Essays on Investment Banks

Introduction

Industrialization refers to the sustained structural transformation of a traditional agrarian society to a modern economy driven by high productivity in manufacturing society (Szirmai, Naudé and Alcorta, 2013). Industrialization started in the mid-eighteenth century in Britain and then spread to other European countries and the USA in the nineteenth century. In the twentieth century, Japan, Singapore, Korea, China, and other East Asian Tigers became industrialized (Szirmai, Naudé and Alcorta, 2013). Gerschenkron (1962) used the term rarly industrializers to refer to countries that were first to industrilze such as Britain. He used the term late industrilizers to refer to countries ...

Market discipline has evolved from the real need to address the financial concerns that brought on the last few financial crises. The international economy is tied deeply to the financial sector, and international organizations such as the International Monetary Fund and the World Bank have been tasked with providing ease of liquidity throughout the world, while also helping to protect the flow of capital across borders to facilitate trade. These financial institutions are remarkably limited to what they can do because they hold little sovereignty over the independent nation-states that compose them; only the World Bank is effective when ...

Money laundering refers to the criminal activity in which money and funds that have been obtained illegally are used to fund or support legitimate and legal activities. In the process, the illegality of the original criminally obtained money and funds is, in essence, “washed” through its use in the legal activity. A more formal definition of money laundering defines it as, “the process through which criminals, hide, disguise, and legitimize the financial proceeds of their crimes” (FATF). There are a number of benefits that money laundering provides to criminals. First, by using the money to fund legal activities, money ...

a. Carson is providing the funds by investing in the treasury securities. A surplus unit is the only unit that can invest in securities. b. As a deficit unit, Carson has actively borrowed the required funds from the financial institutions. c. Providing the required funds for the expansion can facilitate Carson’s expansion. d. As like finance companies, by providing the required funds for the expansion, commercial banks can facilitate Carson’s expansion. e. This limitation could be because of the borrowing of the Carson that reached its maximum limit. Because of this situation, banks and other financial institutions ...

Introduction

In late 2007, the Dow Jones Industrial Average (DJIA) closed at a record low. Stock markets around the world nose-dived alongside the DJIA. Turbulence in the sub-prime segment of the US housing market, paralysis of the credit markets, excessive lay-offs in organizations, steep decline in investments etc. were all some of the indicators that the world was heading for a massive credit crunch. In the words of Mr. Strauss-Kahn, head of IMF, “Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown” (BBC ...

“The finance industry is multifaceted, offering a variety of positions catering to a number of different skills and interests” (Kochanek). Finance is a lucrative career option and includes several opportunities in the field of commercial banking, corporate finance, investment banking, mutual and hedge funds, financial planning, management consultancy, insurance, equity management, money management, real estate, valuation analysis and the like. The scope of the subject also includes the study of financial data and the analysis of financial determinants that affect the economic health of securities, companies, capital markets and countries alike. Job opportunities in the Commercial banking sector are ...

Introduction

The year 2007-08 brought nightmares for the US economy and its participants because least anyone had expected that the world’s biggest economy will cripple and face the worst ever recession after the Great Depression of 1929-1930. While Wall Street lost more than trillion dollars in value, thousands of Americans were left unemployed and the businesses, even the one who had more than 100 years of their presence in the United States, were filing for bankruptcy. On the other hand, Federal Reserve Bank, which once cited economic bubble as the natural event that cannot be prevented( courtesy the ideology ...

(Student’s Full Name)

Question: What does it mean to think critically about the world today? To what extent is such critical thought an important guide for action? Critical Response to Maggi Nelson’s “Great to Watch,” Karen Armstrong’s “Homo Religiosus” and Karen Ho’s “Biographies of Hegemony”

“[The ultimate] could not be accessed by rational, discursive but required a careful cultivated state of mind(Armstrong 18)”

The above quotation represents the viewpoint of one academic as it pertains to critical thinking. However, as one read and analyzes the canon of literature available on the subject, one will discover that there are varying opinions related to the task of critical thought in today’s world. Additionally, there ...

Introduction

In his book “ When Genius Failed,” Roger Lowenstein`s fundamental argument is that the events and the activities that occurred at the Long Term Capital Management hedge fund ultimately acted as a trigger or precursor to the 2008 Global Financial Crisis that occurred 8 years after the fund`s winding up. Throughout the book, Lowenstein gives a detailed account of the formation, growth, expansion and ultimate fall of the fund which was founded and run successfully for 5 years by John Meriwether. Although Lowenstein does not make any specific reference to the 2008 financial crisis since after the entire ...

