Global Issue of Accounting

Global issue of Accounting Minor Report
???The Effects of Globalization on the Automotive Industry???

Table of Contents
Executives summary 3
1. Introduction 4
1.1 Globalisation 4
1.2 Automotive Industry 4
2. Globalisation on the Automotive Industry 6
2.1 Globalisation of markets 6
2.2 Globalisation of production 6
2.3 Declining trade and investment barriers 7
2.4 The role of technological Change 8
3. Conclusion 10
Reference list: 11

Executives summary
This paper will talk about the effects of globalization on the automotive industry. The world economy is moving toward a world in which barriers to cross-border trade and investment are declining. The globalisation of market refers to the merging of historically distinct and separate national markets into one huge global marketplace. Companies hope to lower their overall cost structure and improve the quality or functionality of their product offering, thereby allowing them to compete more effectively. The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market. In economic terms, the most important are probably the development of commercial jet aircraft and super-freighters and the introduction of containerisation, which simplifies transhipment form one mode of transport to another.

1. Introduction
1.1 Globalisation
A fundamental shift is occurring in the world economy which is moving away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business system. (Kew & Stredwick, 2005, p34-5)
And the world economy is moving toward a world in which barriers to cross-border trade and investment are declining; perceived distance is shrinking due to advances in transportation and telecommunications technology; material culture is starting to look similar the world over; and national economies are merging into an interdependent integrated global economic system. The process by which this is occurring is commonly referred to as globalisation. (Meyer, Mar, Richter & Williamson 2005, p.256)
1.2 Automotive Industry
The automotive industry designs, develops, manufactures, markets, and sells the worlds motor vehicles. In 2008, more than 70 million motor vehicles, including cars and commercial vehicles were produced worldwide. In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in Latin America, 2.4 million in the Middle East and 1.4 million in Africa. The markets in North America and Japan were stagnant, while those in South America and other parts of Asia grew strongly. Of the major markets, Russia, Brazil, India and China saw the most rapid growth.
About 250 million vehicles are in use in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India. In the opinion of some, urban transport systems based around the car have proved unsustainable, consuming excessive energy, affecting the health of populations, and delivering a declining level of service despite increasing investments. Many of these negative impacts fall disproportionately on those social groups who are also least likely to own and drive cars. (Toyota Motor, 2009) Toyota will be the real example in this paper. In 1934, while still a department of Toyota Industries, it created its first product Type A engine and in 1936 its first passenger car the Toyota AA. The company was eventually founded by Kiichiro Toyoda in 1937 as a spinoff from his fathers company Toyota Industries to create automobiles. (Toyota Motor, 2009)

2. Globalisation on the Automotive Industry
2.1 Globalisation of markets
The globalisation of market refers to the merging of historically distinct and separate national markets into one huge global marketplace. Falling barriers to cross-border trade have made it easier to sell internationally. It has been argued for some time that the tastes and preferences of consumers in different nations are beginning to converge on some global norm, thereby helping to create a global market. (Fisher, Hughes, Griffin & Pustay 2006, p.152)
With a major presence with Europe, due to the success of Toyota Team Europe, the corporation decided to set up TMME, Toyota Motor Europe Marketing & Engineering, to help market vehicles in the continent. Two years later, Toyota set up a base in the United Kingdom, TMUK, as the companys cars had become very popular among British drivers. Bases in Indiana, Virginia and Tianjin were also set up. In 1999, the company decided to list itself on the New York and London Stock Exchange. (Toyota Motor, 2009)
2.2 Globalisation of production
The globalisation of production refers to the sourcing of goods and services and quality of factors of production. By doing this, companies hope to lower their overall cost structure and improve the quality or functionality of their product offering, thereby allowing them to compete more effectively. While historically significant outsourcing has been primarily confined to manufacturing, increasingly companies are taking advantage of modern communications technology, and particularly the internet, to outsource service activities to low-cost producers in other nations. (Fisher, Hughes, Griffin & Pustay 2006, p.154)
Toyota has factories in most parts of the world, manufacturing or assembling vehicles for local markets. Toyota has manufacturing or assembly plants in Japan, Australia, India, Canada, Indonesia, Poland, South Africa, Turkey, Colombia, the United Kingdom, the United States, UAE, France, Brazil, Portugal, and more recently, Argentina, Czech Republic, Mexico, Malaysia, Thailand, Egypt, China, Vietnam, Venezuela, the Philippines, and Russia. Toyota has invested heavily in vehicles with lower emissions, for example the Prius, based on technology such as the Hybrid Synergy Drive. (Toyota Motor, 2009) In 2002, Toyota had successfully road-tested a new version of the RAV4 which was powered by a Hydrogen fuel cell. Scientific American called the company its Business Brainwave of the Year in 2003 for commercializing an affordable hybrid car. (Toyota Motor, 2009)

2.3 Declining trade and investment barriers
In late 2001, the WTO launched a new round of talks aimed at further liberalising the global trade and investment framework. The agenda includes cutting tariffs on industrial goods, services, and agricultural products; phasing out subsidies to agricultural producers; reducing barriers to cross-border investment; and limiting the use of antidumping laws. Such trends facilitate both the globalisation of markets and the globalisation of production. The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market. Thus, a firm might design a product I one country, produce component parts in two other countries, assemble the product in yet another country, and then export the finished product around the world. (Kew & Stredwick 2005, p.52)
In 2002, Toyota initiated the “Innovative International Multi-purpose vehicle” project (IMV) to optimize global manufacturing and supply systems for pickup trucks and multipurpose vehicles, and to satisfy market demand in more than 140 countries worldwide. IMV called for diesel engines to be made in Thailand, gasoline engines in Indonesia and manual transmissions in the Philippines, for supply to the countries charged with vehicle production. For vehicle assembly, Toyota would use plants in Thailand, Indonesia, Argentina, South Africa and Pakistan. These four main IMV production and export bases supply Asia, Europe, Africa, Oceania, Latin America and the Middle East with three IMV vehicles: The Toyota Hilux (Vigo), the Fortuner, and the Toyota Innova. (Toyota Motor, 2009)

2.4 The role of technological Change
The lowering of trade barriers made globalisation of markets and production a theoretical possibility. Technological change has made it a tangible reality. Since the end of World War II, the world has seen major advances in communication, information processing, and transportation technology, including the explosive emergence of the internet and World Wide Web. (Griffin & Pustay 1999, p.69)
In economic terms, the most important are probably the development of commercial jet aircraft and super-freighters and the introduction of containerisation, which simplifies transhipment form one mode of transport to another. (Kew & Stredwick 2005, p.60)The advent of commercial jet travel, by reducing the time needed to get from one location to another, has effectively shrunk the globe. As transportations costs associated with the globalisation of production declined, dispersal of production to geographically separate locations became more economical. The real costs of information processing and communication have fallen dramatically in the past two decades. (Kew & Stredwick 2005, p.60-1)
In addition to the globalisation of production, technological innovations have also facilitated the globalisation of markets. Low-cost global communications networks such as the World Wide Web are helping to create electronic global market places. Low-cost transportation has made it more economical to ship products around the world, thereby helping to create global markets. (Kew & Stredwick 2005, p.62)
Toyota has introduced new technologies including one of the first mass-produced hybrid gas-electric vehicles, of which it says it has sold 1 million globally, Advanced Parking Guidance System (automatic parking), a four-speed electronically controlled automatic with buttons for power and economy shifting, and an eight-speed automatic transmission. Toyota, and Toyota-produced Lexus and Scion automobiles, consistently rank near the top in certain quality and reliability surveys, primarily J.D. Power and Consumer Reports. (Toyota Motor, 2009)
In 2005, Toyota(2009), combined with its half-owned subsidiary Daihatsu Motor Company, produced 8.54 million vehicles, about 500,000 fewer than the number produced by GM that year. Toyota has a large market share in the United States, but a small market share in Europe. It also sells vehicles in Africa and is a market leader in Australia. Due to its Daihatsu subsidiary it has significant market shares in several fast-growing Southeast Asian countries.

