Preventing Failure

Terms

Overhaul- Overtake or overall repair

Financial Regulatory System- Financial regulations are a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions

Bipartisan- A two party system

en.wikipedia.org/wiki/Financial_regulatory_system and www.babylon.com/define/35/Economics-Dictionary.html


The bill to prevent another recession from happening again is getting closer to becoming law. The Democratic and Republican parties are working together to make the bill beneficial for both parties also to make sure both of their views and ideas are expressed represented in the 1,300 page long bill. They are making two or more improvements.
They are trying to put financial restrictions on the banks and make it so that no bank will be “too big to fail” because right now the bill is said to give “too much financial flexibility.”. By putting financial restrictions on the banks they will be unable to make risky investments that will put us in the same predicament that we were in two years ago when the stock market crashed. Senator Sherrod Shelby said that we need to get rid of the “casino atmosphere” on Wall Street “where they’re gambling basically on synthetic ideas and so forth, with somebody else’s money, putting banks and our whole banking system at risk and producing nothing.”.
If this bill becomes law it would be very beneficial to the stockholders, consumers, and the banks. It will keep our economy safe and protect the people. People in power will not be able to make decisions with our money that will negatively effect us in the long run.

Save by the Bill

Terms
Overhaul-
To renovate or to make overall repairs

CBO-
Congressional Budget Office which is a federal agency responsible for government calculations and analysis

AARP-
American Association of Retired Persons which is a non government organization that promotes the welfare of senior citizens.

http://www.babylon.com/define/35/Economics-Dictionary.html

Late into today the $940 billion health-care reform bill was passed on Capitol Hill. Some people were in favor and some were not. There has been a lot of problems concerning health-care for a while now. Insurance companies have to very trifling. They denied people who were already sick and dropped their customers who got sick. They were very unfair when accepting people for insurance. A lot of people are living with health-care insurance which is very dangerous and some people have even died. The well being of our citizens is vital because without them we would not be a nation. So many have been supporting the bill.

Now that the bill has become law it is estimated that by 2019 95% of people will have health coverage. Rep. Bart Stupak had withheld his vote until he was assured that none of the money is used to fund abortions. After he was assured he and other representatives voted yes. This bill will mandate that insurance companies have to accept all people when if they are already ill. It will expand Medicaid and there will be more taxes for families that earn on $250,000 a year.

I think that even though some people are saying that this bill will ruin are fundamental economy and our freedom that this is a great step forward. We should all care for each other and no one should have to worry that they don’t have insurance to go see a doctor and get help. I predict in the long run this will pay off and we will be a better country because of it.

http://online.wsj.com/article/SB10001424052748703775504575135440191025592.html?mod=WSJ_hpp_LEFTTopStories

Deadly Risks

Terms

Repossess
To possess again, or regain ownership or return something to its owner

Background check
Is a process of looking up official information about a person.

Licensed
Authorized or permitted

http://www.babylon.com/define/35/Economics-Dictionary.html

It has become extremely dangerous for repo men who jobs are to take cars from people. A man almost died when he repossessed a car and then to get away rode on train tracks. A amtrack train almost hit the man but her jumped from the car in time enough. People are also taking matters into their own hands and using weapons against the men who are repossessing their car. Three to four million vehicles are repossessed every year.

This is happening because the repo men are not licensed and trained. They are only told to get the vehicle or they don’t get paid. People tend to become violent when money is involved. Also people don’t want their vehicles taken away from them. Recently 54 cases were reported that includes people getting hurt and some resulting in the repo man driving away with children in the car. Also fire arms are mostly involved.

Repo men don’t have to be licensed and many are ex-cons and some carry weapons. This is a recipe for disaster. Taylor thinks that repo men should be subject to a background check before being hired. It is a extreme danger to our society. The television show Operation Repo is a negative depiction of the real situation. The show makes things extra while glamorizing the unsafe issue.

