Tuesday, 02 March 2010

EXPLANATION OF HOW WE HAVE COME TO THIS CRISIS

In 2001 produced the burst of the tech bubble, it causes the U.S. Federal Reserve down in just two years, the cost of borrowing of 6.5 1 , thereby having a doping of the housing market begins to take off like beasts. In 10 years the real price of housing is multiplied by two in the U.S.. These exceptionally low interest rates continued for years, which caused banks saw that the business is increasingly made them smaller, then gave a low-interest loans. Thus the decreased net interest income, not offset by the commissions, so they thought they should make more risky loans by charging more interest and increase the number of operations for the small margin multiplied by a large number of operations to become a beautiful figure of profits. To do this, building the housing boom, decided to offer mortgages at a rate of customers called "ninja" (no income, no job, no assets, that is, people without steady income, without fixed employment without property) by charging more interest on the greatest risk he assumed the bank. Moreover, full of enthusiasm, decided to grant mortgage loans worth more than the value of the house that he bought the ninja, because, in the aforementioned housing boom, the house in a few months, would be worth more than the amount given on loan. This type of mortgage, they were called "subprime". They are called "prime mortgages" which have little risk of default. Moreover, as the U.S. economy was going great, the insolvent debtor could find a job today and pay the debt without problems. This approach was well for some years.In those years, buyers were paying the mortgage installments and also as they had been given more money than their house was worth, had bought a car, had been renovating the house and had gone on holiday with family . This, surely, in installments, with the extra money they had charged and, in some cases, which were paid in a botched job or they had achieved. But nevertheless, the risk that banks were incurring very important. Like many banks were giving loans, they ran out of money. The solution was easy: go to foreign banks to lend them money, because something is globalization. With that, the money that I, this morning, I joined the Central Box Office chuck may be that afternoon in the U.S., because there's a bank to which my Savings Bank has lent me money for it provide a ninja.Of course the U.S. does not know that the money comes from my people, and I know that my money would be deposited into an entity like myself Savings Bank, began to be at some risk. Neither does the Director of the Office of my box, who knows, "and presumed" that works in a serious institution. Neither does the President of the Savings Bank, which is only known to have invested some money of its investors in a major U.S. bank. Globalization has its advantages but also disadvantages and dangers. People do not know that Chuck is taking a risk in the U.S. and when he begins to read that there are subprime mortgages, thinks: "What do these crazy Americans!" Furthermore, it appears that there are "Basel Standards, which require banks worldwide that have a minimum capital in relation to their assets.To oversimplify, the Balance of U.S. Bank is: ASSETS LIABILITIES Money Money Box that other banks have lent Credits granted Capital Reservations TOTAL X million X million The Basel rules require that the capital of the Bank not less than a certain percentage of assets.

Mar 2, 2010 12:44:31 AM

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On the advertising On the advertising of milk powder A study in the 70s by British researchers demonstrated the superiority of the growth of infants consuming breast milk for those taking Nestle milk powder. In 1979, 150 international organizations created the IBFAN (International Baby Food Action Network) and International Network for infant, whose objective is to fight against Nestle communication strategy that relies mainly on developing countries, on the alleged superiority of milk powder for milk. In the U.S. the International Nestl boycott committee, constitute some thirty NGOs and churches in 1977 launched a boycott campaign, followed mainly in North America, Britain, Sweden and Germany.A special session of the World Health Organization voted in 1981 an international code for marketing of milk powder. prohibits any advertising from inducing the replacement of breast milk for milk powder. This code, known as the International Code of Marketing of Breastmilk Substitutes was signed in 1984 by Nestl . Since then, the multinational has been accused by NGOs and journalists not to comply, along with other companies. A report entitled Cracking the Code and published in 1996 by the Interagency Group on Breastfeeding Monitoring lists any violations, listed by a network of associations of South Africa, Bangladesh, Poland and Thailand. The continuous IFBAN now regularly publishing a dossier of violations by Nestl under this code.
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Economics for the Economics for the Philosophers The economy, for Aristotle, is the science that deals with how resources are managed or use of existing resources in order to meet the needs that individuals and groups. Its object of study is human activity and, therefore, is a social science. The social sciences are different from pure or natural sciences that their claims can not be refuted or validated through an experiment in the laboratory and therefore use a different mode of scientific method. From here its complexity and high level of uncertainty, using approximations or at least defining the trend in the behavior of economic variables, it is risky venture to predict with accuracy close to 100 , the subject of study "the economic subject "is highly dynamic and an of what" should be ", are typical of normative economics, and as such can not be proved. The economy moves constantly between the poles.Economic science is always justified by the human desire to meet their own ends. This aspect of the definition proposed by Robbins is questionable and is probably the least developed in the history of economic analysis, except, perhaps, by the Austrian School and especially for the production of other goods and services. This concept of cost, beyond the pure concept of money, is typical of economists and is known as opportunity cost. To allocate resources should be a criterion for testing to begin social and economic.