3. Conclusion
The world economy is becoming more global, the globalisation of markets implies that national markets are merging into one huge marketplace. The globalisation of production implies that firms are basing individual production activities at the optimal world locations for the particular activities. There are two factors seem to underlie the trend toward globalisation: declining trade barriers and changes in technologies.

Reference list:
Fisher G., Hughes R., Griffin R., & Pustay M. 2006, ???International Business: managing in the Asia-Pacific???, 3rd edi, Pearson, Frenchs Forest, NSW
Griffin R.W. & Pustay M.W. 1999, ???International Business: a Managerial Perspective???, 2nd edi,
Addison-Wesley, New York
Kew J. & Stredwick J. 2005, ???Business Environment???, 2nd edi, CIPD, London
Meyer A. D., Mar P.C.M, Richter F. & Williamson P. 2005, ???Global Future???, John Wiley& Son Pte Ltd, Singapore
Toyota Motor, 2009, ???Toyota: Moving forward???, viewed 25th Aug 2009, < http://www.toyota.com/>

Chid and Young Person Development

? Physical development: Gross motor skills (using large muscles such as arms and legs), fine motor skills (precise use of muscles such as hands and fingers).
? Social and Emotional: This is the development of a child??™s identity and self image, the development of relationships and learning the skills of living in society.
? Intellectual/communication: Learning the skills of understanding, communicating with others.

As every child grows at a different rate to each other so do other aspects of their personal development ~ therefore this is just a rough guide to a child and young person development.

Social and Emotional Behaviour from 0~19years:

from birth a baby can respond to touch and sound will recognize a parent or carers voice and will stare at bright shiny objects. Even from a few months old they will smile and engage with their carer and by 4 months can vocalize by ???cooing??™ and ???babbling. From 6 months old an infant will become more interested in social interaction, although that depends on the amount of time spent with other children and his/hers personality, they will also have a fear of strangers and distress at the separation of a parent or carer. By the time they are 9 months old an infant can recognize familiar and unfamiliar faces. From 1 year ???temper tantrums??™ may have begun. They become more demanding and assertive and can express rage at being told ???no??™, they have no idea of sharing and a strong sense of ???mine??™.
From 2~4 years a child is learning to be separated from a parent or carer for short periods of time i.e.: nursery or playgroup which then gives them more social awareness. Some will play in groups of 2 or 3 and will be able to share ideas. Most children between this age group may have close friends and will still play with both genders.
? By 4~7 a child should have started school and will be able to enjoy their independence although still needing comfort and reassurance. By now a good sense of self awareness (both positive and negative) will have been developed. These include fears such as ???things under the bed??™ and ???ghosts??™. Children around this age are able to form firm friendships and have begun to play in separate *** groups, they are fairly confident and know the difference between right and wrong.
? 7~11 year olds are by now starting to understand more about the world and where they belong. Their friendships become very important and are mostly of the same ***. Children of this age become concerned of what people think of them and can often become unsure about changes in settings. Strong signs of independence from parents and family also start to show.
? from the age of 11~16 a young person will be going through a huge transition in his/her life (both physically and mentally). Their bodies are starting to change, which can affect self-esteem and confidence; peer pressure can become a significant influence. Young adolescents become more independent and want to spend more time with friends than family. Mood swings and confrontation become more apparent and the opposite *** becomes of more interest. Between this age a young person could start to think about their future and what they could achieve.
? Between the ages of 16~19 a young person will have developed more of an understanding about life, will be able to give good reasons for their choices and express their own views. Relationships with their parents will have improved although they will still want to spend more time with their friends. As adolescents become more aware of their strengths and weaknesses and will have started to create their own personal identity in society.

Physical Development from 0~19 years (Gross and Fine Motor Skills)

? As a newborn, infants are showing signs of physical development. They can move their head and limbs, will start to grasp fingers and if held in an upright position uses their legs in a stepping movement. By 6 months old an infant can roll from their backs onto their stomachs and push their head, chest and neck off the floor. By 1 year they could be sitting alone without support, reach out for toys and could also be mobile through crawling or shuffling. By this age a child will have started to show hand preference, can click two cubes together and will place the cubes in a box when shown how to. At 18 months a child may be able to walk alone, will push and pull toys when walking and are able to kick, roll and throw a ball. Some children are capable of using a spoon, turn a handle of a door and pull off their shoes.
? between the ages of 2 and 4 year a child will have greatly improved both their gross and fine motor skills. Most young children can jump off the ground with both feet. They can walk up and down stairs with both feet on one step and run without falling. Some children may also be able to pedal a tricycle, aim, throw and catch a large ball and walk on their tiptoes. Toddlers may also be able to follow a simple dancing rhythm. Fine motor skills of a young child between 2 and 4 years may include drawing circles and dots, drawing faces and turning a single page in a book. They are capable of using a spoon to feed themselves, can thread large beads and undo buttons. By the time a child is 4 they are capable of drawing more detailed pictures of people and can cut around an object with scissors.

? From the ages of 4~7 a child??™s fine motor skills may include; putting together a 12 piece jigsaw and are able to button and unbutton their own clothes. By 5 years they are learning to form letters and some are capable of writing their own name with no support. At around 7 years old a child is able to control a pencil in a small area and accurately use a pair of scissors. Some children may have a better understanding of making intricate models. Gross motor skills for a 4~7 year old can include jumping, riding a bicycle. They are able to run quickly, be skilled enough to hit a ball accurately with a bat and balance on a wall or beam. Some children may be capable of roller skating and get up without using their hands for support.

