Can They Stop This?

Posted by: Lisa Crowley

Sold for $820 million

Written by Lisa Crowley

The economy is in debt, and the economic stimulus bill that was just passed 244-188 is estimated to put the US $1.2 trillion further in debt in the long run. Obama got his $820 billion stimulus package passed on January 29 to try and help the economy out of the recession through a variety of government spending and aids.

Yes, we are in a recession and need something to boost the economy and get us out of this problem; however, all we hear is spending this or borrowing that to fund programs to help us out. We need to cut and save to get money to get out of the financial crisis. Obama plans to have some 225 million in tax cuts to help out the working class but is that going to be enough for the average American to make there payments at the end of the month?

It has been estimated that the plan will create 3 million jobs. The bill is passed to invest in alternative energy, education, transportation, which is all aimed to create job and pump cash into the economy hopefully giving it a heartbeat.The exact pricing of everything is not sure and that will be determined within the next months but Americans will be on the lookout to see how this injection of cash influenced the economy and how that plays along with our fears.

Sources:

http://news.scotsman.com/world/Obama-unveils-details-of-825bn.4911009.jp

http://www.rferl.org/Content/Obama_Economic_Stimulus_Plan_Passes_Lower_House/1376260.html

http://www.worthynews.com/4230-breaking-news-us-house-passes-obamas-stimulus-package

Asian markets surge on U.S. stimulus plan

By: Li Bin Chen

HONG KONG (Reuters) -- Asia stocks and the dollar climbed on Thursday as investors took heart from the U.S. Congress making headway on a $825 billion stimulus spending package and other efforts to stem the financial crisis.

European shares were also expected to edge higher, buoyed by Asian and U.S. gains.

Government bonds slid and U.S. benchmark yields hit a six-week peak after the Federal Reserve laid out conditions for buying Treasuries as part of its aggressive policy easing to relieve credit market strains.

The Fed said it was still mulling the extreme move to buy Treasuries but would do so if it would help private credit markets, emphasizing its focus on bringing down borrowing rates for consumers and companies through other asset purchases.

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Obama Says Not a ‘Moment to Spare’ on Stimulus Plan

By David Stout

We’ll invest in what works,” the president said after what he called “a sober meeting” with prominent business executives at the White House to discuss not just the immediate economic crisis but the ability of America to compete in the global marketplace in the 21st century.
Hours before the House was expected to approve his proposed $825 billion program, largely along partisan lines and in the face of heavy criticism, Mr. Obama tried to convey his message far beyond the corridors of the Capitol and into boardrooms and living rooms. The future of the American economy rests less in his hands than it does “with American companies and workers,” Mr. Obama said.
“They are the ones whose efforts and ideas will determine our economic destiny, just as they always have,” the president said. “For in the end, it’s businesses, large and small, that generate the jobs, provide the salaries and serve as the foundation on which the American people’s lives and dreams depend.”

Posted by Chaoran Hu

First National Leader to resign in response to economic conditions

By HÉLÈNE PAPPER

REUTERS - Iceland's ruling coalition collapsed on Monday under pressure from sometimes violent demonstrations, the first government to fall as a direct result of the global economic crisis.

Jubilant protesters honked horns and banged pots and pans outside Iceland's Althing parliament after the news the government had fallen. It was not immediately clear who might be able to form a new administration or how quickly.

Prime Minister Geir Haarde handed in his resignation to President Olafur Ragnar Grimsson after talks to save his government failed. Grimsson said he was unlikely to give any party a mandate to form a new government until Tuesday.

Full Article with video - http://www.france24.com/en/20090126-pm-resigns-amid-financial-crisis-iceland-government-elections

Posted by Ryan Johnson

Unemployment rates up, State funds low.. will $825 billion be enough??

