Essay about Renewable Energy A Bright Future - 707 Words

In chapter thirteen of our book, Environment by Raven and Berg, it shows us just how important renewable energy sources are. Currently the United States of America thrives on the use of fossil fuels and nuclear power. The main problems with these types of fuel are that they are both limited and can be extremely harmful to our environment. They cause global warming, air pollution, acid rain, and oil spills (Environment), and not only that, but in the grand scheme of things, these sources really aren’t even that cheap of a fuel source. There are many alternatives to these all but outdated fuel sources. Renewable energy is the future, and we should embrace it. The planet we live on is teeming with so many untapped renewable energy†¦show more content†¦In some cases, individuals that have purchased solar roofs even have gotten checks from the power companies for the overflow from their solar powered homes. (Lewis) I find this to be amazing myself, imagine receiving a check from Ameren or any other power company instead of sending them one! Not only can solar power give renewable energy to your home or business, but also to your vehicles. There are cars that run on complete solar energy that are ready and available to purchase. The only problem with the complete solar vehicles as of now is that mainly their top speed is 30-45 miles per hour. (Almasy) However, I suspect in the coming years, if we as a nation decide that fossil fuels are too expensive and a thing of the past, that we can engineer a vehicle that would be completely solar powered and functionally sound and be a good economic purchase. (Solar Power) We already have Hybrid vehicles that run on both gasoline and electric power, we have even cleaned the old fossil fuels up slightly with the use of a biomass source, ethanol. In my opinion it’s only a matter of time before a completely solar powered vehicle hits the market. The only real question is how much longer we will have to wait until America gets their hands on it? I believe it will happen s ometime in my lifetime. I can’t wait to purchase an environment friendly vehicle that I would no longer have to pay for fossil fuel to drive. IShow MoreRelatedIs Energy Consumption A Major Challenge For Most Countries All Over The World? Essay1502 Words   |  7 PagesNowadays energy consumption has become a major challenge for most countries all over the world in terms of efficient utility and environment protection. Most negative effects, such as air pollution, destruction of landform, disturbance of ecological balance and climate change, could be attributed to massive use of fossil fuel. At the same time, fossil fuel resource, which accumulated for billions years on earth, would be running out in a short term under such unlimited consumption. â€Å"The Stone AgeRead MoreRenewable Energy Is Our Future Energy Sources1260 Words   |  6 PagesCurrent Events Essay: Renewable Resources Are Our Future Energy Sources Renewable energy resources are our future energy sources and great strides are being made by using these energy applications to improve the environmental impact towards protecting Earth. Hossain, K.A. writes in The Journal of Fundamental Renewable Energy and Applications that there are basically three sources of energy: fossil fuel, nuclear fuel, and renewable fuel sources (Hossain). Fossil fuels are being used up, nuclearRead MoreWhat Is Reference In Research1336 Words   |  6 Pagesyour Research 1: Department for Business, Energy and Industrial Strategy, (2017), Energy Consumption in the UK (ECUK) 2017, GOV.UK, p21-26, Date accessed (08/10/17). 29% of final energy consumption (energy consumed after transformation) was attributed to the domestic sector. This is a total of 40046ktoe (kilotons of oil), equivalent to 466TWhrs. 80% of this energy was used for water and space heating, the rest being used for appliances. While overall energy demand is increasing, electricity consumptionRead MoreRenewable Energy Through Feed On Tariffs And Taxes1263 Words   |  6 Pagesdebated on whether or not nonrenewable energy such as fossil fuel has caused global warming. Sakamoto and Managi (2016) believe fossil fuel is the likely reason that temperatures have been rising from greenhouse gases, increasing the CO2 emissions (p. 1). With depleting resources, it may be a good idea to look more seriously at renewable energy (Sakamoto Managi, 2016, p. 16). More governments have been trying to create policies to encourage usage of renewable energy. However, it has been debated whatRead MoreWith The Rapid Growth Of World Population, The Limit ed1114 Words   |  5 Pagesnon-renewable energy demand is increasing, especially in the developing countries. This situation causes the risk of depletion of cheap fossil energy sources, as well as environmental pollution and climate change. Therefore, the researchers worldwide have been tried continually to find solutions for the diversification of energy sources, reduce harmful emissions and emissions of greenhouse into the environment, and the renewable energy have been the centre of attention. 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Throughout history, various intellectuals have revolutionized the world through their creative methods of cultivating energy. In recent years, people have witnessed some of the greatest advancements and have reached unprecedented levels in technology. These technological advancements are only possible using energy sources. An energy source is a system which creates energy in a certain way. The lifestyle of the future is determined by the energy sources practiced todayRead MoreWind Energy. The Fossil Fuels That Once Were The Towering1447 Words   |  6 PagesWind Energy The fossil fuels that once were the towering source of energy are going to be used up and will be gone in the nearer future than one might think. Thousands of people have realized that and they are trying to do something about it by using renewable energy sources. Some examples of renewable energy sources are solar and geothermal energy. However, the most popular type of renewable energy is wind energy. Wind Energy is becoming of the more predominately used renewable energy sources in

Left Brain vs Right Brain Research Paper Free Essays

