Jenni Edwards Business Law 2 Professor Rose July 22, 2015 RadioShack Nearly 94 years ago in Boston, Massachusetts RadioShack was founded on February 6, 2015. It is one of America’s oldest retailers that specialize in electronics. The retailer survived the Great Depression by branching out to the mail order economy. During an economic downturn, RadioShack was purchased by Charles D. Tandy for $2.3 million dollars in order to avoid bankruptcy. Throughout the 70s and 80s, RadioShack thrived, as it
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The Great Depression was caused by the brash approach towards the county’s own stock market and wealth. A political cartoon has depicted what seems to be Uncle Sam resting safely in the luxuries of America, clearly not caring about any possible declines or threats to the nation (Doc O). In the cartoon one can tell that the country was blinded by its pride in the economy that they were not able to prepare themselves for any sort of economic decline, therefore worsening any small detail of future decline
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One of the most critical issues that arouse during the 2008 government AIG bailout was that there was no check and balances system in play within the company. AIG employees quickly became only concerned with how much commission they could make, and how fast. The process in which they chose to do so was faulty and extremely risky to not only AIG but all of its stockholders, shareholders, and investors. Because of AIGs prior impressive reputation and clientele, no one doubted their methods of operations
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investments off its books. The firm was active in the market for Residential Mortgage Backed Securities (RMBS). The process involved buying several residential mortgages, combining them and selling them as securities. RMBS buyers actually purchased claims on the cash flow generated by the securities. Lehman produced a great amount of these securities, making the demand high for mortgage originators. This led mortgage originators to extend credit to people who were not credit worthy, or did not
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1. Briefly explain the rise and fall of LTCM. What was the moral hazard issue the fed was worried about? How did they try and get around the moral hazard issue? What specifically was the Fed's role in the bailout? What roles specifically did Bear play and not play in the LTCM's life and death? LTCM’s board of directors included many geniuses in from the financial world, who collectively created complex models allowed them to calculate risk of securities much more accurately than others. LTCM’s
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With the economy already under pressure, the housing market is continuing to decline with expectations for recovery this year dwindling away. Foreclosures are currently pushing the price of homes down making it difficult for homeowners to sell. Changes of income, price, expectations, and changes in processing are excellent examples of supply and demand. The change of income came in the form of $8,000 tax credit for home buyers. What this helped was the ability to buy a house with money they didn’t
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investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, "robo-signed" evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining
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Right now, the total compensation for many bankers does not reflect their contribution to the company. Profits declined sharply in 2011 by 51% but bonuses did not drop relative to the profits instead it dropped by only 13%. During the financial crisis, many banks were being bailed out with taxpayer dollars but Merrill Lynch and other banks still paid out handsome bonuses to its employees. There is no accountability in the banking industry and bank executives are getting compensated the
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Product. So why did such a successful business fail when the Global Financial Crisis hit the Caribbean? Two major issues: 1. The presence of moral hazard as a result of CLICO the British American Insurance Company (BAICO) offering higher returns on customers’ deposits that was higher than other banks. The deposits were then used to finance their real estate and other investments. So when the Global Financial Crisis hit the Caribbean, the investments along with CL Financial crumbled. 2
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frequented mostly for it’s posting of escort services then used cars or job inquiries. Interestingly enough, Village Voice Media owners happen to have stake in global banking firm Goldman Sachs, a key participant in the involvement of subprime mortgages that contributed to the 2008 recession. Although Goldman claims they’ve had no knowledge of the company’s ties to sex trafficking prior to the recent allegations, it seems as if they have done nothing to persuade Village Voice Media to prevent Backpage
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