? both skills (gross and motor) are being enhanced by the time a child has reached the age of 11. They will have improved on the physical skills they have already developed. Their body strength will have increased along with their balance and coordination. Children will have increased in both weight and height and some young girls from as young as 8, puberty may have begun. Breasts may start to develop and their menstruation cycle begins. Young adolescents??™ fine motor skills will have enhanced and concentration can be held for longer which enables them to perform more complex tasks. Some children may have developed talents such as music, dancing and playing a musical instrument e.g. piano, cello or violin. A child??™s writing will have improved and should now be learning how to write using ???joined up writing??™.
? During adolescence, young people go through many changes as they move from childhood into teenagers. Between the ages of 11~16 a young girls breasts will have started to develop and will have fully developed between 12~18 years old. A girls menstrual cycle may start as early as 12 and as late as 15. Pubic, armpit and underarm hair will grow equivalent to that of an adults at around 13~14 years old. Boys may begin to notice that their testicles and scrotum are growing and by the age of 16 or 17 their genitals are usually at their adult size. Pubic as well as armpit, leg, chest and facial hair begins to grow at about age 12 and is equivalent to that of an adult about 15 to 16 years. Physically, teenagers become much stronger and develop gross motor skills through a wide range of sports. Fine motor skills could consist of knitting, sewing, along with arts and crafts. By the time an adolescent has reached 19 years old, they could be sexually active and have children themselves. Some could be taller than their parents. A lot of teenagers who are going through these changes could be worried about personal image i.e. weight issues and how they look.
Intellectual and Communication Development 0~19 years
? from birth to 3 years an infant will be capable of a vast amount of communication and intellectual skills. From birth they will cry when hungry, tired or distressed and can stop crying at the sound of a voice. A baby can respond differently to changes in the tone of a voice and will laugh and chuckle when being spoken to by a parent or carer. Infants can blink in reaction to bright lights and turn their heads to a soft light. By 6 months old a child can focus on small objects close by and reach out to grasp them. By the time a child has reached 1 year old he/she will know their name and can understand around 20 words e.g. cup, dog, dinner, as well as being able to understand a simple message such as ???clap hands??™ and ???where are your shoes??™. A 1 year old child will deliberately drop a toy and watch it fall and look in the correct place for toys that have rolled out of sight. A small child can build a tower of 3 blocks when shown; they are also able to turn several pages of a book and can point to a named object as
Well as parts of a body. By 18 months a child can make simple sentences and will have used more than 200 words by the time they have reached age 2. At 3 years a child can paint using a large brush, will also be competent enough to draw a man with a head and cut using scissors. Verbally, a 3 year should be able to count to 10 and can hold a simple conversation.
? Vocally, a 3~4 year old child is able to understand the concept of questions and can ask ???why??™, ???what??™ and ???how??™ They will know different parts of the body and are able to name different animals. Between 4~5 a child speech is fluent and they could be capable of giving you their full name, age and birthday. Some may even be able to give you their address. A few children can copy accents they have heard. Intellectually, a child between 4~8 years old can copy a square shape and write a range of letters; some spontaneously. They will understand the difference between heavy and light. Writing develops and by the age of 8, speech should be fluent and number of children may well be bi-lingual. By now a child should be reading with considerable ease and writing simple compositions. At 12 years, children are comfortable in producing intelligent thought out work and have the ability to transfer information from one situation and use it in another. Several children may be experiencing preference in subjects at school.
? At 12~16, a young adolescent will be entering a crucial stage in their lives, most will be making a transition from junior school to secondary school, there they will develop the ability to use their initiative e.g. taking options at school and may have a clear preference to arts or science. Teenagers become less sociable towards their parents and peers. Communication becomes less and more aggressive. At this age it is important for a young adolescent to fit in and not appear different from his/her peers therefore image and personal appearance becomes more important.
? Between 16~19 years of age young adolescents begin to think about their future. For some, 6th form or college may be an option; others may choose not to pursue further education and go to work. Adolescents develop the ability to speak rather than to ???act out??™ and relationships with parents and peers improve and become more honest and open. Peer group relationships may well be replaced by individual friendships and by this age a number of youths could be experiencing intimate relationships and a small amount may have children themselves

Global Health Care Issues

Addressing the Importance of Health Care and What Further Actions can be taken on the International Scale for Developing Countries
According to Garrett, the revolution started in 1996 as an international AIDS meeting in Vancouver, Canada. It was at this meeting that scientists introduced the extremely benefits to ART and how they can improve a person??™s quality of life and increase their lifespan period (others would later argue that ART would not be as successful in sub-Saharan Africa because they do not have a concept of time and part of the keys to ART is TIME??”any missing dose can have drastic effects on a person??™s overall health and could potentially allow the HIV strain to mutate and become drug-resistant). Since the conference and practically overnight, tens of thousands of men and women in wealthy countries started the new treatments and by mid-1997, the visible horrors of AIDS had almost disappeared entirely in the United States and Europe.
The downside to ART is that it??™s overwhelmingly expensive and because of its price, developing countries almost didn??™t even stand a chance to afford it at the time. Priced in 1996 at about $14,000 a year while still requiring $5,000 a year for tests and medical visits, the treatment just was unaffordable for the majority of the HIV-infected world population. Because of this, between 1997 and 2000, a worldwide activist movement slowly but surely developed to address this problem by putting pressure on drug companies to lower their prices or allow the generic manufacture of the new medicines. The activists demanded that the Clinton administration and its counterparts in the G-8, to pony up money to buy ART and donate them to poor countries. And by 1999, total donations for health related programs (including HIV/AIDS treatment) in sub-Saharan Africa hit $865 million??”up more than tenfold in three years (Garrett, 17; Pfeiffer 12).
While it may seem great that the world recognized in the late 1990s the importance to handle the HIV/AIDS pandemic and how it relates to the world??™s overall health with such incredible donations and many organizations like the Gates Foundation and individual donations are still coming in large and strong, the money is not getting to where it needs to go directly in order to have a noticeable impact. Why Well there are some factors for this. The first factor is that people who donate in large amounts pull out their wallets as an emotional response. An example of this was the tsunami that hit on Christmas Day 2004. Because of the devastation that hit such a developing nation like Thailand, people reached out the best they could and ended up raising over something in the range of 7 million dollars. But knowing that global health is an issue that isn??™t going to go away and keeps making people donate money, the consistency is hard. Garrett even mentions in her article that it??™ll take almost another two to three generations of consistent donations on the same scale that they are being given now (and maybe even more so) before the world will even see a slight dent in improvement for the health standards in developing countries.
Another point that is preventing from developing countries from receiving all the donations and funds necessary are that most funds (specifically) come with strings attached and must be spent according to donors??™ priorities, policies, politics and values. One detailed branch of this is that not all the funds appropriated end up being spent effectively. In an analysis prepared for the second annual meeting of the Clinton Global Initiative in September 2006, Dalberg Global Development Advisors concluded that much current aid spending is trapped in the bureaucracies and multilateral banks (Garrett, 22). Simply stripping layers of financing bureaucracy and improving health-delivery systems, the firm argued, ???could effectively release an additional 15-30% of the capital provided by the HIV/AIDS, TB, and malaria programs??? (Garrett, 22).
This points to yet another problem, which Butler describes as ???stovepiping??? which is when aid goes down narrow channels relating to a particular program or disease (Butler, 754) From an operational perspective, this means that a government may receive considerable funds to support, for example, an ART-distribution program for mothers and children living in the nation??™s capital. But the same government may have no financial capacity to support basic maternal and infant health programs, either in the same capital or in the country as a whole. So HIV-positive mothers are given drugs to hold their infection at bay and prevent passage of the virus to their babies but still cannot obtain even the most rudimentary of obstetric and gynecological care or infant immunizations.
In ???The fight back starts here???, Butler describes how stovepiping tends to reflect the interests and concerns of the donors, and not the recipients, which again brings attention to a previous point made how the recipients in the developing countries get the short end of the straw even with donors best intentions. Disease and health conditions that enjoy a temporary spotlight in rich countries garner the most attention and money. This means that advocacy, the whims of foundations, and the particular concerns of wealthy individuals and governments drive practically the entire global public health effort. This alone is problematic because if the wealthy nations are controlling the effort, then the developing nations facing the brunt of these issues are not able to voice what it is they would like to be achieved most in the effort and address their top priorities in solving such a crisis.
The HIV/AIDS pandemic continues to be the primary driver of global concern and action about health, even if some developing countries may feel as though that the virus is not the greatest threat to their community. At the 2006 national AIDS conference, Bill Clinton spoke and suggested ???If you first develop the health infrastructure throughout the whole country, particularly in Africa, to deal with AIDS,??? Clinton argued ???you will increase the infrastructure of dealing with maternal and child health, malaria and TB. Then I think when you build it up, you??™ll be helping to promote economic development and alleviate poverty??? (Garrett, 23). I must argue against Clinton??™s analysis because there is evidence in some countries, like in Haiti for example, where even though cases of HIV/AIDS have decreased, they have backtracked in every other health focus. In the case of HIV/AIDS donations specifically, it is a stand-alone disease and program??”there are sites for HIV testing, hospices and orphanages, ART distribution centers and HIV/AIDS education centers and if all the donations from WHO or other private organizations solely focuses on these programs, then no money is distributed to help eradicate or even educate about other viruses and diseases infecting the country and back-tracking is almost inevitable.
Another issue facing developing countries in their quest for access to health care and treatment to disease is due to a concept coined ???brain drain???. Non-governmental organizations often contribute to the human resources ???brain drain??? crisis in Africa particularly, when they lure government health workers away into highly paid NGO positions. In Mozambique, this internal ???brain drain??? has had a more severe impact on the local health system then has the more widely recognized international migration of health workers. The NGO salaries may be 5-10 times higher than that of what they were getting in their home country??™s public-health sector salaries while providing more comfortable working environments and benefits (Pfeiffer, 2137). Kadoma is another African country which has seen the effects of ???brain drain???. Eight years ago, there was one nurse for every 700 residents, which seems pretty bad but is nothing compared to the statistics now??”today, there is one nurse for every 7,500 residents (Garrett, 27). Unbelievable!! So in the case of ???brain draining??? what can other NGO??™s do to prevent residents of African countries from losing those who could serve as the highway to their health
A structural-adjustment program should be implemented in the majority of African countries (this program could be applicable in other countries but for the sake of the argument and because of the statistics given, I will focus on Africa). NGOs should strengthen local human resource capacity by working within existing salary structures and complementing local training capacity. Rather than hiring workers out of the public system to work in a parallel program, NGOs can introduce and integrate projects into local systems and fund additional workers in the public system in accordance with the local pay structures. Nongovernmental organizations can also support other incentives to retain staff, such as payment for overtime or after-hours service expansion, or stipends for extra training and additional job responsibilities.
So what where should the targets be directed Instead of setting a smorgasbord of targets aimed at fighting single diseases, the world health community should focus on achieving two basic goals: increased maternal survival and increased overall life expectancy. Why Because if these two markers rise, it means a population??™s other health problems are also improving. And if these two markers do not rise, improvements in disease-specific areas will ultimately mean little for a population??™s health and general well-being.
Laurie Garret, again, supports this point with her reference of Dr. Francis Omaswa, leader of the Global Health Workforce Alliance-a WHO affiliated coalition??”who argues that in his home country of Zambia, which has lost half of its physicians to emigration over recent years, ???maternal mortality is just unspeakable.??? When doctors and nurses leave a health system, he notes, the first death marker to skyrocket is the number of women who die in childbirth. ???Maternal death is the biggest challenge in strengthening health systems,??? Omaswa says. ???If we can get maternal health services to perform, then we are very nearly perfecting the entire health system.??? (Garrett, 33)
Maternal mortality data is a very sensitive surrogate for the overall status of health-care systems since pregnant women survive where safe, clean, round-the-clock surgical facilities are staffed with well-trained personnel and supplied with ample sterile equipment and antibiotics. If new mothers thrive, it means that the health-care system is working,
and the opposite is also true.