Left brain VS Right brain Matthew Stafford Davenport University 10/25/2012 Right Brain Your brain processes and reacts to certain situations in many different ways. This is directly due to either being left brain or right brain. What is left brain or right brain you ask? People use either side to approach solutions to a variety of problems with different outcomes. We will write a custom essay sample on Left Brain vs Right Brain Research Paper or any similar topic only for you Order Now People who are left brain tend to approach each problem with an analytical point of view. Right brain thinkers tend to arise at solutions based on their understanding of relationships. We will discuss how each side of the brain can have negative or positive impacts of solutions, and will give detail information on each side. (Dr. J. Robert dew, 1996) The brain-dominance theory is the study of the relationship between the brains left and right hemispheres. Roger Sperry a noble prize winner first initiated the study in 1996 and has found that each side of the brain processes information quite differently. Most people don’t even realize they only use a certain side of their brain to come to a solution for a problem. Left brain thinkers tend to focus more on data and collecting all information very thoroughly before making a decision. On the other hand, right brain thinkers tend to be quite the opposite. Those who use their right hemisphere of the brain likes to jump to solutions using the perceptions they have already known. Right brain thinkers are more of the laid back, mind relaxing and tend to arrive at solutions using brainstorming and/or uses the cause and effect diagram. Right brain thinkers also identify root causes of problems by using the five-why method. Right brain thinkers also tend to use understanding of relationships to help determine a possible solution outcome and also views quality as a process for continuous improvement in which controls are only temporary. Being a right brain thinker may be negative because the person does not collect all data before arising at solution, this may lead to an unanswered outcome. Being a right brain thinker also has some advantages also. If you have a problem with a certain person, you’re feeling toward that person may be right and this will save you some trouble in the future. Left brain thinkers have a different way at arriving to solutions then right brain thinkers do. They solve their problems through the use of data. Left brain thinkers also have work done by individuals who are assigned to study a system using an orderly approach. Being a left brain thinker can have negative impacts such as not realizing the intent of another person in time to catch what they are up to, this in turn can be very dangerous. But left brain thinkers do develop solutions using logical analyses of all the facts. They also tend to identify root causes of problems by elaborately categorizing possible causes and using strict rules for questioning. Left hemisphere thinkers also try to improve quality by studying specific variations within a system. They establish controls in the early stages of a system that will ensure quality is controlled throughout the systems life cycle. (Herman N, 1982) Verbal and non-verbal processing of information have a huge impact on how well a student may be in school. A left brained student has trouble in expressing themselves in words when working on a creative paper. While right brained students may know what they mean, but often have a hard time finding the right words to say. Right brain students often have to back up everything visually. If it’s not written down they most likely won’t remember it. This is true in my case, I do have hard times remembering something the next day if it is not written down somewhere. I am right brained and had that pointed out a lot by my family and friends. I remember my friend Brent saying â€Å" Matt, you would lose your head if it wasn’t connected to your body. † I also tend to have a hard time following through on a lecture unless I know exactly what it is on and what the overview of the lecture is. I try to first look at the answer of a question then try going back to the actual question. Being right brained for me has a real negative impact on my studies, because, I tend to miss the smaller steps to a problem and more often than not, the steps I’ve missed are often the more important ones. The ways in which I can become a better student and have a more stabilized study pattern is to simply try to adopt more of the left brain patterns such as using all data to arise at a solution. Also being able to actually focus on each problem as they arrive and take time to solve each problem thoroughly will be a great addition to my learning tools. For decades people have been using learning tools to help them arrive at better outcomes to their problems. In today’s world we now have more studies being conducted to help that process be more transitional to more understanding of different methods. The left brain or right brain theory is a great tool to help the person understand exactly how their learning process is conducted and helps them develop new ways to better outcomes. In this paper I have shown in details how each hemisphere of the brain processes information and how each hemisphere can have either a negative or positive impact on a person’s life. References Herman N, (1982) (Los Angles, CA: the whole brain Corporation) Dr. Robert J. D, (1996), Are you a Right-Brain or Left Brain Thinker pp. 91-93 How to cite Left Brain vs Right Brain Research Paper, Essays

Leading for Change Xiant Inc

Question: Describe abut the leadership skills of Paul, the founder member of Xiant Inc.? Answer: Introduction Aswatthappa (202) says that the leadership style is considered to be a universal phenomenon, which can be easily related to the business environment. Many successful companies these days practice leadership to improve the relationship with the clients and staffs. It also helps in improving production activities, and encourages the employees to adopt innovative strategies for business development. The structure of the company institutionalizes the leadership style and defines the roles of the leaders. In the other process, the interpersonal qualities of the leaders are analysed. This helps in defining the actions that is required to be implemented by the leaders for conducting the operational activities. This essay highlights the leadership skills of Paul, the founder member of Xiant Inc. Paul defines has own structure with the way he works for the organization. It was needed the perfect one in work and this trait was visible from him. (Budhwar Sparrow, 2002) Discussion Observation The success of Xiant has been credited to Paul, who is also an efferent leader. Paul always believed in results of the tasks undertaken by him. This had encouraged the leader to work towards adopting and implementing effective strategies that had helped in accomplishing challenging tasks. Under his leadership, Xiant