2008 Economic Crisis

It is a popular English proverb. Attributed to Joseph Kennedy (father of the US President) and to an American football player Knute Rockne. Also used in a Billy Ocean single released 15th November 1985

The reverse repo rate is the rate at which banks park their short-term excess liquidity with the Central Bank, while the repo rate is the rate at which the Central Bank pumps in short-term liquidity into the system.

Bad. GDP went down for the US government. The public added $3 trillion in debt.

Tens of thousands were getting foreclosures.

House sales plummeted. People were often having issues paying off loans.

If you have anything more specific you would like to know let me know.

~Braydengerr

Well the difference between Muslim community of Muhammad and the society of Arab is because the Muslim's concerns about God while the Arab believes in God and his oneness

Some impacts are:

1. The general public is cautious about saving their money in private banks. This has brought down the corpus of private banks like ICICI, HDFC etc

2. Banks which had exposure to derivative product exposure in the US have had to incur losses which they are trying to cope up with

3. Banks have become cautious in lending loans. They are not ready to grant loans to people who do not have a strong credit profile

4. The profit margins for the banks are coming down hence they are adopting stringent policies with respect to its employees

etc...

Not unless the root causes of the crisis are addressed. These are explained very well by U.S. Congressman Ron Paul. You find a lot of clips on YouTube concerning these issues if you search on his name. In a nutshell, the problem is that the system of banking in the U.S. has been unconstitutional since 1913. This has allowed a redistribution of wealth that has eroded both the economy and the democratic processes in this country. Every patriot should learn about these issues and demand a change. The impetus for change in this country has to come from the people, and those who think that a President or any other governmental body is going to make a difference are in for a rude awakening.

3. HUBUNGAN HUKUM PAJAK DENGAN HUKUM PERDATA

Prof. Mr. W.F. Prins, mantan guru besar Ilmu Hukum Pajak di UI dalam bukunya "Het Belanstingrecht van Indonesia" mengatakan bahwa hubungan erat ini sabgat mungkin timbul karena banyak dipergunakannya istilah2 hukum perdata dalam perundang-undangan pajak.

Sebaliknya pengaruh hukum pajak terhadap hukum perdata, sebagai akibat ketentuan bahwa "lex specialis derogate lex generalis"(peraturan yang khusus mengalahkan peraturan yang umum). Maka dalam setiap PENAFSIRANNYA pertama-tama dianut peraturan yang khusus ini.

4. HUBUNGAN HUKUM PAJAK DENGAN HUKUM PIDANA

Ketentuan-ketentuan pidana yang diatur dalam KUHP banyak dipergunakan dalam Hukum Pajak.

LIHAT :

UU No.6 tahun 1983 tentang "Ketentuan Umum dan Tata Cara Perpajakan" pasal 38 dan 39 yang kemudian DIUBAH dengan UU No.16 Tahun 2000: JELAS sekali menyebutkan adanya SANKSI PIDANA (berupa KEALPAAN dan KESENGAJAAN) terhadap wajib pajak yang melanggar ketentuan di bidang perpajakan.

Bahkan, ANCAMAN2 pidana dalam hukum pajak selalu MENGACU pada ketentuan hukum pidana.Misal: è thd wajib pajak yang MEMINDAHTANGANKAN atau

MEMINDAHKAN hak atau merusak barang yang telah disita karena tidak melunasi utang pajaknya akan DIANCAM pasal 231 KUHP

the effect of tourism in the philippines:

1. many tourist from different countries to visit

2. income

3. to appreciate the beauty of the philippines

4. to be well know in different countries the beautiful places,people, the foods

It's a public limited company. Anyone can buy shares in the company - share ownership is not limited to employees.

.

