...ETHYL CELLULOSE Ethyl Cellulose polymers are derived from cellulose. They inert, high purity powders with no caloric value and are virtually colorless, odorless and tasteless. According to the DOW films made from ETHOCEL (a brand name of Ethyl cellulose) polymers are highly flexible and retain their flexible and retain their flexibility at temperatures well below freezing. It is excellent as a film former. Films made from it are tough, with high tensile strength and unusual degree of flexibility even at low temperatures. It yields a greater volume of film-forming solids than any other cellulose derivative. It is compatible with most common plasticizers and polymers. It yields clear films with a wider variety of plasticizers and polymers and cellulose derivatives. It is also an excellent water barrier. In films it absorbs a little moisture either on exposure to the atmosphere or after long immersion in water. The good binding qualities of it are useful in applications such as tableting and microencapsulation. Its solubility dissolves in a wide range of solvents such as aliphatic alcohols, chlorinated solvents, and natural oils. It is practically insoluble in glycerin, propylene glycol, and water. In formulating with it other polymers are used to improve gloss, rubbing properties, adhesion, and resistance to certain solvents. Generally, the percentage of modifying polymer is approximately equal to that of the ETHOXYL polymer, and the amount...
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...case with more current information. Do these new facts reflect any changes in the ethical culture of the financial industry since the 2008 meltdown? 1. Are subprime loans an unethical financial instrument, or are they ethical but misused in a way that created ethical issues? We believed subprime loans are ethical tools that were misused. Subprime loans involve “lending to borrowers, generally people who would not qualify for traditional loans, at a rate higher than the prime rate” (Ferrell et al 385) meaning that it is a financial instrument in which borrowers benefit from accessing capital that otherwise would have been denied to them, and financial institutions benefit from charging a higher interest. What made subprime loans so attractive was the fact that it enabled low-income individuals and minorities (no qualifies for regular loans) to have access to homeownership. In the right hands, in the right time, a subprime loan could signify an important tool for different minorities to improve the quality of their lives by obtaining financing for more than just home mortgages but also school tuition, for example (Iacono). However, as the Countrywide Financial case illustrates, there is wide misuse of this tool by institutions that engage in indiscriminate lending for the sake of short-term profits at the risk of major financial downturn, as in the 2008-2009 financial crisis. (Ferrell et al 388) Moreover, while lending money to low-income and minority families justifies a...
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...Greenspan, Alan. “We Will Never Have a Perfect Model of Risk.” Financial Times, March 16, 2008, http://www.ft.com/cms/s/edbdbcf6-f360-11dc-b6bc-0000779fd2ac,Authorised=false. html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fedbdbcf6-f360-11dc-b6bc-0000779fd2ac. html%3Fnclick_check%3D1&_i_referer=http%3A%2F%2Fsearch.yahoo.com%2Fsearch%3Fp%3Dthe%2Bm ost%2Bwrenching%2Bsince%2Bthe%2Bend%2Bof%2Bthe%2Bsecond%2Bworld%2Bwar%252C%2BAlan%2B Greenspan%26fr%3Dyfp-t-501%26toggle%3D1%26cop%3Dmss%26ei%3DUTF-8&nclick_check=1 (accessed November 15, 2008); Gutierrez, Carl. “Countrywide’s New Bad News.” Forbes, March 10, 2008, http://www.forbes. com/markets/2008/03/10/countrywide-fbi-mortgage-markets-equity-cx_cg_0310markets26.html (accessed September 1, 2009); Staff infoZine,“Kansas, 11 Other States Reach Agreement with Countrywide Financial Corporation.” Kansas City infoZine, November 14, 2008, http://www.infozine.com/news/stories/op/storiesView/ sid/31858/ (accessed September 1, 2009); LenderRATEMATCH. “Mortgage Industry Statistics.” freeratesearch. com/en/newsroom/mortgage_statistics/ (accessed April 1, 2008); Marco, Meg. “Subprime Meltdown: Inside the Countrywide Subprime Lending Frenzy.” The Consumerist, August 27, 2008, http://consumerist.com/consumer/ subprime-meltdown/inside-the-countrywide-subprime-lending-frenzy-293902.php (accessed November 13, 2008); Morgenson, Gretchen. “Judge Says Countrywide Officers Must Face Suit by Shareholders.” The New York Times...