had designed and launched innovative products that were meant to serve the purpose of the end users. Some of the products were I-phone I-pad Macbook OS X Lion Paul had the ability to lead his team and encourage to work towards the goal achievement. In this process, Paul would ensure to direct and guide the staffs to do the right tasks. It was necessary to motivate the staffs, as this will help in developing innovative products required for the getting the tasks done from the members. Some of the many definitions include: to guide, to direct, to begin, to be chief, to influence, to command, to be the first, to go ahead of, to create a path, to show the way, to control actions, to cause progress (Smith, 2015) Interview Caulfield (2012) says that management style of Paul is might not have followed any kind of the university texts and there are few that who can argue that the Paul unconventional leadership that is combined with the sheer genius and innate ability that is present to have the articulation of the vision and it didnt make the Xiant worldwide success. When the unconventional leader is not following the rule of how to be a great leader then Paul says that he can learn from the leadership outlier. In the Paul, one of the leadership traits that could be seen is that of the fostering the greatness in him. Let us consider an example of where my leader of the organization named as Mr. Paul has muttered this quote with the fact that he denied three of the original six employees and also it includes that of the former friends of him stock, when the presence of the no longer assets were there for the prosperity of the company. In one of the books, 50 leaders inspirational quotes on how to corporat e culture drives business success, this quote speaks of this great leader in the words of , every move have made and no kind of the matter there heartless it seems for the good and the betterment of the employees and the products and the employment. He says that it is important for an individual to follow the passion. In an interview, when he was asked about the most successful and motivational leader, then he replied that there should have passion and this passion is not alone sufficient, it has to be followed. Comparing with others, he says that when you do not love something then you can go to the extra mile and work the extra weekend where the challenges that will come will have an impact on the status quo with the fact of it. It is the work that will fulfil the large part of the life therefore, it is important that there should be everyone to go to the work they love. This is about the passion and this passion will make the great love to all and with it will come the greatness of love and life. The passion is thus described by him as something that will be the only way where one is truly satisfied with the great work and great work, as he said, was the only way to get the love towards the work you wish to do. It was all about has fearless pursuit passion that has made him to grow with the intense love and feeling that has brought about the co-founder of Xiant in year 1976. Thus he was motivated for the same for the first 10 years. The passion according to him is the love for the work where one will make a great love to its own work. (Torrington, 2002) Allen (2011) says that one at the entire instance says Paul, requires having the true vision. This true vision lies in the fact that, if there is any kind of things that the Paul would not tolerate and then it was an employee that will never share the vision of it. After the time came, when the Xiants best programmer as mentioned about the requests for the newest Xiant II computer that could not have been done, the co-founder made a huge fire on him without keeping any kind of the hesitation, the true vision lies in the fact that where the jobs says that one need to be made focussed on the Xiant and made sure to the company that there is always the time to have the best output in this ratio with the conclusion of the fact that every employee need to have the constant head for that vision. Because of this, he had also made the better vision applied for it. He will always be remembered as the greatest visionary of all the time. It was his vision that had made him kept in the way that w ill made the company to be grow at such a large level that will make the good of the company and will bring the farsighted visions. Creativity is a kind of thing that is instinct. With the creativity, there is always made the huge impact on these things. Xiant had a slogan and it is think different. It was not he who used to hire the technically engineers then he also had to hire the musicians and the poets with the artists including the historian too who were also the computer scientist. With such kind of creativity, there are various things that will make the beauty of the thoughts. Jobs finished the quote, by saying that while there is someone who will perceive them as a crazy but they are indeed the genius and we can definitely know them. The people who will be thinking of them to be crazy are enough to be like that of the genius to change the world.The jobs had quoted that the greatest artists like Picasso and Newton all have risked failure in their life and if one wants to be all great then they too need to have the risk. In the life, where there also comes the greatest failure in life. When people are all ready to face the failure in life, then there will come the time to have the time risk factors with the risks in life. In the life it is most important that there is to be served the purpose in life. If there is someone who is always keeping an eye on the profit then its more advisable that they should be kept the eye on product. When you focus on the great products, it will create profits. Whenever anything comes in life then one has to make it great all the way. There is sometimes when he has asked himself that whether it will make the great or not. Contingency theory of leadership deals with the technology, suppliers and distributors, government and union. In this case, Mr. Paul suitable created the technology and framed this in the way that will boost up the sure shot success to the company. Others, on the other hand, deal the technology and its devices with form care. (Boxall Purcell, 2003) Reflection Dessler (2003) says that Paul won over the entire planet is like that with the stunning designs and its reflection is made from the technically complex and that is yet simple to use. The devices that were remarkable were with elegant and with each of the touch of the humour there is to keep the lead in the innovation. Mr. Paul believes