The New Century Financial Corporation Finance Essay - Free Essay Example

Sample details Pages: 24 Words: 7122 Downloads: 3 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? In 2006, a boom in U.S. housing prices abruptly reverses course; between the fourth quarter of 2005 and the first quarter of 2006, median U.S. housing prices fall 3.3 percent. Don’t waste time! Our writers will create an original "The New Century Financial Corporation Finance Essay" essay for you Create order These declines accelerate in 2007. The downturn prompts a collapse of the U.S. subprime mortgage industry, which offered loans to individuals with poor credit or no cash for a down payment. More than twenty-five subprime lending firms declare bankruptcy in February and March 2007. The collapse rattles the Dow Jones Industrial Average, which on February 27 loses 416 points, or 3.3 percent, its biggest one-day point loss since 9/11. New Century Financial Corporation, the largest U.S. subprime lender, files for bankruptcy following a series of bankruptcies at smaller subprime lending firms. Analysts worry about the impact debt from subprime mortgages will have on the financial sector, which invested heavily in securitized debt from subprime loans. July 31 2007: Bear Sterns Hedge Funds Bear Stearns, one of the largest investment banks in the United States, announces two of its hedge funds have lost almost all of their investor capital and will file for bankruptcy. The bank previ ously attempted to use money from other parts of its operations to bail out the funds and halted redemptions, but the losses at the funds, which eclipsed 90 percent of original holdings, proved too large. This is one of the first signs of major problems in financial markets beyond the subprime loan industry. August 2007: Subprime woes go global Subprime mortgage problems go global as hedge funds and banks around the world reveal substantial holdings of mortgage-backed securities in their investment portfolios. Frances BNP Paribas announces on August 9 that it cannot value the assets held by three of its hedge funds. Other EU banks follow with similar announcements. The European Central Bank immediately steps in offering low-interest credit lines to these banks August 10 2007: Global Coordination With lending markets drying up around the world, central banks coordinate to inject liquidity into credit markets for the first time since 9/11. The U.S. Federal Reserve, the Eur opean Central Bank, and the Banks of Australia, Canada, and Japan all inject money. On August 15, Countrywide Financial, the largest mortgage lender in the United States, says foreclosures and mortgage delinquencies have risen to their highest levels since 2002. September 13 2007: Northern Rock Northern Rock, a British bank, requests emergency funds from Britains central bank. A run on deposits at Northern Rock ensues, with large lines forming outside bank branches. In February 2008, Northern Rock will be taken into state ownership. Sep 18 2007 : Fed Slashes Rate The U.S. Federal Reserve makes its first in a series of interest rate cuts, lowering the benchmark federal funds rate from 5.25 percent to 4.75 percent. By November 2008, the Fed will cut rates to 1 percent, as displayed on the adjoined chart. In December 2008, they will make another cut, lowering rates to between 0 percent and 0.25 percent. October 9 2007: Market Peak The Dow Jones Industrial Average, whi ch measures the combined stock values of the thirty largest companies in the United States, peaks at 14,164. By February 2009, the Dow will fall to just over 6,500. October 10 2007: Subprime mortgage plan Following a request from President George W. Bush, U.S. Treasury Secretary Henry Paulson and Secretary of Housing and Urban Development Alphonso Jackson unveil a plan called the Hope Now Alliance aimed at stemming a wave of foreclosures on U.S. subprime mortgages by freezing interest rates on some loans. The plan spotlights concerns that variable mortgages, which adjust from a low initial interest rate to higher interest rates over time, will gradually force more homeowners to default on their home mortgages. Critics eventually fault the plan for taking too long to implement and not going far enough to stabilize the subprime market. October 15-17 2007: Super SIV Plan A consortium of banks backed by the U.S. government announces plans for a $100 billion fund to buy and u nwind structured investment vehicles (SIVs), a complicated financial instrument bundling different forms of debt, including debt from subprime mortgages, into tradable securities. Citigroup, Bank of America, and JPMorgan Chase agree to form the fund, which will purchase and value existing SIVs, to help restore confidence in interbank lending markets. The plan crumbles, however, due to lack of demand for the mortgage-backed assets packaged in the SIVs and difficulties coordinating among participating banks. The Treasury abandons the idea on December 24. Jan 24 2008: Real Estate Fear The National Association of Realtors releases data for 2007 showing the largest single-year drop in U.S. home sales in twenty-five years, increasing fears that more Americans will default on mortgage debt and other forms of debt, adding to credit market problems. March 14 2008: Bear Sterns bailout Bear Stearns, one of the largest U.S. investment banks, announces major liquidity problems and is granted a twenty-eight-day emergency loan from the New York Federal Reserve Bank. Investors are fearful that the firms collapse could spark a collapse of the financial sector. Two days later, JPMorgan Chase buys Bear Stearns for $2 per share (later, it will increase its bid to $10 per share). The bank traded at a high of $172 per share about two months earlier. The collapse and sale of one of the most iconic institutions on Wall Street sparks broad fears about the future of the financial sector. March 31st 2008: Paulsons plan Treasury Secretary Henry Paulson proposes a broad overhaul of the U.S. financial system. The plan calls for the possible merger of two major regulatory bodies, the Securities and Exchange Commission and the Commodity Futures Trading Commission. It is also interpreted as giving additional powers to the U.S. Federal Reserve. Many of the long-term regulatory proposals from the plan remain under consideration. July 15 2008 Paulsons Bazooka Following th e collapse of IndyMac, a major Pasadena commercial bank, and with problems swirling around U.S. mortgage lenders Fannie Mae and Freddie Mac, Treasury Secretary Henry Paulson makes reference to his bazooka option. His comments lead many analysts to believe that the U.S. government will step in to stabilize any financial institution so large that its collapse poses systemic risks. September 7 2008: Government Interventions The U.S. government announces it will seize control of federal mortgage insurers Fannie Mae and Freddie Mac, in what is considered Washingtons most dramatic credit crisis intervention to date. The two firms are riddled by mortgage defaults, and federal regulators fear their collapse could lead to massive collateral damage for financial markets and the U.S. economy. September 15 2008: Lehman Collapses On September 15, Lehman Brothers, a major global investment bank and a fixture in the U.S. financial sector for more than 150 years, files for the largest b ankruptcy in U.S. history. The announcement spooks many investors who had assumed the U.S. Treasury would act to prevent a bank the size of Lehman from failing. On the same day, Bank of America announces a $50 billion purchase of the investment bank Merrill Lynch, reassuring investors of Merrills ability to cover its short-term debts and stave off bankruptcy. The following day, credit ratings agencies downgrade AIG, the largest insurer in the United States. On September 17, the U.S. Federal Reserve loans AIG $85 billion. Septemeber 19 2008: Rescue Plans Treasury Secretary Henry Paulson unveils a rescue plan dubbed the Troubled Assets Relief Program, or TARP. The plan aims to use $700 billion of U.S. taxpayer assets to stabilize markets. It also proposes a plan to buy troubled and difficult-to-value assets from the countrys largest financial firms, value them, and resell them, in the hopes of restoring confidence in credit markets. Later, on November 12, Paulson will abandon th e element of the plan aimed at buying