Eleanor Roosevelt Essay Example for Free

Eleanor Roosevelt Essay And strength, courage and confidence she possessed. Forty-six years after Eleanor Roosevelt’s death yet she the former First Lady still remains an influential women in the world. She supported her husband’s political career. In fact, President Franklin Roosevelt often called his wife his â€Å"eyes and ears† (Bradgon, McCutchen, and Ritchie 776). Eleanor Roosevelt played a pivotal role in the Roosevelt administration especially when paralysis hit the president (776). She used this power to advocate for civil rights, especially for the women (Goodwin 1998). The was the first woman to become the voice of the ordinary people, she spoke in national conventions, held press conferences, lectured, and wrote a syndicated column (1998). She fought for the plight of the poor, the women, and the African Americans (777). She was a super woman, so to speak. Her fight for social justice was perhaps what Roosevelt is famed and revered for. She helped laid the cornerstone of the civil rights and women’s movement. It was her greatest achievement, one that the world will forever be grateful for. Eleanor Roosevelt was born October 11, 1884 to Elliott Roosevelt and Anna Hall (Caroli 2008). Although she came from an influential family (her uncle was Theodore Roosevelt), her life story did not start out smoothly (2008). Hers was what people would call a â€Å"dysfunctional family† (Tindall and Shi 1266). Her father was described was an alcoholic who got servant girl pregnant while her mother was said to be a â€Å"cold, self-absorbed socialite† (Tindall and Shi 1266). Despite this, Eleanor loved her parents deeply. However, tragedy struck the family. By age ten, both her parents died and Eleanor, together with her brother, was brought to be raised by relatives (Caroli 2008). Eleanor’s other brother had died a year before (2008). Eleanor was extremely close to her father and his death deeply affected the young girl (2008). The siblings were brought to their grandmother Mary Hall to become their guardian (Black 2008). An introvert, Eleanor was sent to Allenswood, a girls’ boarding school by age 15 (Caroli 2008). Under the wing of Mademoiselle Marie Souvestre, Eleanor’s intellectual curiosity was awakened. Souvestre was a confident woman who was a staunch believer in the liberal causes (Black 2008). In Eleanor’s three years at Allenswood, she forged friendship not just with Souvestre but with young girls her age; she learned language, literature and history; expressed her opinions on political events; and discovered Europe in summers (2008). She was, to say the least, transformed into a â€Å"tall, willowy, outgoing woman† (Tindall and Shi 1266). In 1902, Eleanor went back to New York for her â€Å"coming out† into society (Caroli 2008). Following her family’s tradition, she immersed herself into social responsibilities, enlisting with the National Consumers League and the Junior League for the Promotion of Settlement Movements (Black 2008). She also volunteered to teach at the College Settlement on Rivington Street (2008). Her endeavors soon reached the attention of the New York reform group (2008). One summer, on a train ride to Tivoli, she bumped into her fifth cousin Franklin Delano Roosevelt (Black 2008). A secret courtship began and on November 22, 1903, the two became engaged (2008). The two were different. Eleanor was often described as a serious person, someone of â€Å"high ideals and principles† while Franklin was a confident man, who grew with love and affection from his family (Tindall and Shi 1267). Franklin’s mother, Sara was against the relationship and tried in vain to separate the two. On March 17, 1905, Eleanor and Franklin were married in New York (2008). The wedding, wherein President Theodore Roosevelt gave the bride away, was on the front page of the New York Times (2008). In a span of 10 years, Eleanor gave birth to six children, one of whom died after birth (Caroli 2008). In 1911, Franklin won a seat in the New York senate and the family relocated to Albany (Black 2008). Eleanor looked forward to moving out, especially since in their old home, her mother-in-law was constantly breathing down her neck. She was said to comment that the move ignited her desire to become independent and be an individual (2008). As Franklin started to carve his political career, Eleanor took on the role of a political wife- gracing formal parties and â€Å"making social calls† (2008). When World War I broke in 1917, Eleanor found herself returning to volunteer work. She spent her free time helping the Navy- Marine Corps Relief Society and the Red Cross (Caroli 2008). Her unwavering commitment opened another door in her life- that of being able to be of service to others. For some time, she was in the shadow of her political husband. The War ignited her desire to pursue other plans outside her husband. It helped boost her confidence. Ruby Black, Eleanor’s friend, once commented that the war became her first work â€Å"outside her family† (Black 2008). But this awakening of sorts was dampened when Eleanor found that her husband was involved romantically with another woman, Lucy Mercer. Mercer was Eleanor’s social