Download National Deficit

Survey
yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project

Document related concepts

Synthetic CDO wikipedia , lookup

Federal takeover of Fannie Mae and Freddie Mac wikipedia , lookup

Securitization wikipedia , lookup

Financial crisis wikipedia , lookup

Asset-backed security wikipedia , lookup

Financial crisis of 2007–2008 wikipedia , lookup

Financial Crisis Inquiry Commission wikipedia , lookup

Transcript
5 October 2015
by
Sigrid Brevik Wangsness



The largest economy in the world with a
major impact on the global economy
Until October 2008 an economic superpower
– did the financial crisis change that?
A significant characteristic of the US economy
is its resilience, i.e. its ability to bounce back
after slowdowns. Has this happened again?

Collapse of the housing market
The property bubble burst: House prices
dropped dramatically

Sub-prime loans
= risky loans (mortgage loans for borrowers
with a poor credit history)

The banking crisis
Banks had granted too many risky loans
Bad debts – huge losses
Complicated financial instruments:
MBSs (mortgage-backed securities)
CDOs (collateralized debt obligations)
“Credit crunch”
Vocabulary






To default
Leverage
Homeowners
Mortgage lender
Investment banker
Credit Default Swap
Treasury bills
Interest
Broker
AAA rating
Prices plummet
Foreclose


Speculation and excessive risks on the stock
markets
Lack of trust
Free fall of share prices
Insufficient regulatory system
Deregulation encouraged “gambling”
Repeal of Glass-Steagall Act (1999)

The Federal Reserve System (the Fed)
(= the US central bank)
Too low interest for too long? Too easy to
borrow from the Fed?
Did it therefore indirectly encourage
speculation?


US government intervention in the economy
Rescue (bail-out) packages
The role of the Federal Reserve System
"Head of the Fed” at the time:
Ben Bernanke
“Quantitative easing”



Part –nationalization of American banks
Cooperation between major economies:
Summits (G20), co-ordinated efforts
The IMF

National Deficit/ Debt
USD 18.5 trillion. How serious is that?

Trade Deficit
Current-account balance: -$429bn (Q2)
-2.6% of GDP in 2015 (forecast)

Budget Deficit
Budget balance: -2.6% of GDP in 2015 (forecast)

GDP:
+2.7% growth in Q2, 2015
Forecast for 2015: +2.4%

Inflation: +0.2% (Aug. 2015)
Forecast for 2015: +0.4%

Unemployment: 5.1% (Aug. 2015)
(See article in the Comp.)

The Primary Sector

The Secondary Sector

The Tertiary Sector

The Fed
o Head of the Fed”: Janet Yellen
o Organization
o Appointment
o Key powers: Monetary Policy
Banking Regulations

Wall Street
o NYSE, AMEX, NASDAQ
o Banks, insurance companies,
rating agencies, brokers, asset
managers etc.