The Financial Crisis

The Financial Crisis

The financial crisis of the U.S and the global economy started late 2007 and early 2008. It has since affected the economies of the U.S. in a bad way as well as the European Union countries. From these large economies it spread to other parts of the world. At present the world is still struggling to overcome the financial problems (Britten, 2013; Jickling, 2010). 

Causes:

The world does have ups and downs economically, but 2007/2008 is the most severe down period. The cause of this is the effect of globalization and interconnected economies and big transnational corporations. These are ones such as Citicorp Bank, General Motors, AIG Insurance company and other huge mortgage and lending banks and institutions. The financial problems are found in the financial institutions, banking sector, real estate and productive areas of the economies (Berberoglu, n.d.). We have overproduction of goods and under-consumption of these goods. This means fewer profits for companies leading to lay-offs of workers resulting in unemployment. Unemployment means less money to buy. Real wages of workers declined while companies made huge profits (Hurd and Rohwedder, 2010; Porter 2013). The sub-prime mortgage rates in the U.S. and elsewhere such as in Iceland (banks) led to the crisis. Lehman Brothers, the lending bank, collapsed in the U.S. and other mortgage holders also collapsed (Blundell-Wignall, et.al, 2008; The World Bank, 2013). People were accumulating more credit card debt as banks were optimistic on growth and extended loans and credit. Huge institutions (banks and mortgage companies) engaged in speculative corporate financial deals on the basis of optimism and debts accumulated. All the financial institutions and governments were engaged in financial activities as if there would be endless prosperity in sight. In the U.S. large corporations made huge profits on low wages. With these profits they invested and some bought out other businesses and formed mergers. They also bought debt as investments based on interest being paid back. Banks loaned and financed low-end wage earners to buy things like houses and other products. Consumer debt rose because of ‘easy money’, and so debts increased and spun out of control. However, banks did not cease loans but granted ‘new loans’ (secondary mortgages) at high interest rates (Berberoglu,n.d.). These meant more profits for banks. These banks and financial institutes invested abroad and big manufacturers outsourced their production overseas and US workers became more unemployed (Jickling, 2010).

Effects

The unemployed found they could not pay back mortgage loans or credit card debt. Foreclosures of properties took place and homes became unoccupied while banks monies were tied up in these properties. Bankruptcies of individuals as well as banks followed. Financial institutions and banks collapsed. The U.S. government had to invest trillions of dollars in the banking system to try and avoid a total collapse of banks (Berberoglu, n.d.; Hurd and Rohwedder, 2010; Porter, 2013). The economic crisis is still big in the U.S. Unemployment remains high. It increased from around 7 million in 2007 to about 16 million in 2010. Foreclosures and repossession of homes were at 1 million per year. Banks around the world felt the impact and money ‘dried up’ for loans and debt. The U.S is still struggling. The EU has enormous problems (Blundell-Wicknell et al., 2008; Britten, 2013; Lantier, 2013).

Possible solutions:

The U.S. government has passed laws in terms of what banks can do. Before, there was less control as part of a free economy. Now there is a realization that it was not a good idea. The U.S. is trying to stimulate the economy and create more jobs through government incentives (Berberoglu,n.d; Blundell-Wignall et al.,2008; Porter, 2013). The EU Central bank is taking action in some countries to alleviate debts. These countries have been advised to cut back on unnecessary spending and to manage their money and debts in a better way (Lantier, 2013). The capitalist system seems to be part of the problem. More jobs are needed so that people earn more and buy more. This consumption will stimulate the economy. Production will then be increased and more jobs will be created lessening unemployment. More employment means more money; more money means better living standards and less poverty so the world will become a better place (Hurd and Rohwedder, 2010; Jickling, 2010; Porter, 2013).

Economic Crisis Effect on the UAE

The economic crisis of 2008 did not leave the UAE untouched. The crisis hit the GCC also and the UAE as well. At first there was an idea that the impact would not be as great as the region is not tied too heavily to sub-prime rates as in the US or other mortgage or financial instruments as found overseas. The UAE declined more than the other GCC countries. In 2008 the national Bank of Abu Dhabi (NBAD) general index declined by 56.6% over 2007. Corporate earnings also declined (Global Investment House, 2009). At this time Dubai’s economic and financial problems also arose and difficulty was experienced in repayments of loans taken for development. 2009 was predicted to not be better as oil prices were lower and the GCC region’s economies are oil-based. Since then the economies slowly recovered as oil prices climbed. Dubai restructured its debts and confidence returned to local banks and loans were granted again compared to the turmoil years when loans dried up. A lesson was learned that care should be taken in these economies and it was realized that the region is not immune to the financial crises of the world. The UAE is more careful now in terms of finances (Global Investment House,2009; Hasan, 2010; Khamis and Senhadji, 2010).

Conclusion:

Mismanagement of finances has led to the financial crisis. Companies need to pay better salaries to workers. When the employees have more money they will spend more and so increase consumption. Increased consumption leads to higher production, and higher production means more jobs. More jobs mean a better society as more people have money to spend.