secretary (Caroli 2008). This caused a dent in the couple’s relationship and Eleanor suggested to have a divorce, which Franklin refused (2008). Franklin ended the relationship with Mercer and tried to patch things with Eleanor. Though they continued on with the marriage, it was said that they remained affectionate but no longer intimate (2008). In 1921, Franklin fell ill with polio and was paralyzed (Tindall and Shi 1267). Despite what had happened in their relationship, Eleanor did not leave her husband. She helped him in his career, attending political gatherings and speaking on his behalf (1267). According to their daughter Anna, polio was instrumental in bringing their parents together (1267). While Eleanor supported her husband, she started to carve her own name. She became active with the Women’s Trade Union League and the Democratic Party of the New York state (Caroli 2008). As Chair of the League of Women Voters Legislative Affairs Committee, Eleanor read the Congressional Record, talked with members of Congress and the State Assembly and presented a report on a monthly basis (Black 2008). She was especially interested in non-legislative issues like primary reform, voter registration and party identification (2008). Eleanor also wrote for the Women’s Democratic News (2008). Three years after, Eleanor was part of a group whose purpose was to inform women on participating in political and social issues. As board member of the bi-partisan Women’s City Club, Eleanor led the City Planning Department, tackling issues such as housing and transportation, child labor, and the distribution of birth control information on married people (Black 2008). She also taught at a school (2008). When Franklin was elected governor, Eleanor divided her time equally, ensuring that she pursued her personal interest and that of being a governor’s wife. When the Governor’s inner circle had disagreements with Eleanor’s League of Women Voters, Eleanor acted as arbitrator (Black 2008). Her political grace, no doubt, was shaping up. Following Franklin’s successful crack at the presidential election, the now First Lady continued with her passion. With her own staff, Eleanor carried on with her causes. She had press conferences with women correspondents, something she was keen on. She also talked to her husband about employing women in his cabinet (Tindall and Shi 1268). In fact, she backed the successful appointment of France Perkins as Secretary of Labor (Caroli 2008). Like the First Lady, Perkins was an advocate of minimum wage and maximum hour laws, child-labor restrictions and other reforms (Bradgon, McCutchen, and Ritchie 776). Eleanor was not afraid to speak her mind, even if it meant carping on her husband’s plan regarding unemployment insurance (Caroli 2008). In 1936, she started her own daily syndicated newspaper column â€Å"My Day† (2008). This was her channel for expressions her opinion publicly. While some greeted her write-up with criticisms, many people admired her for taking interest in their plight. She often tackled child welfare, racial minorities, housing reform and women equality (2008). Following her husband’s death in 1945, President Harry Truman her to the US delegation in the United Nations (UN) (Caroli 2008). She was responsible for the drafting and adoption of the Universal Declaration of Human Rights (UDHR) (2008). The UDHR was approved on Dec. 10, 1948 at a U. N meeting in Paris, for which the former First Lady received a standing ovation from the delegates (Gardner 1988). The UDHR is deemed the touchstone of human rights (1988). It is also used to measure the performance of UN entities and NGOs (1988). Likewise, the UDHR continued to serve as inspiration for other human rights treaties in Europe and Latin American (1988). Based on the American Bill or Rights, the British Magna Carta, and the French Declaration of the Rights of the Man, the UDHD comprises a preamble and 30 articles on basic rights and freedoms (1988). When John F. Kennedy became president, she appointed Eleanor as chair of the Commission on the Status of Women (Caroli 2008). She continued to work and fought for the underprivileged. Even at her age, Eleanor travelled the globe to conduct meetings with world leaders (2008). She also did not stop writing books and articles. In 1962, she contacted a rare form of tuberculosis and succumbed. She was buried at Hyde Park. Works Cited Black, Allida. â€Å"Anna Eleanor Roosevelt. † The Eleanor Roosevelt Papers Project. Jan. 31, 2008. May 7, 2008 http://www. gwu. edu/~erpapers/. Bragdon, Henry, Samuel McCutchen and Donald Ritchie. History of a Free Nation. Ohio: McGraw-Hill, 1996. Caroli, Betty. â€Å"Eleanor Roosevelt. † Britannica. com. 2008. May 7, 2008 http://www. britannica. com. Gardner, Richard. â€Å"Eleanor Roosevelt’s Legacy: Human Rights. † Dec. 10, 1988. May 7, 2008 http://www. nytimes. com. Goodwin, Doris. â€Å"Leaders and Revolutionaries. † TIME. com April 13, 1998. May 7, 2008 http://www. time. com. Lewis, Jone. â€Å"Eleanor Roosevelt Quotes. † Womenhistory. about. com 2008 May 7, 2008 http://www. womenhistory. about. com. Tindall, George and David Shi. America A Narrative History 5th ed. USA:W. W. Norton and Company, 1999.