toxic assets, focusing the remainder of the TARP assets on recapitalizing financial firms. September 21 2008: Goldman and Morgan convert status The two largest U.S. investment banks, Goldman Sachs and Morgan Stanley, announce they will convert to bank holding companies, exposing them to additional government regulation but also giving them access to more loans from the U.S. Federal Reserve. Combined with the collapse of Lehman Brothers and the sales of Bear Stearns and Merrill Lynch, the move marks the end of independent investment banks, symbols of Wall Streets success in the second half of the twentieth century. September 25-29, 2008: Bank Failures Washington Mutual is seized by the Federal Deposit Insurance Corporation (FDIC) and declares bankruptcy; the next day, the FDIC sells the banks assets to another bank, JPMorgan Chase. On September 29, another major U.S. bank, Wachovia, enters crisis takeover talks with Citigroup. Wachovi a is purchased in early October by Wells Fargo. October 01 -03 2008: Congress acts After the U.S. House of Representatives rejects Treasury Secretary Henry Paulsons $700 billion rescue package on September 29, the U.S. Senate approves revised legislation on October 1. As calls for quick action mount from business leaders, the media, and the U.S. public, the House passes the revised legislation on October 3. EU safeguards: October 02 2008 Ireland approves a guarantee of bank deposits, setting off criticism from EU partners of unfair competition and spurring moves by individual European countries to safeguard banks. October 06-07 2008: Fed Intervention With equity and credit markets both reeling, the U.S. Federal Reserve moves on October 6 to make an additional $900 billion of short-term lending available to banks. The next day, the Fed announces plans to lend approximately $1.3 trillion to companies outside the financial sector. Dow finishes worst week: October 10 2008 Amid spiralling financial concerns, the Dow Jones Industrial Average suffers t he worst week of losses in its history, dropping 22.1 percent. During the course of the week, the U.S. Federal Reserve intervenes in loan markets, extending aid both to banks and nonfinancial firms. The Danish government follows Ireland and guarantees bank deposits; BNP Paribas takes over Fortis, making it the largest bank in the Euro zone; and Iceland passes legislation to nationalize, merge, or force into bankruptcy failing banks. The central banks of the United States, the EU, Britain, China, Canada, Sweden, and Switzerland make coordinated interest rate cuts. G7 leaders coordinate October 08 2011 Finance ministers from the Group of Seven (G7), which includes Britain, Canada, France, Germany, Italy, Japan, and the United States, meet in Washington. They do not agree on a concrete plan to address the crisis, despite growing calls for a coordinated international response. Two days later, several European countries move to nationalize banks and increase liquidity. November 07 2008: Heavey US job losses The United States announces 240,000 jobs were lost in October 2008, the first in a series of announcements of heavy job losses that continues into 2009. By March 2009, U.S. unemployment will reach 8.5 percent, its highest level in over twenty-five years. November 14 2008: Finance Summit Leaders from the worlds Group of Twenty (G20) major economies gather in Washington for a summit billed by many as the second coming of the 1944 Bretton Woods conference. The leaders release a communique outlining plans for further meetings and calling for ambitious reforms to the global financial system. The leaders also make firm statements against trade protectionism, though most of the G20 member states will implement protectionist measures in the months following the summit. January 20 2009: Obamas Economic team Barack Obama succeeds George W. Bush to become the forty-fourth president of the United States. Obama promises to make addressing economic con cerns his top priority and pledges sweeping policy changes to address the crisis, saying only government can lead the United States out of its economic doldrums. He appoints former New York Federal Reserve Chair Timothy Geithner to head the U.S. Treasury and Christina Romer, a professor of economics at the University of California, Berkeley, as the chair of his Council of Economic Advisers. Jan 27 2009: Icelands government collapses A financial meltdown in Iceland, a country that had focused its economy heavily on the financial sector, leads the Icelandic government coalition to crumble. The collapse marks the first political casualty of the financial crisis. By the end of February, the governments of Belgium and Latvia also will collapse due in part to domestic financial turmoil. February 17 2009: Stimulus Spending Amid a wave of global spending on fiscal stimulus, President Barack Obama signs a $787 billion stimulus package into law. The bill aims to boost vital sector s of the U.S. economy, including energy and health care. It wins praise from some economists, who laud Obamas recognition of the urgency of the moment, but others criticize the bill for inefficiencies. Feb 25 2009: Early Moves Under Obama U.S. Treasury Secretary Timothy Geithner unveils the details of a plan for stress tests at big U.S. banks to determine the strength of their balance sheets. The move comes as part of Geithners Financial Stability Plan, which coordinates action among several U.S. regulators. Other parts of the plan include a Public-Private Investment Program, designed to facilitate private-sector investment in troubled assets, and the Term Asset-Backed Securities Lending Facility, or TALF, designed to free up credit to consumers and small businesses. March 18 2009: Quantitative easing The U.S. Federal Reserve announces it will buy an additional $750 billion in mortgage-backed securities and $300 billion in U.S. treasuriesa move known as quantitative easi ngto try to push long-term interest rates down and jumpstart economic activity. On November 3, 2010, the Fed announces it will initiate another round of QE by buying up $600 billion in long-term treasuries, to be completed by the end of June 2011. The Fed says it will also reinvest between $250 and $300 billion of proceeds from its mortgage-related holdings to buy other government bonds. April 02 2009: G20 Summit Following up on Group of Twenty meetings in Washington in November 2008, heads of state from twenty of the worlds leading economies meet in London. At the meetings, the G20 nations pledge to triple funding for the International Monetary Fund, as well as directing new money to trade financing. The leaders do not make any major statement on increasing global stimulus spending, a focus of the United States ahead of the meetings. Following a major push by France and Germany, the leaders do, however, announce their intention to crack down on tax havens and improve internat ional regulation of financial flows. June 17 2009: Financial Regulation Plan Having already moved to tighten regulation on specific aspects of financial markets, including the market for complex derivatives, Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers introduce a sweeping proposal to reform the U.S. financial regulatory system. The plan calls for giving additional oversight powers to the U.S. Federal Reserve, aimed at better enabling the Fed to monitor systemic risk. The plan also calls for higher capital and liquidity requirements for banks, new reporting requirements for issuers of asset-backed securities, and the creation of a council of regulators aimed at coordinating among different existing regulators. September 25 2009: G 20 supplants G8 Nearly a year after the financial crisis began, G20 leaders meet again, in Pittsburgh. The meeting firmly establishes the G20 as the supreme coordinating body for global economic affairs, supplanting the G8. Leaders agree to at least a 5 percent shift in voting rights in the International Monetary Fund from developed countries to developing countries and that IMF leadership should be chosen based on merit rather than nationality. The G20 pledges to develop policies to prevent the re-emergence of unsustainable global financial flows, acknowledging the need to improve savings rates in high-deficit countries like the United States, while spurring consumer spending in high-surplus countries like