Credit Card Debt and its Effect on the Economy by Laura Agadoni The economy relies heavily on consumer spending, which often requires people to borrow and go into debt. That system cannot sustain itself if borrowers keep getting poorer from credit card debt.
Graeme Robertson It was the year the neo-liberal economic orthodoxy that ran the world for 30 years suffered a heart attack of epic proportions. Not since has the financial community witnessed 12 months like it. Lehman Brothers went bankrupt.
Western leaders, who for years boasted about the self-evident benefits of light-touch regulation, had to sink trillions of dollars to prevent the world bank system collapsing.
The ramifications of the Banking Collapse of will be felt for years if not decades to come.
Here, Observer writers pick out the three pivotal weeks that shaped a year of unforgettable and remarkable events. By the end of February, all was quiet save for global banks routinely updating queasy investors over the tens of billions of dollars they had lost by fuelling the madness we now know as the debt catastrophe.
At the start of the year, a global economic meltdown still seemed unimaginable to many. If by May that didn't stem a freefall in US consumer confidence, rising unemployment and plunging house prices, then he argued, perhaps we were in trouble.
But, during the first two months of the year, a lingering belief remained that perhaps the vicious economic hurricane might blow itself out before it hit the real world. That changed during the week beginning 9 March, seven days in which the real storm broke and swept away some of the biggest and most revered names in international finance.
It began on Sunday evening with an unbelievable personal fall from grace and ended with the most spectacular American banking collapse seen in decades. As the once proud defender of the people against the excesses of capitalism sank into the quicksand, financial storm clouds swiftly gathered overhead.
The following day, Blackstone Group, manager of the world's biggest buyout fund, revealed it had suffered a 90 per cent profit drop during its fourth quarter. Headed by New York society figure Stephen Schwarzman, Blackstone perhaps more than any firm exemplified the gung-ho leverage mania.
Blackstone spent hundreds of billions of dollars on consumer and leisure firms as well as the betting on the latest investment craze: Now its strategy was unravelling, placing the businesses it bought in serious jeopardy. In Britain house-builder Bovis meekly warned that unless there was an urgent cut in interest rates, the property market would collapse.
It was a message the Bank of England failed to heed until much later. On Tuesday, there was blind panic on Wall Street. Few asked the question: A process that would bring Wall Street and the world's banking system to its knees had begun.
It meant that when Alistair Darling, in his first Budget, said the UK was well placed to withstand the effects of US turbulence, no one quite believed him. Darling's speech, in which he downgraded his growth forecasts, raised taxes and admitted the UK economy faced its biggest slowdown since Labour came to power, was effectively blown out of the water.
If there was hope that perhaps Thursday would bring a sense of calm, more news from America shattered that illusion. The most revered name in private equity, and for many an extension of American foreign policy, the Carlyle Group, admitted that one of its funds could not repay its debt.
In other words, it toppled over under the weight of unsustainable debt. CCC's demise would not be the last big-name casualty. In fact we had to wait just one day for the next one.
As rumours over the health of Wall Street's fifth-largest investment bank prompted clients to pull their cash out of the institution, on Friday morning, New York time, Bear Stearns received an emergency bail-out from the Fed and JP Morgan Chase.Nov 19, · Get the latest headlines on Wall Street and international economies, money news, personal finance, the stock market indexes including Dow .
An economic bubble or asset bubble (sometimes also referred to as a speculative bubble, a market bubble, a price bubble, a financial bubble, a speculative mania, or a balloon) is trade in an asset at a price or price range that strongly exceeds the asset's intrinsic value.
It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views. I t was the year the neo-liberal economic orthodoxy that ran the world for 30 years suffered a heart attack of epic proportions.
Not since has the financial community witnessed 12 months like. Project management is the practice of initiating, planning, executing, controlling, and closing the work of a team to achieve specific goals and meet specific success criteria at the specified time.
A project is a temporary endeavor designed to produce a unique product, service or result with a defined beginning and end (usually time-constrained, and often constrained by funding or staffing.
D) STRUCTURAL UNEMPLOYMENT: Unemployment is as a result of slight change in the Industries structure of a country, workers will be retrenched as a result. This is causal by economic recession and it happened in Nigeria in when firms folded up as a result of this.
Moral Markets challenges the 'homo economicus' rational choice framework of mainstream economics with 15 chapters contributed by a team researching the nature of values in economic thinking. Zak has compiled what may become a starting point for further work on this topic, given the volume's scope and creative insights.