Global Financial Crisis in the US

Introduction It was hard for the economists, professional analysts and policymakers among other players in the financial industry to foresee the crisis in the US mortgage lending industry in 2007 that resulted in the world's worst economic recession in two years' time (Sher and Iyanatul 2010). Initially, there was a housing bubble characterized by high house prices, low-interest rates, more support for subprime mortgage and increased speculation by the buyers (Acharya and Schnabl 2010). Eventually, there were decline of house market prices, increased lending rates and increased default and foreclosures by the mortgagors (John 2009). Notably, by mid-2008 the ...

Today, almost seven years after the financial crisis that threw America into upheaval in 2008, the effects are still being felt. In September 2008, the collapse of Lehman Brothers, a global bank, nearly caused the collapse of the financial system of the entire world. What resulted was the worst economic downturn seen by the world since the Great Depression, 80 years ago. The event has been called the Global Financial Crisis and the 2008 Financial Crisis; the period following the collapse became known as the Great Recession.

While the ...

Question 1: Bhopal Disaster

Uncertainty is part of any corporate organization and it may range from typical crises to existential crises. The crises can be national and affect all types of organizations or they can be industry specific. Whatever the type or case, how a corporate leader manages a crisis will have a long-term effect on the company or organization. Hearit (2006) defines a crisis as any activity or occurrence that is not planned for and has a negative effect on an organization if not managed effectively. Crises in companies are a test to managers. As a corporate leader, managing a crisis that is industry specific or that the company is ...

In the Business Ethics course, we encounter philosophies dealing with the appropriate decisions and actions in the face of business circumstances. It is often that business practices solely prioritize raking in money that is possibly disregarding economic impact. To expound on this issue, we would discuss the infamous 2008 Subprime crisis.

The year 2008 made a critical impact to the world of business, especially to the economy of a powerful nation, the United States of America. The economic downfall or in other terms, the financial crisis, that took place in the late 2000s made a lot of people pay for the unfortunate ...

Part 1

- In what ways did the video "The Crisis of Credit" demonstrate the failure of the banking industry's Fiduciary Relationship to investors and home owners?

The video explains a worldwide financial disaster that effected everyone. It started on the burst of the dot com bubble when the federal reserve of the United States decreased the interest rate to 1%. This value dramatically dropped the investment level because of the reduced ROI. This action made banks to take more and more loans from the Federal Reserve. The leverage increased as it became very easy to return a loan, so the demand for credit increased rapidly.

The banks took a lot of credit, and they were easily able to payback and made a lot of profits. Investors saw this as ...

1. Claims of Globalism

Globalism is mesh of inter-reliance at a multi-continental level whereby, there is exchange of people, information, and capital between continents. An increase in Globalism is termed as Globalization while a decrease is De-globalization.

Globalization integrates global markets and liberalizes them

Globalism integrates global markets via the inter-reliance among the continents and liberalizes global markets through the divide between a state’s economy and the government, such that there is minimal interference from the government. The absence of government interference increases social interaction among the continents and the exchange of technology, labor, and wealth.

Globalization is unavoidable and permanent

The establishment of inter-reliance among the continents has been going on and will continue to take ...

Question 1

Stock flipping refers to buying stocks during an initial public offer with the intention of reselling them immediately at a profit. It is a short term investment strategy that takes advantage of existence of liquid markets. Institutional investors engage more in stock flipping than individual investors since they have more shares availed to them at the offer price .

Investment banks encourage stock flipping for various reasons. If an IPO is allocated only to long term investors, there will be no trade in the secondary market. The stocks will be in the public but they will be illiquid since nobody is selling. ...

Macroeconomics 2301

18.04.2014

HCC

Spring 2014 8 week course The world’s economy has faced several periods of crisis during the last twenty years. The financial crisis in 2008 is the one that is most recent. It emerged in the United States and then spread to Europe, later affecting the rest of the world. The most problematic sector in the US was the mortgage sector, and was one of the main causes leading to the financial crisis. The house prices have been rising from 1998 to 2006, prompting home builders to construct more new houses every year, but these injections ...

The study of Bear Stearns abrupt fall and demise reveal the importance of credibility for a financial institution in a specific sense irrespective of its robustness. A business in general could fall if credibility and illiquidity become questionable. Bear Stearns is the first ever major investment bank to fail during the global financial crisis (Li and Mizrach, 2010). The 85 years old firm has survived a number of economic turmoil and recession, yet it fell when it was least expected to fall. A number of factors become apparent when studying the Bear Stearns demise, and these include the role of management, illiquidity, ...

The tale of the Great Recession is one that has been told and retold countless of times. In the years following the 2007-2008 financial crisis, much has been said in retrospect, and numerous conversations have been initiated with the key players that have made a significant impact in the event. And yet, the story of the financial crisis, and the recession that followed it, is still rife for exploration, particularly in considering the steps which are to be taken to prevent it from happening again. In this regard, it is important to question the matter of accountability. Who were the ...