Premature Specialization :: essays research papers

Premature Specialization   Ã‚  Ã‚  Ã‚  Ã‚  A medical doctor in today’s world is educated and trained in a traditional manner that seeks to insure the well being of his or her patients. Practicing medicine requires a strong science background and rigorous training; it is in the interest of clients and medical boards across the world to assure this. Thus, education in the science field is extremely important, even at the undergraduate level. Being a doctor is not just a job, nor is it solely a career. The medical profession is saturated with risk, for both the patient as well as the doctor. Doctors need early specialization in their education in order to acquire the skills necessary to handle delicate situations that occur on a daily basis. Malpractice must come to an end. The education that a doctor receives is a tool that he or she will use his or her whole life, (unlike a person who majored in something contrary to what their field of work is). A doctor’s experience is a vital instrument. Medical skill is a demand for certain practicing procedures and should be taken seriously. Knowing the legal system requires a doctor to have a good amount of experience can ease the concerns of family and loved ones, and also gives confidence to a doctor that he or she can do his or her work correctly.   Ã‚  Ã‚  Ã‚  Ã‚   In order for doctors to get the best experience and education needed, training must take place early on in education. An abundance of science courses in college is a good start to prepare for medical school. Even though medical schools might cover the material that is offered in undergraduate biology and chemistry courses, repeat exposure to the material can only be beneficial to the student. The more experience that a student has in science and related subjects ultimately helps the future doctor in the long run.   Ã‚  Ã‚  Ã‚  Ã‚  To ensure the level of maturity of a doctor, it is necessary to educate them on a broad level. According to Thomas, English, History, the literature of at least two foreign languages, and philosophy should come near the top of the list, just below Classics, as basic requirements, and applicants for medical school should be told that their grades in these courses will more than anything. (Thomas 115) Educating premed students in these courses is important, but science is the most significant part in an undergraduate program. It requires thought and practice as well as research, which are all fundamental keys to being a doctor.

Cultural Tourism Essay

Tourism is one of the largest industries in the world today that consists of eco-tourism, beach tourism, cruises, cultural tourism and business tourism. This essay will mainly discuss the authenticity of cultural tourism. Meethan suggested in 2001 that modern cultures and societies are just as authentic as those that are present since decades and even centuries. Meethan here is correct, because the tourists really seek a dispersed experience in cultures both modern and old. However, many people think that only the traditional cultures and original artefacts come under the definition of authentic cultural tourism. Even the tourists have a different insight of what constitutes the authenticity in cultural tourism. This essay will talk about these issues and their implications for cultural tourism. Cultural tourism, according to World Tourism Organization (WTO), is the visit of the interested tourists to culturally rich destinations and their visit consists of a range of activities such as visits to heritage buildings and sites, attending performances of the local artists, taking part in traditional festivities and pilgrimage of holy places. Many do not agree with this narrow definition by WTO as the cultural tourism is synonymised with the civilizations and the way of living of the historic societies in that tourist destination. The local residents are mostly ignored from the definition and also from the concept of cultural tourism. However, the truth is that the locals make up for the major part of the experience of tourists. Their way of living and the current culture of the residents if often revitalized for enhancing the experience of the tourists. This forced influence on the local cultures for attracting more tourists is hurting the authenticity of the cultures in tourist destinations (Clarke 2003). Although it is true that tourists seek a combination of modern and traditional cultures on their destinations, but they prefer to consume traditional and modern tourism separately. Some of the tourists just fly from East to West for sinking into the beauty of traditional culture. These tourists want to enjoy the tradition by visiting cultural heritage buildings, attending traditional theatres and listening to the cultural songs of the destination. However, some cultural entrepreneurs try to blend the modern aspects with the traditional culture for the promotion of the destinations. There is a triangle of the cultural entrepreneurs, the tourists and the residents of the destination. The culture of the destination is defined by the way of living of the residents and the activities of the entrepreneurs. For the purpose of expanding the business, attracting more tourists and enhancing their sales, the local hosts and cultural entrepreneurs force the residents to change their way of living and link it to the culture. This is done in order to present the tourists with a cultural experience. Hungary has been known for the production wine and the tradition of small wine shops with their own vineyards. These shops and the people involved in the production of wine were of a particular attraction to the tourists as they saw this tradition of wine production as a rich culture. As tourism thrived, there were attempts to increase the production of wines through both, the government authorities and through the cultural entrepreneurs. However, this mass production of wine was not as successful as the wine from small wineries. This is the threat to the authenticity of the culture and the tourists proved that they did not like this blend of modern and traditional culture in Hungary. They proved that they preferred the traditional culture over the modern culture as the mass production of Hungarian wine was not successful. The tourists came to this Hungarian destination for the experience of the traditional small wineries and not for the wine. The tourists also did not get any special treatment by the independent wine producers in Hungary because they considered the