China. October 26 2009: Greeces Debt problem spiral Greeces new government vows to overhaul its finances after announcing the 2009 budget deficit will be 12.7 percent of GDP, far in excess of the EUs 3 percent limit. Six weeks later, rating agency Fitch cuts Greeces sovereign debt rating to below A grade for the first time in ten years. Public sector riots erupt in Athens in response to EU demands for Greece to outline a strict deficit-reducing plan under threat of sanctio ns. November 26 2009: Dubai world Debt woes Dubai government-owned conglomerate Dubai World requests a six-month standstill on $26 billion in loan repayments, amid rising sovereign debt fears in Europe. The request draws global attention to Dubais tenuous financial position in the wake of a massive building boom. Nearly three weeks later, fellow emirate Abu Dhabi offers Dubai a $10 billion bailout to avoid a default and allow the investment company to negotiate a debt restructuring. Sovereign Debt Crisis Woes Standard Poors downgrades Greeces credit rating to junk, making the country the first eurozone member to lose investment-grade status. The cost of servicing Greeces short-term debt rises sharply. The next day it downgrades Spains rating because of poor growth prospects. German Chancellor Angela Merkel demands Greece toughen its proposed austerity measures before Germany will approve a joint EU-IMF rescue package. April 27 2010: Sovereign Debt Crisis spreads S tandard Poors downgrades Greeces credit rating to junk, making the country the first eurozone member to lose investment-grade status. The cost of servicing Greeces short-term debt rises sharply. The next day it downgrades Spains rating because of poor growth prospects. German Chancellor Angela Merkel demands Greece toughen its proposed austerity measures before Germany will approve a joint EU-IMF rescue package. May 2010: Greek Bailout and Creation of EFSF On May 2, the EU and IMF announce a $146 billion financial rescue package for Greece to address its sovereign debt crisis in exchange for the country enacting strict austerity measures. Less than two weeks later, the EU and IMF agree to create a temporary eurozone stability mechanismthe European Financial Stability Facilityworth $1 trillion. The move comes in conjunction with a decision by the European Central Bank to buy eurozone government bonds on the open market in an effort to provide an added safety net for the euro a rea. June 2010: G20 spending disagreements As the G20 convenes in Toronto, a disagreement appears to sharpen over economic recovery strategies. French President Nicolas Sarkozy and German Chancellor Angela Merkel send a letter to summit host Canadian Prime Minister Stephen Harper urging his support for fiscal tightening among G20 countries. U.S. President Barack Obama stresses the need for continued spending to support growth and warns that excessive government spending cuts could lead to renewed hardships and recession. In their closing statement, member countries agree to halve their annual deficits within three years and stabilize their overall debt by 2016. November 28 2010: Irish Bailout The EU and IMF agree to provide Ireland with a $114 billion rescue package. The fund will help Ireland to manage its sovereign debt and recapitalize its insolvent banking sector, after having been forced into debt as a result of insuring its banks against all losses at the peak of t he crisis in 2008. May 05 2011: Portuguese Bailout The EU and IMF agree to provide Portugal with a $116 billion rescue package. Portugals dependence on foreign debtdemonstrated by a current account deficit that was over 10 percent of GDP in 2009makes it susceptible to sovereign debt contagion. Credit rating agencies predict Portugals exposure to the debt crisis will become unsustainable, and investors agree, ultimately making it too prohibitive for the country to finance itself on global debt markets. July 21 2011: A second Greek bailout Mounting fears over sovereign debt contagion to Italy and Spain force an emergency eurozone summit, where EU and IMF officials agree to provide Greece with a second financial rescue package worth $156 billion. The plan calls for an additional $55 billion in contributions by private bondholders, which could lead to a Greek default. Eurozone leaders also agree to an expansion of the temporary European Financial Stability Facility, which wi ll now be authorized to buy eurozone bonds on secondary markets and to lend directlyat lower ratesto troubled countries before they lose access to market financing. August 07 2011: ECB Bond Buying The European Central Bank announces it will actively implement its Securities Market Program to buy up Spanish and Italian government debt. The moves come amid a worsening eurozone sovereign debt crisis and soaring yields on Spanish and Italian bonds. September 21 2011: Operation Twist The U.S. Federal Reserve announces a new measure to stimulate the beleaguered economyknown as Operation Twist, a Fed policy originally enacted in the 1960sby which it will sell $400 billion in short-term treasuries in exchange for longer-term bonds. The move is part of a continuing effort to keep long-term interest rates down and generate borrowing. The controversial plan provokes a backlash from Republican lawmakers. The Fed also faces internal dissent, as three regional bank presidents vote aga inst the policy. Regulation and Deregulation Gold Standard 1880 As the industrial revolution blossoms in the United States and Europe, the United States adopts the gold standard, making U.S. currency freely convertible into gold at a fixed price. Currency election 1896 Monetary policy becomes a defining issue in the 1896 U.S. presidential campaign. Republican candidate William McKinley runs on a platform calling for industrial growth and a continuation of the gold standard. Democrat William Jennings Bryan runs on a populist ticket calling for bimetallism, in which silver is freely exchangeable for the U.S. dollar. McKinley wins, though skepticism about the gold standard persists. Federal Reserve system created 1913 Following a financial panic in 1907, calls for banking and currency reform lead to the creation of the Federal Reserve System, in which a central government bank lends to regional banks. The primary purpose of the system is to increase financial liquidity and to give the U.S. government better control over its currency. Click here for more on the structure and functions of the U.S. Federal Reserve. The New Deal 1933 The onset of the Great Depression, following the stock market crash in 1929, prompts a series of regulations by the incoming administration of President Franklin D. Roosevelt. First, in April 1933, the United States government outlaws nearly all private ownership of gold and places significant limits on gold exports. One month later, the Securities Act of 1933 requires that any interstate sale of securities be registered with the federal government. In June 1933, the Glass-Steagall Act creates the Federal Deposit Insurance Corporation, which guarantees private bank accounts up to a certain value. The act also gives the Federal Reserve control over the interest rates at which it lends to banks and prevents banks from operating as either insurance companies or investment firms. In June 1934, the U.S. government creates the Securities and Exchange Commission, a body tasked broadly with regulating transactions of securities. Finally, in 1938, the Federal National Mortgage Association ( FNMA, or Fannie Mae) is created in order to improve liquidity in the U.S. mortgage market. New Accounting Standards 1936 New accounting Standards : 1936 The U.S. government forms the Committee on Accounting Procedure, the first major attempt to regularize business performance reporting procedures in the United States. The committee institutes a framework called Generally Accepted Accounting Principles to provide a common framework for financial accounting. The Committee on Accounting Procedure is often considered to have failed in its primary objectives, but it evolves into future bodiesthe Accounting Principles Board in 1959, and then the Financial Accounting Standards Board in 1973that broaden the scope of U.S. accounting regulation. Bretton woods 1944 Following two years of negotiations and half a decade of war, world leaders meet in Bretton Woods, New