...The World Financial Crisis: Will It Continue To Deepen? Introduction The Great Recession of the 21st Century (Wesel, 2010), which began in 2007, has affected the entire world economy; admittedly, some countries have been hit harder than others but few nations can really say that they have been entirely spared from the crisis. What is more, the devastating repercussions of the financial crisis can still be observed to this day, more than five years since it first began, as numerous countries around the globe are still struggling to get back on track. The road to recovery from the financial crisis has been more difficult than initially anticipated and, with the dawn of a new year, it is still hard to say whether things will start looking better for the world economy or not. The question on everybody’s mind is whether the world financial crisis will continue to deepen or not. Background Though still a somewhat a highly debated matter, the onset of the world financial crisis can be pinpointed to 7 August 2007, when BNP Paribas terminated withdrawals from three hedge funds, on grounds of a complete lack of liquidity (Elliot, 2012). For the two years that followed this incident, the world economy was on a continuous downward spiral. Economies around the globe started to slow down, some faster than others, stock markets began to drop, international trade declined, and credit tightened. In the United Kingdom for example, the catalyst for the economic crisis that engulfed the...
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...The Euro Crisis According to Wikipedia (2012), the Euro Zone is comprised of 17 members that have accepted the euro as their only method of payment for goods and services. Monetary policy and management of inflation levels is governed by the ECB (European Central Bank) which consists of a president and board originating from central banks within the area. Since the late 2000's the Euro zone has experienced financial troubles mainly resulting from the varying degrees of difference between fiscal and monetary policy within each country. The majority of the debt can be attributed to the increase in both public and government debt around the globe as well as the arising debt within the euro zone. Some countries were noted for their involvement in the property crisis while other countries including Greece developed most of their financial obligations from increased public sector wages and pension contributions at an unsustainable level. As the desire for higher yielding investments expanded, many investors sought global markets as those offered by the U.S. Treasury. Norbert Walter (2012) argues that different growth rates, employment levels and unit labor costs have attributed to the euro crisis leading to heightened risk premiums and increased capital flights to those with lower risk assessments. Trade imbalances resulted from rising labor costs within several countries as well as accumulation of trade surpluses between those with the same currency that prevented appreciation...
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...word crisis. By the virtue of its phonology and perceptual disruptive characteristics, it needs no introduction. However, over the years, men and women both educated and uneducated have become victims on a number of reasonable and unreasonable grounds ranging from acts of God, ignorance, materialism, human error and as well as unsafe acts, lack of standard of operations, government decisions/indecisions. As it is world-wide, crisis has assumed the right of occupancy in the affairs of mankind, making it extremely imperative for us to critically and objectively explore, expand and to deepen our understanding about its triggers, escalations, life-cycle, dimensions and including every conceivable aspects of crisis through education, sensitisation and conscientisation on the platform of Crisisology. Key words: crisis, emergency, disruption, management and Crisisology Crisis is the occasion of pain, injuries, illnesses, disabilities, deaths, and property damages. It disrupts means of livelihood and unleashes other undesirable consequences to lives and the environments that threaten growth, development and communal survival. Crises are inevitable. No individual, organisation or society is immuned from it. A crisis is one of the purest forms of global equality – blind to race, culture, religion, occupation or income. A crisis is an equal opportunity employer. It is rarely planned for, surfaced unexpectedly and disrupts normal operations. In attempts to curb crises, Crisis Management...
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...We live today in a multi-polar world where immense financial and economic activity has resulted in wealth being amassed and destroyed on an unprecedented scale in different parts of the world. This dynamic has been driven by the effects of globalization and the structural shift between developed and emerging markets. The recent crisis in financial markets and the global geo-political situation has brought with it challenges which will require increased depth and understanding for the changing dynamics of markets and economies, which will present opportunities to build a more robust rigorous system and institutions. I believe this backdrop provides for a great opportunity to further my academic studies in the area of finance. My interest in finance started from a young age when I was given the opportunity to shadow a broker for a week. I was able to gain a firsthand experience in the markets. It was the fast-paced environment, the ability to analyse large amounts of information that first sparked my interest in finance. It was from this experience that I felt studying finance at an undergraduate level would satisfy my interests and provide me with a solid foundation for my future career. My desire to pursue further academic studies is fueled by the enriching experience I have had at Cass Business School. Being surrounded by intellectually engaging individuals from diverse backgrounds and an academically rigorous course has stimulated a passion of finance as an academic study...