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...Timeline of a Crisis Below, see key dates from the stock, bond and commodities markets as U.S. investment banks and the Federal Reserve struggled to contain the fallout of the mortgage meltdown. * * * June 2007 | July | August | September | October | November | December | 2008 | January | February | March 2007 June 8 -- Amid growing concern about the housing market's reliance on subprime loans -- those made to people with poor credit -- the Dow industrials plunge 198.94 points, or 1.5%, to 13266.73. Treasurys see some of their sharpest losses in years, pushing the yield on 10-year notes up to 5.10% amid simmering inflation jitters. June 13 -- U.S. bond yields hit a five-year high as investors continue to sell Treasurys, with the yield on the benchmark 10-year note rising to 5.249%. June 14 -- Bear Stearns reports a 10% decline in quarterly earnings as the mortgage market shows signs of cracking. Chief Financial Officer Sam Molinaro says, ``We are impacted in a weaker mortgage market until that industry turns around.'' June 18 -- Reports say Merrill Lynch seized collateral from a Bear Stearns hedge fund invested heavily in subprime loans. June 22 -- Bear Stearns commits $3.2 billion in secured loans to bail out its High-Grade Structured Credit Fund, says company's troubles are "relatively contained." June 22 -- Blackstone Group's initial public offering is priced at $31 a share, raising as much as $4.6 billion; the next day, on the first day of trading, the stock jumps...
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...bulk of the U.S. population to change its mentality and live sensibly has resulted in expensive purchases that were not backed by economic realities. Lenders have helped fuel the public mentality by providing easy credit. Anyone who wanted to buy an expensive car or a mansion was a precious customer. To further boost profits, financiers engaged in risky business deals and did not keep enough cash reserves.” (lucidpages.com). This credit driven economy was unsustainable and became daily practice by business, banks and government which as a result has led to the financial meltdown that we are still experiencing today. Financial institutions, specifically Bank of America, engaged in predatory lending practices, poor acquisitions with Countrywide and Merrill Lynch, and faulty balance sheet management in which have all contributed to the collapse of the U.S. economy. Not to mention, corporate greed, the increase in financial hits on their customers and the fact that they are against any federal legislation that would help Americans avoid foreclosure all provide reasons as to why Bank of America is bad for America. The 1998 $48.7 billion merger between Bank America Corp and NationsBank created the Bank of America Corp. This...
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...Subprime Lending Discuss in detail the event, the people involved, and its background and impact of America. Before 1930, features of Housing loans presented significant challenges. To obtain a home loan a down payment of half the value the house was required. Further issues with these loans were large balloon payments and short maturities. The pricing for mortgage loans varied widely due to no nationwide housing market. The main funding for these loans was provided by life insurers, thrifts, and commercial banks. By 1932, a housing crisis was wreaking havoc on home loans. The estimated defaulted loans were rising to twenty –five percent. In response to this crisis, the FHL Bank System was designed to provide relief to lending institutions and homeowners. In 1933, President Roosevelt birthed two Acts regarding the housing market. The first was the Home Owners Loan Act. This act established the HOLC, which was designed to slow down the quickly rising foreclosure rate. Under this act, long-term self-amortizing fixed rate mortgages became the new norm. The second act in the New Deal was the National Housing Act. The FHA was created in this act. This protective measurement was used to help the lenders maintain foreclosed homes by adding automatic insurance payments to active loans. The FHA also expanded the use of a fixed rate long-term home loan. In 1938, the American government formed Fanny Mae to provide a secondary market for home mortgages. This secondary market gave...
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...SCHOOL OF GRADUATE STUDIES CENTRAL PHILIPPINE UNIVERSITY LOPEZ JAENA STREET JARO, ILOILO CITY ____________________________________________________________________________ REACTION PAPER Asian Economics Comment Presented to: Prof, Jima G.DeLeon, MBA Professor, School of Graduate Studies Central Philippine University In Partial Fulfilment of the Course Requirement in MBA 612 Financial Systems Presented by: Mehrdad Alavi MBA Thesis Option September 13, 2013 I. PRELINMINARY 1- The title of paper is Asian Economics Comment, The anatomy of bubbles, part 1. It is written at August 27 2009 by Dr, Feredric Neumman, whom is senior Asian Economist. The issuer of report is The Hongkong and Shunghai Banking Corporation Limited. Additional information for connecting to the author is +85228224556. FEREDERICINEUMANN@HSBC.COM.HK For more information, the reader can view HSBC Global Research at: www.research.hsbc.com 2- It talks about The Bubble in the financial market specifically in the financial housing market in the Asia and what was happening in the USA at 2008 in the same field. II. ANALYSIS AND REACTION 1- The author tried to anatomy of a bubble in the asset market which was happening at 2008 and before. The first part is discussed about what conditions required for that and the part two and three are belong to what is need to sustain the run. He had paid particularly attention to psychology and what behavioural insights...
