The author’s main theory is that the economy is headed for a recession. The text book defines fiscal policy as: Changes in government spending and tax collections designed to achieve a full-employment and non inflationary domestic output. Government spending is understated and slightly overlooked in the article. The author only hints of the fact that federal government spending on defense is down. “Another negative factor was a 6.6 percent drop, on an annualized basis, in federal defense spending.” She supports that the decrease in GDP is directly related to the decrease in government spending g which proves how fiscal policy can affect overall economic growth.
Bartender Bailout The Missing Piece of the U.S. Economic Bailout Plan By: Derek Hubenak Bartender Bailout: The Missing Piece of the U.S. Economic Bailout Plan The United States congress decided to enact an economic plan to rebuild the U.S. economy and, in turn, has directly affected my income extensively. I have seen the effects of our economy slowing as consumers hold tight to hard earned money because of a fear the markets may crash any day. The Dow drops continuously and consumer spending drops just as fast. One can not thrive without the other. The US economic bailout plan is unethical and outright criminal.
Executive Summary Fraudulent financial reporting can have adverse effects on companies, as well as, public confidence in capital markets. This paper examines financial statement fraud and analyzes the financial statement fraud that occurred at Rite Aid in the early 2000’s. The result of Rite Aid’s fraud, as well as many other major accounting scandals, led to the creation of the Sarbanes-Oxley (SOX) Act of 2002. SOX supports the growing need to restore consumer confidence in accounting and reporting practices. Companies want to put their best foot forward when they release financial statements.
Recently, the market is on an uptake with its improving stocks & bonds. The light in a year-plus-long tunnel is bringing both hope and realization. The market improvement is also shedding a truth on a troubling facet of the economy, the 401(K). The realization Stephen Gandel, of “Time Magazine”, has highlighted in his article “Why It’s Time to Retire the 401(k)” focuses on the sad truth that 401(K) is not effective and thus can not be relied on. 401(K) has become ineffective because of the corruption of big business, the misunderstanding of and as a result a mishandling of the 401(K) accounts, and its correlating dependency on the market’s success.
Ultimately, what caused Mozilo’s, and subsequently Countrywide’s downfall can be attributed to greed and other unethical behaviors. Countrywide serviced more than $1.5 trillion dollars in home loans (Englund, 2008) and Mozilo was trying to increase that, which led to bad loans and their eventual downfall. JPMorgan Chase, on the other hand, has been a steady presence in the banking and loan industry, with very little issues arising from the mortgage debacle that plagued many other banks. This is most likely because they are dedicated to being a bastion of corporate responsibility, always providing an example of how a bank should
1.a. Summary of the case identifying the key issues and its stakeholders Moody's, the oldest and more recently most profitable credit rating agency in the world, underwent strong criticisms for misjudging the inherent risks of complex, asset backed securities in an already flawed financial structure that inevitably helped fuel the 2008 global financial crisis. Instead of being arbiters of risk Moody's business model had over time adjusted itself to meet the needs of its market stakeholders; a colorful variety of hyper optimistic lenders, investors, bankers, issuers, governmental sponsored organizations, and Moody's stockholders and employees. Equally symptomatic to the defect financial structure were the influential non market stakeholders like the US government and its regulatory arms and oversight committees. Shorty after Moody's started rating asset based securities, especially subprime mortgages, they started defaulting and eventually were downgraded.
Total liabilities ÷ Total stockholders' equity 283,800÷292,200=97.1% 248,000÷268,000 = 92.5% j. (Income before taxes+ Interest) Interest (55,000 + 8,000) ÷ 8,000 = 7.9 times (54,800 + 7,200) ÷ 7,200 = 8.6 times k. Plant assets ÷ Long-term debt 270,000 ÷ 132,000 = 2.05 : 1 255,000 ÷ 127,000 = 2.01 : 1 l. Net income ÷ Net sales 32,000 ÷ 230,000 = 13.9% 32,800 ÷ 210,000 = 15.6% m. Net sales ÷ Avg. total assets 230,000 ÷ 546,000=0.42 210,000 ÷ 516,000=0.41* n. Net income ÷ Avg. total assets OR (l.) x (m.) 32,000 ÷ 546,000 = 5.9% 32,800 ÷ 516,000 = 6.4%* o. Net income ÷ Avg.
If we want to help the people who are suffering in this crisis and recession, then we should make financial policies with them directly in mind. Just throwing money at the banks will not get the job done.” In reference to “Bailout Nation”, Wolfson proves that bailing out large insolvent banks hurt the taxpaying people. He brings to light where the people’s money really goes, and how it’s
Tax Exempt Status A Review of Credit Unions Tax Exempt Status Professional Writing Instructor: Alice B Smith Cohort Number LNBA06 August 12, 2013 Credit Unions 1 Thesis Having the tax exempt status can give credit unions a competitive edge by offering lower loan rates, lower fees, higher savings rates, and options for the consumer. Banks do not agree with the tax exempt status that credit unions have been given. Credit Unions 2 Why Credit Unions Should Remain Tax Exempt 2008 and 2009 will be remembered as the years the invisible became visible. The world financial markets and the banking industry became the center of attention due to
If the poor performance is released, his wealth would be negatively affected and of course he wouldn’t be able to afford his luxury life style. 2) Opportunities: * The value of account balance in HealthSouth’s books is significantly based on estimates, such as bad debt and other liabilities, which allows the management to manipulate easily. * The ineffective in internal control, monitoring and control environment among the firm, which allows Scrushy control everything, do what he wants, or fire who goes against him. Also, the collusion between the management, involving bribing the auditor, makes the opportunities for committing fraud are more obvious. 3) Rationalization: * The management, especially the CEO and controller, agree on using “flexible accounting” for bookkeeping in order to meet the expectation and hide the poor performance.