Channel 1 New's 9:30 2008

Capital hill has a 700 billion dollar buy out
Stock prices dove
DOW was down 770 points more then ever
a million more homes will likely be foreclosed on
bill could have fixed the mortgage problem
2/3 republicans opposed
1/3 democrats opposed
City group took over wakovia
washington mutual took over chase
wakovia is not a failing bank
South america Hugo chaves will work to develop nucleur energies
Venezuela and Russia have become strong allies since russia invaded georgia
Pirates siezed a russian cargo ship and is demanding a ransom for its release.
The ship contains military equipment
Southeast's gas is running out since the hurricanes hit
Gas tankers are being guarded by police
NOW IS NOT THE TIME TO PANIC!!

Channel 1 New's 9:30 2008

Anxiety Spreads

1. Mary Ashbury had to raise her prices because inflation was raising the prices of everything she was buying from everywhere else so she had to raise in order to turn a profit.

2. The apartament prices have risen because there is so little housing available that people have to move into apartaments in order to live.

3.
Consumer Price Index-Is just a bunch of goods, the same ones are used every year, that they take the price of.
Core Inflation-A measure of inflation excluding goods that might be facing a huge change in price.

I think that Core Inflation is the better method. Because with CPI you have the same items every year and with industry changins as rapidly as it is those core items may not be being used as much as they were.

Sources
CPI-Leah
CI-http://www.investopedia.com/terms/c/coreinflation.asp

The economic situation

Subprime Mortgage-Is the loan that you can get if you have a low credit score.

Credit Swap-A credit swap is when you have bad credit and you need a loan but the bank can't give you a loan because of your bad credit. So what the bank does is takes the credit score of someone else who has a higher score and uses their score to get you a loan.

Credit Insurance-Credit insurance is just like any other insurance company. With credit insurance you can get a loan and if you cant pay it back for any reason such as you losing your job or something like that, the credit insurance company such as AIG will pay for a certain percentage of your debt.
http://www.investopedia.com/articles/optioninvestor/08/cds.asp

These are all causing the market to crash for a number of reasons. With a CDS you may be able to get a loan even if you have bad credit but if you cant pay the loan back who's credit is affected? The CDS business is something that someone created solely to make money and not to help people. People who are getting subprime loans are always defaulting on them and with too many people defaulting the banks cant afford the money there losing and the people cant pay it back so everyone is losing money. With so many people losing their jobs and not being able to find work the credit insurance companies cant afford to cover all the people who they need to cover.

Monday's Assignment

Causes of the Great Depression- The main causes of the Great Depression was that we spent too much money in the 1920’s and because of the extensive stock market speculation that took place during the latter part of the same decade. Stock market speculation is when you take a position that will benefit from an outcome. Basically just guessing on what a stock will do and if it goes up you benefit and if it goes down you lose money.

Src.-http://www.gusmorino.com/pag3/greatdepression/


Effects of the Great Depression-The Great depression affected the American people because there was no welfare system set up. From 1929 to 1933 income fell 53% and because of the fallen income demand for products fell also. When the demand fell it led to lower levels of production and since there was a lower level of production there was also an extremely high unemployment rate. The Great Depression didn’t instantly throw everyone into poverty but it did affect the American people, particularly the unemployed people.

Src.- http://www.thegreatdepression.co.uk/effects-on-america/

How We came out of the Depression-Roosevelt created a wealth of new jobs using the new deal. After the new deal war struck providing Americans with tons of new job opportunities. The new deal helped the american people in three main ways, Relief, Recovery, and Reform. It gave relief to unemployed americans through numerous social programs which gave many unemployed americans jobs. With relief came recovery and reform. Under the new deal financial systems were reformed. Roosevelt got us a balanced budget and more financial resposibility and numerous other policies which promoted economic health and growth. He also pushed us to getting involved ni the World War II because he knew that it would help to improve our nations economy.

Src. http://www.wisegeek.com/what-was-the-new-deal.htm

Src. My Head