tourists as a source of sales. The tourists were not treated any differently from other customers and they were given the sale offer; taste it and purchase it if you like it. This was because the only interest for the wine producers was the revenue from the sale of the wines and nothing more. In this case, the original culture was not touched by the cultural entrepreneurs, and minimal accommodation was made for the tourists such as the use of local wood for furniture. This resulted in the reduction of wine tourism in this area as there was no cultural entrepreneurship. There was nothing more in the offer except the wine, but afterwards some food dishes were also added to the menu but the tourism still was low because of the more complex wine tourism efforts by the other countries. The other countries excelling in wine production attracted more tourists than Hungary because they were able to blend the modern and traditional culture. Another case that supports the view of Meethan is the case of â€Å"Valley of the Arts† which attracted millions of customers each year at the arts festival that was organized by Istvan Marta. The organizers gave a deep thought on the cultural perspectives of the valley and they came to the conclusion that different tourists have different needs. The high spenders would require different type of product than attending just a simple art festival. The venues were made better and redesigned and the marketing efforts were doubled. The organizers attracted sponsorships and media coverage and hence added to the appeal. The locals were also involved and were allowed to attend the shows and these events were transformed into a very fashionable one. Soon the streets became crowded with high end cars owned by the German tourists. Hence, from these two case studies, the lessons learnt are that an entrepreneurial spirit is necessary for the promotion of the cultural tourism focusing on the core of the activity. Hence, modern and traditional cultures need to go hand in hand for the attraction of the international tourists. The commercial intent is necessary but the tradition should be kept alive which is the driving force for the tourists. The tourists should be given added facilities to augment the sales and attract the high spenders and luxury seekers. While Alan Clarke was working in the rural areas of Hungary, the local tradition was kept alive but still the communication technologies had a lot of penetration. The list of available international channels was far more than the number available in United Kingdom. The rural areas had access to Hungarian, Italian, Spanish, French, German, American and Russian channels (Clarke 2003). Jaipur, a culturally rich city of India, is particularly selected as a destination by tourists because of its historical attractions including the handicrafts and the heritage. Jaipur inhibits some of the forts built by the Moguls, centuries old paintings, the preserved sculptures and the traditional excellence in architecture that is preserved in buildings such as mosques. The tourists are also keen to visit Jaipur because of the folklore dances and Sufi music that was inspired by pundits and saints centuries ago. However, the city is continuously gearing up and adding more hotels and hi-tech facilities for the tourists. The core product of tourism in this city is the same for all tourists, but different income level groups can enjoy different class of tourism in this city (Kala 2008). High spenders can opt to spend their evenings in luxury spas while the people belonging to lower income group can live in small hotels and save money to spend on the purchase of handicraft and sculptures. According to a survey on the local residents, around 85% of the residents of Jaipur think that there was an evidence of development of city because of tourism and more entertainment facilities such as pubs, bars, hotels, swimming pools and parks were being developed. In the city, the local small scale industries were also being promoted by the government as the handicraft items were in demand by the foreign tourists. New hotels were also being built for accommodating the increasing number of tourists over time. This has induced employment and created new job opportunities for the local residents. Around 81% of the respondents in Jaipur thought that employment was being generated in the city because of the increasing tourism. Hotels and restaurants are labour intensive and hence they require the locals to work in their facilities. This generates more jobs for the local residents. Increasing tourism had positive impacts on the economy, but the locals have to face the problems such as increased traffic jams in the city and change in the culture. The way of living of the locals change as the standard of living gets better. Once the international tourists start coming in, and development start, then the primary culture is forgotten. 71% of the respondents of a survey in Jaipur commented that the increase in tourism has affected their traditional culture (Kala 2008). This change in traditional culture and way of living could harm the cultural tourism industry in the long term because the tourists will not be attracted to the city once the way of living of the locals is changed. The tourist-host interaction is very important in cultural tourism because it is an integral part of cultural tourism. The cultural tourists expect a spontaneous interaction with the locals and their traditional hospitality. However, if these important elements are vanished from the Jaipur culture, then the cultural tourists will no longer be attracted to the city. From the case studies presented, it is proved that only those tourist destinations have been successful which integrated modern and traditional culture. Authenticity of the culture is affected by designing attractions for the tourists but this depends upon the definition of cultural tourism. The modern tourist, however, can no longer enjoy cultural tourism that is untouched by modernity. There are also some issues when there is a blend of the two types of cultures. If these issues are managed properly, cultural tourism can be of great help to the economy of the destination and it can be responsible for raising the standard of living of the locals too. WORKS CITED Clarke, A. â€Å"The Cultural Tourism Dynamic. † Conference on Developing Cultural Tourism. UK: University of Nottingham, 2003. Kala, N. â€Å"Host Perception of Heritage Tourism Impact with Special Refernce to the City of Jaipur. † entrepreneurs 1, no. 1 (2008): 65-76.