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...SUBSCRIBE NOW and Get CRISIS AND LEVIATHAN FREE! Subscribe to The Independent Review and receive your FREE copy of the 25th Anniversary Edition of Crisis and Leviathan: Critical Episodes in the Growth of American Government, by Founding Editor Robert Higgs. The Independent Review is the acclaimed, interdisciplinary journal by the Independent Institute, devoted to the study of political economy and the critical analysis of government policy. Provocative, lucid, and engaging, The Independent Review’s thoroughly researched and peer-reviewed articles cover timely issues in economics, law, history, political science, philosophy, sociology and related fields. Undaunted and uncompromising, The Independent Review is the journal that is pioneering future debate! Student? Educator? Journalist? Business or civic leader? Engaged citizen? This journal is for YOU! SEE MORE AT: INDEPENDENT.ORG/TIROFFER SUBSCRIBE to the The Independent Review NOW and q Receive a FREE copy of Crisis and Leviathan OR choose one of the following books: Beyond Politics The Roots of Government Failure By Randy T. Simmons The Challenge of Liberty Classical Liberalism Today Edited by Robert Higgs and Carl Close Lessons from the Poor Triumph of the Entrepreneurial Spirit Edited by Alvaro Vargas Llosa Living Economics Yesterday, Today and Tomorrow By Peter J. Boettke q q q q q YES! Please enroll me with a subscription to The Independent Review for: q Individual Subscription: $28.95 / 1-year (4 issues)...
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...Subprime Mortgage Crisis 1. What is Subprime Mortgage? A type of mortgage that is normally made out to borrowers with lower credit ratings. As a result of the borrower's lowered credit rating, a conventional mortgage is not offered because the lender views the borrower as having a larger-than-average risk of defaulting on the loan. Lending institutions often charge interest on subprime mortgages at a rate that is higher than a conventional mortgage in order to compensate themselves for carrying more risk. There are several different kinds of subprime mortgage structures available. The most common is the adjustable rate mortgage (ARM), which initially charges a fixed interest rate, and then converts to a floating rate based on an index such as LIBOR, plus a margin. The better known types of ARMs include3/27 and2/28 ARMs. ARMs are somewhat misleading to subprime borrowers in that the borrowers initially pay a lower interest rate. When their mortgages reset to the higher, variable rate, mortgage payments increase significantly. This is one of the factors that lead to the sharp increase in the number of subprime mortgage foreclosures in August of 2006, and the subprime mortgage meltdown that ensued. Many lenders were more liberal in granting these loans from 2004 to 2006 as a result of lower interest rates and high capital liquidity. Lenders sought additional profits through these higher risk loans, and they charged interest rates above prime in order to compensate...
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...real-world economics review, issue no. 46 The housing bubble and the financial crisis Dean Baker [Center for Economic and Policy Research, USA] Copyright: Dean Baker, 2008 The central element in the current financial crisis is the housing bubble. The irrational exuberance surrounding this bubble created an environment that was ripe for the cowboy financing that got Wall Street and the country into so much trouble. Of course the cowboy financing fed into the bubble, allowing it to grow to proportions that would not have been possible with a well-regulated financial system. This essay first describes the circumstances under which the bubble began to grow. It then discusses how financial innovations and the lack of a proper regulator structure allowed the bubble to grow to ever more dangerous levels and eventually to crash in a way that has placed unprecedented strain on the country’s financial system. The third part outlines key principles for reform of the financial system. The origins of the housing bubble The housing bubble in the United States grew up alongside the stock bubble in the mid-90s. The logic of the growth of the bubble is very simple. People who had increased their wealth substantially with the extraordinary run-up of stock prices were spending based on this increased wealth. This led to the consumption boom of the late 90s, with the savings rate out of disposable income falling from close to 5.0 percent in the middle of the decade to just over 2 percent by 2000...
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...robin blackburn THE SUBPRIME CRISIS I n the summer of 2007 many leading banks in the us and Europe were hit by a collapse in the value of mortgage-backed securities which they had themselves been responsible for packaging.* To the surprise of many, the poisonous securities turned out to constitute a major portion of their ultimate asset base. The defaults fostered a credit crunch as all financial institutions hoarded cash and required ever widening premiums before lending to one another. The Wall Street investment banks and brokerages haemorrhaged $175 billion of capital in the period July 2007 to March 2008, and Bear Stearns, the fifth largest, was ‘rescued’ in March, at a fire-sale price, by JP Morgan Chase with the help of $29 billion of guarantees from the Federal Reserve. Many of the rest only survived by selling huge chunks of preferred stock, with guaranteed premium rates of return, to a string of ‘sovereign funds’, owned by the governments of Abu Dhabi, Singapore, South Korea and China, among others. By the end of January 2008, $75 billion of new capital had been injected into the banks, but it was not enough. In the uk the sharply rising cost of liquidity destroyed the business model of a large mortgage house, leading to the first bank run in the uk for 150 years and obliging the British Chancellor first to extend nearly £60 billion in loans and guarantees to its depositors and then to take the concern, Northern Rock, into public ownership. In late January Société...