Chicana Falsa

Independent Reading
Period 3 PA 10-22-12

Chicana Falsa
Michele M. Serros writes clearly, vividly, and with great humor of her unique Chicana experience. With “Weight Watchers mexi-cuisines,” a sister guessing the values of appliances on “The Price is Right,” and a typical family silenced by old grudges at the funeral of a great-grandfather, one would be forced to think that these poems and short stories are only about Chicanos. For this is a very personal book, a book built on not only her Mexican culture but her American side as well. While reading the book, Serros??™s emotions and devastation captivates the audience, and Serros accomplishes this with amazing success by carefully describing how it feels like to live in a place where your heritage is the most defining thing about you and being split in the middle between two opposing cultures. In a struggle to find herself, she goes through many obstacles in her life and constantly battles the struggle of being a ???Chicana falsa???.
By reading this book, I have learned about Serros??™ Mexican culture. She mentions in the beginning of the book, that her sister ???La Letty, calls her a ???Chicana falsa???. This immediately infers that there are some sorts of expectations that Mexicans feel they have to meet to be a ???real??? Chicano. She calls her that because of her mixed cultures. Michele grew up in California and doesn??™t speak Spanish. To the Mexican community she is too American, and she is too Mexican looking for the American community. Although she does have undeniable American traditions, such as watching American shows with her family and eating breakfast at IHOP, she does have some Mexican customs as well.
It is mentioned in the book that Michele has a deep love for chicharrones, a Hispanic dish that consists of deep fried pork fat. Other things mentioned were ???no tortillera down your street.??? Tortillas are popular amongst Central American countries.
She mentions ???mariachi blaring???. Mariachi being instantly associated with Mexican culture is a traditional Mexican music genre.
As for her family, she has a highly outspoken aunt that tells Michele ???You could never be a writer, let alone a poet.??? Her mother died being an unrecognized artist, and thus becomes Serros motivation to disregard what her aunt has said and to not end up like her mother. Her uncle is said to run his own food truck and is described as the entrepreneur in the family. This implies that her family definitely does not consist of doctors and lawyers, in fact most have never gotten proper education. One would think because of her family??™s past, Serros shouldn??™t have much pressure or high expectations but it is the opposite. She feels that as the American of the family, she has the most pressure and highest expectations due to her endless possibilities.
Her aunt brings up Michele??™s grade and says that she got a D on her last book report. In a short description, Serros illustrates how her sister has drastically changed and how every morning she would be picked by a Mexican Cadillac riding slow and low. Spinning rims and candy paint on the car, driven by men in hair nets and dirty hands. These symbols and images don??™t depict a nice clean environment. On the contrary, when reading this I pictured the stereotypical Mexican gangsters riding in their low cars. This makes me believe that she must not have lived in a good neighborhood and infer that she mustn??™t have gone to a remarkable high school either.

Global Financing and Exchange Rate Mechanisms

Mechanisms pg.1

Global Financing and Exchange Rate Mechanisms

MGT/448

Mechanisms pg.2
Global Financing and Exchange Rate Mechanisms

Countertrade is a different way to complete a sale that is international when currency is just not an option. Barter is a well-known word that involves the exchanging or trading of goods instead of the use of money. In societies, before a currency system was put into place, they mainly relied on bartering goods and services. This type of system was very time consuming and eventually a money system was put into place so they could put a specific value amount on each item traded. They used to have groups that would grow corn and other groups that would raise sheep (Hill,2009). They made agreements to trade amongst each other for what was needed at that time in history. This type of system still goes on to a certain degree but most of the time money is also involved. On a local level the barter system seems to work good even when money is involved in the transaction. However, on a global level when currency is involved it tends to be somewhat difficult because the value of money in different countries make it a problem. We will discuss the basic countertrades through bartering, the strategies, and the different types used.
Countertrade is basically a system that involves bartering. Some businesses in some countries just are not able to accept currency that may not be convertible. They just simply make the transactions work through the system of bartering their goods or services. Some examples of these types of situations have occurred such as a transaction in Saudi Arabia where they agreed to buy over 10,000 jets from Boeing in exchange for crude oil that was discounted for them at about 10 percent below world prices. There was another transaction involving a deal made with the Venezuela government where they had a contract with caterpillar to trade 350,000 tons of iron ore for caterpillar equipment. Another example is the company Philip Morris who ships
Mechanisms pg.3

cigarettes to Russia in trade for certain chemicals. Then those chemicals are traded with China who then ships types of glassware products back to Philip Morris(Hill,2009).
There are different strategies used when making deals through countertrades. The first one is called a defensive strategy. This strategy is used very much when working with different nations to gain support. It is used for the simple fact of gaining alliances. For example, if one state finds itself in some type of trouble then another will come in a supply that state with certain resources to help them out. In return, there is a promise that they will come to support that state sometime in the future to help them out! Another type of strategy is what is considered a passive strategy where a very poor country has to rely on countertrades for supplies. In these circumstances they feel the pressure to keep up with others. Another type of strategy used is one that is called a reactive one. This one involves a poorer country and a wealthy one. The wealthy one offers assistance to the poorer one in the way of support through technological help, and in return has complete access to all of their resources. This one leaves the poorer country feeling like they got the bad end of the stick. The state is almost left dealing with certain types of inferiority fears after the deals. Then last but not least there is a strategy called proactive. The proactive strategy is just about opposite of the reactive one. In this type of situation the poor country takes the initiative to move in a forward direction. If let??™s say for example the poor country somehow finds itself in debt to creditors at some banks, they can work out a deal to mortgage their resources in trade to cover the debt and still use some of their resources to make