Managing a business during a Financial Crisis - Free Essay Example

Sample details Pages: 11 Words: 3421 Downloads: 4 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? According to business dictionary, financial crisis is a condition in which the money supply is exceeded or more than the money demand. As a result, liquidity in the market is becoming lesser. In other words, the availability of the money in the market becomes lesser. Don’t waste time! Our writers will create an original "Managing a business during a Financial Crisis" essay for you Create order The available money is withdrawn from banks. Eventually, there are only two ways for bank to handle this problem. Banks either can sell other investments to make up for the shortfall or to collapse as unable to withstand with the crisis. In addition, the financial crisis in year 2007 up to the present is a crisis which caused by a liquidity shortfall in the United States banking system. The financial crisis brings a severe effect to community and banking industry. From the perspective of financial market, it has resulted in the collapse or been bought out of large financial institutions including banking institutions, index in the world stock market had fallen, and the effort of bailout financial systems of Wall Street titans by national governments. The entire financial system is affected by financial crisis. From the perspective of community, the financial crisis has impacts on almost every corner in the world and also every one of us who is living on this earth. The financial crisis has brought to the failure of key businesses, consumer wealth also decreases as the value of money is depreciated, influences the growth of the economy as inactive in economic activity. Eventually, standard of living of community is decline as the economic activity is the indicator of a countrys growth. The Lehman Brothers bankruptcy on September 15, 2008 was a major surprise to a global financial system which already suffering from the mortgage crisis and credit crunch. This collapse of investment bank sparked the worst financial crisis. The victims of the crisis consist of many Giant Corporation, such as Lehman Brothers and also some mortgage giants such as Fannie Mae, Freddie Mac, insurer American International Group (AIG), and banks Merrill Lynch, Washington Mutual, and Wachovia. These giants had been takeovers by the government or to be acquired by competitors at low prices. Causes of Financial Crisis 2008 One of the factors that make the financial crisis happened is the cheap credit which inspires people buy houses by credit especially people in the middle or lower level of income or make investments that is based on the pure speculation. The presence of cheap credit made more money ready in the market. Increasing in money supply aroused consumption and expenditure. When the demand on goods and services increased, price increased as well. As this situation continued, eventually inflation happened. Another cause of financial crisis is the greedy of mortgage lenders who made sub-prime loan to people who have poor credit ratings such as borrowers with a record of delinquent payment, previously charged-off loans, bankruptcies or even court judgment to pay off by charging higher interest rate. The loose regulation also made people easier to get loan and this made the demand of houses became higher and drove up the house values. Thus, lenders, insurers and investors made more money. Consequently, many borrowers could not afford to pay their home mortgage payments with adjustable rate mortgages (ARMs) because the monthly home loan payments were rising skyward. Thousand of home mortgage foreclosures as scores of lower-income home buyers, especially those with subprime mortgages. Lenders were suffered from illiquidity and unable to pay to investors. Mortgage-backed securities became more risky and the value of the securities was dropping, thus caused some investment firms like Lehman B rothers get suffer from it. Besides, insurers who insured those bad mortgages were not get away from suffer and involved in trouble as well. Impacts of Financial Crisis 2008 Impact on Financial Market According to Bloomberg Businessweek, the Standard Poors 500-stock index, the broad U.S. stock index, dropped 9% in September 2008 and another 17% in October 2008 as investors worried the worlds financial system would stop operating after the fall of Lehman Brothers that cause the world financial crisis. Many individual investors faced huge losses in almost every asset class such as equities, corporate bonds and real estate except for cash and government bonds which are less risky. Due to the sudden and huge losses faced by investors in the financial market, so when some clients came and seek for advices from financial planners, they have claimed that they do not want to expose to the stock market at all. (Frank, 2009). Being of this, the stock market had declined and become inactive as there were lesser investors trading and push the stock market. According to Professor Vickie Bajtelsmit, Chair of the Finance and Real Estate department at Colorado State University, investors often sell at the bottom of the market due to the huge losses that individual investors faced during crisis. They do not buy in the stock or other investments until investments are well and stable along their way to recovery. Therefore, they essentially lock in the losses and miss out on gains due to the fear