in the jobs aspirations that will carry with the shined and simplicity and when he made the elimination of the on/off button on iPod, then the music player that was displayed there was made at the simple steps and thus was very easy to carry with the new operations. Paul also had to make the writings on the swipe. Paul believes in the innovation and on all the launches that has made was all innovative. The products when are focused as he used to do then there will have retention time to close the dealings in the different branches. Xiant will be at the top. It is necessary that one must have the intuition and the foresight, in the present time when one of such nature and the people knowns that what people really want is to be known till they are aware of what they really need and how we show them. Software, hardware and all the content will be the intuitively one and connected to one another. Nature loves simplicity and this is what from Kepler, to Newton to jobs said. It is very important to keep the focus on the various fields. When the design in the company is to be manufactured and the company is to made run with it, then the single minded person requires. For example, with the 10 projects on the coming years and jobs stuck down it, seven lists from the list and it left the three one like ipad, iphone and ipod. Paul always used to say that one must have the intuition to learn and grasp about the technicals and there must have the distortion and a good leader is one who makes the people to do that things which people never thought that they can do it. The leaders are known for their kind of vision they keep and always look to the best of the time coming substances where they have said that Paul looks for the passion and creativity. As aforesaid, these two factors have already been mentioned in this paper. Therefore, with the remarkable talents and how the leaders makes their representation is of such nature that will make the good to all kind of the beings and thus the company will share the good profit. (Heathfield, 2015) The reflection of the persona of Paul is like that he believes in the adaptability. Paul has a sense of urgency. It means that whenever he spoke of life and death, it is well known for him they wait for something is always like that thing that will never cut it out. This is the reason why he always sought for the innovative reasons and the building of the products and it was so that the reasons that customers could realized it firstly. He had a vision where he never like to keep the replicate of anything, with all thing new, he look to the products and with this kind of products he wish to launch only these that were the driven factors in it. And these things will magnify the glasses of the Xiant. The visions of the jobs is like that of the person who could look to the far and meeting the demands and the requirements of the company, there will be made a kind of the huge profit or the benefit that will boost the kind of the game in this one. With this, the vision could be explained wi th the focus and attention of him. The most beloved part of him is that do the ability to focus and when one is able to make a focus on the one self then one will be definitely attain the success where everyone gets the time equal to that. Thus is required to keep the great things open, says Paul and has been explained earlier. In the history there are remarkable ones that will put a force on the different parts with it. Once, there is made the time to have the success attained then will come the great things, says jobs. He was the leader of the determination and he always made a fight with the determination and such like. He has always created the loyal teams and with the run of the loyal teams he has thus made the significant in the character of the good and better outputs with the team. He always did the work in the perfect manner and with this he served the company Xiant in the manner that has given a lot to it. Conclusion Misa (2011) says that it can be concluded that Paul was a constructive leader and he always looked to the best ability and output to the Xiant. It was he who with his certain traits and qualities has never tolerated anything that hinders the success and such like things in the very nature. As the co-founder of Xiant, he was well-known for his kind and pleasing personality where he has always seen the good of the many and with the products launch he believed in the successful completion of the company with the delivered ratios. In this time, where the companies have a large competition in the market and there are many giants companies that are emerging then the foremost things that is observed is that there is need to have the placement and cells that will make the company at the very large. (Mullins, 2005) References Aswathappa,HumanResource Personal Management(3rdedition) TMH (2002), 39-50 Beardwell, I., Holden, L. Claydon, T. 2004. Human Resource Management: a Contemporary Approach 4thedition, Harlow UK, FT Prentice Hall Becker, B Gerhart, B. 2015. The impact of human resource management on organizational performance: Progress and prospects. 39 (4), 779-801 Bobinski, D. 2004. The role of HR in strategic planning: Management issues for managers who give a damn. Boxall, P. and Purcell, J. 2003. Strategy and human resource management.Basing stoke: palgrave macmillan. Budhwar, P. Sparrow, P. 2002. An integrative framework for understanding cross national human resource management practices: Human resource management review. 12, 377-403. Deb, T. 2015. Strategic approach to human resource management: Concept tools and application. Dessler, G. 2003. The strategic role of human resource management: Chapter 1. Ninth edition. Pearson education. Farnham, D. 2010. Human resource management and its external contexts: Chapter 1. 3rd edition. Heathfield, S. 2015. What is the importance of human resources management: An effective HR department delivers systems that retain great employees. Kumar, D. 2006. Strategic human resource management: An overview. Lohrey, J. 2015. What is the competency framework in strategic HRM: Demand media. Mayhew, R. 2015. Differences between transactional HR and strategic HR: Small business. Mullins, L.J. 2005. Management and Organisational Behaviour 7thedition, Harlow UK, FT Prentice Hall Price, A. 2015. The Harvard map of HRM: Human resource management. 4th edition. Regis, R. 2015. Strategic human resource management and development: Meaning of strategic HRD management. Smith, A. 2015. Why link HR strategy to the organizational strategy: Azcentral. Torrington, D. 2002. Human resource management: 5th edition. Harlow UK. FT prentice hall.

