasons so then the banks lost huge amounts of money and since very few of them had any decent amount of capital saved up, they didn't have enough money to survive with their loses and were forced to lose. But since many banks sold off some of these loans, not only were the banks effected but anyone who bought the loans were also effected.