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...UNDERSTANDING THE SUBPRIME LENDING The term "subprime" refers to the credit status of the borrower, which is being less than ideal. Subprime lending is a general term that refers to the practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history. According to the U.S. Department of Treasury guidelines issued in 2001, "Subprime borrowers typically have weakened credit histories that include payment delinquencies i.e. non-payment of the mortgage, and possibly more severe problems such as charge-offs, judgments, and bankruptcies. They may also display reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories." This is when the borrowers have a poor credit history that is they are bad borrowers. Subprime lending is also called B-Paper, near-prime, or second chance lending, as the borrowing is done to customers with a poor credit history or no credit history without any security in return of the money lending. Subprime lending encompasses a variety of credit instruments, including subprime mortgages, subprime car loans, and subprime credit cards, among others. A subprime loan is offered at a rate higher than A-paper loans due to the increased risk. Subprime lenders To access this increasing market, lenders often take on risks associated...
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...LEADERSHIP AND ETHICAL DECISIONS PERFORMED BY KENNETH LEWIS AND THE FED DURRING THE FINANCIAL CRISIS OF 2007-2008 November 29, 2010 Introduction The robust leadership decisions of both the Fed and Kenneth Lewis, CEO of Bank of America (B of A), were not only ethical and accurate, but could have simply saved our financial system as we know it. During the weekend of September 13-14, 2008 Kenneth Lewis met with CEO of Merrill Lynch (Merrill), John Thain, in order to try and rescue Merrill from a hasty bankruptcy that lurked around the corner. Lewis was thinking that it was the perfect opportunity to add the only thing that B of A lacked after recent acquisitions, a “Wall Street investment bank that underwrote and sold securities” (Pozen and Beresford, 2010). On December 5, 2008 B of A’s shareholders voted to approve the merger between the two (Pozen and Beresford, 2010). It wasn’t until days later that Lewis became progressively more concerned about the growing fourth quarter losses on Merrill’s books, from $5.38 billion on November 12 to $12 billion on December 14, one month later. By mid December Lewis began looking for a way out of the deal before the scheduled closing date in late January. Both the Fed and the U.S. Treasury Secretary, resisting that Lewis walk away, threatened to fire Lewis and replace the board at B of A if the merger didn’t take place. Lewis, afraid of legalities from not disclosing the losses to their shareholders before the vote, and the drop in...
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...Running Head: CLEAN UP THE HOUSE 1 Clean Up the House: An Analysis of the Housing Crisis and the Endeavor to Lift the US Housing Market Neil Smith Wilmington University MBA 6400 Economic and Financial Environment of Business CLEAN UP THE HOUSE 2 ABSTRACT This is an inquiry of the Housing Crisis that culminated to the Great Recession of 2007-2009. A review of the aspects that led to the Housing Crisis will be considered. The causes that contributed to the Housing Crisis will range from the Community Reinvestment Act of 1977 to the greed and voracity that engulfed the Financial Markets. Such greed maligned the financial markets causing eventual bailouts and measures that the US Federal Government employed to avert a major financial depression. This paper will discuss definite recommendations that will improve the US Housing Market. CLEAN UP THE HOUSE 3 Clean Up the House: An Analysis of the Housing Crisis and the Endeavor to Lift the US Housing Market In today’s world it is generally accepted that a home is the most expensive thing that any American can buy. The idea of home ownership - a chance to own a home - is a dream fulfilled for many. To have a piece of property and call it your own is reflected...
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...swaps and how large companies look at risk. The 15th of September in 2008 the United States 4th largest investment bank filed for bankruptcy with devastating consequences for the financial market. After a period of impudent investments and poor oversight both internally and externally this paper will look at the many causes and subsequent effects Lehman’s failure had on the U.S. financial system. Lehman Brothers A Versitile Company Henry Lehman Immigrated from Rimpar, Germany, to Montgomery, Alabama in 1944 where he established a small hardware store that sold groceries, dry goods, and cotton related tools and equipment to the local farmers. Six years later his brothers Emanuel and Mayer joined him in his endeavor and Lehman Brothers was born. Not too long after it’s inception Lehman Brothers branched out from general merchandising and involved themselves in commodities brokerage. Lehman’s became the major brokers for the purchase and sale of cotton in Montgomery and it’s surrounding areas. By 1858 Lehman Brothers had opened up an office in New York and expanded it’s commodities trading in addition to obtaining a foothold into the powerful New York financial community. After the Civil War passed Lehman Brothers drew most of their attention to their New York office and with it the financial arm of their business. By 1870 Lehman’s had helped establish the first cotton exchange and also spearheaded the creation of the Coffee and Petroleum Exchange. Lehman maintained...
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