econ expert info and tips needed forpowerpoint presentation

[theultimatebrucelee]

I have this 10slide powerpoint presentation tomorrow afternoon at school that's worth 25% of the course grade that I have started to work on this morning with no vile...google has failed me(don't think its got anything to do with me sucking at all tech related stuff) so now I would like to seek help from fellow beta members regarding my topic of: Economy recession as well as economic recovery for England, France and Germany and possibly to relate them to U.S. economic recession and recovery plan. websites that deals with specifically those issues would be of help as well.

was wondering if any member here could let me in on the problems that caused Economy recession and the actions they took on regarding solving those problems, for England, France and Germany. respective native info would be great help. and simply ones would be of great use. otherwise I'll have to be on dictionary.com all night.

I prably need to start on similar issues that have cause all those counties problems, after this entire morning of search everything seems to be either off topic or too complicated-_-

any help appreciated,

thanks in advance.

[Quacker]

That is a pretty-loaded & info.heavy question UBLee. I am surprised that you have not been able to Google anything that may have been able to assist you?

In a (very small) nutshell - the main cause of the GFC or Global Financial Crisis and the resultant recessions, forced economic stimulus and government interventions - was due to the freezing of the money/credit markets, that is money being borrowed & lent between different businesses & institutions both locally & internationally.

It is still heavily debated & finger-pointing as to the actual origins of the GFC, whether it was due to Governments, the Banks & Institutions, the general public, individual CEOs, lacklustre regulations etc.
The most accepted theory is that back in 1999 during the Clinton administration, Government pressure was placed upon mortgage lenders to increase the availability to "low-income earners" acquiring a mortgage - hence the "Subprime" industry was created.
In its simplest terms - a Subprime mortgage is a 25/30year loan granted to a low-income earner, where up to 105% of the property value may be borrowed. At the beginning of the loan, usually a period of 3/5yrs, a reduced interest rate is granted to the borrower, but when that 'honeymoon' period is over, the interest increases to a rate above the normal rates paid.
The theory behind is that during that 3/5year period, the borrower would have earned a job promotion and an increase in their base income & thus be able to afford the increase in their interest rates..........
That was the theory anyway, but as we all know - what sounds good in theory, hardly ever converts across to reality.

These Subprime mortgages became so popular, that at one stage they made up 34% of the US property market!! That is 1 in every 3people!!
Also Mortgage Brokers that only dealt with Subprime mortgages started to emerge in the period between 2002-2004.
This created a period of "Cheap & Easy" money on the credit markets as more & more people applied for these Subprime mortgages.
A whole separate industry was created for Subprime mortgages where people could select from loans that allowed them to borrow 125% of the property value, but at the cost of having a reduced 'honeymoon' period, where the cheaper interest rate only lasted for 12months.

Things started to go pear-shape & reality sinking in toward the end of 2006 when the Subprime honeymoon periods started to finish & the interest rates switched across to the higher interest rates.
People found that they could no longer afford the increased interest payments required!
And here is the main problem, unlike most other countries - take Australia for example, where if a person defaults on their home-loan, they are still liable to pay-down as much as the debt as possible. The Bank is allowed to seize any assets of value (car, furniture, shares etc) they deem necessary in order to pay-off the loan. It is the actual person themselves who carries the risk of the loan.
In the US, people are allowed to walk-away from their home-loan.
Which is what happened, once the honeymoon period and people found they could not afford to pay the increased interest rates, they simply vacated the house!!
Banks & Financial institutions found themselves holding onto a glut of empty, over-priced houses with no one to pay back the debts.
This is why during 2008/09 you would have heard Banks were collapsing or were near bankruptcy as Banks had lent out all of this money, but very few people where actually able to repay it back!!

Some important dates you may wish to Google UBLee include:

April 2, 2007: New Century Financial Corp, a leading subprime mortgage lender files for Chapter 11 Bankruptcy protection.

August 6, 2007: American Home Mortgage Investment Corp files for Chapter 11 bankruptcy protection.