Mechanisms pg.4

alliances that may end up helping them out in the future with some types of new development. This is especially good if the poorer country is wealthy in natural resources.
Countertrades can also be broken down into different types. We??™ve already mentioned previously the use of barter. There is also one called counterpurchase. This is a type of purchase that one country purchases some goods from another with the promise that the other will spend some of that money gained on buying some of their products. There is another type of counterpurchase called an offset! An offset is sort of like a countertrade. In this situation they can fulfill their obligation with any firm in the country that the sale is made. This allows the exporter greater flexibility to choose the goods it wants. Then there is yet another called switch trading. Many times when a countertrade is done a country will end up with some additional credits. Switch trading happens when a third-party purchases those additional credits then sells them to a firm that can really use them. Then there is one called a buyback. A buyback is where a firm buys a plant in a country in exchange for using the resources from that plant over a certain number of years(Hill,2009).
Countertrades are a way that some countries deal with each other other than currency for purchases. There are a few pros and cons when it comes to countertrades however. The obvious is that it gives a country a way to barter other than using currency for exchange. Some of the negatives about countertrades are that many countries prefer to deal with cash, so it can be difficult to convince them. Another reason a country may not want to deal with countertrades is that there may be some poor quality or just unusable products that can??™t be sold
Mechanisms pg.5
off for currency. One country made a deal with Hungary and it ended up being bad because about half of the televisions ended up being defective.

references
Hill, C. (2009) International business: competing in the global marketplace
www.globalcountertrade.com

Chicago

Our first stop was in Harlem. It was prominently a black neighborhood with an occasional white or Asian person walking by. As we explored a little more, I noticed that many of the stores were small, privately owned, ???mom and pop??? stores. The overall condition of the neighborhood was disheveled. There weren??™t any new buildings and there weren??™t any stores with recognizable names. For instance, rather than a Jewels, there was Sandy??™s food mart. There was a small playground next to a school where the swings were broken and the slides were rusted. The playground and school, to me, were a reflection of housing discrimination. Based on the conditions of their homes, the value of these houses weren??™t as great as those in perhaps a suburb. Since school system are based on property taxes, the condition of the playground as well as the small size of the school seem too make sense.
The next destination was Chinatown. Here, the population was mainly Asians. Chinatown consisted mostly of adults, although there were a fair number of teenagers. Many of the residents were immigrants who ran their own restaurants of shops. Again, the shops were mostly privately owned, no major superstores were in sight. The creation of Chinatown was the result of segregation in communities. In the 20th century, many whites rejected the idea of integration with minorities causing minorities to form their own communities. Although segregation isn??™t as prominent as back then, there is still a lack of nonAsian residents around Chinatown. The fact that there is a separate community exclusively for Asian residents shows that segregation is still there, but is less noticed or talked about.
The lack of integration in many city neighborhoods is the results of industrialization. As industrialization grew, minorities flocked to the cities in search of jobs. They faced discrimination on many levels where they were not judged on their merit, but by the color of their skin or their origins. Although discrimination is illegal today, it is still deeply rooted in society. Whether consciously or subconsciously, minorities are still being discriminated against. One trip through the city makes this very clear.

Global Financial Crisis

ECOP 3019
Question 5

Stocks tumbled, with the Dow Jones shedding more than 777 points, its worst one day loss as the House of Representatives barred a US$700 billion bailout package. [1] International capital markets collapsed, while the Dollar (USD) rallied on extreme risk aversion. Nations who lacked the foreign reserves to support their liabilities became victims of a credit crunch, while survivors of the Great Depression from the likes of Lehman Brothers and Washington Mutual folded. From all corners of the globe, millions lost their source of employment as economies slipped into the stages of economic contraction not seen in generations. Indeed, the Global Financial Crisis (GFC) was a horrific period that ultimately required extraordinary policy responses to provide liquidity and stabilise global markets.

To cope with the GFC and its aftermath, the Federal Reserve System (Fed) of the United States (US) along with other major central banks including the European Central Bank, Bank of Japan and the Bank of England, has practiced unconventional monetary policy to reduce downside risks to growth and repair crippled markets. By far one of the world??™s largest financial agents, the Fed has been the backbone of the US economy since its establishment in 1913. The institution provides banking oversight, financial services to depository institutions, the government and international bodies in addition to regulating the money supply to achieve maximum employment, moderate interest rates and stable consumer prices, including the prevention of deflation or excessive inflation. [2] As the sole actor of monetary policy in the world??™s most influential economy, the Fed has become an enormous provider of liquidity and stability, not just to US institutions, but to global banking giants as seen recently with the onset of the European debt crisis.

When credit markets froze and banks collapsed in 2008, the Fed lowered interest rates towards zero percent and increased its balance sheet from US$900 billion in September to US$2.3 trillion by December that year (Figure 1). [3] The rapid expansion reflected a massive round of asset purchases, including US Treasuries and corporate securities, to shore up confidence and prevent the annihilation of financial institutions and the economy. Today, that figure is nearly US$2.9 trillion as the Fed has provided stimulus through programs known as Quantitative Easing (QE) and most recently Operation Twist. The logic behind QE involves the Fed increasing the money supply to fund the purchase of US Treasuries to reduce the government??™s borrowing costs, which also lowers the rate of interest consumers and businesses pay on loans and mortgages to encourage spending. Furthermore, forcing interest rates lower negatively affects cash deposit rates, which has encouraged investors to allocate funds in higher-risk assets, namely stocks.
Figure 1: Fed??™s Balance Sheet
[pic]

In contrast to the methods the Fed is pursuing today to spur growth, traditionally, they have established interest rates through open market operations, which inflate or deflate the money supply. Particularly in the case of the GFC, when conventional monetary policy became ineffective, the Fed began buying financial assets, including US Treasuries and Commercial Mortgage Backed Securities (CMBS), to inject liquidity into the economy. These practices are easily distinguished from the usual policy of buying or selling assets to keep interest rates at a determined value. [4] While there are short-run benefits, there is the potential for QE and other asset purchase programs to create long-run inflation that??™s undermined the USD and ability for Uncle Sam to meets his liabilities, prompting Peter Schiff, a renowned investor and Chief Executive of Euro Pacific Capital, to remark ???I am a hundred percent convinced that anybody who has their wealth in US Dollars will be just as broke as the people who had their money with Madoff.??? [5]
Figure 2: US 2-Year Treasury Yield
[pic]