appear in their mind. They are fear to take risk again. Bear Stearns The Bear Stearns Companies, Inc. was a global investment bank and securities trading and brokerage firm based in New York City. In addition to this, it was the fifth-large U.S. investment bank before its collapse. The main business areas of Bear Stearns were capital markets which consisted 80% of its business including equities, fixed income, investment banking, 10% of its business areas was wealth management, and another 12% was global clearing services. Besides, Bear Stearns was involved in securitization and issued huge amounts of asset- backed securities. Before Financial Crisis Bear Stearns had survived major crisis since it was founded in 1923, such as the Great Depression, World War II, the 1987 market crash and 11 September 2001 attacks. In the months following 11 September, Bear Stearnss executives were relied heavily on the manufacture and the sale of mortgage-backed securities. In the short run, Bear Stearnss decision to become a leader in manufacture and the sale of mortgage-backed securities resulted in huge profits for them. Bear Stearns capitalized on the boom of mortgage market that happened in 11 September when the Federal Reserve loosened the money supply. Another source of profit of Bear Stearns was a small hedge-fund division with $45 million equity investment. Bear Stearns has established a hedge fund called High-Grade Structured Credit Fund with money from outside investors. This hedge fund invested in low-risk, high-grade debt securities, such as Collateralized debt obligations (CDOs), which has the investment ratings of AAA or AA. The fund used leverage to generate returns by borrowing money in the low-cost, on the other hand buy higher yielding and long-term CDOs at short-term repo markets. In August 2006, Bear Stearns opened a second fund called the Enhanced Fund that used more leverage and it was more risky than the High-Grade Structured Credit Fund. High-Grade Structured Credit Fund never had a losing month for 40 months and achieved a 50% cumulative return. The Enhanced Fund also performed well during its short existence. During Financial Crisis Subprime Mortgage Hedge Fund Crisis The subprime mortgage crisis is an ongoing real estate and financial crisis because of the fall in U.S. housing prices. Securities backed with subprime mortgages which were widely held by many financial firms faced losses due to lost in the securities value. During the weeks of July 2007, Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of their value due to the rapid decline in the market for subprime mortgages. A report in the New York Times dated September 21 noted that Bear Stearns posted a 61 percent drop in net profits due to their hedge fund losses. In addition to this, Bear Stearns was writing down a further $1.2 billion in mortgage-related securities. Besides, Standard Poors downgraded the companys credit rating from AA to A. After financial Crisis Federal Reserve Bank of New York and J. P. Morgan Chase had provided emergency funding to prevent the financial collapse of Bear Stearns in year 2008. J. P. Morgan Chase is a global investment banking and securities firm. It is also one of the Big Four banks in United States. The Federal Reserve issued a non-recourse loan of $29 billion to J. P. Morgan Chase for it to bail out Bear Stearns. J. P. Morgan Chase is just paying $10 a share to take over Bear Stearns which a little compared to year 2007 which was trading for as high as $170 a share. The purchase price indicated that how far the value of Bear Stearns dropped with the collapse of its two big hedge funds. As the consequences of failure of huge investment bank, U.S. financial system is almost collapse if the Federal Reserve did not take action to rescue Bear Stearns. Bear Stearnss shareholders had faced losses and this incident has shrunken the investors confidence in investing in stock markets. Fannie Mae and Freddie Mac Fannie Mae (Federal National Mortgage Association) was established in 1938, and its brother company Freddie Mac (Federal Home Loan Mortgage Corporation) was founded in 1968. Both Fannie Mae and Freddie Mac are government sponsored enterprise (GSE) which created to expand home ownership. In addition, it is also provides a secondary home loan market for buyers. Fannie Mae was a middleman and never made loans directly to the consumer. It buy mortgages from approved mortgage sellers, either for cash or in exchange for a mortgageÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ backed security (MBS) for a fee, carries Fannie Maes guarantee of timely payment of interest and principal. Fannie Mae keeps some but resells most to investors guaranteeing to pay off a loan if the borrower defaults. By purchasing the mortgages, Fannie Mae and Freddie Mac provide banks and other financial institutions with fresh money to make even more new loans, thus increasing the pool of homeowners and allowing Fannie Mae to continue making large profits. Before Financial Crisis Due to the political pressure, Fannie Mae and Freddie Mac have had to expand their home ownership to middle or lowerÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ income families or poor credit rating borrowers and this led to a riskier mortgages being issued, as well as riskier MBSs. There was a actual risk was that Fannie Mae might guaranteed and pledged those questionable mortgages and lose out when many borrowers were not capable to