Hampshire, and draft the first framework intended to govern monetary relations among the worlds largest economies. The conference results in a system of fixed exchange rates, the creation of the World Bank and the International Monetary Fund, and plans for a third organizati on, aimed at governing world trade, that will eventually be founded as the General Agreement on Tariffs and Trade in 1947. Fannie Freddie 1968-70 In 1968, the Federal National Mortgage Association (FNMA, or Fannie Mae), which was created in the late 1930s to purchase and securitize U.S. mortgages, is privatized as a government-sponsored enterprise, a special designation for a private company created by Congress to serve a specific financial role. In 1970, the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac), is created to expand the secondary market for home mortgages and to compete with Fannie Mae. Nixon ends International gold standard 1971 Embroiled in the Vietnam War, the financing of which requires the U.S. to sell its currency abroad and prompts rising inflation, U.S. President Richard Nixon cancels the Bretton Woods system of monetary governance and ends the direct convertibility of the dollar to gold. The move, which includes temporary wage and pric e controls and an import surcharge, becomes known as the Nixon Shock, in part because it was made without consulting members of the international monetary system or the U.S. State Department. In December 1971, a group of ten countries signs what becomes known as the Smithsonian Agreement, pledging that they will allow their currencies to appreciate against the U.S. dollar. Credit Expands 1974 -77 The Equal Credit Opportunity Act, passed in 1974, makes it illegal for creditors to discriminate against loan applicants on the basis of race, gender, religion, ethnicity, marital status, or age. In so doing, it opens credit opportunities to a much larger group of Americans. One year later, the Securities and Exchange Commission establishes a regulation called the net capital rule, limiting broker and dealer leverage (the ratio of debt to capital) to 12-to-1 on their investments. In 1977, the Community Reinvestment Act requires banks and savings and loan organizations to make credit a vailable to low- income households. 1980-1982 Banking Deregulation In 1980, the Depository Institutions Deregulation and Monetary Control Act deregulates interest rates, allows bank mergers, and allows savings and loan institutions and credit unions to offer checking accounts. Two years later, the Garn-St.Germain Depository Institutions Act further deregulates the savings and loan industry by allowing it to offer a new kind of account, the money market deposit account, aimed at helping the industry better compete with money market mutual funds. 1983: Collateralized Debt The financial firms Salomon Brothers and First Boston create the first collateralized debt obligations (CDOs), tradable securities combining debt pooled from bonds, loans, mortgage-backed securities, and other assets. CDOs will figure prominently in the financial crisis of the late 2000s. Savings and loan crisis: 1986 In October, the United States passes the Tax Reform Act of 1986, an attempt to sim plify the income tax code and eliminate real estate tax shelters. The act has unintended consequences, however. It pops the real estate bubble that characterized the first half of the 1980s, and eventually catalyzes a crisis at savings and loan institutions (SLs) across the United States. Over seven hundred U.S. SLs fail between 1986 and 1991. The crisis does not subside until after the 1989 Financial Institutions Reform, Recovery, and Enforcement Act, which introduces new regulation of the savings and loan industry and creates the Resolution Trust Corp oration, a body tasked with unwinding the contracts of failed SLs. Basel 1988 Central bankers from the worlds largest economies publish a set of banking standards, focusing on establishing minimal capital requirements, that is eventually implemented in the United States, Canada, Japan, and ten European countries. It is followed, in 2004, by a broader accord called Basel II which attempts to set up more rigorous capital and risk management requirements. Pooled Credit proliferates 1992 Congress passes the Federal Housing Enterprises Financial Safety and Soundness Act, which requires government-sponsored enterprises Fannie Mae and Freddie Mac to devote a percentage of their lending to affordable housing. This leads to an increase in the overall number of loans being pooled and securitized. Two years later, JPMorgan introduces the first credit default swap (CDS), a credit derivative which can act as a kind of insurance against defaults for investors in credit. Over the next decade and a half, CDSs become the most widely traded credit derivative product globally. The CDS market proves a major source of systemic financial risk when major CDS-issuing firms, including AIG and Lehman Brothers, find themselves in financial trouble. Subprime market grows 1995-99 affordable-housing lending obligations for buying subprime securities, thus encouraging the proliferation of risky housing loans during the latt er half of the 1990s. In September 1999, government-sponsored enterprise Fannie Mae eases credit requirements to encourage banks to extend loans to people whose credit is not good enough to qualify them for conventional loans, further encouraging growth in the subprime lending industry. Bank and Credit Deregulation 1999 In November, the Gramm-Leach-Bliley Financial Services Modernization Act partially repeals the Glass-Steagall Act of 1933, allowing banks to operate other financial businesses such as insurance and investment brokerages. One year later, the Commodity Futures Modernization Act exempts credit default swaps and trading on electronic energy commodity markets from regulation. Greenspan cuts interest rates 2000 2001 Prompted by the bursting dotcom bubble and the resulting recession, and with policymakers fearing deflation, the U.S. Federal Reserve, led by Alan Greenspan, lowers its benchmark interest rate eleven times. Low interest rates lead to an easy-credit environment, encouraging lending practices that will prove to be unsustainable later in the decade. The resulting credit bubble plays a large role in the run-up to the financial crisis of 2008. Sarbanes-Oxley 2002 In response to a series of corporate governance and accounting scandals, Congress passes the Sarbanes-Oxley Act in an effort to improve government oversight of corporate accounting procedures and securities markets. Supporters argue this legislation succeeds in restoring confidence in U.S. securities markets, but critics say it places undue restrictions on U.S. corporations and puts them at a disadvantage internationally. Leverage restrictions lifted 2004 In April, the SEC changes the net capital rule, which had limited broker-dealers and investment banks to a 12-to-1 leverage (the ratio of debt to equity) on investments. The change allows firms with more than $5 billion in assets to leverage themselves an unlimited number of times. Qualifying firms at the time include Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley. In the years that follow, these firms greatly increase the amount of leverage they employ, to a point where in 2007 they routinely use thirty times leverage on investments. None of the five firms survive the 2008 credit crisis intact as independent investment banks. Paulsons Regulatory Plan: 2008 Amid a rapidly unfolding financial crisis, Treasury Secretary Henry Paulson unveils a proposal for a sweeping overhaul of the U.S. financial regulatory system. Paulsons proposal calls for consolidation among the federal and state bodies tasked with supervising financial firms, including a merger of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The plan is also interpreted as giving additional powers to the U.S. Federal Reserve. Many of the long-term proposals from the plan are still under consideration as of early 2009. Beyond legislation, sever al financial events in 2008 work to change the financial regulatory order. In September, the U.S. government nationalizes the mortgage lenders Fannie Mae and Freddie Mac, leading to much more direct government oversight of the firms. Later that month, the investment banks Goldman Sachs and Morgan Stanley convert from private