Since the Fed began QE and buying CMBS in the depths of the recession, the USD has weakened in line with a large decline in real interest rates (Figure 2), encouraging investors to seek yield elsewhere. [6] At the same time, growth, while improving, has remained somewhat stagnant, keeping the US jobless rate above eight percent still five years since the first signals of an impending crisis first came to light. As a consequence of a depressed USD, the US inflation rate has begun rising above what??™s deemed to be acceptable. With more USD??™s in circulation, the less purchasing power each one has, resulting in higher prices for goods limited in supply. In the worst case, increasing the money supply may result in hyperinflation, hence why alternative assets that are considered an inflation hedge including Gold (Figure 3) have appreciated. ???I think it is a much tougher call to do more QE this time around,??? St. Louis Fed President James Bullard said last year when economists were calling for additional Fed stimulus to cushion the blow of Standard & Poor??™s US credit downgrade and the European crisis. ???The inflation picture is different this year than it was last year and the risk of deflation is much more remote than it was last year.??? [7]
Figure 3: Spot Gold (USD/oz)
[pic]

There is little doubt that without the Fed??™s and fellow central banks actions, the global economy today could be stuck in an economic downturn that may have exceeded the Great Depression. Without their actions, institutions from the likes of American International Group (AIG), Citigroup and Royal Bank of Scotland could have collapsed under the weight of their toxic assets that would have wiped out domestic savings, killed economies and sent jobless rates in developed states soaring. In fact, since the Fed initiated its first round of QE in early 2009 the S&P 500, a bellwether gauge of US equities, has rebounded as much as 113 percent from its bear market lows, [8] the number of unemployed Americans has fallen by 2.9 million from a record-high of 15.4 million [9] and the nation??™s economy has recorded eleven straight quarters of growth. [10] Indeed, since the US is the world??™s largest economy and is a global centre of finance, its recovery is critical to trading partners, including emerging economies such as Brazil and China.

By March of 2008, Bear Stearns, which before its failure was the fifth-largest US investment bank, began to crumble. The institution was a major participant in the securitisation of ultimately toxic mortgages that remained on its books. At the time, it was deemed by the Fed that its sudden collapse would have a devastating impact on an already stressed financial system that was ill prepared. To prevent a panic, the Federal Reserve Bank of New York provided emergency loans and eventually orchestrated its sale to larger rival JPMorgan Chase. To complete the deal, the Fed established an entity known as Maiden Lane to facilitate the purchase of distressed assets from Bear Stearns that JPMorgan Chase refused to take on its own books. While the transaction was largely a success and prevented a sudden meltdown, the Fed was on the hook to ensure Maiden Lane did not collapse and therefore it provided a US$30 billion credit line. [11]

Soon after JPMorgan Chase??™s acquisition of Bear Stearns, in September, Lehman Brothers became the next domino to fall followed closely by AIG. In the absence of a private buyer, the Fed and US government decided to let Lehman fail, with the view that it would not bring down other institutions. The event, however, stressed AIG, the largest US underwriter of commercial and industrial insurance and counterparty to virtually every global financial institution by entering into credit default swap (CDS) contracts on more than $400 billion of AAA rated securities, [12] to the point of destruction. In what was probably the Fed??™s most controversial decision during the GFC, the central bank bailed out the insurer by establishing Maiden Lane II [13] to purchase AIG??™s highest risk RMBS and Maiden Lane III to cover AIG??™s credit default swaps, a form of insurance, on collateralised debt obligations (CDO) that combined had a market valuation in excess of US$40 billion. [14] The two entities were established with loans from the Fed totalling US$41.8 billion in addition to a US$85 billion credit facility the central bank provided AIG to ensure that the so called ???Too Big To Fail??™ institution remained liquid and could meet its daily obligations.

The Fed??™s involvement in the rescue of AIG and Bear Stearns marked a strategic change in the direction of the central bank. No longer was it an institution that was only involved in the implementation of monetary policy to meet its statutory objectives, but rather the Fed evolved to become an emergency provider of liquidity and stability to the financial system. Importantly, while there is little doubt that without the actions of the central bank the GFC could have been far worse, the actions the Fed has and is continuing to take are far from desirable as a strategy to secure long-term economic growth and prevent futures systemic crises. In fact, with a stronger regulatory framework and a better oversight of financial institutions, the Fed should never have to repeat its actions again and if the US economy continues to recover, they should normalise monetary policy to prevent excessive inflation and restore the purchasing power of the USD by avoiding excess money supply growth to fund asset purchases.

The fact that global governments and central banks deemed it necessary to rescue failing financial institutions in the GFC highlights that there was an abysmal lack of global regulation and capital requirements to ensure that banks did not exceed their operational mandates by betting customer deposits and overleveraging their balance sheets. The events that unfolded have resulted in a great distaste towards capitalism and the world of finance by ordinary citizens of society, who in many cases are struggling to overcome the effects of a depressed global economy, particularly in Europe where state governments are implementing austerity measures to reign in government spending that was supposed to provide stimulus amid the GFC. ???The banking culture has evolved radically, to the point where the perception amongst most members of society is that their actions are driven by the relentless pursuit of earnings with no regard to their potential negative impact on communities,??? said Anson Rosewall, a sales trader at BBY Ltd. ???The fact that banks have taken government cash, while the average person has lost his job and house without help, will probably forever tarnish the reputation of these major institutions.??? [15]

Only years after accepting taxpayer bailout funds, global banks are still taking aggressive risks, which in the future may require renewed emergency actions by central banks to stabilise conditions. Shockingly, JPMorgan Chase, which is renowned for its sound risk management and strength as an institution of finance, recently announced a US$2 billion trading loss tied to synthetic credit securities that were suppose to provide an economic hedge against its portfolio of loans. Chief Executive Jamie Dimon flagged that there were ???many errors, sloppiness and bad judgment,??? prompting renewed criticism that there is still a major lack of regulatory oversight. [16] ???Dimon should resign from his post at the New York Fed to send a signal to the American people that Wall Street bankers get it and to show that they understand the need for responsibility and accountability,??? Elizabeth Warren, a Massachusetts candidate for US Senate said in the wake of the scandal. [17]

The Fed and other central banks have an important role in promoting US and global economic stability. They have provided support to financial markets, helping steer the GFC away from an economic disaster that would have been comparable to the Great Depression. Unfortunately, the policies which the Fed in particular has conducted are not ideal and should not become a standard market management technique to sustain the economy and financial system, both in downturns and periods of sustained growth. Ultimately, they have devalued the purchasing power of the USD that may result in longer-run inflation and it has given the idea to banks that they can reap the rewards of good times and be bailed out when their profitability turns south. Ultimately, the fact the Fed was required to play a major role in bailing out financial firms who are still taking aggressive risks to this day highlights that there needs to a radical restructure of the regulatory system to ensure that no institution is ever allowed to become ???Too Big to Fail??™ again.
———————–
[1] ???Dow Sinks 777 Points As Bailout Plan Fails??? ?© 2008 Forbes.com
http://www.forbes.com/2008/09/29/dow-bailout-selloff-markets-cx_cw_0929transclose.html
[2] ???Mission??? ?© 2009 Federal Reserve System
http://www.federalreserve.gov/aboutthefed/mission.htm
[3] ???Price graph for Federal Reserve System Reserve Balances 11/05/2002 to 11/05/2012??? ?© 2012 Bloomberg L.P.