Research Proposal Global Financial Crisis Essay Example

Research Proposal: Global Financial Crisis Essay Definition and Types of Crises There are four general types of financial crisis (listed below) and many crisis situations may have elements of all of these types or only of one of them. Currency crisis. A currency crisis occurs when there is a speculative attack on the exchange rate, that devaluates domestic currency or significantly depreciates a floating currency. A currency crisis occurred in Europe in 1992 when United Kingdom and Italy were forced to leave the ERM. Banking crisis. A banking crisis happens when investors lose confidence in banks and withdraw their deposits that, causing a run on the banks. Banking crisis can also happen when banks make many bad loans and investments, that they become insolvent. In both cases banks are forced to close or ask government for help. The most famous banking crisis occurred in the United States in the beginning of 1930s, when more than 10,000 banks collapsed. We will write a custom essay sample on Research Proposal: Global Financial Crisis specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Research Proposal: Global Financial Crisis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Research Proposal: Global Financial Crisis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Systematic financial crisis. Systematic financial crisis is a devastating disruption in financial marketing affecting the whole economy. Systematic financial crisis may involve banking and currency crises, as well as breakdown of equity and bond markets and money market institutions. Systematic financial crises happen not so often as other types of crises and usually involve a major political collapse. A systematic financial crisis happened in Serbia in 1993 and was accompanied by hyperinflation. Foreign debt crisis. Foreign debt crisis occurs when a country is unable to keep up the interest payments on the foreign debt. This situation may trigger currency and banking crises. In such cases, countries usually ask IMF for help. This type of crisis happened very often in the modern history. A big crisis occurred in 1982 and affected many Latin American countries, including Mexico, Brazil and Argentina. The survival of many US and UK banks that have invested in these countries has been threatened. Origins of Crises All crises usually have common causes, which include creation of unsustainable economic imbalances in asset prices and exchange rates. Many crises have been causes by a sudden loss of confidence in a banking system. A big financial crisis has occurred in Asia in 1997. A currency crisis has evolved into banking crisis and affected Korea, Thailand, Malaysia, the Philippines, and Indonesia. These countries have experienced several years of constant growth and were known as the success story of the world economy. The banks have made many loans, since profits were rising, as well as equity and property prices. Very few loans defaulted and bankers got too confident in the ability of borrowers to repay their loans. Many young bankers have seen only financial growth and did not expect any other conditions. Asset prices were driven up by speculators who borrowed money to buy assets, which in turn was also driving assets prices up. When an asset bubble burst, it created a chain of bankruptcies. In addition to that, good times have covered up that many banks were poorly run and that a system of banking regulations was inadequate. The financial crisis caused bankruptcies and financial problems for millions of people. Asian crisis was very similar to the current crisis and it is surprising that the Asian crisis in 1997-1998 did not teach the rest of the world a lesson. Asian crisis did raise several questions in the rest of the world, namely whether government should control asset prices. Assets here are referred to such assets as houses and factories, as well as partially to prices of securities, including company shares. Before the crises, the main approach was that government should keep under control retail prices. It was believed that if retail prices are stable they will eventually stabilize asset prices. However, this approach did not take into account asset price bubbles. Such bubbles can cause significant damage to the economy, however, they can be prevented if necessary policies and regulations are in place. Causes of the Current Financial Crisis Just like before the Asian crises of the 90s, financiers, bankers and lawmakers during the last several years, became too confident in the market growth and stability. There were no financial regulations to prevent risk concentration. Macroeconomic policies did not prevent acceleration of systemic risks in the financial system and in housing market. For seven years in a raw interest rates were low and economy growth was high. Compensation is financial companies was based on short-term profit, which stimulated risk-taking. Financial institutions were not properly controlled and supervised. Everyone apparently relied on the market discipline and due diligence, which, as it turns out, has failed. The regulators did not have enough information about the risk activities of the banks. The US Government has temporally banned short selling in more than 900 financial institutions. The ban was lifted in October. Current Credit Crisis Credit crisis is dragging the U.S. and together with them the rest of the world into very deep recession. In the last decades the economic slow-downs were quite mild mainly because the consumer spending was more or less stable, which in turn was possible due to the numerous ways to borrow money. Since 1985, consumer personal savings were steadily declining and debt was tremendously increasing. People were spending and borrowing more and more. No one would be surprised now to see that a person has 15 credit cards. Now the period of great spending seems to be over. Stock markets and house values have dropped and consumers spending decrease. These negative financial factors are driving out of business many companies all over the world. The firms that go out of business lay off workers, who, after losing their job, might not be able to pay their bills and file for bankruptcy. Banks all over the world are not issuing enough credits. Many corporations are not able to obtain working capital which prevents their development. Foreign investors are especially reluctant to invest in developing countries since their economic systems are more vulnerable. Almost no