investment banks to bank holding companies, subjecting themselves to additional federal oversight in exchange for new loan opportunities. Obamas regulatory Plan 2009 Having already moved to tighten regulation on specific aspects of financial markets, including the market for complex derivatives, Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers introduce a sweeping proposal to reform the U.S. financial regulatory system. The plan calls for giving additional oversight powers to the U.S. Federal Reserve, aimed at better enabling the Fed to monitor systemic risk. The plan also calls for higher capital and liquidity requirem ents for banks, new reporting requirements for issuers of asset-backed securities, and the creation of a council of regulators aimed at coordinating among different existing regulators. US Financial overhaul Dod Frank Wall Street reform President Barack Obama signs into law a financial reform bill giving the federal government new powers to regulate Wall Street and prevent financial crises. The bill includes creation of a Consumer Financial Protection Bureau and a Financial Services Oversight Council of existing regulators to monitor market stability. The Federal Deposit Insurance Corporation gains power to seize and dismantle troubled financial firms deemed too big to fail, and proprietary trading (when banks invest for their own profit) is banned. The bill also limits the scope of banks investments in hedge funds and private equity funds and requires most derivatives to be traded through public clearinghouses or exchanges. Capitalism in theory and practice 1776 : Wealth of Nations With war raging in North America as Britains colonies there fight for independence, a British economist named Adam Smith publishes the seminal text defending modern liberal economic theory, An Inquiry into the Nature and Causes of the Wealth of Nations. The book, which is often referred to simply as The Wealth of Nations, advocates free-market economies and promotes the idea that individuals pursuing their own economic self-interest can create unintended positive side effects for the overall economy. 1820: Industrial revolution The development of the Watt steam engine in the late eighteenth century spurs a wave of industrial development in Europe and the United States, which comes to be known as the Industrial Revolution. Major changes alter the face of agriculture, manufacturing, and transportation, and rewrite the economic status quo that had dominated Europe for centuries. 1846: Corn laws repealed Britain repeals its Corn Laws, a system of tariffs aimed at bolstering British competition against foreign imports. The move signals a shift away from British mercantilisma theory of trade that holds the global volume of trade is unchangeable and thus focuses on building a positive balance of trade with other nations. It marks a significant step toward increasing free trade internationally. 1848: Communist/Capitalist Divide With unrest erupting across Europe, the German philosophers Karl Marx and Friedrich Engels publish The Communist Manifesto, the founding work of communist economic and social theory; the same year, the British philosopher John Stuart Mill publishes The Principles of Political Economy, which will become the dominant textbook on economics through most of the remainder of the nineteenth century. These two works coincide with the rise of laissez-faire economics, which espouses limited government intervention in the economy and which takes hold particularly in Britain during the middle part of the 1800s . The growing popularity of The Economist, a British news publication founded in 1843 that advocates liberal economic theory, accompanies this tide. 1884 : Fabian Socialism An elite British intellectual group, founded in 1884 and calling itself the Fabian Society after the Roman general Fabius, promotes a strand of utopian socialism drawing from the ideas of Karl Marx but eschewing the violent revolutionary tactics of some of his followers. The group becomes known for its essays and literary works; its ranks include the prominent intellectuals Sidney and Beatrice Webb, George Bernard Shaw, H.G. Wells, and Virginia Woolf. The society promotes ideas such as the nationalization of property and the implementation of a minimum wage. Its followers figure prominently in the founding of the British Labour Party in 1900. 1913: Federal reserve System created Following a financial panic in 1907, calls for banking and currency reform lead to the creation of the Federal Reserve Syste m, in which a central government bank lends to regional banks. The primary purpose of the system is to increase financial liquidity and to give the U.S. government better control over its currency. Click here for more on the structure and functions of the U.S. Federal Reserve. 1917: Russian revolution With World War I raging across Europe, Bolsheviks seize power in a coup in Russia, giving power to Communist groups called soviets (councils), and eventually leading to the establishment of the Soviet Union in 1922. For the better part of the twentieth century, the Communist Soviet Union would stand as capitalisms main rival and a competing power base of economic ideology. Two years after the Russian Revolution, in 1919, the publication of the Fascist manifesto sets the stage for pockets of fascism to emerge in Europe. Fascism and communism duel for supremacy in Germanys Weimar Republic until National Socialism, or Nazism, comes to dominate with the rise of Adolf Hitler. 1922: State Corporatization The idea of corporatism, in which a ruling party mediates between civic groups that represent various economic or social interests, rises to prominence in the early 1920s with Benito Mussolinis ascendance as Italys prime minister. In the corporate economic model, alliances representing different industries and worker groups are part of the ruling mechanism of the state. Corporatist models are implemented in Italy, Spain, Germany, Japan, and other countries in the run-up to World War IIoften accompanied by a brand of authoritarian nationalism known as fascism. The model largely disappears following World War II, but authoritarian economies like China and Russia adopt elements of state corporatism in their post-Cold War models. 1935: Keynes Economic rethink Following the stock market crash of 1929, more than half a decade of economic depression, and a series of massive government interventions in the economy including new regulatory strictures implement ed by President Franklin Roosevelt, a reassessment of markets takes root. The British economist John Maynard Keynes comes to represent the new thinking, suggesting several changes to the status quo of economic thought. Among other points, Keynes argues that capitalism wont self-correct and will require ongoing government oversight. 1944: Brettenwoods Following two years of negotiations and half a decade of war, world leaders meet in Bretton Woods, New Hampshire, and draft the first framework intended to govern monetary relations among the worlds largest economies. The conference results in a system of fixed exchange rates, the creation of the World Bank and the International Monetary Fund, and plans for a third organization, aimed at governing world trade, that is eventually founded in 1947 as the General Agreement on Tariffs and Trade. 1949: Chinese revolution With the Chinese civil war that began in 1946 nearing its end, the Communist Party of China, led by Mao Zedong, seizes power in 1949. It implements a Communist government that alongside the Soviet Union will oppose U.S. capitalist ideology throughout much of the twentieth century. Within a decade, Mao breaks with Moscow, however, in part over doctrinal disputes relating to industrialization and collectivization of agriculture. 1956: Peak Oil A geophysicist named M. King Hubbert theorizes that the rate of oil production in any given geographical area tends to follow a bell-shaped curve. Hubbert correctly predicts that oil production in the United States will peak between 1965 and 1970, lending credence to theorists who use a similar model to predict the date at which oil production will peak on a global scalea theory which becomes known as peak oil. New fears over global oil production coincide with the formation in 1960 of the Organization of the Petroleum Exporting Countries, or OPEC, as a cartel bringing together many of the worlds leading oil producers. 