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.

Fox News

Just a funny little web page I found while using StumbleUpon.
You have to love Glenn Beck.

The Recession and the Military

This article is about the enlistment and reenlistment numbers for the Army rising because of the recession. The Army offers a steady pay check, health benefits, and an experience in leadership. Sounds enticing for an unemployed person. So, the reccesion may be bad for the military in funding, but for recruitment numbers it's great.

Defense Spending

21% of the federal budget for fiscal year 2009 is appropriated for defense spending. The budget is eight time larger than the next largest military, the People's Republic of China. Most of the money does not go to the payroll of soldiers, but to new technologies. The amount spent on planes, bombs, and tanks is astronomical.

Even in this economic climate, the military is still spending away. One of the largest contracts to come is one for new tanker airplanes. The military is currently using relics form the 1960s. This contract was supposed to have been tendered out years ago, but the process stalled twice. The first time, a lease deal with Boeing was botched due to corruption. The second time, European manufacturer EADS won, but the Government Accountability Office (GAO), canceled the contract. The DoD is trying again. This article is about how the Air Force is going to direct the new round of bidding.

Google Wave

Interesting article on CNN today. The "wave" of the future? Here is the link to Google's preview.

website: http://crisistalk.worldbank.org/2008/11/microfinance-an.html

how the economic crisis affects global micro-finance.

Microfinance and the financial crisis

Editor's Note: Elizabeth Littlefield is Director and CEO of CGAP. From November 18-20, CGAP is running a virtual conference on microfinance and the financial crisis.

Throughout past financial crises—especially those of the 1990s (Mexico, Asia, Russia)—financial services for poor people have shown remarkable resilience to shock. In fact, the loan portfolios of microfinance institutions (MFIs) in Asia during the Asian crisis and in Latin America during various banking crises in that region barely blinked while corporate portfolios collapsed.

This is because these banking and currency crises had little relevance to subsistence-based economies in closed ecosystem markets. Our present financial crisis is like no other, and microfinance is far more connected now. Although microfinance still has deep shock-resistant roots, there will be impact—both on the institutions and the clients they serve. The medium and longer term effects of a global recession are likely to be punishing to poor people.

Low-income people in many places already have been suffering from high food and fuel prices. A recent CGAP survey of MFIs revealed that many clients were withdrawing savings, cutting back on nonfood expenses and in some cases struggling with repayment. While prices have come down in recent months, inflation is poised to surge. Making matters worse, remittances from the United States and Europe are down sharply. Mexican remittances from the United States are slowing significantly, and now the same is happening in Europe, Africa corridors, and elsewhere. So, in many places—though not everywhere—clients are feeling serious pressures.

MFIs will likely feel the first effects of the financial market turmoil in sharply curtailed funding. From domestic and international lenders, investors and depositors, money will become more scarce, more conservative, and more costly. Refinancing risk is a serious concern for some institutions.

Many MFIs depend on financing from local and international banks. They face more pressure today than MFIs that have built a deposit base. Some are already seeing their banks withdrawing loan offers, cutting credit lines, or raising rates. Some banks are even asking for loan prepayment and offering to waive prepayment fees. Steep rate increases are being announced—from 250 basis points in Eastern Europe, to 450 basis points for top-tier institutions in South Asia. While the immediate reactions have come from international banks, domestic ones may well pull back too.

A stronger U.S. dollar and steep local currency depreciation in developing countries means the cost of dollar financing for MFIs has increased dramatically. While the dollar may well soften, unhedged principal and interest payments in dollars will be difficult for MFIs to fund in the interim.

A few private equity transactions have closed even in the past few weeks, but these have been in the very deep and heated Indian market. For the most part, we are sensing that most private deals are slowed up and the few planned IPOs are on hold.

Financial pressures on families may lead to less savings and more withdrawals from deposit-taking MFIs. Also, some clients may understandably worry about the safety of their life savings and decide the mattress is safer. In previous banking crises depository MFIs fared well, but we worry that this one is different. Thus far, we have seen only a few isolated deposit runs, and these seem to have been triggered by a combination of factors beyond the crisis. But we worry about how rumors could shake confidence even amongst microfinance clients in today’s globally connected and wired world.