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...Tiffany M. International Business BRIC – Russia Question 1 What are the current economic indicators for the assigned country that clearly demonstrate that this country is on a consistent growth path and that this will play an important role in the 21st century world economy? The financial crisis of 2008, lead to a deep recession in Russia in 2009 due to a severe decline in oil prices. “The GDP fell by 7.8 percent and the number of unemployed increased from 4 million in the summer of 2008 to 7 million (or 9.3 percent) at the beginning of 2010. Between October and December 2008, production experienced its worst drop in the history of Russia, plummeting by a record 19 percent. The official inflation rate, which reached over 14 percent in 2008, remains high at 6.1 percent.” (Weiss, 2012) Russia was hit hard by this economic crisis, however although recovery was slower than the other BRIC countries, Russia is showing much potential for further growth. Because of supply constraints, the price of Urals oil has gone past $125 USD per barrel for the first time since 2008. The high oil prices have bolstered Russia’s economy in the form of large export revenues, active fiscal revenues, and a rising stock market. “…The Central Bank of Russia has added to its stock of foreign reserves, unemployment has returned to its pre-crisis levels of around 6.5 percent, and wages have grown at double-digit rates in early 2012. In February 2012, headline inflation was 3.8 percent, which...
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...The European Economic Crisis A Paper Submitted to Webber International University In partial fulfilment for the Bachelor of Science Degree in Finance By: James Holt Date: November 26, 2013 Course: ENG112-1 Semester: Fall 2013 Instructor: Professor Nancy Davis Word Count: 2663 The European economy is in turmoil. The credit crunch in 2008 caused chaos throughout the global and European economic systems and highlighted the negligence of not only governments but also the financial systems in place. In the highly praised publication the Economist the author G. Tett writes “The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile” (Tett, 2013). A publication of this magnitude publishing this shows the utter chaos in the European Economy. The economy of all countries within the Euro has been greatly affected; it has also affected the surrounding countries around the Eurozone. The stronger European economies have recovered a great deal these include...
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...Latvia, a country of 2.5 million people, is one of the three Baltic states that gained independence after the collapse of the Soviet Union. For most of the 2000s, the economic story in Latvia has been one of rapid economic growth powered by a vibrant private sector. The country joined the European Union in 2004 and pegged its currency, the lat, to the value of the euro. The eventual goal for Latvia was to adopt the euro. To maintain parity against the euro, Latvia used a variation of a system known as a currency board, where local currency in circulation is backed, unit for unit, by re- serves of foreign currency, which in Latvia’s case was primarily the euro. From 2006 onward repeated warnings indicated the Latvian economy might be overheating. Increasingly, an economic boom was being sustained by inflows of foreign money into Latvian banks, particularly from Russia. For their part, the banks were using these funds to finance aggressive lending, including leading to an increasingly frothy property market, with prices being bid up by borrowers who could get access to cheap credit. Critics urged the government to rein in the lending by raising interest rates, but to no avail. What the government failed to do, the market ultimately did anyway. The boom started to unravel in 2008 as a global economic crisis that began with overvaluation in the U.S. property market rolled around the world. For Latvia, the trouble began when the nation’s largest private bank, Parex, revealed it was...
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...aftermath of World War II, economic devastation was evident throughout much of Europe. Vast amounts of resources, infrastructure, and financial ability had been destroyed in the nearly decade-long conflict. Due to the obvious disunity that European nations shared, an idea was created out of the ashes of the largely European conflict: The European Union. In 1958, after attempting to create several different organizations to unite Europe (The European Coal and Steel Community, the European Economic Community, etc...) the European Union was organized. The objective of the European Union is both economical and political. The six original founding members (Belgium, France, West Germany, Italy, Luxembourg, and The Netherlands) envisioned an organization of such economic unity, that the threat of another continental war would be nearly impossible to instigate in Europe again. As members of the European Union grew, an idea was formed to enhance the economic cohesiveness of the many member nations. In 1992 the Maastrict Treaty was established to create a universal currency for members of the European Union who wanted to participate (cited in Lynn, 2012, p. 25). Those nations that joined this Eurozone can be seen in Figure 1 as indicated by their blue color. Figure 1 Members who abandoned their national currency in favor of the new "Euro" currency became known as members of the "Eurozone" (Ashton, 2012). By linking a single currency to multiple economic engines, the Euro quickly...