1960: Competing economic t heories Following a period during which Keynesian economic theory reigned supreme, in part due to the work of the renowned economist Paul Samuelson, healthy economic times in the United States during the 1960s coincide with the rise of Milton Friedman, an economist who argues strongly in support of laissez-faire, libertarian economic principles that stand in contrast to the theories of John Maynard Keynes. Friedman also spreads the theory of monetarism, a school of economic thought in which the supply of money in an economy is used as the primary tool to affect the countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s rate of inflation. 1978: Socialism with Chinese characteristics Beginning in 1978, pragmatists within Chinas Communist party, led by Deng Xiaoping, spearhead a series of economic reforms aimed at generating economic surplus and modernizing the Chinese economy. These reforms are generally credited with lifting millions of Chinese out of poverty during the final decades of the twentieth c entury. Analysts in the West commonly characterize these reforms as part of a gradual Chinese shift toward a capitalist system, but Beijing rebuffs such claims, saying Chinese economic liberalization does not undermine the Marxist principles followed by the countrys government or the Chinese Communist Party itself. 1979: Stagflation and Deindustrialization Paul Volcker takes the helm at the U.S. Federal Reserve during a period of stagflationa combination of economic stagnation and inflation. Volcker implements the monetarism espoused by economist Milton Friedman as a counter inflation strategy, provoking a deep recession that accelerates the shift of the U.S. economy from manufacturing to services and lays the foundation for steady growth during the 1980s. 1981: Reganomics and the laffer curve Ronald Reagan assumes the U.S. presidency in 1981, preaching four pillars of economic policy that come to be called Reaganomics: reducing government spending; reducing marginal tax es on labor and income; reducing government regulation of the economy; and using monetary policy to keep inflation rates low. This theory of economics is bolstered by the Laffer curve, a concept popularized by the economist Arthur Laffer that argues increases in taxation rates do not necessarily increase overall tax revenue. 1991: Post Cold War globalization The collapse of the Soviet Union and the end of the Cold War function as enabling mechanisms, spurring a period of globalization and economic liberalization across many countries. This shift is exemplified in 1995 by the establishment of the World Trade Organization, an organization tasked with supervising and standardizing oversight of international trade and liberalizing the global trade agenda. The shift toward globalization comes with discontents, however. The vulnerabilities engendered by a more liberalized international financial network become clear during the second half of the 1990s, as financial crises break out in several emerging economies, including Mexico, several East Asian countries, Russia, and Brazil. The International Monetary Fund (IMF) makes emergency loans to many of these countries, but imposes political restrictions as a condition for the loans. The shock of these crises and irritation over the IMFs loan conditions changes the way affected countries think about reserve capital. Particularly in East Asia, countries build up large reserves of foreign currencies in an effort to stave off future crises and the need for future IMF loansa trend which exacerbates trade imbalances throughout the early 2000s. 1992 WTO The establishment of the European Union signals a period in which several groups of countries seek to integrate their economies with those of their neighbors through regional economic blocs. The European Union expands throughout the 1990s and 2000s. In 1993, the United States, Canada, and Mexico sign the North American Free Trade Agreement, or NAFTA, binding their e conomies much more comprehensively. Other blocs, including Mercosur in Latin America and ASEAN in Southeast Asia, seek to expand their influence over the course of the decade. The culmination of this trend is the establishment of the euro, a common currency adopted by a group of EU member states in 2002. 2000-2006 Deregulation as poilcy By the latter part of the 1990s, with the U.S. economy booming, dissenting opinion about the free markets ability to self-correct has faded. U.S. President George W. Bush presses an agenda, initiated by the Clinton administration, that encourages home ownership as a major economic priority. Interest rate cuts at the U.S. Federal Reserve, made in the wake of the dotcom bubble, encourage easy credit in the United States, eventually fueling a credit bubble. Meanwhile, in 2004 the U.S. Securities and Exchange Commission lifts a regulation limiting the extent to which major investment banks can leverage their investments. Increased borrowing, taken alongside U.S. spending on the wars in Iraq and Afghanistan, work together to balloon the U.S. budget deficit. Eventually, a bubble in the U.S. housing market bursts, bringing major problems for U.S. subprime lending outfits, sparking the 2007-08 financial crisis and leading to a broader rethink of when and how markets should be regulated.

The Horror Of Horror Films - 1288 Words

The joy and excitement of a horror movie is such a great feeling to have. So many people ask why do people enjoy watching horror Films if they are only going to make you get scared and not be happy the whole night? That is something really easy to answer for example, horror movies are one of the genres that will make sure you got your money worth and you didn’t waste money on a movie that you didn’t enjoy. Another fact would be is that when anyone goes into a horror film nobody knows what to expect so that makes them way more excited with the feeling of wanting to watch the horror film. Lastly, the most important one why people watch horror films would have to be because a lot of people while watching a scary movie get a funny feeling all around there body and that feeling is not just physically but it also happens mentally. Everybody who spent his or her money on watching a movie at the theater always wants his or her money worth. Horror films don’t have a prob lem with satisfying there customers because whenever a person goes and watch a scary movie they end up exiting the movie happy because they got scared and they got to feel the excitement of a horror movie. People know that they got their money worth when a scary movie does its job and it doesn’t let you sleep at night or it makes you scared of being in the dark by yourself. That is a prime example as in why a horror film never disappoints because that is the purpose of scary movies to make people scared and letShow MoreRelatedHorror : Horror And Horror Film Essay2210 Words   |  9 PagesMerriam Webster defines â€Å"horror† as â€Å"painful and intense fear, dread, or dismay.† A popular definition of horror film argues that horror is subjective-anything that evokes the emotion of horror in an individual is a horror film to that individual. (Horror Writers Association) This definition is far too dependent on the audience for its categorization. Although, the em otional argument being made in films is an essential factor when defining a genre, it cannot be the only device considered for definingRead MoreThe Horror Of Horror Films1360 Words   |  6 Pagesâ€Å"Horror Films are unsettling films designed to frighten and panic, cause dread and alarm, and to invoke our hidden worst fears, often in a terrifying, shocking finale, while captivating and entertaining us at the same time in a cathartic experience.