Written by: Stephanie King

As the global economy continues to take a deeper plunge toward the bottom, unemployment rates are continually rising to its highest in decades. With the massive amount of company layoffs in the past couple months, it is not surprising that filing for first-timer unemployment benefits have increased dramatically from 62,000 to 589,000 in one week of January alone. More than 2.6 million jobs have been lost in just 2008 alone, a record high since 1945. Unemployment rates have been reported by the U.S. Department of Labor to have increased in all 50 states for the first time in history since 1976.

As these unemployment numbers continue to increase, so will the number of filings for unemployment benefits; gradually decreasing funds for states. Indiana, New York, South Carolina, Ohio and Michigan are borrowing funds from the federal government to pay for these benefits due to insolvency. As the unemployed continue to receive benefits, the states are suffering. It is estimated that 13 states are at "major risk" of insolvency that will leave them with about eight more months or less of funds to provide benefits. These states include: New Jersey, California, Kentucky, Missouri, Wisconsin, North Carolina, Rhode Island, Arkansas, Pennsylvania, Idaho, Minnesota, Connecticut and Illinois. Wisconsin is predicting that the state’s unemployment benefits reserve will be used by February. With the shortage of benefit funds, states will make it harder for filers to collect these unemployment benefits. Therefore, states will be potentially raising the minimum earnings needed to qualify, disqualifying a large number of people from benfits, such as part-time or temporary workers.

President Barack Obama’s push to pass the $825 billion stimulus package will be able to provide some relief for these states to cover some of the interest from these federal government loans. It is believed that this package will help create three to four million jobs. Although, some critics argue that it will not be enough to bring back the economy to life and aid these states to continue helping the unemployed.

Sources:

http://money.cnn.com/2009/01/22/news/economy/jobless_claims/index.htm

http://money.cnn.com/2009/01/27/news/economy/state_unemployment/index.htm

http://1410wizm.com/news.php?action=fullnews&id=2127

How to avoid personal financial crisis

How to avoid personal financial crisis

by JieYing Peng






Admitting that there is a financial problem is usually considered a good first step. Then, you can ask for help because you are probably not the only one facing this situation. Find out your immediate needs, concerns, dues and crisis. Consult a professional financial planner who could assist you through your financial problems. They could do a financial analysis of your situation, assemble facts and information, and come up with solutions, suggestions, and alternatives. You could also set up a personal and household budget, income, expense statements, asset-liability summaries, expense categories, line items, amounts, estimates and more.


Take responsibility and have realistic expectations with a positive attitude. Take some risks when require and be pro-active by explore your options. The best way to avoid a financial crisis is to spend less than you earn. You could save money for unexpected expenses or life-changing events that might significantly reduce your income or increase your expenses. These unexpected expenses are more liked to be caused by loss of a job, divorce, unexpected health or medical expenses, and unexpected home or car expenses. You can avoid a financial crisis by purchasing insurance.

Sources:

http://family-budgeting.blogspot.com/2006/10/avoiding-personal-financial-crisis.html

http://www.mastercard.com/us/personal/en/learningcenter/debtknowhow/debtwarningsigns/financialcrisis.html

http://www.tridentpress.com.au/prod138.htm

Backgrounder: The U.S. Economic Stimulus Plan

Introduction

President Barack Obama took office in January 2009 facing the country's biggest economic crisis since the Second World War. Obama and Democratic Party leaders have suggested an economic stimulus package to confront the crisis. This package, they say, will save or create over three million U.S. jobs and provide most Americans with tax cuts. In the longer term, Obama says his plan will stimulate vital sectors of the economy such as energy and health care, making U.S. firms more competitive internationally. When Democratic lawmakers first introduced stimulus legislation in early 2009, they presented a bill with a price tag of $825 billion, though many analysts say the total cost of the plan will likely increase as it makes its way through Congress. The package comes amidst a global wave of stimulus spending, and if it succeeds in pulling the U.S. economy from recession, economists say, the positive impact could be felt around the world. Yet experts also see a number of ways the plan could go wrong. Some encourage targeted, temporary spending measures and say lawmakers should take budgetary concerns into consideration. Doing too little to solve the financial crisis could prove calamitous, they say, but legislative overreach could also have serious consequences.