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...From the era of a combusting and all-encompassing science of philosophy to a period of intellectual break-ups, the world has witnessed the sharp emergence of various disciplines that have shaped the direction and focus of knowledge. Centuries ago sciences that today form the salient block of social science had to create a niche for themselves and thus became an entity of their own. However, this so called academic and intellectual independence from the clutches of philosophy was not achieved by mere coincidence but rather was borne out of rigorous strides and brainstorming arguments by the founding fathers of each of these components (Sociology, Economics, political science etc) of social science (Shadi Sabeh,2013). Social Sciences are a group of academic disciplines that study human aspects of the world with emphasis on the use of scientific methods. As an umbrella term, it encompasses the followings: Sociology Sociology is the study of human social relationships and institutions. Sociology's subject matter is diverse, ranging from crime to religion, from the family to the state, from the divisions of race and social class to the shared beliefs of a common culture, and from social stability to radical change in whole societies. Unifying the study of these diverse subjects of study is sociology's purpose of understanding how human action and consciousness both shape and are shaped by surrounding cultural and social structures. Sociology offers a distinctive and enlightening...
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...The Crisis of Crimea and Ukraine Key Lessons for President Obama from Presidents Reagan and Clinton [pic] SOURCE: AP/Greg Gibson President Bill Clinton reads a statement at the conclusion of the NATO 50th anniversary summit, Sunday April 25, 1999, in the Ronald Reagan Building in Washington. By Rudy deLeon and Aarthi Gunasekaran | May 14, 2014 In the past two months, the Crimea and Ukraine crisis has grown. Russia annexed the Crimean Peninsula, the Ukrainian government and pro-Russian militia are engaged in a back and forth standoff in eastern Ukraine, and Russian President Vladimir Putin has threatened that the conflict “essentially puts the nation on the brink of civil war.” The United States has been at the forefront of building international support for Ukraine, and the Obama administration continues to assemble Western support. However, efforts to reach a diplomatic settlement, or at least to reduce immediate tensions, are still in progress. As the Obama administration prepares its next steps in response to Russia in Ukraine, it can examine lessons from two other administrations in times of crisis. First, the Reagan administration’s reaction in 1983 to the Soviet downing of a civilian Korean airliner and its response to the terrorist attack against U.S. Marines on a peacekeeping mission in Lebanon. Second, the Clinton administration’s initiative to proactively expand and deepen partnerships in Europe during the 1990s through its Partnership for Peace. President...
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...EUROZONE CRISIS The Eurozone in 2012 EUROZONE CRISIS: Eurozone fracture in 2012 This paper outlines a plausible scenario in which the Eurozone fractures in 2012. Events are unlikely to follow the path precisely as described, given the complexity of the problem and the number of variables which are continually changing. That said, we feel 2012 is unlikely to end with all the current members still being part of the Eurozone. Mapping a ‘break-up’ scenario should help readers understand how fragmentation could occur and therefore assist businesses’ contingency planning. To this end the paper highlights some key events and when they are due to take place. It also identifies some key indicators to monitor which are likely to dictate how the crisis will unfold. EXECUTIVE SUMMARY A plausible scenario for Eurozone fragmentation in 2012 would see elections in Greece, France, Finland and probably Italy changing the terms of the debate to reflect frustration with economies in recession, rising unemployment and hostility to proposed or actual austerity measures. In this scenario, Greece receives an irregular rescue from the European Financial Stability Facility (EFSF) and negotiates a rescheduling of its debt in March. But once its April elections are over, the new Greek government is unable to secure bailout funds having missed austerity and reform targets, prompting a formal sovereign default. Greece announces its withdrawal from the Eurozone, closing its banking...