Governments in all countries need to control the economy better, see that banks do a better job and control government debt and spending (Britten, 2013; Porter, 2013).

  

Reference

Berberoglu, n.d, B. Prof. The Global Capitalist Crisis: Its Origins, Nature and Impact.
University of Nevada. Sociology Department. http://www.atiner.gr/events/Berberoglu.ppt

Blundell-Wignall, A., Atkinson, P., Se Hoon Lee. (2008).The Current Financial Crisis: Causes and Policy Issues. http://www.oecd.org/finance/financial-markets/41942872.pdf

Britten, N. (14 April 2013). The Telegraph. Financial crisis caused by too many bankers taking cocaine. http://www.telegraph.co.uk/finance/financialcrisis/9993266/Financial-crisis-caused-by-too-many-bankers-taking-cocaine-says-former-drugs-tsar.html

Global Investment House. (2009).UAE Economic & Strategic Outlook, 2009. http://www.globalinv.net/research/UAE-RealEstate-062011.pdf

Hasan, Z.Prof. Dubai Financial Crisis: causes, bailout and after. A case Study. University Munchen.  http://mpra.ub.uni-muenchen.de/26397/1/MPRA_paper_26397.pdf

Hurd, M.D., Rohwedder, S. (2010). Effects of the Financial Crisis and Great Recession on American Households. The National Bureau of Economic Research. NBER Working Paper No. 16407. Issued in September 2010. NBER Program(s):   AG http://www.nber.org/papers/w16407

Jickling, M. (2010). Causes of the Financial Crisis. Congressional Research Service. http://www.au.af.mil/au/awc/awcgate/crs/r40173.pdf

Khamis, M. and Senhadji, A. IMF (2010). Impact of the Global Financial Crisis on and Challenges the Gulf Cooperation Council Countries Ahead: An Update.

http://www.imf.org/external/pubs/ft/dp/2010/dp1002.pdf

Lantier, A. (26 April 2013). Europe’s Economic Crisis: Unemployment hits Record Highs in Spain, France. Global Research. http://www.globalresearch.ca/europes-economic-crisis-unemployment-hits-record-highs-in-spain-france/5333053

Porter, E. (23 April 2013). Solutions remain elusive after financial crisis. The New York Times. http://www.nytimes.com/2013/04/24/business/solutions-remain-elusive-after-financial-crisis.html?pagewanted=all&_r=0

The World Bank.  Financial Crisis. (2013). http://www.worldbank.org/financialcrisis/

The Great Wall of China

The Great Wall of China is one of the Seven Wonders of the World. The Wall stretches through a variety of different terrains across plateaus, deserts, grasslands and mountains. The wall is approximately 8,851.8 kilometers long, which is 5,500 miles. The Wall stretches from Hushan in the east to Jiayuguan Pass in the west of China. Built over 2000 years ago, now parts of the wall remain only in ruins, but are still one of the most attractive tourist destinations in the world with great historical significance and architectural uniqueness. The Wall is at least 7.6 meters in height and up to 9 meters in width. In Chinese the wall is called ‘Wan-Li Qang-Qeng’. ‘Wan Li’ means 10,000 Li that is 5,000 kilometers. And ‘Qang-Qeng’ means Long Wall.

It took about 250-270 years to complete the construction of the wall.  The construction began in 221 B.C. It was built between the Warring States Period and the Ming Dynasty era. Currently the wall built during the Ming Dynasty is what remains visible to the tourists. The first emperor of the Qin Dynasty initiated the construction of the Wall as a defensive line to protect the three states of Yan, Zhao and Qin. The construction took a great deal of energy and resources. The construction of this enormous structure demonstrates the wisdom, tenacity, will power and determination of the Chinese people.

The construction did not have any monetary cost, but it took a lot of resources. It’s made of masonry, stone, wood, rocks and packed earth. The first emperor of the Qin Dynasty who is considered to be Qin Shi Huang made the people of China build it with no pay, considering them as slaves. The bricks and building material were transported either by men or by animals. The men carried the load on their backs while the donkeys, mules, and goats had the brick bags strapped onto them. Today the wall is worth a lot, owing to its historical importance.

The Wall was built as a defense from the invading tribes from north China. These tribes were known as the nomadic Hsiung Nu tribes. Armies were stationed within the wall and the soldiers on the walls could see long and far for any sign of attack. Signal fires were used from these soldiers on the wall to indicate any sign of attack approaching. It became very hard for any enemy to breach these walls. There were very few entrances to get into the city, and those were heavily guarded. The Wall was too steep and flat for any enemy to climb over, and could be easily shot down by the soldiers on the wall. The Great Wall served as the perfect watchtower. Later on cannons were added which gave the ability to open fire on the enemy even when they were a few kilometers away.