Read full article: http://www.nytimes.com/cfr/world/slot3_20090126.html

Posted by JieYing Peng

Obama freezes White House salaries

Posted by: Stephanie King

President Barack Obama's first public act in office Wednesday was to institute new limits on lobbyists in his White House and to freeze the salaries of high-paid aides, in a nod to the country's economic turmoil.

Announcing the moves while attending a ceremony in the Eisenhower Executive Office Building to swear in his staff, Obama said the steps "represent a clean break from business as usual."
The pay freeze, first reported by The Associated Press, would hold salaries at their current levels for the roughly 100 White House employees who make over $100,000 a year. "Families are tightening their belts, and so should Washington," said the new president, taking office amid startlingly bad economic times that many fear will grow worse.

Those affected by the freeze include the high-profile jobs of White House chief of staff, national security adviser and press secretary. Other aides who work in relative anonymity also would fit into that cap if Obama follows a structure similar to the one George W. Bush set up.
Obama's new lobbying rules will not only ban aides from trying to influence the administration when they leave his staff. Those already hired will be banned from working on matters they have previously lobbied on, or to approach agencies that they once targeted.

For Full article, click here

Government Intervention During Financial Crisis

Posted By Lily Chung

Government Intervention

By: Lily Chung

Over the past couple months, the United States government has continued to pour money into banks and the market in order to keep businesses and banks afloat. The list of government intervention includes providing Bear Stearns with $30 billion, government takeover of Fannie Mae and Freddie Mac, $40 billion injection for Citigroup, and the list can go on. Even with all these interventions, the financial crisis continues to spread globally with no end in sight.

The spread of the financial crisis across the globe can be seen when observing the exchange rates and having observed them over the past couple months, constant fluctuations have been noticed during this time of financial crisis. The International Monetary Fund was created to stabilize currencies, but lately it has been too busy fighting the financial crisis instead of concentrating on reducing exchange rate fluctuations.

The fight against the financial crisis continues with Barack Obama taking the lead now. "The Obama administration plans to move quickly to tighten the nation's financial regulatory system." After the most recent discovery of a Ponsi Scheme created by Bernard L. Madoff, the administration plans to engage stricter federal rules for hedge funds, credit rating agencies and mortgage brokers. A new guiding principle that has embraced by the administration was that "major companies and financial instruments must be swept back under a larger regulatory umbrella." The administration has been evaluating the crisis, taking notice of the holes and lack of regulation in the system that has brought the United States financial system into a crisis.

Sources:
Rx for Our Financial Crisis
The Global Financial Crisis
Obama Plans Fast Action to Tighten Financial Rules

Global Financial Crisis Upends the Plans of Many South Koreans to Study Abroad

Posted by Lily Chung
Article written by Martin Fackler

The global financial crisis has hammered confidence in South Korea's once-booming economy, decimating the value of its currency, the won, and forcing tens of thousands of students to alter their study plans, or cancel them altogether.

For Ms. Seo, the won’s plunge in value by a third just in the last few months drove up the cost of her four-year degree program by $10,000, far beyond her savings.

In recent years, studying abroad has become de rigueur for competitive students in this education-obsessed nation. As the growing economy raised living standards and strengthened the won, increasing numbers of parents sent their children overseas to learn English and earn prestigious foreign degrees, hoping to help them gain a leg up in South Korea’s intensely competitive job market, or to help them escape from its high-pressure education system.

Now there are early signs that the [study abroad] bubble may be deflating.

For full article click here

What's the cause?

By Li Bin Chen

Starting in July 2007, the world economy is sliding into a downfall. Initially people refer to the downfall in 2007 as the “credit crisis”. It results from loss of confidence by investors in the value of securitized mortgages in the United States. Although the housing crash of the United States is often being marked by the cause of this global financial crisis but it is not the only reason. The high vulnerability of the financial system with its intricate and highly-leveraged financial contracts and operations allow no-asset investors to take out loan for its mortgage. Before 2007, there is a dramatic increases in the housing price which encourage people to take out mortgage loan with the confidence that the rising in housing will fuel their investment.