† Horror films have been to Hollywood since the early days of cinematography. Horror films are very interesting to watch because horror movies are scary and we don t know what is going happen next. That kind of suspense in the movies makes us watch moreRead MoreThe Horror Of Horror Films1228 Words   |  5 Pagesunknown. Horror has been around for years, instilling fear into individuals. It makes us scream. It makes individuals feel as if they are going to die. Horror Films has a story behind their twisted, sick fantasies of monster s, murders, demons, and beast including ghost stories. All of these fictional charterers have a historical representation behind them. The main historical moments behind the horror movies we encountered as children all had a relation to what was going on in the world. Horror filmsRead MoreThe Horror Of Horror Films858 Words   |  4 PagesHorror films are alluring to viewers for many reasons. Horror movies have longed to serve a purpose which is to scare and also provide stories about the dark scary side of life. People watch horror movies to get scared, for the thrill and most of all plain old entertainment. Three main characteristics of horror films are according to Maggie McCutcheon is scaring people into creating morals, Stephen King differs and says that horror films are made to let people’s emotion and fears rein free, andRead MoreThe Horror Genre Of Horror Films Essay1461 Words   |  6 PagesThe horror genre has become a popular genre among the movie industry. It has become a popular genre since it has been evolving throughout the years it has been around, but one of its major climax points was when the subgenre of zombies came into the mix. The zombie genre became very popular in the year 1968 when it was first introduced in G eorge Romero’s film Night of the Living Dead. Night of the Living Dead is one of the most prominent zombie films till this date especially since it has introducedRead MoreHorror Films And Gothic Horrors2537 Words   |  11 Pages HORROR FILMS In this paper, I will be discussing reviews on horror films and gothic horrors using the movie mama as my main example. My aim is to analyse the horror genre and the emotional effects it has on different people. My objectives are to identify and analyse the generic elements of the horror genre, gather people’s opinions about the horror genre and to find out the reasons for these opinions. To aid my research, I have preparedRead MoreThe Horror Of Film Films988 Words   |  4 PagesThe genre of film, found footage, is looked down upon in today’s society. Although the genre has a large following, since some if its top movies are the infamously popular Paranormal Activity series. Some believe the genre is taking the art away from making the movie and replacing it with jump scares all from the view of a handheld camera. Others believe it is a new way to make films cheaply and be able to still deliver the same amount of excitement or even more than your traditional film. Found footageRead MoreEssay on Horror Films727 Words   |  3 PagesHorror films Movies have been growing increasingly more explicit for years. Horror films are no longer based on a cleverly written script with lots of twists and turns, but rather how graphic and twisted the images are throughout the movie. Horror films are appealing to viewers for various reasons. In fact, according to some film critics, â€Å"good† horror films have particular characteristics. Maggie McCutcheon in â€Å"Too Disturbing, Too Shocking,† According to Olson, people particularly enjoy experiencingRead MoreThe Genre Of Horror Films1563 Words   |  7 Pagescategorized a film based on similarities in the narrative elements. There are a wide range of different types of film genres: detective, action, adventure, gangster or crime, science fiction, drama, horror, romance, comedy, musical and so on. It is quite difficult to identify a particular film because a film might have a few of different genres. That is the reason why sub-genres exist. Sub-genres can help us to more c larity in identify the genre of a film. For example, a horror film might involveRead MoreHorror Genre Films586 Words   |  2 PagesHorror Genre Essay Horror Genre Films are unsettling films that are created to frighten and panic the audience. They are there to invoke our hidden worst fears yet entertaining the audience. They deal with our most undiscovered fears, our nightmares, and our vulnerability, our terror of the unknown, our fear of death or our loss of identity. Watching a horror film gives an opening into the scary world, into a passage for the essence of fear itself, but not really being in danger. Common story lines

The Legacy Of Abraham Lincoln - 1217 Words

Abraham Lincoln was born in the year 1809 on February 12th in the town of Hardin County, Kentucky to Thomas and Nancy Lincoln. Growing up Lincoln had no proper education, consequently he read books and educated himself. During Lincoln’s young adult years, he worked a various number of jobs as a shopkeeper, surveyor, and a postmaster. In 1832, Lincoln became a captain of the Hawk War against the Native Americans. Shortly after the war was over, he began his political career and was elected to the Illinois state legislature in 1834. It was also around this time that Lincoln decided to practice law and was admitted to the state bar in 1837. During his law practicing years, he met his future wife Mary Todd (Biogrpahy.com Editors). Lincoln†¦show more content†¦In his work, he states that slavery is an offense to the Almighty and as punishment, God â€Å"scourged war† on both the north and south. Despite the north and south’s differences, Lincoln reminded the American people that they both â€Å"read the same bible† and â€Å"prayed to the same God.† While Abraham Lincoln’s work impacted culture the most, there was one individual that was impacted by his address. His name is Frederick Douglass, an African-American who was an abolitionist and writer. Douglass attended Lincoln’s second inaugural address and later that evening, he attended the inaugural festivities. Douglass later wrote about his experience at the Inaugural Ball when President Lincoln recognized him and called upon him, saying, â€Å"Here comes my friend Douglass.† Lincoln was happy to see him and asked Douglas what he thought of his speech as Lincoln said to him, â€Å"There is no man in the country whose opinion I value more than yours. I want to know what you think of it?† Douglas replied, â€Å"Mr. Lincoln, that was a sacred effort† (Editors pg.639). Abraham Lincoln on inauguration day of his second presidency, delivered his inaugural address to the nation as the result of his election win for the presidency in November of 1860. This event, in and of itself influenced the writing of his work as it is customary for elected presidents on inauguration day to address the nation. Prior to this election, Lincoln wasShow MoreRelatedThe Legacy Of Abraham Lincoln1958 Words   |  8 PagesLeadership and Legacy: Background Research Paper Abraham Lincoln By:Audrey Knight Introduction Great leader and main topic Abraham Lincoln lived in the 1800’s where he accomplished many things in his 54 years of life. He lived in the U.S. through several major events in history and left a legacy that will never be forgotten. As the 16th president of the United States he brought about the emancipation of slavery, preserved the Union during the Civil War, and served the people. His heroic leadershipRead MoreThe Legacy Of Abraham Lincoln933 Words   |  4 PagesSynopsis Regarded as one of the United States of America greatest heroes, Abraham Lincoln is famous for his unique appeal and incredible impact on the nation. He was the United States 16th president. His story is an astounding one rising from a humble background to become the most powerful man the land. However, at the time when his country needed him most, a tragic and sudden death strikes him. He is assassinated. He left a legacy that endured due to his unique humane personality as a leader of the unionRead MoreThe Legacy Of Abraham Lincoln Essay2383 Words   |  10 PagesReport Name Abraham Lincoln paved a path of equality and freedom for slaves and people of the 1800s as well as having a major impact on society and government; Abraham Lincoln s engagement with the public people skyrocketed his career as being a president and a suitable leader to the people of the United States of America. Born on February 12th, 1809 in Hardin County, Kentucky, Abraham Lincoln in his later years would be known as one of the most influential leaders of all time. Abraham Lincoln was bornRead MoreThe Legacy Of Abraham Lincoln1817 Words   |  8 Pagesmore than any of these other men: Abraham Lincoln, the man who freed the slaves. Abraham Lincoln, born February 12, 1809 in Hodgenville, Kentucky, is widely considered to be one of the greatest presidents to have ever been in office. During the course of his presidency, Lincoln