securities are issued and equity prices have significantly declined. Subprime mortgage crises The subprime mortgage crisis is one of the main triggers of the financial crises in the United States. It started in late 2006 and caused a chain effect crisis in the financial markets worldwide throughout 2007, 2008 and 2009. The crisis began with the bursting of the US housing bubble and the big number of defaulted borrowers of â€Å"subprime† credits and other adjustable rate mortgages made to people with less income or poor credit history. The mortgage crisis expressed itself in liquidity problems in the banking system and high number of foreclosures. The loan incentives and the trend of stable price rising in the housing sector pushed the borrower to assume mortgages, thinking that later on they will be able to refinance their loans at more favorable conditions. But when the prices of the real estate started going down in 2006 – 2007, refinancing became less feasible due to the rising adjustable interest rates. Borrowers had to pay more than their property was wort h. During 2007, the default rate rose with 79% compared to 2006 and around 1,3 Million properties in the United States were subject to foreclosure. The first ones to be affected were the mortgage lenders who retained the credit risk – borrowers were unable or unwilling to make the payments. Among such lenders is New Century Financial Corporation, which used to be the second lender in the country. Major banks and financial institutions suffered huge losses. â€Å"The failure of these companies has caused prices in the $6.5 trillion mortgage backed securities market to collapse, threatening broader impacts on the U.S. housing market and economy as a whole.† Subprime lending has become a common practice in the United States during the last decades. Unfortunately, land owners very often lend their lands to people with poor credit ability. Poor credit characteristics put under doubt financial responsibility of some subprime borrowers. In these cases lenders take on risks cooperating with such borrowers. Lenders use different methods to compensate this risk. They use higher interest rate, higher over limit fees, higher yearly fees, or higher late fees as a compensation for poor credit ability. â€Å"These late fees are then charged to the account, which may drive the customer over their credit limit, resulting in over limit fees.† The subprime mortgage crisis is the most severe real estate recession, it is far from over and it is growing drastically spreading in nearly every major US city. The prices of home decline and the number of filing for foreclosure rises with a pace unseen before. According to the SP/Case-Shiller composite index for 20 cities the house prices tumbled 12.7% in February compared with 2007’s rate. According to the National Bureau of Economic Research this drop left around nine million people who have to pay to the lenders more that their properties are worth. This amount is 10% of the mortgage borrowers, another 6% are behind their schedule for payment. Loan providers are foreclosing on many houses amounting to more than a million. The pessimistic opinions is that the amount of defaults will rise more and more and it will exercise pressure on home prices pushing them further down. It is very likely to happen in short term whereas in long term there is light in the tunnel. The falli ng prices have made homes a bit more affordable, the government is also putting efforts into the ongoing real estate issue. Even though measures were taken by the Federal government and the Federal Reserve, the forecast for declining house prices remains until the excess inventory has been gradually removed. But the problem the world economy faces is not only the mortgage market shrinking but the three-fold effect that the price deflation brings along. The first one logically is the tougher credit conditions banks require for loans which, some experts believe, should have been done long time ago. The second effect is worsening of the labor market with rising unemployment and slowing salaries. The wages in 2008 in the private sector have risen with 3.6%. This is the worst result since mid-2003. On the other hand the inflation hit a record of almost 4% for the same period which make the real pay falling. The third effect of the subprime market crisis is pushing the commodity prices high up. The strongest impact the crisis had, was on the financial markets. A chain effect was created around the world. As already mentioned above many banks like Bank of America, Citibank, Merrill Lynch, UBS and others have written off billions of dollars. Bear Sterns Bank was bailed out by JP Morgan Chase with the support of the government. These events made the policy makers in many developed countries to undertake more aggressive actions in order to soften the disastrous impact. The first step was to provide liquidity and undertake saving operations for some troubled bank (above ex.: Bear Sterns Bank). The second step was to cut interest rates. In order the boost the economy and to stimulate investment the Currently the home prices are still going down and the sales are decreasing. The experts do not see the situation otherwise until the credit markets loosen and nobody expect encouraging financial figures from the construction companies. The recessions are healthy for any economy and happen once in a while, however the coming recession is promising to deeper and longer than many before. My biggest fear is that the Great Depression of the 1929 soon will be known as the first Great Depression. As I said already, theoretically there is nothing wrong with recession, it is not a sign of â€Å"sick† economy, however, the unethical behavior of financial institutions that brought about this depression is really disturbing. Several big financial institutions were gambling with their investors’ money and as a result the whole world might be facing were problematic economic conditions soon. It seems like the whole financial system is falling in a domino effect. Some experts blame American government for subsidizing house buying and making houses seem artificially more attractive. Government spent millions of money to encourage home ownership, because it thinks that people who own homes are more stable and obedient. Government thought that home owners will save more than they would do otherwise, however, home-equity loans increased spending. Government subsidies are not the main cause of the inflation, but it certainly helped it to