Current (April 2008) instability in the U.S. and to some degree international financial markets is not limited to sub-prime mortgages, although rising interest rates resulting in foreclosure have brought the issue to the public's attention. The current financial market uncertainty can be traced to the increasing use by financial institutions of asset-backed securities, in particular asset-backed commercial paper. Asset-backed securities are a way that companies borrow money. They are similar to bonds, which are basically loans to companies (or countries) that can be bought and sold in a relatively liquid bond market. Bonds are backed by a company's credit; the company is obligated to repay the bonds, or else face consequences such as bankruptcy. Asset-backed commercial paper is a fundamentally different way to borrow money. What "asset-backed" means is that the "interest" income the bondholder receives is based on a stream of payments from the underlying asset. The most common type of asset we are hearing about right now is home mortgages. So basically what happens is that a bank or other financial institution (the involvement of "other financial institutions" is a significant contributor to the growth in this market) makes loans such as home mortgages, or in other cases car loans, credit card payments, etc. So instead of a bank receiving mortgage payments and using them to pay back loans, foreclosing if necessary, banks are more or less an intermediary. They make loans, and then re-sell them in the commercial paper market. What people who own these securities get is essentially a bundle of home mortgage obligations. When people are paying back their home mortgages, everything works well. However, when people stop paying their mortgages, the owners of the commercial securities see the value of their investments plummet. Since the package of securities is relatively concentrated and homogeneous (rather than diverse, like a bank that makes loans to business, homeowners, car loans, credit cards, etc.), the risk of these securities is substantially higher than an investment in a large corporate stock or bond, or even regular commercial paper backed by the credit of a particular institution. One of the problems has been that it has been difficult to assess the risk and value of asset-backed securities. Home mortgage loans are divided into murky "troches," and the value of your security relates to which "troche" may underly your particular security. There is also a substantial opportunity for abuse and misrepresentation. Most notably, in 2003-2004 a company sold asset-backed securities supposedly based on rental income from various properties in India. As it turned out, the only "property" the corporation had was a rented office in a building off a dusty, isolated road. Essentially, all people needed was a Post Office box, and people were rushing to lend them money. So these securities were risky. But risk itself is not a problem, as long as investors are properly compensated for the risk with higher interest rates, for example. However, investors substantially underestimated the risk involved in these securities; as a result, banks and financial institutions were borrowing at relatively low interest rates. In addition, since non-bank institutions do not have the same reserve requirements as banks, they were able to create money much more efficiently. The end result was a substantial increase in the overall money supply, which will be discussed later. Part of the issue is that multiple components of the financial markets were involved in this business. Banks held some of this commercial paper, as did some money market funds. Also, payment of these bonds was frequently insured. So loss of faith in asset-backed securities could topple not only banks, but also large insurance companies and re-insurers, the companies that insure the insurance companies. Everyone more or less panicked and became much less willing to buy asset-backed securities. As stated above, the availability of asset-backed securities considerably increased the overall money supply. Recent economic theories suggest that interest rates, not money supply, directly impact the economy. This financial crisis may prove them wrong. The asset-backed commercial paper market resulted in a substantial increase in the money supply while interest rates remained low. Inflation appeared to be low partly because of low energy costs (because Saddam Hussein was secretly selling massive amounts of oil above and beyond his OPEC quota). In addition, inflation was concentrated in the housing sector -- not surprising, since that's where the majority of asset-backed security money was available. Availability of money through bonds and bank lending is the oil that allows the engine of the financial markets to keep working. Basically, people finally figured out that the engine has been leaking oil (perhaps literally) for many years. The financial engine finally seized up. Not only are they worried about banks, but also insurance companies, etc. That's why the Fed has stepped in to re-lubricate the engine by increasing the money supply (which will only serve to increase inflation, but that's another story). JP Morgan Chase stepped in to save America, just as good old JP Morgan did around the turn of the century. This "crisis" bears striking resemblance to the savings and loan crisis of the 1980s. A significant contributor in both cases is deregulation. The savings and loan crisis was caused because of substantial changes in federal regulations governing loan policies for S&Ls. In that situation as well, investors significantly underestimated the risk of the underlying assets. The parallel to savings and loans is the non-bank mortgage brokerages and other financial institutions that got into the home mortgage business. For example, Ditech looks like it is in the home loan business, but is actually a unit of GMAC -- that's right, auto-maker GM's financing arm. This is another connection that spells trouble. The only reasonably profitable business of U.S. automakers has been financing -- they don't make money on cars, they make money on selling loans to people who buy cars. This makes the already-troubled U.S. automakers dependent on a supply of income that has suddenly dried up. GM has an overall negative capitalization (has lost more money than it has ever made). Combined with changes in the car market toward smaller, more efficient vehicles as opposed to the SUVs that are U.S. car companies' bread and butter, it does not look good if you are an employee or retiree of the U.S. auto industry. So those people stop buying stuff, and people they stopped buying stuff from stop buying stuff, and so on. And the economy shuts down, known politely as a "recession." If this description sounds hauntingly like the second half of the 1970s and the first half of the 1980s, yes, there is reason to be afraid. The above dynamics are reminiscent of that period. Add to that concern over an emerging Asian economic power (then Japan, now China), skyrocketing oil prices, Middle East terrorism (Iran hostage crisis, anyone?) and significant concerns about American foreign policy and our ability to sustain our military and other commitments, and the feeling of deja vu is overwhelming.

His belief that the federal government could not give direct aid to individuals left millions without help.

It is the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, the spread of technology, and military presence.

Average is the total amount of tax divided by the total amount of income...it therefore includes all deductions and tax brackets, usually lower % ones, getting to the total as part of it...average. The marginal, is on the NEXT $ of income. So it basically is going to be closer (or exactly) the highest tax rate you pay, being applicable to the last bracket your in, and generally having already used up all dedcutions available, and in fact, maybe losing some because some dedcutions drop off above certain incomes. Clear as mud? Marginal rate...the amount of tax pid on the NEXT $ of income...average rate includes the lower brackets and he tax, or no tax, on the first amounts of income.

Short term answer: recession happened because a lot of money disappeared when bad loans defaulted.

Long term answer: recession happened because of supply side economics.

Lending creates money. You put money in the bank, the bank lends it out, for example by writing a mortgage, the borrower has the money but you still have the same amount of money in the bank. The bank sells the mortgage, the buyer exchanges money for a financial asset, therefore the buyer's wealth does not change. The bank can now lend the money again creating more wealth.