As we know the wall was built over a long period and finally joined together during the rule of the Ming Dynasty. There were four distinctive periods that this was built during: the First Great Wall was built between 221-207 B.C by the Qin Dynasty, the Second Great Wall was built between 205-127 B.C by the Han Dynasty, the Third Great Wall was built in 1200A.D by the Jin Dynasty and the Fourth Great Wall built between 1367-1644 A.D by the Ming Dynasty. The First Great Wall was designed to stop raids by the Xiongnu raiders of the north. Although the Wall kept the enemies out, internal problems led to changing of leadership to the first Han emperor, Taizong. The Wall continued to be used as a line of defense but the raiders had breached the wall in several areas. Taizong then established a program to rebuild, and extend the First Wall. After the Han Dynasty collapsed the Wall was still maintained by the kingdoms of Wei, Shu and Wu. The Nuzhen established the Jin Dynasty then continued to build the Third Great Wall noticing that the Mongols were on their heels. They added a new characteristic to the Wall, having ditches running along the walls full length. In spite of the efforts the wall did not sustain the Mongols from overthrowing the Jin Dynasty. The Ming Dynasty later overthrew the Mongols and reclaimed the Wall. The Ming emperor Hongwu established garrisons along the Wall to ensure no enemy could take the empire. After the battle of Tumu against the Mongols the Fourth Great Wall was reinforced and completed.

References

How Long is the Great Wall. (2013). In Travel China Guide. Retrieved April 15, 2013,     from The Great Wall of China (2006). In Great Wall. Retrieved April 15, 2013,        from http://www.greatwall-of-china.com/51-90/the-great-wall-of-china.html

The Great Wall of China (2006). In Great Wall. Retrieved April 15, 2013, from     http://www.greatwall-of-china.com/51-90/the-great-wall-of-china.html

Great Wall of China - Wikipedia, the free encyclopedia. (n.d.). Wikipedia, the free encyclopedia. Retrieved April 21, 2013, from                                                            http://en.wikipedia.org/wiki/Great_Wall_of_China

History of China Great Wall in Qin, Han, Ming Dynasties. (n.d.). China Travel Agency with 24/7 Tour Service - TravelChinaGuide. Retrieved April 28, 2013, from http://www.travelchinaguide.com/china_great_wall/history/

Great Wall of China — History.com Articles, Video, Pictures and Facts. (n.d.). History.com — History Made Every Day — American & World History. Retrieved April 28, 2013, from http://www.history.com/topics/great-wall-of-china

Great Wall of China, Great Wall Introduction (500 photos and videos). (n.d.). Beijing Travel Guide, China : 8000 photos and 2500 videos. Retrieved April 28, 2013, from http://www.kinabaloo.com/great_wall.html

Who, When and Why Built the Great Wall of China?. (n.d.). China Travel Agency with 24/7 Tour Service - TravelChinaGuide. Retrieved April 28, 2013, from http://www.travelchinaguide.com/china_great_wall/facts/who-built.htm

Youth put skills ahead of money

In January 2013, from different universities in the UAE, 50 students participated in a live voting session. 30% of students said the opportunity for growth and promotion is the most important factor in a job offer; 20% of students said learning new skills is the top factor; 18% said work environment and culture; while 10% said salary is first. As a result for the voting, students consider working for the private sector is more demand than working for the government. In addition, students’ main issue about working in the private sector was competition for promotion and recognition while in the government sector the issue is dealing with routine. Universities help its graduated students to have full awareness about working for the private sectors by different ways, like job fairs, career guidance and workshops with corporate guests. According to a survey of Emirati youth, 70% said when deciding on a job there are factors other than salary and benefits which are more important; while 30% of the university students considered growth and promotion are the most important in selecting a job. This edition of Tawdheef will see a renewed focus on the recruitment of Emiratis and expatriates.

More than half of the participants at the forum prefer to get their jobs immediately after graduation rather than higher education or entrepreneurship opportunities.    

Asian Houbara

At the Abu Dhabi International Hunting and Equestrian Exhibition, the International Fund for Houbara Conservation announced that IFHC released to wild life more than 13,000 Asian houbara which exceeded their expectations. This number of houbara was collected from different centers which are located in the UAE. In addition, the number of houbaras released increased in Morocco from 14,734 to 17,262 and from 77 to 303 in Kazakhstan. The organization’s global target is 50,000 chicks in those countries.   

 The main reasons why the houbara population decreased are because the construction of the cities and new development and because of the hunters who want to train their falcons how to hunt or they may be hunted by shotguns. Moreover, falconry is in danger because of the poachers and non-traditional practices. Naturally, houbara is not a prey for most falcons but the falcons must be trained to hunt them.

IFHC distributed a survey during the exhibition to all falconers to determine the number of houbaras they need to meet their demands and how many wild birds are trapped and which areas require the reintroduction programme. “Another issue we face is that we cannot determine the size of the black market, which is why these surveys are important” Al Biadani said. In this year, IFHC targeted the primary and middle schools to educate students to be future hunters and falconers.