September 14, 2007: (UK) Chancellor of the Exchequer, Alistair Darling - equilivant to the Fed.Chairman - authorises the Bank of England to provide liquidity support for Northern Rock, the UK's fifth largest mortgage lender.

February 13, 2008: President George Bush signs the "Economic Stimulus Act of 2008" into law.

September 15, 2008: Bank of America announces its intention to purchase Merrill Lynch for USD50bn.

September 15, 2008: Lehman Brothers files for Chapter 11 bankruptcy protection. At one stage, Lehman was the fifth largest Wall Street investment bank. This collapse sets off further market turmoil & the money market literally freezes as banks & institutions no longer wish to lend out funds for fears that other banks will collapse too.

September 17, 2008: SEC bans short selling in all Financial sector stocks.

September 21, 2008: the Federal Reserve Boards allows Goldman Sachs and Morgan Stanley to become 'bank holding' companies - meaning they are now able to accept deposits from the general public.

October 3, 2008: The US Congress passes the "Emergency Economic Stabilisation Act of 2008" allowing the creation of the USD700bn "Troubled Asset Relief Program" TARP.

February 17, 2009: President Obama signs "American Recovery and Reinvestment Act of 2009" which includes spending measures and tax cuts to promote economic recovery.

Those dates are all taken direct from my Desk-diary during that period - as an Investment adviser & stockbroker, I need to record any items that may have an affect on the markets - so the above dates are pretty accurate for you.


Debt again is the main concern for Europe.
The peripheral countries of Portugal, Ireland, Greece & Spain are the main cause of concern for the European Union. Think of the term P.I.G.S.
Each of these country's Governments has mis-managed & accrued way too much debt for their individual economies to handle.
It has even since come to light that the previous Greek Government lied to the European Union about their entire debt situation!
In amongst the European Union, every country owes every other country varying amounts; they are all inter-connected with each other. With that in mind, think of a set of Dominoes, with each country representing an individual domino and Greece being the very first domino. Knock Greece down, it will it knock all the other dominoes behind it.
The main fear being that the bad debt situation, if not controlled, will spread like a contagion, starting with the weaker economies until it drags down the more powerful economies of Germany & France.
To counter this, the Governments of those economies most at risk have implemented 'austerity' measures in an effort to cut-back on their debt. Some measures include the freezing of wage increases of Public servants for 3/4years or where possible, the reduction in pay of P.servants. Increases in taxes as well as the increase or addition of extra charges on some commercial goods.


Phew!!! Thank goodness I am a quick typist!!
There is a lot of information contained above there UBLee, hopefully this helps you out or at the least points you in the right direction as to what you require?

[theultimatebrucelee]

O_O ...longest reply I've ever seen on any discussion topic(wasn't expected lol), a big thanks Quacker, your awesome

I can't seem to find any info on google since I have been doing search on stuff like "germany economy crisis" or "U.K. national deficit" since my research is mainly about econ crisis and recovery of those countries in comparison with U.S. good thing class got canceled for the day so now I have more time to do research and do a better job on it lol

for U.S, it looks like the American Recovery and Reinvestment Act of 2009 would be my main research and I decided to to presentation based on debt, unemployment rate and national budget deficit for those countries. hopefully everything works out as this is a big chunk of my grade, will see what happens on thuesday.

thanks again for this helpful info

[iceman57]

You can add curves from the European Central Bank to make your powerpoint more visual.

http://www.ecb.int/stats/exchange/effec ... ex.en.html
http://www.ecb.int/stats/exchange/eurof ... sd.en.html

Switch range to "5 years" and you'll have an overview of the Euro currency during this period, and may easily explain the audience the plunge on the stock market.

[Quacker]

Not a problem UBLee.

Let us know how your presentation/lecture goes on the Tuesday.

[theultimatebrucelee]

the presentation went by ok, not sure about my grades yet but think I did an ok job on it, good thing its finally done and I can now move forward.

thanks a lot for helping me on the project guys

[iceman57]

Quacker rocks when its about finance

[glorff]

I just saw this and find it amazing that Credit Default Swaps and AIG were not mentioned in the explaination of the problem. People buying debt that they do not know what it is and insuring 1000 times assets seem like major issues to me.