NOTES: this article is really interesting because it explains the damage being done to businesses which are trying to help and save people all over the world. This economic downfall is lowering MFI's income becuase banks and partners can no longer loan money that a micro finance firm would distribute to get poor people a chance at living; usually, third world countries.

The Recessions effect on Religion

For my topic I chose to research the effect of religion during the recession.

Here is an article that I found about my topic:

http://news.yahoo.com/s/ap/20090928/ap_on_bi_ge/us_rel_meltdown_religion

Impact on the Entertainment Buisness

As of now, this is my topic. I found an overall article on how the crisis is affecting this buisness. Its here.

Women in the Recession

http://www.docuticker.com/?p=28082

This article is very interesting because it is saying that women are re-considering having children until later, or not at all. This could be the opposite of a baby boomer. I wonder what will happen.

Banks too big?

This article is about a British banking regulator who believes that the banking industry is too big for its purpose: serving customers. Instead, banks just "push money around" and enrich themselves.

http://www.nytimes.com/2009/09/24/business/global/24turner.html?_r=1&hp

Unemployment Article

This Article talks about why the unemployment rate is so high and the history of employment issues in this country.

Homework 9/23 The Free Market (Con't)

I feel that we did not get through the entire article on Tuesday so tomorrow I would like to continue the discussion on Free Market economy. Here is a rather interesting take on this economic theory. And this article and this one from the same source are very interesting as well. Please look over this information for Thursday. The first site is really just for grazing and the other two are very short.

You also need to decide on a particle aspect of the current financial recession that you would like to investigate further. This topic should be something that you are particularly interested in researching. You will become our "resident expert" on this topic and will use your research to keep the rest of the class aware of current events happening in your subject. Possible topics include:

the credit crunch
government financial institutions (e.g. the Treasury Dept, SEC, Federal Reserve System)
international financial institutions (the World Bank, IMF)
Wall Street practices
Wall Street firms
Banking Crisis
government response (TARP, bailouts)
impact on Main Street
Unemployment
impact on various professions (retail, housing/construction, sports/entertainment, advertising, etc.)
economic theory (free market, regulation, planned economies)

Remember that I will not be in class on Friday and we have a holiday on Monday. By Tuesday you need to have chosen a topic and begun your research. You are required to have at least one blog post on your topic by Thursday 10/1. Please email me as soon as you have your topic.

P.S. I'm sorry that this is so late in the evening. I'm afraid some of you may not see this before class Thursday. Please, as always, do what you can. And some of you have not yet posted articles and/or the required number of comment. Now would be a good time to do so. This is part of your grade.

British Parliament

Last Friday we discussed British Parliament and I though I'd share what it may actually look like.

http://www.youtube.com/watch?v=TsAa9VmwOaI

My articles

This first article is from the New York Times website. It's a very specific article concerning the industrial banks in Utah and how they are fighting against more regulation from the government and the government is saying that they are an unnecessary risk to our economy. It is a relatively long article.

My second article is much shorter and is about how the self employed are the happiest people in America. The article lists a series of occupations and show how they rank according to the Gallup-Heathways Well-Being index. If you click on the second link it will take you to their main website where the article is a bit longer and has other polls as well.

This Made me Laugh SO Hard...

Ok. So I know a lot of this footage has been circulating, but this is an amazing clip of the 9/12 "Tea Party" in DC. Its here.

Its not immediately relating to our topic, but I think its important to realize how ignorant some citizens are of what is actually going on with the economy, and especially right now the health care plan.

I don't know weather to laugh or cry.

Emily Watson

Recession Humor?

I-Panic

Videos Today

Here is a link to the animated video we watched today. And here is a link to the two men discussing the crisis. It is British humor so sometimes it is difficult to follow...