not only lead the Union during the Civil War and tried to unify the nation through a harsh time of crisis, conflict, and bloodshed: through his beliefs, his example and his legacy, Lincoln freed the slaves, gave them the rightRead MoreThe Legacy Of Abraham Lincoln Essay2382 Words   |  10 PagesAbraham Lincoln paved a path of equality and freedom for slaves and people of the 1800s as well as having a major impact on society and government; Abraham Lincoln s engagement with the public people skyrocketed his career as being a president and a suitable leader to the people of the United States of America. Born on February 12th, 1809 in Hardin County, Kentucky, Abraham Lincoln in his later years would be known as one of the most influential leaders of all time. Abraham Lincoln was born intoRead MoreThe Legacy Of Abraham Lincoln1826 Words   |  8 Pages Abraham Lincoln’s victory in the 1860 presidential election, was a beacon of hope for many slaves in America. Becoming the 16th president of the United States serving from 1861 to 1865, Abraham Lincoln is one of America’s most celebrated heroes. Holding office during the years of the American Civil War, Lincoln preserved the Union, while creating a new era that consisted of emancipated African American slaves. After winning a victory at the Battle of Antietam on September 17, 1862, he issuedRead MoreLegacy Of Abraham Lincoln s Legacy Essay1582 Words   |  7 PagesLegacy Leader: Abraham Lincoln A legacy leader is someone who has left a positive and lasting impression in society due to his or her leadership qualities and/or traits. Abraham Lincoln is a prime example of a legacy leader due to the leadership traits he displayed throughout his presidency. Abraham Lincoln was the 16th President of the United States. He exhibited great leadership qualities such as integrity, duty, and selfless service. Abraham Lincoln’s Emancipation Proclamation and hisRead MoreThe Legacy Of Abraham Lincoln1500 Words   |  6 PagesAbraham Lincoln has been studied more than any other in American history. In fact, over 15,000 different books have been written about our 16th president. Throughout the pages of these books, President Lincoln is affectionately referred to by many different names, such as the Railsplitter, Honest Abe, and the Great Emancipator. A vast majority of these written works honor Lincoln as one of our greatest presidents. Not everyone feels that way, however. Charles Adams, in his book, When in the CourseRead MoreThe Legacy Of Abraham Lincoln1292 Words   |  6 PagesAbraham Lincoln has been called the greatest president in all of American history. His principles were dedicated to the survival of the United States during one of the most gruesome and bloody wars in the country s history, the American Civil War. During his presidency, he fought for the emancipation of slaves because he believed the institution of slavery was morally unjust. His ideals, which appealed to the founding principles of the country, energized and mobilized the union and kept it aliveRead MoreThe Legacy Of Abraham Lincoln928 Words   |  4 PagesP. Thomas, Abraham Lincoln: A Biography (Southern Illinois University Press, 2008). †¢ David Herbert Donald, We Are Lincoln Men: Abraham Lincoln and His Friends (Simon Schuster, 2004). †¢ Roy Morris Jr., The Long Pursuit: Abraham Lincoln’s Thirty-Year Struggle with Stephen Douglas for the Heart and Soul of America (Bison Books, 2010). 5. Similar Articles: †¢ Mary Frances Berry, â€Å"Lincoln and Civil Rights for Blacks,† Volume 2, Issue 1, 1980, pp. 46-57 (Journal of The Abraham Lincoln Association)

Evaluation and Comparison of Information Systems

Question: Compare the difference between several forms of information systems. A discussion and comparison of: Executive information systems (EIS), Decision support systems (DSS) Management information systems (MIS)? Answer: Evaluation and Comparison of Information Systems Executive Information System (EIS): It is a time of intelligent management support system that provides the business managers the capability to make critical business decisions by facilitating heavy data storage. EIS is most commonly utilized as a tool of proficient guidance by senior level mangers for making important business related decisions. The decision making facilities provided by EIS is mostly unstructured (Ada, Karaman Ghaffarzadeh, 2015). However, it gives guidance to make high level strategic decisions about the major functionalities of the particular organization. EIS extracts summary of the important information from internal systems and combines with external data to take intelligent senior level decisions. Decision Support System (DSS): As the name suggests, it guides a business organizations to make the right decisions (Asemi, Safari Zavareh, 2011). The intelligent support system automatically considers the major operations of the organizations, forecasts, management and planning activities and other functions. DSS focuses on information processing that helps taking semi-structured or unstructured decisions that are beyond the scope of describing in accurate detail. Most of the problems resolved by DSS are often based on qualitative information and uncertain knowledge. Numerous organizations widely use DSS for the purpose of making the major investment decisions. DSS uses data sources comprising of variety of information such as accounting, production, inventory, analytical tools and statistical analysis activities. Management Information System (MIS): It focuses on the major internal operations of a business for managing the functions by the middle level managers. Both MIS and DSS implementation is necessary to a business as MIS suggests the basic theories for decision making while DSS guides the actual process of practical analysis. MIS is utilized for making the operational decisions by staff managers and management professionals (Downing, 2014). On the contrary, DSS can be used my managers and individual at various hierarchical levels of the organization. MIS generates performance reports based on the existing transaction processing systems (TPS) and supports structured decision making. MIS is used in product pricing and stock management decision making activities. EIS best practices: Executive decision making can be used for making last minute major and crucial decisions by analyzing operation data from different departmental sources (Zeng Duan, 2012). EIS can be utilized to access the databases to gather data and efficiently converts them into reports and charts so that executives can make decisions quickly. EIS can gather relevant information from different organizational and departmental levels and converts them into performance charts and reports to provide specialized support in senior level decision making. Therefore, EIS is very useful for company CEOs, executives and senior managers for formulating strategic decisions to strengthen the companys long term performance. Benefits and role of systems to improve competitive advantage: Executive information systems extract data from organizational sources for providing accurate measure of performance using graphs, charts and reports so that the executives of the business can take proper decisions accordingly (Joshi, 2013). MIS and DSS helps in making quicker and more accurate decisions that can improve the operational and functional attributes of the companys business. These information systems assess the market value and the firms competitive position so as to assist the managers and executives to take the next steps based on correct information. References Ada, S., Karaman, E., Ghaffarzadeh, M. (2015). Decision Making Based on Management Information System and Decision Support System. Journal for Studies in Management and Planning, 1(3), 206-217. Asemi, A., Safari, A., Zavareh, A. A. (2011). The role of management information system (MIS) and Decision support system (DSS) for managers decision making process. International Journal of Business and Management, 6(7), p164. Downing, C. E. (2014). Examining the Present and Looking to the Future of DSS and Intelligent Systems. Communications of the IIMA, 3(2), 3. Joshi, G. (2013). Management Information Systems. Oxford University Press. Zeng, L., Li, L., Duan, L. (2012). Business intelligence in enterprise computing environment. Information Technology and Management, 13(4), 297-310