When the mortgage defaults the last owner of the mortgage loses wealth. The borrower also loses wealth because the house goes to the bank but the value of the house is now less than the mortgage (because mortgages are defaulting all around and house prices have dropped), so the borrower still owes money.

If many mortgages default the economy loses money. That is, money disappears. We still have the same resources, but we no longer have enough money to transfer all the resources from producer to user, so some resources stand unused. That includes workers, factories, raw materials and consumer goods in stores, all waiting for money that isn't there any more.

The long term question is why there were so many bad loans. The long term answer is that "trickle down" policies took money from consumers and handed it to investors. Investors will invest in production only when consumers have the money to buy the product. If consumers don't have enough money to encourage productive investment, investors turn to financial investments to extract money from other investors. Or else they spend the money on things like art works, with the result that art prices soar.

A thriving economy works on "trickle up," not "trickle down." Workers get paid, and then as consumers they buy stuff from retailers. The money they pay the retailers goes partly to the retailer's profit, partly to workers and partly to wholesalers. The money paid to wholesalers goes partly to the wholesaler's profit, partly to workers and partly to producers. The money paid to producers goes partly to the producer's profit, partly to workers and partly to suppliers of raw materials. At each step a part goes back to the workers to go around again, and another part goes to investors to be reinvested. The process is driven by consumers buying. If consumers can't buy, nobody invests and nobody works.

Why the recession? Because we moved from a productive economy to a "service economy," from an economy that made and sold goods and services to an economy that shuffled money around.

Oil crisis is basically a phenomenon where the prices of oil products boost up because of the increase in world market's price which is caused to a so-called 'decrease' of oil deposits.

What_were_the_effects_of_Lehman_Brothers_bankruptcy_on_the_economy"

jan <3<3<3<3<3<3<3<3<3<3

The financial crisis was caused, at its very root (as in this was the last straw), by the sudden drop in home prices. Banks held mortgages on homes that people could no longer pay. Normally, the bank forecloses on the home and sells it for either profit or break-even. But this time, home values had fallen by as much as 40%. So banks lost 40% of their original investment when people started falling behind on mortgages payments and the banks were forced to foreclose. This is easier to describe with numbers. Say a bank gives a family a mortgage for the total value of their home, say $100,000 (this is lower than most mortgages, but makes it easier to see what's going on). The home then loses 40% of its market value, becoming worth only $60,000. The family then falls behind on their mortgages payments and the bank has to foreclose. The bank can only recover that $60,000 and is out $40,000. Now imagine this happening millions of times.

Once you get into much more complex financial mechanisms, we find that banks packaged these loans as investments call CDOs (collateralize debt obligations) that they then sold to other banks or financial institutions. Sometimes they are called commercial paper. When the value of these assets plummeted, a lot of financial institutions lost a lot of money. Again, normally this really has no bearing. But some bad choices were made with a normally useful financial tool called leverage. One can leverage funds by (this is a simple description) using the cash you have on hand as a down payment on a loan and then taking that loan an investing it. A great example of this is taking $100,000 and instead of buying just one house that you rent out to someone, you take out mortgages on 10 houses and use the $100,000 has a downpayment. You now own ten houses that you can collect rent from.

As you can see, the profit possibilities when leveraging assets (in this case cash) are amazing. Unfortuntately, you also magnify your losses. Imagine if you couldn't find renters for those houses. You're stuck with a huge loan and no way to apy it off, whereas with just one house you wouldn't be in debt. The point here is that a few financial institutions (Lehman Brothers being one) leveraged cash to buy these CDOs. These CDOs then plummetted in value. Lehman Brothers was unable to sell them because no one wanted them. Thus, they had huge loans from the leverage and they couldn't repay them.

So now we have banks that are extremely scared and cash-strapped. They don't want to lend moeny for fear of losing more.

the no of times a husband sleeps with his wife is called repo rate

I think you are asking Reason of Economic crisis.

1) Electricity, Gas, Water Problems

2) Terrorism

3) Lawlessness

4) Poor Economic Policies like interest rate in double figure.

5) Target Killing in Karachi

Most ensure the "Great Depression", but the times we are living in now will only get worse. Big corporations/the rich are controlling the poor/middle class by giving the corporations and the rich massive tax cuts. More money to the wealthy and less to the middle and under classes which will cause massive inflation.

Yes. The "Great Depression." And Inflation is indeed what threatens the economy, but it's important to know what causes inflation. Below is part of the definition from American Heritage Dictionary, but in simple terms, it is when there is a lot of money being put into the economy. This excess causes the value of each dollar to go down, so it costs more to buy a loaf of bread, for example. When the federal Reserve puts a lot of money into the economy, it causes inflation.

Inflation has nothing to do with class warfare, the rich against the poor.

"...or a persistent decline in the purchasing power of money, caused by an increase in available money and credit beyond the proportion of available goods and services."

Class warfare is very important because of the amount of money being put into the economy by each class. Inflation is also caused by printing more money than what's worth in gold that a country has.

1) to keep power equal in all 3 branches ( Checks and balances)

2) to provide national security

3) to have a econmic equality (money)

4) to pass laws so that we can live in a better country