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.
Article: http://economix.blogs.nytimes.com/2010/02/11/so-thats-what-too-big-to-fail-means/
Really interesting topic, but there's a lot of spelling errors here. Check your spelling and grammar before you publish!
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