You see, an administration before had been given two choices: let the nation heal itself or plunge astronomical amounts of money into industry causing a national debt far beyond anything we had ever seen. The choice was clear: Hoover would have to gradually improve the country without creating an enormous national deficit. However, FDR was not so subtle. Through the use of what I lovingly dub, the "Money Arm" he threw money at whatever obstacle was presented to him. "Unemployment?
FINK-403 Case Studies in Finance The Rise and Fall of Michael Milken 4/9/2014 The Rise and Fall of Michael Milken Michael Milken is known for many things. He is known to many as the “junk-bond king”, the “leveraged-buyout king” an innovator who changed the face of financial securities, to others he is seen as a crook who allowed his greed to beat out his integrity in order to make himself and those around him wealthier. The truth, as in most cases, is more than likely to fall somewhere in the middle. Michael Milken’s story is one with many highs and very few lows, while those lows would be considered catastrophic for some, Michael Milken conducted himself with a grace that very few people possess. He weathered the storms he was confronted with throughout his life and continued to remain on top.
1. Outright purchase of Smith stock a) Yes, Mr. Jones should purchase the stock of Smith outright, leaving Smithon intact as purchasing the stock of Smith co. is the simple and reasonable transaction where he can also minimize the cost of administrative matters. While issuing debt in his Johnson Services Co. to pay for the Smith Company there can arise debt issue for Johnson co if the cash flow of the company is insufficient in making such purchase to buy Smith co stock. b) Converting C corp to S corp has taxation benefit as C corp faces double taxation. Here, converting Smithon to S corp can give an advantage of having a control of limited or small number of shareholders.
He enjoyed a good reputation in the market because his firm was consistently giving high return for his clients. It was revealed later on that he employed Ponzi scheme to defraud his entire investor portfolio. With the promise, of large returns as bait, the fraudster took in money from new investors and used it to pay off the earlier investors until no more new recruits could be found and the whole scheme collapsed, with the newest clients losing all especially the nonprofit organizations and education institutions. Bernard Madoff had a legal firm to attract investors with high return rate also eluded the investigation from SEC; he injected money to the legal firm from illegal one when the loss happened. His family did a lot for this fraud, Bernard's son, and his brother was involved in his business, his wife did the social networking to attract celebrities to open account in his firm.
The big financial-center banks that erivatives may have won a Nobel, but are they really a sell derivatives, moreover, may have an incentive to push a good idea? Companies have suffered huge losses trading product without clearly explaining the risks to a customer. in the type of derivative financial products whose invention was “You see a gap between the sophistication of Wall Street firms facilitated by the work of Fischer Black and the Nobelists. and the client firms,” notes Suresh M. Sundaresan of the Options and other derivatives—including futures, forwards Columbia University Graduate School of Business. “Because and swaps—are instruments for speculation as well as hedges bonuses on Wall Street are tied to transaction volume, this creagainst a drop in an asset’s value.
Sarbanes Oxley came into force mainly due to the financial scandals committed by corporate giants like Enron, WorldCom, etc. Since then the Sarbanes Oxley act had been the most important piece of legislation which seriously affects the corporate governance, financial disclosures and total accounting pattern in the companies. After the Sarbanes Oxley act came into force, accounting system and financial statements disclosed by the companies made tremendous progress. This improvement has been possible due to rigorous requirements stated in the Sarbanes Oxley act. Due to this improvement it helps to protect investor confidence in the companies and the US legislature as well.
The book Dumb Money, written by Daniel Gross describes the era of “Dumb Money” and even “Dumber Money” causing the credit bubble that occurred prior to the 2008 financial crisis. Gross explains that it wasn’t “skeezy money managers” that caused the recent financial tsunami, but rather Ph.D. economists, central bankers, CEO’s and investment bankers. Gross reveals that the four factors that precipitated the Dumb Money era were low decreasing interest rates, increasing asset prices (real estate in particular), plentiful borrowers, and a strong debt market. He explains that due to the “shadow banking system” American financial culture was too fixated on short-term gains rather than long-term gains and encouraged excessive borrowing, lending, and trading. Gross criticizes
It uses Public money unnecessarily and is unfair to taxpayers. It makes financial reform going forward much more difficult. Protecting the markets for derivative products like CDOs and CDSs allows for a repeat of the risky practices that got us into the current crisis. And finally, by guaranteeing the corporate existence of large banks, we are maintaining their power and priorities and thus are not likely to see gains on predatory lending, foreclosure abuse, and other areas where reform is sorely needed. 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.
In Harry J. Carman and Harold C. Syrett’s, A History of the American People, they state that, “As more investors put their money into securities (stocks) in hope of making a quick profit on a speculative rise in stocks, the characters of the New York Stock Exchange was fundamentally altered” (Doc F). Because of the rise in stocks during this period were so high, many people did not have any reasons to believe that it would drop or change anytime soon. So rather than seeing this as a business and investment opportunity to make money, they saw it as an opportunity to gamble to make quick money. In addition, they also explain that, “Liberal margin requirements permitted the investor to enter the market in a shoestring. By buying on margin, the investor had to pay a fraction of the quoted price of any particular security.
The above named moral and economic implications of the “Occupy Wall Street” movement can be analyzed with these theories. The moral implications show that the rich and powerful in the society base their actions on the Kantian theory. This is because they oppress, harm, and degrade the other citizens. They get their way to the top by extorting the common citizen. This is clear as the protestors