[4] ???Open Market Operations??? ?© 2012 Federal Reserve System
http://www.federalreserve.gov/monetarypolicy/openmarket.htm
[5] Schiff, Peter. ???Dollar Collapse Peter Schiff???. 27 Feb. 2010. Youtube. http://www.youtube.com/watchv=0yktM4iCz3g
[6] ???Price graph for US 2-YearTreasury Yield 11/05/2002 to 11/05/2012??? ?© 2012 Bloomberg L.P.
[7] Matthews, Steve ???Fed Isn??™t on Brink of QE3 With 2013 Rate Promise, Bullard Says??? Bloomberg L.P. August 17, 2011
http://www.bloomberg.com/apps/newspid=munievents&sid=a2I9Ln9CgKLc
[8] ???Price graph for S&P 500 01/03/2009 to 11/05/2012??? ?© 2012 Bloomberg L.P.
[9] ???Price graph for US Unemployment Unemployed Workers Total 01/01/2009 to 11/05/2012??? ?© 2012 Bloomberg L.P.
[10] ???Price graph for GDP US Chained 2005 Dollars QoQ 01/01/2009 to 11/05/2012??? ?© 2012 Bloomberg L.P.
[11] ???Maiden Lane??? ?© 2012 Federal Reserve Bank of New York
http://www.newyorkfed.org/markets/maidenlane.html#tabs-1
[12] Pittman, Mark ???Goldman, Merrill Collect Billions After Feds AIG Bailout Loans??? Bloomberg L.P. September 29, 2008
http://www.bloomberg.com/apps/newspid=newsarchive&sid=aTzTYtlNHSG8
[13] ???Maiden Lane II??? ?© 2012 Federal Reserve Bank of New York
http://www.newyorkfed.org/markets/maidenlane.html#tabs-1
[14] ???Maiden Lane III??? ?© 2012 Federal Reserve Bank of New York
http://www.newyorkfed.org/markets/maidenlane.html#tabs-1
[15] Miller, Rich ???Capitalism Seen in Crisis by Investors Citing Inequalities??? Bloomberg L.P. January 25th, 2012
http://www.bloomberg.com/news/2012-01-25/capitalism-seen-in-crisis-by-investors.html
[16] Kopecki, Dawn ???JPMorgan Loses $2 Billion on Unit??™s ???Egregious Mistakes??? Bloomberg L.P. May 12th, 2012
http://www.bloomberg.com/news/2012-05-11/jpmorgan-loses-2-billion-as-mistakes-trounce-hedges.html
[17] Thompson, C. ???Elizabeth Warren Calls for Dimon to Resign From New York Fed??? Bloomberg L.P. May 13th, 2012
http://www.bloomberg.com/news/2012-05-13/elizabeth-warren-calls-for-dimon-to-resign-from-new-york-fed.html

Chewing Gum at School

Chewing Gum at School
As John worked on his class work in Ms.Cruz??™s class, while chewing a piece of gum, he is comforted by the teacher to spit out his gum and is given a referral. Frustrated, he packed his work in his back pack to leave to his SLC. On his way out, he notices that the teacher is chewing gum as well and complains to her asking why she can chew gum but he can??™t, and in her defense she replies that she ???just can.???
Being a student myself, I believe that staff administration and students should be treated equally under the rules and regulations of the school, and that if students can??™t chew gum in class, than neither should staff. In many cases, the staff is such hypocrites. The most common excuse a teacher will commonly say that is the reason students cant chew gum in class is because students stick it under their desk. Well maybe if students didn??™t have to hide chewing gum, they wouldn??™t stick it under the desk and instead would throw it in the trash can.
As a matter of fact, academic surveys show that students who chewed gum while taking their final exam have had higher test scores, compared to those who didn??™t. Several teachers have even realized that students who chewed gum required fewer breaks, paid better attention and stayed quiet longer, opposed to those who did not chew gum. Also, chewing gum may help students concentrate because it could help students unconsciously disregard their hunger when they are working in class. All in all, the positive results in chewing gum out weigh the negative consequences and because of this students should be allowed to chew gum.

Global Financial Crisis

Introduction
The global financial crisis came to the forefront of the business world when a number of American banks and insurance companies effectively halted the global credit market which required government intervention.The Sub-Prime Mortgage Crisis was the main cause of the crisis as this caused the instability in both the American and European financial institutes. As the economy was built on credit with companies borrowing money from each other and consumers took advantage of the boom and started to borrow money to buy cars and homes, and at the end of it both investors and mortgage companies was in trouble.

The concept of subprime loans came about in the early 1900s, where loans were given to individuals who were not qualified to get a loan because they had low credit ratings or a poor loan repayment history. Fannie Mae and Freddie Mae were the leaders in the mortgage industry in the 1990s as they were promoting home ownership to those individuals who was in the low income brackets which was not normally done by the banks. This was because Subprime loans had a higher interest rate than prime rates on traditional loans. This meant individuals had to pay additional interest payments over a longer loan period and in some cases individuals was only paying the interest and never paying the principle of the loan. The financial crisis is what really exposed the flaws in these credit rating procedures.

How it began.
In September 2008, Fannie Mae and Freddie Mac two well knew Mortgage Company was taken over by the government to ensure the financial stability. Lehman Brothers filed for bankrupt, Bank of America was bought over by Merrill Lynch and American International Group (AIG) suffered when its credit rating had reduced and the Federal Government had to inject 85 billion dollars to stop it from collapsing. Soon after, JP Morgan Chase agreed to buy the assets of Washington Mutual which appeared to be the biggest bank failure in history. This factor caused a major instability in the stock markets and there was a dramatic decrease in market value in both the United States and Europe. Consumer spending began to fall and the banks became more unlikely to approve loans, as the many countries began to fall into a recession.

Ireland Financial Crisis

One of the biggest casualties of the crisis was Ireland, since the mid-1990s Ireland had enjoyed a prolonged boom by which their economy grew by 6% from 2007 to 2008, due to a low corporation tax rate, low Electronic Communication Network rates and other factors. Then in September of 2008 the Irish government finances began to show signs of trouble deficits increased, many businesses closed and unemployment increased and then they made an announcement that for the first time since the 1980s that they were having a major economic crisis that caused the country to go into a recession.? Since the Irish economy was so closely tied to the US economy which gave over 33% of inward investment into the Irish manufacturing companies. So, when U.S investment bank Lehman Brothers fell, Ireland became the first country in the economy European Union to officially enter a recession as declared by the? Central Statistics Office.

Effects of the crisis

When the crisis hit the Irish businesses began to shut down, and the Irish Stock Index fell which causes a number of immigrants to leave. Both residential and commercial property markets took a severe downfall with both sales and property values collapsed. This caused a decline in the construction sector which since the 1990s was the backbone to the Irish economy as it accounted for approximately 25% of the nation??™s Gross Domestic Product (GDP). The rapid decline in construction caused unemployment to increase by 11% and consumer spending to fall. Also, the banking sector in Ireland was affected where banks lost money due to bad debts and struggled to repair their balance sheet. Many of them have been nationalized and others are awaiting naturalization. Also a series of scandals came out in the open, one involving the Anglo Irish Bank where the Chairman resigned after failing to disclose ?81 million in loans which was loaned to another lender over the course of an eight year period.

Bailout

In November 2010, after two years of economic troubles, Ireland finally agreed to accept a rescue deal package of ?†85 billion, from the European Union and the International Monetary Fund to tackle its budget and banking crisis. The purpose of the external financial support is to help return the economy to sustainable growth and to ensure that they have a healthy functioning banking system. ?†35 billon of the total package was used to support the banking system; ?†10 billon was immediately used to inject fresh capital against expected loan losses and ?†25 billon was made available as a contingency fund, effectively an overdraft facility, to be drawn down by the banks as and when required. The remaining ?†50 billon was used for budgetary financing needs.
In February 2011, European Financial Stability Facility (EFSF) released the first tranche of ?†3.6 billion, from the euro zone rescue fund.