discharge their payment or obligations. During Financial Crisis Unfortunately, in year 2007, the subprime mortgage crisis began. Poor credit ratings borrowers were unable to pay their mortgages payment especially with adjustable rate mortgages (ARMs) because the payments risen sharply. This made a sudden rise in home foreclosures. Consequently, house prices had fallen and cause more and more foreclosures added to the large inventory of homes. Besides, strict in lending standards made it difficult for potential borrowers to secure new mortgages. The decline in house prices led to a huge amount of losses for Fannie Mae and Freddie Mac. The US government attempted to calm the market in July 2008 because government believes that Fannie Mae and Freddie Mac play an important role in the US housing finance system. Therefore, Treasury Department and the Federal Reserve decided to take steps to build confidence in the companies. The steps included permitting both corporations enter to Federal Reserve discount window and removing the prohibition and allowed Treasury Department to buy Fannie Maes and Freddie Macs stock. However, in August 2008, shares of both Fannie Mae and Freddie Mac had plummeted more than 90% from their one-year prior levels. At the same time, their investments in other financial institutions reported losses as well. Their capital adequacy ratio of 0.5% was unable to meet up to the requirement of subprime lending crisis. Creditors and some responsive investors responded it by limiting and restraining the credit supply and selling those shares. Treasury Secretary, Hank Paulson asserted that these losses could jeopardize the US financial system entirely because it already struggling by housing markets and it could have collapsed if Fannie Mae and Freddie Mac had failed. Besides, the fall in the securities of both companies would result in losses to many institutions like pension funds, mutual funds, and global economies. Many US banking institutions own stock in Fannie Mae and Freddie Mac, all are now facing pending dividends in addition to a huge and visible loss in share value. Some banks may also have problems with capitalization due to the related loss of invested funds. Fannie Mae and Freddie Mac had great impact on our financial system that a failure of one of them would give rise to a great turmoil in our financial markets. Besides, the credit default swap (CDS) market is concerned as well, the federal bailout of Fannie Mae and Freddie Mac being looked on as a type of bankruptcy. So, a new protocol is being developed to evaluate and settle Fannie and Freddies credit default swaps accurately. After financial Crisis Consequently, in September 2008, the Federal Housing Finance Agency (FHFA) announced the federal takeover of Fannie Mae and Freddie Mac and placed them under conservatorship and took control of both the companies assets and operations. The bailout of these two government sponsored enterprises (GSEs) happened in the mid of the current credit crisis. At the time of the takeover, Fannie and Freddie owned or guaranteed about half of all American home loans and had total obligations of $5 trillion. So, making their conservatorship is one of the largest and potentially costliest federal bailouts of private companies in US history. It is also a most expensive bailouts ever faced by the taxpayers in the US history. The value of the companies common stock would be diluted but not die out whereas US government may protect the holdings of other securities such as company debt and preferred shares. Government also make quarterly injections as the companies losses warrant. As a result of the governments intervention, the cost of borrowing for Fannie Mae and Freddie Mac should turn down, because the government will be standing behind their debts. Although the US Treasury has made a solid $200 billion commitment to maintain financial operations and support mortgage guarantees, but stockholders will bear any primary losses and taxpayers may eventually be in risk of covering the firms combined liabilities. The government conservatorship is planned to maintain and sustain the financial stability and capitalization of both Fannie Mae and Freddie Mac as well as to prevent further losses when possible. Feds responses In order to minimize the effect of the financial crisis, Fed had taken some actions to response to this financial crisis. First of all, we need to investigate on its monetary policy. Federal considered the dual mandate which is price stability and maximum employment. So, policymakers conduct monetary policy through open market operations, discount rate and reserve requirements. By changing the discount rate, Fed manages to influences the demand and supply of balances at the Fed and shifts the actual federal funds rate toward the target which been set during the meetings of the Federal Open Market Committee. After decreasing the target federal funds rate, bank borrowing became less expensive and more affordable to bank because the spread between the target federal funds rate and the primary credit rate was narrowing. This spread was 100 basis points in the early August of year 2007 but narrowed it to 25 basis points to make available source of liquidity to strong financial institution. However, the rate offered to banks is still an above-market rate. On the other hands, Federal Reserve requires the depository institutions maintain reserve requirement or in other words amount of funds