Category Archives: Economics

My final word on this weeks stockmarket

Coaster Express at Parque Warner Madrid

Image via Wikipedia

http://www.youtube.com/watch?v=XwKvwD97cf8

 

Maybe this video will help, but probably it’ll just make you smile.


“The chickens are coming home to roost”

Giełda na Wall Street

Image via Wikipedia

Two videos that actually address our financial and political crisis:

http://www.bing.com/videos/watch/video/markets-react-as-fed-leaves-rates-unchanged/6tjpvo6?from=&adlt=strict

http://www.businessinsider.com/dylan-ratigan-rant-2011-8

Please watch these videos they give a fresher perspective on our current situation.  Here are some definitions to help:

Brady bonds are dollar-denominated bonds, issued mostly by Latin American countries in the 1980s, named after U.S. Treasury Secretary Nicholas Brady.

http://en.wikipedia.org/wiki/Brady_Bonds

The Marshall Plan (officially the European Recovery Program, ERP) was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism[1] . The plan was in operation for four years beginning in April 1948. The goals of the United States were to rebuild a war-devastated region, remove trade barriers, modernize industry, and make Europe prosperous again. The initiative was named after Secretary of StateGeorge Marshall. The plan had bipartisan support in Washington, where the Republicans controlled Congress and the Democrats controlled the White House. The Plan was largely the creation of State Department officials, especially William L. Clayton and George F. Kennan. Marshall spoke of urgent need to help the European recovery in his address at Harvard University in June 1947.[

http://en.wikipedia.org/wiki/Marshall_plan

The Finnish Banking Crisis of 1990s was a deep systemic crisis of the entire Finnish financial sector that took place mainly in the years 19911993, after several years of debt-based economic boom in the late 1980s. Its total taxpayer cost was roughly 8% of the Finnish GNP, making it the most severe of the contemporary Nordic banking crises. The crisis has been attributed to a combination of macro-economic turbulence, weak regulation, and bank-specific problems.[1] Governmental intervention included bank takeovers, direct monetary assistance and temporary blanket guarantees to the banks.

http://en.wikipedia.org/wiki/Finnish_banking_crisis_of_1990s

A Derivative is a financial instrument with a value dependent upon underlying variables. The term can refer to a contract, or its value, derived from the underlying assets. The most common derivatives are futures, options, and swaps but may also include other tradeable assets such as a stock or commodity or non-tradeable items such as the temperature (in the case of weather derivatives), the unemployment rate, or any kind of (economic) index.[1] A derivative is essentially a contract whose payoff depends on the behavior of a benchmark.

http://en.wikipedia.org/wiki/Derivative_%28finance%29


As those in finance walk away from the rubble of the recession unscathed; average citizens may face jail time for their debt

The main cellblock taken by ghostieguide dec 2...
Image via Wikipedia

Dickens wrote about the world where debtors prisons were common.   It is the same world that gave us Karl Marx.  If you believe that was long ago think again.

Six states (Arkansas, Arizona, Illinois, Indiana, Minnesota, and Washington) allow debt collectors to seek arrest warrants for debtors in default if all other collection methods have failed. Whether a debtor will actually be prosecuted or not varies from state to state, county to county, and town to town. The individual is taken into custody and is typically required to submit financial documentation to the courts (to facilitate seizure of assets or wage garnishment), although in some cases the individual may be held indefinitely until a payment plan is reached or the debt is paid in full, especially if the individual is insolvent

 http://en.wikipedia.org/wiki/Debtors%27_prison

More than a third of all U.S. states allow borrowers who can’t or won’t pay to be jailed. Judges have signed off on more than 5,000 such warrants since the start of 2010 in nine counties with a total population of 13.6 million people, according to a tally by The Wall Street Journal of filings in those counties. Nationwide figures aren’t known because many courts don’t keep track of warrants by alleged offense. In interviews, 20 judges across the nation said the number of borrowers threatened with arrest in their courtrooms has surged since the financial crisis began.

http://online.wsj.com/article/SB10001424052748704396504576204553811636610.html

Kyle Dewitt spent three days in jail because he was too poor to pay a fishing fine. Last spring, Dewitt was ticketed and fined $215 for fishing smallmouth bass out of season (Dewitt disputes the charge). But Dewitt, 19 years old with a fiancée and a nine-month-old son, lost his job at a grocery store in 2010 and has been out of work ever since. He couldn’t afford the $215 fine. Instead he offered to pay $100 up front, and repay the rest in a month. But Judge Raymond Voet of Ionia, Mich., refused.

http://www.credit.com/blog/2011/08/man-jailed-for-not-paying-fishing-fine/

That could be me before the blow-drying and eyeliner, and it’s definitely Al Szekeley at any time of day. A grizzled 62-year-old, he inhabits a wheelchair and is often found on G Street in Washington, D.C. — the city that is ultimately responsible for the bullet he took in the spine in Phu Bai, Vietnam, in 1972.

He had been enjoying the luxury of an indoor bed until December 2008, when the police swept through the shelter in the middle of the night looking for men with outstanding warrants. It turned out that Szekeley, who is an ordained minister and does not drink, do drugs, or cuss in front of ladies, did indeed have one — for “criminal trespassing,” as sleeping on the streets is sometimes defined by the law. So he was dragged out of the shelter and put in jail.

“Can you imagine?” asked Eric Sheptock, the homeless advocate (himself a shelter resident) who introduced me to Szekeley. “They arrested a homeless man in a shelter for being homeless?”

http://www.salon.com/news/politics/war_room/2011/08/09/america_crime_poverty/index.html


Keynes v Hayek: Two economic giants go head to head

cartoon of two people fighting over bag of money

CC-BY-ND by HikingArtist.com on Flickr

Two economic theories are coloring the current debate on how to solve the ongoing financial crisis, here is a break down of both so that you can make informed decisions:

John Maynard Keynes and Friedrich August Hayek were two prominent economists of the Great Depression era with sharply contrasting views. The arguments they had in the 1930s have been revived in the wake of the latest global financial crisis.

The contemporary relevance of their ideas has even been debated in a rap video. More than 1,000 people attended a BBC Radio 4 debate at the London School of Economics to hear supporters of the two economists argue their case.

http://www.bbc.co.uk/news/business-14366054