intensify. Government involvement The current financial crises has caused the most severe recession since World War II. The economy is expected to decrease by 1.3% in 2009 and to start slow recovery a year after. The improvement is possible mainly due to the governments’ involvement. IMF Chief Economist Olivier Blanchard believes that by the end of 2009 the unemployment will start decreasing and growth can become positive again. According to IMF, financial sector restructuring is now the main priority for the governments. Obviously governments all over the world have to interfere to save their financial systems. Governments take various measures including interest rate cuts, capital injections, and lending guarantees to restore liquidity, revive the ailing banking system and rebuild investors’ confidence. This financial crisis has shown how interdependent many financial organizations are. If government will not support one collapsing bank, it can lead to collapse of several others. As a results, financi al organizations that have taken excessive risks and have incurred incredible loses are being saved by the governments and tax-payers money. It can convey a wrong message to other organizations that will also decide to take excessive risk hoping that the government will bail them out if necessary. So far government institutions did not come up with the way how to track interdependency and interconnection of the companies in order to notice when they are too connected. In the years after the recession, policy-makers might need to concentrate on the way to decrease domino effect from financial institution’s collapse. Financial analysts are proposing rules to regulate short selling. Many countries have already introduced some restrictions on this practice after the collapse of Lehman Brothers in 2008. Short seller benefits when the prices are decreasing. Some experts say that short selling has caused collapse of several companies and that the policies should be restricted or modified, however, there is no unanimous opinion on this matter among the regulators. U.S central bank has cut interest rates to 1.5%. Loans are becoming more accessible with the lowering of rates, and it creates a hope that more people and businesses put money into the economy. Stock exchanges around the world reacted to the decline in rates, but not very strongly. Virtually all of the world’s governments are now developing and take crisis measures, including collaboration with other countries to mitigate the possible effects of the economic downturn. Perhaps, it is due to the current crisis will occur soul-searching that bring together the positions of many politicians and economists. In the face of modernity such global economic crisis requires global action and concerted action by various countries. However, not everyone understands this fact continuing to swing the â€Å"boat† and risking themselves to â€Å"fall into the water†. Crisis in Europe Germany had a very careful housing market policy, however, it did not escape the crisis. The government now is trying to avoid using taxpayers money without punishing shareholders, but this move might be inevitable. Germany is also very reluctant to nationalize banks. Government of Spain increased deposit guarantees, banned naked short selling, and approved measures that allow government to buy bank shares. The United Kingdom cut interest rates in October 2008, increased level of saving guaranteed. French government provided ˆ320 billion to guarantee bank lending and temporarily banned short selling. Austria provided unlimited guarantee on bank deposits, injected ˆ15 billions to boost bank capital, and limited amount of short selling. Crisis in Middle East Financial institutions in Middle East and Africa have not been as vulnerable to the financial crises as the Western world, because they are not completely integrated in the global financial system. Nevertheless, according to the World Bank, the region experiences decline in growth rates and growth in 2009 is expected to be lower than in 2008 in all countries except from Qatar and Yemen. The growth of Qatar and Yemen will be supported by increasing available natural gas resources. According to IMF, Middle Eastern economy will grow 2.5% in 2009, which is a significant decline compared to 5.9% in 2008 (See Table 1). Middle East and Africa are expected to slow down in their growth, but will not be as affected by the crisis as other developing regions, such as Eastern Europe, Central Asia, East Asia and Pacific, In Egypt, economic growth slowed by 3.6% and unemployment rose to 8.8%. Several big construction projects sponsored by foreign investors stopped in Dubai, which resulted in significant job loss. Countries of Middles East and Africa can be divided into four groups depending on their reaction to financial crisis: First group consists of oil exporters, countries that are financially strong and have small population – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. This group is least vulnerable to the financial crisis. Despite the fact that their stock markets were in trouble during 2008, the governments managed to relax monetary policy – they provided capital and guaranteed deposits to the investors. Decline in oil prices will slow down the growth of these countries, with the exception of Qatar, whose GDP is expected to grow 29%. The growth of Saudi Arabia, Kuwait and the UAE the growth is supposed to be around zero. These countries have large financial reserves, which are expected to help get the countries over the crisis. The governments of these countries got involved on the early stages of the crisis to protect their banking systems and stock markets. They relaxed monetary policy, secured deposits and provided new capital where it was needed. Government of Saudi Arabia introduced a significant investment spending plan and gave capital to Saudi Credit bank to secure credits to people with low income. Second group of countries are also oil exporters, but with relatively large populations – Algeria, Iraq, Iran, Libya and Syria. These countries have entered the crisis with less financial reserves. Iran’s government is using fiscal contraction measures and Algeria is drawing down the reserves. Third group consists of countries that do not export oil – Jordan, Lebanon, Yemen and Djibouti. Lebanon and Jordan depend on tourism and foreign financial aid, both of which have declined. Migrant workers are returning to the countries, which will increase unemployment rate and government