Financial Markets and Institutions Essay Example | Topics and Well Written Essays - 2000 words

Financial Markets and Institutions - Essay Example A number of investors had seen these signs as warnings for the development of the crisis situation. Based on these signs, some of the investors had predicted that the tremendous growth of the US economy was a temporary phenomenon and the US economy was ultimately going to collapse (Connolly and Wall, 2011). Several researches have been conducted since then, and are being continued still now, regarding the causes and the warnings of the crisis. Several leaders belonging to different countries have predicted the inevitable collapse of the economy of United States. However, some of the leaders made legitimate and confident forewords about the critical elements within the economy’s financial structure and the extent of dire consequences that the economy was going to face in the near future (McDonnell and Burgess, 2013). Several logical analyses were made on the facts and data that were collected from the-then economic and financial condition of the economy. A considerably large fr action of investors, including buyers of private homes, received credible warnings about the occurrence of a housing bubble. According to some researchers and market observers, the root to this crisis lied in the policies and regulations developed by the Federal Reserve. Additionally, many of the investors ignored these messages received and did not make any changes in their course of action. Banks were also bound by the need to meet the credit needs of local investors. This policy forced the â€Å"banks to make subprime loans† (Gramm and Solon, 2013). Bank authorities transferred this pressure to the banking personnel and regulators to make more loans of the subprime category. The banks performance was measured on the basis of the loans that they were able to extend to the investors (Wang, Ali, and Al-Akra, 2013). In this process, the issue of credibility of the investors was ignored. The quota to provide affordable housing loans was fixed at 30 percent in the year 1993 (Gra mm and Solon, 2013). This was made during the era of President Bill Clinton of the USA. Within three years this quota was increased to 40 percent. The quota further increased within a few years and reached the target of 50 percent by 2000. At that point of time, the administration of President George W. Bush took control of the American economy. Under his control the affordable housing loan goals were increased further. Documents from that period of time reveal that â€Å"these quotas were promoting irresponsible policy† (Gramm and Solon, 2013). The risks involved in these subprime loans were severely high as due to lack of credibility check a large proportion of the borrowers would be found to be defaulters. According to some sources, researchers claim that as high as 28 million high risk loans were provided to borrowers. Although the safety enforcement laws advised the banks to reduce high loans, there existed conflicting regulations regarding the promotion of affordable ho using loans. Thus, the safety and soundness measures were ineffective in restraining the pattern of loan giving, conflicting laws regarding providing housing credit

A reflective of The Pain Scale by Eula Biss Essay

A reflective of The Pain Scale by Eula Biss - Essay Example ea of establishing a measurement scale or a pain scale because she realize that there is really no such thing as absolute especially when it comes to pain. Bliss article was a wonderful literary excursion to articulate the nature of pain but she did not have to go such length had she just been keen with how people deal with pain and distress than study Dante’s Inferno in her quest to understand pain. Her synthesis also that it is virtually impossible to measure pain could not have been lengthy had she observed that pain is relative to people and its triggers are virtually countless. Being such, the examples that would show how relative is pain is abundant. We need not go further to cite examples. We can cite our study. There are students who would be devastated to get a failing or a lower grade while there are students who would just shrug it off and just try to study harder next time. There are people who are daunted by failure and are immensely distressed by it while there are people who take pain in stride and instead measure their true success from their ability to recover from failure. Biss associated pain to religion and to be specific, to Christian perspective of religion which for me is a limited attempt to establish a reference to understand pain. It is limited because pain is universal albeit how we feel it varies in degree and what causes it is relative and the yardstick she attempted to use are prejudiced. For example, Dante’s Inferno is a brilliant literary masterpiece as referenced in the article The Pain Scale but it cannot be inferred to in measuring pain as something universal that could cover every human being. For all we know, Dante’s Inferno is Christian in orientation because in it Prophet Muhammad was referred to as false prophet and therefore to be placed in the vortex of hell and to use to quantify the pain of Mohammedans or Muslims is quite offensive. God is also associated to the number zero and this must be the