In 2007, the housing bubble burst. The housing boom led to so much over-supply that prices could no longer be supported. Banks were in trouble because people can no longer pay their loans. The failures of American and European banks to rescue distressed financial institution led the originally credit crisis into a global financial crisis as country are interdependent on each other’s economic stability. Loss of investor confidence and tight budget had resulted in the falling prices of the stock market which contribute to the financial crisis.

Sources:
"Financial crisis of 2007–2009" Wikipedia.
http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008

"The housing bubble has popped" By: Bill Fleckenstein
http://moneycentral.msn.com/content/P149596.asp

"Credit Crisis -- The Essentials" By: THE NEW YORK TIMES
http://topics.nytimes.com/topics/reference/timestopics/subjects/c/credit_crisis/

Failing Economies: What's the Solution?

Posted by Ryan Johnson


With its weakened economy and large amount of national debt, America is looking for ways to pull itself out of this trench that it's dug for itself over the past decade or so. Numbers keep falling, and companies keep reporting "layoffs" and other indications of failing businesses. President Barack Obama offers a solution to initiate a $825 billion stimulus to fire up the economy again. His fear is that the economy will sink low enough to drop family household incomes by $12,000 a year, summing a $1 trillion deficit if the economy follows its current trends . By feeding the economy that massive amount of money, he hopes to improve the renewable energy industry to reduce energy expenses in the long run. However, Senator McCain and the republican party suggest that this plan will not work as it is currently planned. Instead, the republicans are opting to lower taxes for businesses, payroll, and so forth, permanently.

Iceland, feeling the effects of the worldwide recession, had failed to keep its currency alive. Too many banks were failing, and according to commerce minister Bjorgvin Sigurdsson who had resigned yesterday partly to help restore trust in the nation's leadership abilities, the government had some responsibility for the collapse. Now Iceland requires the International Monetary Fund (IMF) to revive its economy by initiating a $827 million stimulus plan of its own, a similar plan to that of Obama's.

The World Economic Forum is an example of an organization taking matters into its own hands to some extent. Composed of economic superpowers, this group of 2,500 meets annually to coordinate their efforts towards global financial well being and success. Their meeting this year will almost undoubtedly concern the global economy, but in years past they have discussed lowering trade barriers, as well as solutions to deadly human diseases.


Sources:
http://www.moneymorning.com/2009/01/26/obama-stimulus-plan-3/
http://www.cnn.com/2009/WORLD/europe/01/26/iceland.government/
http://www.reuters.com/article/worldEconomicNews/idUSLQ6683820090126
http://www.msnbc.msn.com/id/28825558/

Global financial crisis overwhelms tiny Iceland

By Li Bin Chen

In the depth of winter, the sun shines about four hours a day here. But thousands of Icelanders – more than 1 percent of the entire country – have sacrificed much of their precious few hours of daylight in recent weeks to protest the financial darkness that now shrouds their island.

From dapper senior citizens to masked anarchists, an eclectic group gathers every Saturday to demand the resignation of their government. On Tuesday and Wednesday, they clashed with police in increasingly violent demonstrations that suspended Parliament.

They’re furious over Iceland’s recent plunge from the world’s fourth richest nation – and the best in the world to live in, according to the United Nations – to global financial crisis roadkill. Its banks are ruined, the currency devastated, and one of the country’s closest allies recently named it a terrorist state.

“This has been very hard for the nation,” says protester Rosa Eyvindardottir, eight months pregnant and carrying a red socialist flag in her hand during a recent Saturday protest. “Maybe this is a lesson that we need to wake up and see what’s been right and wrong with our minds.”

For full article: http://features.csmonitor.com/economyrebuild/2009/01/21/global-financial-crisis-overwhelms-tiny-iceland/