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...vulnerabilities. We have seen those who laughed or are silent at the proposal for the discipline of Crisisology for ‘wont’ of analyses and intelligence. Others include: * The belief that Crisisology is a temporary call and that the initiator is incompetent regardless of its benefits; * Fear of loss of authority or control of social or academic standing? * Feeling of change overload (too much too soon); * Lack of trust or dislike for the concept of Crisisology; * Great idea but not for us? * Its below ‘our’ standards; * It cannot be guaranteed. We noticed all these from our interactions, diagnosis and inferences and we are not surprised that many of them – the practitioners, researchers, and educators in the fields of crisis management, emergency management, disaster management, and catastrophe management are slow in responding to calls for a serious debate regarding the matter of Crisisology becoming a professional/academic discipline. Collaborative Crises Firstly, academicians in particular are slow in responding to substantially new and radical concepts. They often want to see what research is being conducted by others in a given area, and would subsequently need to corroborate those finding by doing their own research. They do not want to stick their academic necks out there until they think it is safe to do so. The 'organized' disciplines of Biology, Sociology, Psychology, Geology, etc, took some time to become accepted in a formal way. According to...
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...Financial Crisis Will Not Deepen Further Financial crisis occurs when the value of financial institution or asset price drops quickly. (Investopedia US, 2013) Today the world financial system is undergoing economic recession. It is assumed to have begun in the year 2007-2008. After the great depression US economy suffered a short term recession in 2001 but came out with it adequately. It also wide stood dotcom bubble bust, attack by terrorists and accounting scandals. Federal government decreased it rate 11 times from 6.5 in 2000 to 1.7% from the year 2000 in order to increase its liquidity in the economy. A man with no job, no income and no asset was able to afford a house mortgage. This rate was decreased to 1% in June 2003. In 2004 country’s elite banks like Lehman brother, Goldman sacs, Merrill lynch, Morgan & Stanley were relaxed with the net capital requirement 30-40 times. (Sivakumar and Krishnaswami, 2012)But after saturation point problem started rising with the rising interest rates. In 2007 it turned out to be a bad new when federal fund rate reached 5.25% in 2006. Many banks got erupted and with shortage of money. Central banks in several countries like UK, Europe central, Sweden, Canada, Switzerland, china etc help in adding world economy but failed. This economic crisis also exploded the economies of Arab nations, Japan, UK, Ireland, Greece, China etc. The consequences faced by these countries in the meltdown were low GDP, high inflation, low deflation, volatile...
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...Does Nationalism within the Colonies provide a sufficient explanation for the downfall of the European Empires after the Second World War? Discuss in relation to the Theories of Decolonization that you have learnt about using examples. Beginning with Britain’s American colonies in 1783 and ending with the handover of Hong Kong, more than 160 colonial dependencies have become new independent states or have been fully incorporated into existing sovereign states. This notion of ‘decolonization’ was first coined in the 1930’s by Moritz Julius Bonn a leading economic expert of Weimar Germany. He believed decolonization to be the ‘transition from colonial dependency to sovereignty.’ John Springhall, supports this notion and suggests himself that “Decolonization signifies here the surrender of external political sovereignty, largely western European, over colonized non-European peoples, plus the emergence of independent territories where once West had ruled, or the transfer of power from empire to nation-state.” However, historians are yet to acquire an agreed definition of decolonization and so is often interpreted differently. For example, John Darwin suggests that “decolonization is often equated with the end of colonial rule, but this is much too narrow.” He continues to critically analysis it as the “demolition of a Europe-centred imperial order in which territorial empire was interlocked with extra-territorial rights.” This essay will aim to provide evidence that nationalism...
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...their own political and legal systems. The British government's threat to American self-government led to war in 1775 and the Declaration of Independence in 1776. With major military and financial support from France, the patriots won the American Revolution. In 1789 the Constitution became the basis for the United States federal government, with war hero George Washington as the first president. The young nation continued to struggle with the scope of central government and with European influence, creating the first political parties in the 1790s, and fighting a second war for independence in 1812. U.S. territory expanded westward across the continent, brushing aside Native Americans and Mexico, and overcoming modernizers who wanted to deepen the economy rather than expand the geography. Slavery of Africans was abolished in the North, but heavy world demand for cotton let it flourish in the Southern states. Through shipping, manufacturing and supplies, major northern cities were closely tied to the Southern cotton economy and slavery as well. For 50 of the 72 years between the election of George Washington and that of Abraham Lincoln, a slaveholder served as president of the United States and, during that period, only slaveholding presidents were re-elected to second terms.[1] The 1860 election of...
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