<Author> <Instructor> <Course>

AIG has been among the leading companies in the insurance industry ranked 14th in the Fortune 500 companies, operating over a decade globally offering various insurance options for companies and individuals including 98% of the Fortune 500 companies, 96% of Fortune 1000, and 90% of Fortune Global 500, and insures 40% of Forbes 400 Richest Americans. With a strong history and reputation in the industry and persistent operations around the world, AIG was believed to be resistant to any crash or collapse. Huge amount of funds in terms of institutional investors, mutual funds, pension ...

High speed trading is an illegal practice by some firms that involves the acquisition of useful information in investing, prior to knowledge of the same by other equally important market players. It usually involves the masking of information such that some participants are unaware of such information hence discriminating them from any financial benefits. It may involve the creation of an illusion of rampant activity in the stock market through placement and cancelling of transactions. This may give the impression that such a market is lucrative to a potential investor. This significantly affects the exchange. Potential investors who are unaware ...

High speed trading is the style of algorithmic trading. This trading uses complicated technological tools, mostly computers that are extremely powerful. These computers are programmed to perform commands at very high speeds and carry out numerous orders all at once (Seven Pillars Institute, 2014). This trading employs complex algorithms to analyze a number of markets carefully a number of markets. It then implements commands in relation to the prevailing market conditions. Those traders who are fastest in their speeds of execution earn more profits than the traders with low execution speeds. High speed or frequency trading accounts for almost above ...

Introduction

The introduction of banks replaced the traditional method of storing money. During the Stone Age period, human beings stored their possessions in caves and caverns. An ancient Chinese legend talked of a dragon which was the kept by villagers to guard their treasure. The banking industry replaced the need for hiring animals and soldiers to guard their possessions. The advent of banking replaced the barter trade and signaled the demise of the traditional method of keeping money. The conventional banking system was first developed in England. Banks kept equal an equivalent amount of gold or platinum with the amount of ...

The Global Financial Crisis (‘GFC’) had a very dramatic impact on the domestic economies of a number of global nations, in a plethora of ways, typically replicating the fiscal and financial health of such nations. United Arab Emirates (UAE) was one such nation that had a serious impact of the GFC and since then the myriad challenges posed by the capital markets has been an interesting area of focus for the Middle East. UAE is one of the oil rich economies of the Middle East. During the initial and developing years of the last century UAE discovered new abundance and wealth from its ...

Factors that Determine Stock Market of Corporations

Abstract In this paper, I look into capital markets in general describing them as markets in which financial securities are traded. The capital market instruments differ from money markets in that they take longer to mature, a year or more, as opposed to money markets (Martin, 2013). They are also a source of income for the investors who earn when the stocks rise in values. I will also look into services offered by capital (krani, 2010). Most importantly however will be a cross-sectional study on financial market trends in the stock markets and the capital market of corporate companies. Under ...

It is a universal phenomenon that when you have power you can control the entire universe. Goldman Sachs as an investment bank has its origin in the United States and has influenced the business world as well as strongly spreading its tentacles to influence the political orientation of the United States. In the recent past, the company has been viewed just as an entity having no interests of the people in the United States and abroad. The company has been placed at a very advantageous position owing to the closeness in its continued deals with the US government. It has ...

Overview of the Company

In 1844, Henry Lehman, a German immigrant resettled in the United States of America. The 23-year old immigrant decided to make Montgomery, Alabama his home where he ended up opening a general store that was then referred to as “H. Lehman.” Three years later, in 1847, Henry was joined by his younger brother, Emanuel Lehman, and henceforth the store changed its name to “H. Lehman and Bro.” The youngest of the Lehman Brothers, Mayer Lehman, joined his two elder siblings in 1850 and together the three Brothers founded what was until 2008 referred to as the Lehman Brothers (LEH). From its ...

EXAMINATION QUESTION PAPER: May, 2013

Module code: EC5004 Module leader:

Exam type: Part Seen/Part Unseen, Closed Materials supplied: None Materials permitted: Language dictionaries only where prior permission has been obtained. Non programmable calculators Warning: Candidates are warned that possession of unauthorised materials in an examination is a serious assessment offence.

All questions carry equal marks.

DO NOT TURN PAGE OVER UNTIL INSTRUCTED © London Metropolitan University Section A Answer One Question from this section. - "Critically discuss the role played by income and wealth inequality inthe financial crisis of 2007-8". (25 marks) The financial crisis of 2007-08 also known as ...

A Study

The US Subprime crisis and its impact Introduction The United States subprime mortgage crisis was a chain of events in the country that led to a financial crisis that was one of the biggest in the world since the era of great depression of the 1928 -1933. It began in the late 2000’s and the effects of it are still being felt in 2012. The subprime mortgage crisis originated due to a number of factors. Those included a boom and the bust in the housing market, the house-owners speculation, improper and high risk mortgage loans and lending/borrowing practices adopted by ...