will face some difficulties. Jordan announced fiscal stimulus package and guaranteed deposits in the domestic banks. Despite forecasts, Lebanon did surprisingly good in 2008 – its GDP grew 9%. The number of tourists in the first three months of 2009 has increased 50% compared with the previous year. The property prices remain steady. The economic growth and stability is surprising taking into account country’s turbulent political situation. Four years ago, head of the Lebanese central bank prohibited dealing in mortgage-linked securities. Iran and some other reach Gulf countries have provided significant financial aid to Lebanon after its war with Israel in 2006. Lebanon still h as huge national debt which is equal to 162% of its GDP, so country still has a long way to go in order to improve its financial situation. Forth group consists of countries that heavily rely on tourism from Europe – Morocco, Tunisia and Egypt. These countries have already experienced decline of numbers of tourists and worsening of economic conditions. Egypt created a fiscal stimulus package directed to create new jobs and improve infrastructure. Tunisian government is taking measures to increase employment rate.Auguste Kouame, Acting Chief Economist for the MENA Region suggests that countries in Middle East should change their social security policies and create social support programs for the parts of population that have suffered the most from the crisis. Social benefit programs will help economy to recover faster. It is important to support employment and develop infrastructure. Eastern Europe and Central Asia Unlike Middle East, Eastern Europe and Central Asia were hit really hard by the crisis. After several years of growth, financial crisis brought millions people in this region back to poverty. According to the World Bank, by the end of 2010, 35 million people will live in poverty or slightly above it. Albania, Moldova and Tajikistan have been hit especially hard by the crisis. It is obviously imperative for the governments of the Region to meet the urgent and immediate needs of their citizens,† said Shigeo Katsu, World Bank Vice President for the Europe and Central Asia Region. â€Å"Safety net programs – school feeding programs, nutrition, conditional cash transfer projects, cash for work – are important not only in times of crisis, but in the long-run they help to protect the poor and allow governments to avoid other more costly or inefficient policies. And if programs are well targeted, you do not need exorbitant amounts to protect the poor. Their cost – at less than one percent of GDP – can go a long way and is a small price to pay.† Among Eastern European countries, Poland is relatively better of than its neighbors. It has received a $20.5 billion credit from the IMF. But for Poland it was not a bail-out like for Ukraine, Hungary and Latvia. It was a precautionary measure and money were offered only to top borrowers. Polish central bank has ct interest rates from 6% to 3.75%. Polish consumers have relatively fast wage growth and low level of debt, which makes them spending more. Nevertheless, the country faces serious problems: migrant workers are returning from Western Europe which drove unemployment to 11.2%. Polish government is more stable than many others in Eastern Europe. An asset-price bubble has already occurred in Poland several years ago and government has taken necessary measures to prevent it from happening again. Bank regulations have restrained borrowing in foreign currency. Compared to the neighbors in the region, Polish politic and economy looks relatively stable and plans to introduce euro in 2 012-2015. Legal Responses Experts are predicting growing number of civil and criminal lawsuits as a result of the financial crisis. For example, recently there was a billion-dollar lawsuit filed against KPMG, one of the four biggest auditing companies. The claim of the lawsuit is that KPMG’s negligent audits helped cause the collapse of the largest subprime mortgage provider in the United States. New Century Financial Corporation has filed for bankruptcy two years ago and triggered collapse of other firms and banks, which suffered losses from mortgage-linked securities. Debtors of New Century Financial Corporation accuse KMPG in covering up problems of the company, its accounting and financial errors. In 2008, there was a lawsuit against Merrill Lynch because the terms of its acquisition of Bank of America were unfair. AIG was sued for losses of pension. However, it is not going to be easy to satisfy all the claims, since many companies are filing for bankruptcy, like, for example, Lehman Brothers. All the lawsuits against this company are frozen and funds to pay the claims will be limited. Getting money out of nationalized companies, such as Fannie Mae, Freddie Mac and AIG will be also not easy. Lawyers are also planning to press charges against rating agencies that approved many questionable operations. Accusations of executive excess, accounting fraud and lack of disclosure are very popular now. Significant amount of information is becoming public very fast and it becomes easier to find someone to blame. Shareholders and debtors can pursue even companies that incurred significant losses because of their liability insurance. Shareholders have files lawsuits not only against the corporations, but against directors and officers. Rating agencies are blamed for not spotting the subprime crisis. City of Baltimore pressed charges against Wells Fargo bank N.A. for targeting mainly African-American customers in their subprime lending activities. Many experts argue that the crisis was foreseeable and this notion promises much new litigations. There appeared a new area of law – financial crisis law. Law firms are creating financial crisis to help the customers manage their financial difficulties. Some financial observers argue that corporations are using their power and influence to prevent government from passing new regulations and necessary reforms. Many questions remain unanswered still, for example, should there be new laws to prevent institutions to become too big to fail? Should existing large corporations be split up? I my opinion, given the current global financial environment, there should be big corporations. However, the regulations how to monitor such big corporations should change. European Parliament is working now on the new legislature that is supposed to improve risk management and help avoiding financial crisis in the future. Bibliography