American International Group

On an international level Ireland was one of the biggest casualties, but on a more domestic level in the United States of America, American International Group was hit hard by the crisis. AIG is one of the world??™s leading international insurance corporations, that operate in over 130 countries and its headquarters located in New York City. AIG was once considered the fourth largest companies in the world. It focuses on four different markets: life insurance and retirement services, financial services, general insurance and asset management. This company was founded in Shanghai, China 1919 by Edwin Cornelius Vander Starr and when the business became successful he later expanded it to Asia, Latin America, Europe and the Middle East. In 1962, Starr gave the management of the U.S. Holding company to Hank Greenberg. He focused on selling insurance to a more corporate coverage than personal insurance. In 1969, Greenberg became Starr??™s successor, and later the company went public with their shares being listed on the New York stock exchange.
Over the past decade, banks and investment banks would put together risky sub-prime mortgages that they would have sold and then sell these to investors or banks in Europe. To make these mortgage investments more profitable they would purchase an AIG Credit Default Swaps or also known as debt insurance contracts.?  AIG??™s credit default swaps were insurance contracts which were not regulated. Normally these insurance policies were for three to five years. AIG did not have any of the capital reserves required to back up these policies, if they were to pay out any of these claims. Even though, AIG was not required to hold any capital in reserve as collateral on its credit default swaps as long as they could maintain a triple-A credit rating. The banks that purchased these credit default swaps had been assure that their national regulators were holding only triple-A credits mortgage products instead of the sub-prime mortgages that they were really holding which were a high risk. This proved to be their one of their downfalls.

AIG During the Crisis

On September 2008, with the collapse of some respected financial institutes such as Lehman Brother caused shock waves throughout the world and weakened investors??™ confidence in AIG. It became impossible to access capital as the credit markets deteriorated rapidly. AIG??™s credit ratings began to fall again, which triggered the New York regulators to lend them $20 billion. Soon after that AIG was faced a severe liquidity crisis. Because AIG was one of world??™s largest insurers, that was linked to many large commercial banks, investment banks, and other financial institutions through counterparty credit relationships on credit default swaps and other activities such as securities lending that its potential failure created systemic risk. The Federal Government concluded that if AIG failed it would cause severe ramifications, soon the 16 September 2008; they created a two year credit facility for which AIG and guarantee to loan up to $85 billion. The government in exchange took up to 79.9% equity ownership of AIG through preferred stock. The federal seizure of AIG represents the first time ever that a private insurance firm was controlled by the government. On October 8 2008, the Federal Board provided another bailout to the sum of $37.8 billion to help deal with the rapid declining supply of cash. On November 10 2008, AIG receives rescue package grows up to $150 billion which includes a $60 billion loan, a $40 billion capital investment and about $50 billion to buy mortgage-linked assets guaranteed by the insurer through credit-default swaps, the government also lowered their interest rate and gave them three (3) years to pay back the loan. AIG received a fourth bailout on March 2 2009, the government once again restructured it bailout of $30 billion more. With all the support AIG received from the Federal Government, they have modified their operations and structure to strengthen their financial position so that they can meet its working capital needs to repay the U.S. taxpayers. Since September 2008 AIG main objective was in restoring their financial strength, instilling a performance management culture to help reduce any unforeseeable risk and repaying the US taxpayers. AIG has already repaid some of the bailout loans received from the other some financial institutes.

The Impact of AIG

The collapse of AIG has had a major impact on the mortgage market and the banking system worldwide. Unemployment rose, homes were repossessed due to homeowners not being able to keep up with there mortgage payments, real estate prices decreased. There is a lack in confidence between the banks when it comes to lending money to each other. Government had to intervene to implement banking systems and policies.

Monetary and Fiscal Policies

The monetary and fiscal policies are two of the most important functions of the modern governments. The monetary policy centers on increasing or reducing the monetary supply to fuel the economy, while the fiscal policy uses the expenses of the government and the tax rate to fuel the economy.

Monetary Policy is used by the government to measure economic activity, specifically by manipulating the money supply and interest rates. This policy is directed to a nation??™s central bank, and in the U.S. it??™s responsible for the Federal Reserve System, which uses three main items: open-market operations, discount rate and reserve requirements. Open-market operations are used to stabilize the prices of government securities. These government securities are normal just short-term such as treasury bills. The discount rate is the interest charged by the central bank. By raising or lowering this rate alters the rates that the commercial banks charge on loan, it can also be used as a tool to combat recession and inflation.

Fiscal Policy is used by government to measure the stability of the economy, by altering the government expenditure as well as taxes. If the economy is slow, government can lower taxes, this way taxpayer will have extra cash to spend, and with an increase on public spending it would in return put cash back into the economy. Fiscal policy is more effective at stimulating a failing economy than an increasing one, partly because spending cuts and tax increases are unpopular and partly because of the work of the economic stability.? 

Chevrolet Aveo Replacement

During the research process for the project, I??™ve tried to present the most honest information about all of my three competitors, based upon their selling strategies and promotions offered to customers. I think there should be no trouble of them in the following years to come, and believe that my own topic cars will make their stand in the rough surface of the current situation of the economy.
On the other hand, I believe that among many other carmakers in the U.S., either domestic or foreign, there are always products exist which make customers doubtful about their low safety and reliability characteristics. I want to talk more specifically to point out the weaknesses of 2011 Chevrolet Aveo

The 2011 Chevrolet Aveo looks as if it could be a front runner in the subcompact economy car segment. The car comes up with positive economy point, and it??™s nearly affordable for all levels of customers. Secondly, with the rate of gas-consuming as 27 miles per gas in city, and nearly 35 miles per gas in freeway, the Aveo is gas-efficient, and earns positive impression, at least, in customer decision-making process. The problem for the Aveo is that even in this bargain-basement class of vehicles, there are still better choices. Even though Chevrolet tries to impress customers with various color choices, available high-technology features such as bluetooth connection and a sunroof, and the faux carbon-fiber interior option, these options aren??™t enough offset the Aveos bland styling and middling performance. Generally, customers dont expect blazing acceleration in this class, but rivals such as the Ford Fiesta and Kia Soul offer more conveniences. Part of the reason is that they have better-performing manual gearboxes as the Aveos is geared rather tall, blunting performance in highway merging and passing maneuvers. Among competitors in the same category, the 2011 Chevrolet Aveo always comes up short because its competitors such Honda Fit or Nissan Versa are more enjoyable to drive, have nicer interiors and, in some cases, provide considerably more cargo capacity. Before going with an Aveo, we highly suggest cross-shopping it with the others or even lightly used versions if a low purchase price is of the utmost importance. Test drivers don??™t like its underpowered 1.6-liter engine, sloppy steering and cheap, poorly equipped interior. Even air conditioning is optional. With the exception of a low base price and good fuel economy with the manual transmission, the Aveo will hardly gain impression in customers??™ decision.
The safety condition is another weakness of Aveo. Front-seat side airbags are standard on all trim levels, but side curtain airbags (a feature that is increasingly common on subcompacts) arent available. Antilock brakes are optional on the LT models, but only on those with the automatic transmission. Stability control isnt offered. In government crash tests, the 2011 Aveo sedan earned a top five-star rating for the driver and four stars for the passenger in frontal impacts. Four stars were awarded for the front and three stars for rear passengers in side impacts. The hatchback did slightly better, earning five stars for the front passenger in the frontal-impact test. In Insurance Institute for Highway Safety crash tests, the Aveo received a second-best score of “Average” for its performance in frontal-offset collisions, though it should be noted that most rivals score the higher “Good” rating. IIHS side-impact testing resulted in the second-lowest “Marginal” score.
As a matter of fact, The Chevrolet Aveo will be replaced in 2012 by the all-new Sonic.