either in the form of vault cash or deposits with Federal Reserve Banks. Changes in the reserve requirement formally will influence the bank liquidity and the lending capacity in the market. Besides, Congress was allowed Federal Reserves to pay interest on required reserve balances and surplus balances. This will helps Federal Reserve to expand its balance sheet to provide the liquidity for financial stability. Next, Fed formed a new lending procedure in the form of the Term Auction Facility (TAF) and the Primary Dealer Credit Facility (PDCF), and transformed their securities lending program and introducing the Term Securities Lending Facility (TSLF). The TAF offers commercial banks funds through an unknown auction facility to remove the stigma attached to normal discount borrowing. The PDCF extends lending rights from commercial banks to investment banks whereas TSLF allows investment banks to borrow Treasury bills, notes and bonds using mortgage-backed securities as collateral. All of these programs offered funding for terms of roughly one month at relatively favourable interest rates. Fed also made adjustments to original procedures. Firstly, they extended the term of their repurchase agreements to 28 days and accepted mortgage-backed securities. Moreover, Fed extended the swap lines to European Central Bank and the Swiss National Bank that allowed them to offer dollars to commercial banks in their currency areas. Central banks balance sheet is one of the important elements in this financial crisis. There are two principles in managing its assets and liabilities. First, size of the balance sheet must been controlled or in other words is the quantity of monetary base. By changing the level of the monetary base, Fed can keep the market-determined federal funds rate near to their target. Furthermore, central bank is responsible to control the composition of its assets. Fed can make decision on which assets to hold. These assets include treasury securities, foreign exchange reserves and others. The assets of Fed hold highly related to its new programs. For example, by the end of March 2008, Fed had committed more than half of its assets to the new programs such as $ 100 billion to the Term Auction Facility. Changes in the combination of central bank assets are projected to control the relative price of a financial asset. In conclusion, Fed broaden its traditional programs and implemented non-traditional programs in order to improve credit markets through infusions of liquidity and restore the confidence in turn to maintain financial stability. Recommendation In our opinion, we think that Fed should review its policies. Fed was not responding well to reduce the impacts brought by financial crisis. For example, Feds action of cut interest rates and loosen the money supply in market. Instead of lowering interest rate, Fed should charge higher interest rate to make the emergency credit more costly for better- targeted lending. Besides, high interest rate discourages consumption. As a result, inflation will decrease. On the other hands, Feds responses had forced central banks in countries outside U.S. which manage their exchange rates against the dollar to import inflation rather than deflation. Consequentially, these countries currencies have become undervalued. As their real interest rates had declined, these countries in fact are exporting inflation back to the US. So, emerging markets need to tighten their monetary policy further in order to reduce inflation. By revaluing against the dollar, these countries can prevent inflationary pressures from the U.S. Besides, we think that government should promote a recapitalization of the banking systems to enhance it. This can help to inject some public capital into banks and pressure banks to raise additional private capital. Government also have to ensure that all the depository institutions must maintain the adequate reserves in their vault. Lastly, government can loosen the repayment terms on mortgage agreements in order to reduce the defaults of payments and foreclosures. Government is also encouraged to expand its monetary and fiscal policies abroad. This is because the increase in spending in countries outside U.S. can offset the decrease in U.S. consumer spending. Besides, this allows US to offset the fall in housing construction by increase in exports activities. Conclusion In conclusion, financial crisis can harm the financial markets either in US market or global and the economy will experience recession. So, Fed as the central bank for U.S. is bearing heavy responsibilities in the market. All the decisions made should consider many factors so that the market would not collapse due to the crisis. Financial crisis had caused panic to people in the markets. Panic drives people to sell risky assets to raise money in cash. People save more and spend less. Besides, corporations also cut their spending and investments. Worst, some corporations faced difficulty to defend themselves and finally fall into bankruptcy. Even though some actions had taken by Fed and Treasury department to solve this financial crisis, but the actions taken did not fully solve the problems and some actions even bring the opposite effects in the markets. So, government must ensure the market stability and liquidity by proper using its tools such as monetary and fiscal policies. Besides, corporations and people must also cooperate with government to prevent financial crisis happen.