I think that people who apply to be a repo man should have a background check done on them. It is better to be safe. Also we as a people shouldn’t want to increase danger in our society. The government should implement this requirement for the safety of everyone. Even though someone in the article said that it would disrupt the court system I think that if they were required to have a background check it would be very simple and the courts would not be disrupted.

http://www.npr.org/templates/story/story.php?storyId=124654374

I want the real thing

Revenues :the income of a government from taxation, excise duties, customs, or other sources, appropriated to the payment of the public expenses http://dictionary.reference.com/browse/revenues
Commerce :an interchange of goods or commodities, esp. on a large scale between different countries (foreign commerce) or between different parts of the same country (domestic commerce); trade; business
http://dictionary.reference.com/browse/commerce
Disseminate :to scatter or spread widely, as though sowing seed; promulgate extensively; broadcast disperse
http://dictionary.reference.com/browse/disseminate
In the article Knock-offs catch on , the economic situation that they brought up was that people are making counter fit goods. By them making counter fit goods they are making a lot of money off something that’s not real. Now they are making counter fit vehicles in Bangkok and fake gold in Germany.
The counter fit world makes a lot of money. Just in 2007 they made $250 billion dollars , it makes up 5-7 % of the world trade. The recession increases the profit of counter fit goods. People aren’t able to buy the same expensive items , so they look to the thing that are close to them. Louis Vuitton made complaints just last year and it lead to 9500 knock offs being seized.
I think that more people are going to continue to buy knock offs , as long as the economy is the way it is . I think its wrong for someone to make a duplicate of something that a person has spent there time and effort and also there money on. I believe the crack downs are going to help the situation but people are becoming more crafty and discreet about the situation.
http://www.economist.com/business-finance/displaystory.cfm?story_id=15610089

Homelessness Solution: Shelters

Terms

Refinance
To add additional funds or credit , to financially support again

http://www.babylon.com/define/35/Economics-Dictionary.html

Disbanded
To break up, to dissolve

http://www.babylon.com/define/35/Economics-Dictionary.html

Delinquency
failure to perform a duty like a bill, violation of the law; felony

http://www.babylon.com/define/35/Economics-Dictionary.html

Foreclosure
To take away the right to redeem his property, hindering, shutting out, closing or settling beforehand

http://www.babylon.com/define/35/Economics-Dictionary.html

The number of homeless people who are homeless because of foreclosures increased. Everything was looking great for Ms.West. She bought a new home and opened the home up to homeless people. She took care of them provided food and took them where they needed to go. The government would pay her $750 a month for each resident. But the money started to decrease because of the recession so the government gave her less money which made it difficult for her and her husband to sustain of they wages. They were spending more money than they were earning which had a negative conclusion in the end. They had to maintain their bills and expenses of a lower amount of money. So things proceed to go downhill. She called to mortgage company to see if she could get her mortgage payments reduced but with her bad credit and not having a full time job they denied her request. She let her cousin buy the house from her and her cousin disbanded the housing for the homeless people. So the mortgage company made a deal with her to move out and give them the keys and they would give her $2,500. She accepted the offer with no place to o so she stayed in her car and prayed. Then her went to stay with a friend and then with her cousin but neither were where she wanted to be and very uncomfortable. One day a lady helped her make a recovery plan and then she got a room at a homeless shelter because she needed her own space. Now she is trying to get her life together and get a house again.

This happened indirectly. The recession affect many people in many different ways. Since the government decreased Ms.West’s payments for the people who were staying in her home it made it very difficult to keep everything afloat. She could not continue to pays her bills with less money.

Ms.West’s home went into foreclosure just like many other people who faced this problem. Money got low and she didn’t have any other place to go expect to stay from people to person which get extremely uncomfortable.