Homework 9/21 The Free Market

This article is from the website Investopedia which is produced by the business magazine Forbes. Please read the article for homework and post a comment for discussion in tomorrow's class. You should note that this site includes a section on Economic Basics and a Dictionary that are very helpful in explaining complex terms and concepts.

Jocelyn Cole HW

Here is my first article:
http://topics.nytimes.com/top/reference/timestopics/subjects/u/united_states_economy/index.html
It is about the overall US economy. It gives a good understanding of the economy and what is happening and what happened.

Here is my second article:
http://www.huffingtonpost.com/mike-laracy/new-poll-shows-americans_b_291317.html
This article is more about what is happening to Americans and how they are being affected from the recession. It also talks about the governments involvement in the economy and what the people want and expect of the government.

Cholena Smith Recession Articles

http://money.cnn.com/2009/08/25/news/economy/recovery_unemployment_jobs.fortune/index.htm

http://www.nytimes.com/2009/09/16/business/economy/16bernanke.html?_r=1&scp=1&sq=FEd%20Chief%20Says%20REcession%20Is%20%22Very%20likely%20Over%22&st=cse

victoria de lesseps

second article:

website. http://www.nydailynews.com/money/investing/2009/09/15/2009-09-15_bam_speaks_street_shrugs.html

notes: This article is interesting because it shows wall streets lack of participation in trying to regulate health care prices. Also how people on Wall Street believe they can stop a consumer America but that’s because they want the support of banks. Wall street seems to only be looking at the money not the people.

here the webstie= http://www.economyincrisis.org/articles/show/3423

articles:

U.S. to Hit Debt Ceiling- Again

Published 09/17/09 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

Sometime after the battle over health care reform is over, for the 90th time in the past 69 years lawmakers are set to engage in another contentious debate, this one with a foregone conclusion.

This fall, lawmakers will once again increase the national debt ceiling. The debate will be highly partisan, but the outcome will assuredly be that the U.S will raise its credit limit by about $1 trillion.

At $12.1 trillion, the national debt ceiling was just $349 billion away from being topped after unprecedented intervention into the financial markets that included $700 billion in bailouts and a $787 billion stimulus package.

On August 7, the U.S. Treasury Department sent a letter to lawmakers warning them that another vote to raise the national debt ceiling was imminent. Since that time, the economy has improved somewhat. Lawmakers are hoping that this will allow them to put the vote off until later in the year and provide them with some political cover.

"We're getting some signals that the economy is perking up a little bit so that we don't have to face (debt limit legislation) until maybe November," Finance Committee Chairman Max Baucus(D-MT) said, according to the ,Associated Press.

Still, the vote is certain to be one fuel of political bomb-throwing. As is typically the case, the party out of power will almost uniformly oppose any debt increase, calling it an undue burden placed on future generations.

Even so, lawmakers have little choice but to go ahead with the debt increase. Without it, the U.S. Treasury Department would be unable to pay the holders of securities when they came due, meaning that the U.S. would essentially default on its debt obligations.

If that were to happen, it would send shockwaves through the world’s economies .

"Our credit as a nation would plummet immediately and throw the world economy into a depression," Charles Konigsberg, chief budget counsel for The Concord Coalition, a deficit watchdog group, toldCNNMoney.com.

The debate and ensuing vote could, however, have major implications for President Barack Obama’s domestic agenda that includes a nearly $1 trillion health care reform package, cap-and-trade legislation and other forms of expanded federal spending. In addition, the current White House budget projections estimate a budget deficit of $9 trillion over the next decade.

“Passing a trillion-dollar health-care bill on top of a trillion dollar deficit won’t convince Americans that Congress is serious about reining in spending, and it won’t put our fiscal house in order,” Senate Minority Whip John Kyl wrote in theNational Ledger.

notes: this is interesting because it talks about raising the national debt and how that would be the only way to help the market. and the health care base been reformed over 80 times in less than 70 years. and without this raise of national debt america would not be able to measure up to its "debt obligations".