I think that if people had back up plans then this would have been easier to go through rather than becoming homeless. If people having savings when things like this happen they will be able to recuperate.

http://www.nytimes.com/2009/10/19/business/economy/19foreclosed.html?_r=1&sq=homeless%20shelters&st=Search&adxnnl=1&scp=1&pagewanted=all&adxnnlx=1267426827-kfjLDkqQJHaGq8RghS7ddA

The San Francisco Library gets Social Worker

Terms

ALA
The American Library Association. It combines different aspects of the library’s resources.
http://www.ala.org/ala/educationcareers/education/3rdcongressonpro/roledefinition.cfm

Social Worker
Is some one who gives professional economic and spiritual help to those in the lowest echelons of society.
http://www.babylon.com/define/35/Economics-Dictionary.html

Department of Public Health
Is a department that is concerned for the health as a community.
http://www.medterms.com/script/main/art.asp?articlekey=5120


The San Francisco Library hired a Social Worker for the many homeless people that spend all of their day in the library. This library is the first to go as are to help the homeless people that seemed to becoming more everyday. Many that come hae a mental illness or are on drugs. The homeless people come to use the bathroom to wash themselves and sometimes use the toilet as a place to do drugs. It has become a problem and having a social work there to alleviate the problem. Since the economy has took a downfall social programs have been cut back so some homeless people don't have anywhere to go. Some libraries have hired homeless people to clean but they can not shave or get into fights otherwise they will have to leave for a certain amount of time. It is one day for shaving at the library and three years for fighting.

I think that it is a good idea to hire social workers at public libraries. Everyone is effected by the downfall of the economy even in ways that they don't realize. Most of the time people don't wonder why something has happened they just focus on what’s happening and sometimes that is okay but we need to have a balance so we can figure out how to fix the problem not just short term but long term.

Financial Sector Assets

Terms ( http://dictionary.babylon.com/ )

Economic Report of the President

The Economic Report of the President is a document produced by the President of the United States’ Council of Economic Advisers (CEA) It is released in February of each year. It provides reports of the previous year and what economic strategies made a difference in that year. It gives the overall goals for the next year and it is based on the President’s economic agenda. And it gives predictions of how the economy will perform. This is where the graphs come from.

Gross domestic product (G.D.P.)

Is the market value of goods and services produced over time. This includes the income of foreign corporations and residents working in the U.S. But it doesn’t include the income of residents and corporations overseas from the U.S.

Fannie Mae (Federal National Mortgage Association)

Is a U.S. Government-chartered corporation that purchases mortgages from lenders and the offers them to investors as mortgage-backed securities which ensure that banks have a constant supply of mortgage funds.

Freddie Mac (Federal Home Loan Mortgage Corporation)

Is a U.S. Government-chartered corporation that purchases mortgages from lenders and then offers them to investors as mortgage-backed securities.

Asset-backed security

Is a type of bond that is based on pools of assets. Assets are pooled to make minor and uneconomical investments profitable, at the same time reducing risk by diversifying the other assets. It also makes assets available for investment to a more different set of investors. They can be made of any type like credit card payments, auto loans, and mortgages, or esoteric cash flows such as aircraft leases, royalty payments and movie revenues. Typically, the secured assets might be highly illiquid and private.

Hedge fund

A hedge fund is an investment fund made to avoid direct taxation in major host countries and charges a performance fee that is based on the increase of the value of the fund's assets. The assets of a hedge fund will be managed by an investment management firm. Investing the a hedge fund comes with a lot of risks.

The financial sector grew extremely faster than the G.D.P. over the past half century. This happened because the assets in backs have changed vastly. Assents in banks such as commercial banks, bank-holding companies, thrifts and credit unions have shifted to other institutions which include mutual fund, government-sponsored enterprises such as Fannie Mae and Freddie Mac.

Banks are not as dominate as they used to be which shows in the past when financial sector decreased in the early 1980’s. In 1952 banks made of 53.2 percent of financial sector assets but as of June 2009 banks only represent 26.7 percent. In the past decades, financial sectors have been able to out do the overseers of the government. The government doesn’t even know the most raising factor of why this is happening. It is hedge funds and they are not included in the reports because “the Federal Reserve is unable to get a clean number for hedge funds because they are largely unregulated private investment pools that are not required to report their holdings to any official source.”

Some Banks are too big to fail be cause they but things are changing drastically and they need understand that. Banks prevalence has decreased which leaves larger banks to stand alone.

I think in the future that people will invest in more hedge funds which are not taxable and the financial industry will increase. People will not depend on the government as much.

Article: http://economix.blogs.nytimes.com/2010/02/11/so-thats-what-too-big-to-fail-means/