Current Financial Market Events and their Implications

Current Financial Market Events and their Implications Event one The recent global financial crisis has dealt a heavy blow on the American International Group, leading to loss of mortgage-backed securities. Following this loss, AIG has filed a suit against Bank of America in a bid to recover over $ 10 billion USD (Story and Morgenson 2011).Advertising We will write a custom term paper sample on Current Financial Market Events and their Implications specifically for you for only $16.05 $11/page Learn More AIG maintains that Bank of America, along with its Countrywide Financial units and Merrily Lynch sold to investors misrepresented mortgages that had been placed as securities. AIG is blaming banks for this historic loss and maintains that it was misled into purchasing risky securities while the property market was still faced with a housing boom. Other large financial institutions that IAG plans to sue on similar grounds include JPMorgan, Goldman Sachs, and Deutche Bank. The US Justice Department has also receiv ed a number of credit crisis cases but because none has yet been prosecuted, consumers and investors are now apportioning blame on financial institutions for the loss (Story and Morgenson 2011). Nonetheless, the Justice Department is pushing for the prosecution of these cases, albeit at a slow pace. For example, a former chairman of Taylor, Bean Whitaker, a mortgage company, has been handed a jail sentence. Requests by investors and consumers for the Justice Department to hold investment banks accountable for the losses occasioned by the global financial crisis are being weighed in by State attorney-general. These cases mainly involve foreclosures and mortgage servicing. This is despite the fact that the government is yet to start following up on the most fundamental of these practices. Event Two President Obama is pushing a strategy to create more jobs and at the same time, ensure larger long-term deficit cuts. The proposed tax cuts are aimed at combating long-term unemployment. T herefore, new spending on the construction industry is anticipated, as well as extending tax cuts to firms hiring workers. The president is also proposing for a new deficit reduction (Calmes 2011). These moves are aimed at stimulating economic growth by encouraging consumers to spend and businesses to hire. However, the Republicans are opposed to additional stimulus proposal, blaming President Obama for lacking a detailed debt-reduction plan. They are also opposed to higher tax revenue.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The pledge by the central bank to maintain interest rates at a near zero for a minimum period of two years has received opposition from two policymakers with the US Federal Reserve. They argue that such a move is an indication that the government intends to support the stock market. The decision to reduce interest rates up to mid-2013 has also be en criticized, with opponents terming the policy as inappropriate. Event Three A strong Australian dollar in 2011 has resulted in low domestic travel and this has prompted Wotif.com, an Australian based online travel company to consider expanding its business to the Asian market. In 2009, domestic leisure travel business, which also happens to be Wotif.com’s core business, was stronger because the Australian dollar was getting weaker against the major currencies (LaFrenz 2011, p. 39). Now, a lot of Australians are opting for overseas trips, at the expense of domestic travel. This has helped to strengthen the international accommodation booking. Wotif.com has enjoyed tremendous growth since 2006, when the company was listed on the ASE (Australian Securities Exchange). However, in 2011, its growth slowed significantly. As part of its growth strategy, the company has focused on the Asian market with the adoption of novel-phone-based initiatives, a move that the company sees as h elping to facilitate its growth (LaFrenz 2011, p. 39). Already, the company does 15 percent of its bookings in Asia. Besides mobile bookings, the company also plans to enter into joint ventures with a number of travel firms in Asia in order to get a share of the expanding domestic travel market. The Asian local market boasts of a growing middle class who are not only eager to travel, but also have more disposable income. Event Four In the second quarter of 2011, the US economic expansion was below what had been forecasted, and this is a pointer to the weakness of the economy. This has forced the Federal Reserve to revise its growth forecast downwards (Willis 2011, p. 56). Between April and June, the GDP of the US is estimated to have increased at an average rate of 1 percent per annum. The previous estimates had been pegged at 1.3 percent. At the same time, the month of August recorded the lowest level of consumer sentiments since November 2008, in the face of political wrangling an d financial-market turmoil regarding the budget deficit (Willis 2011, p. 56). The country’s GDP stands at USD 13.26 trillion, and it is still below its peak before the recession.Advertising We will write a custom term paper sample on Current Financial Market Events and their Implications specifically for you for only $16.05 $11/page Learn More On a lighter note, there has been an upward revision of salaries and wages, thereby revealing the highest gain in over 4 years. At the same time, corporate profits have grown. Following the recent downgrading of US debt by S P amid concerns of a default in the euro-zone, coupled with deficit-cut measures, economists have been forced to reduce growth forecasts. Analysis The fact that the Justice Department has been slow to prosecute the culprits who initiated the recent global financial crisis has only acted to reduce investor and consumer confidence. As a result, the economy has been growing at a slower rate t han anticipated, and this has prompted the Federal Reserve Bank to revise the country’s growth rate downwards. When the economy fails to attain the predicted rate of growth, this results in low consumer sentiments. When consumers are less optimistic about the economic growth rate, their spending and saving rates are likely to decrease (Colin 2008, para. 3). Stimulus packages are therefore a way of stimulating the economy when faced with slow growth. Other measures that a government can institute to deal with a sow rate of economic growth are to impose tax cuts and facilitate temporary spending. Economists suggest that such moves add to deficits initially. In the long-term though, these measures could lower costs for safety-net programs, increase tax collections and in the end, maintain smaller deficits than would be the case with lowering unemployment and spurring growth (Cooper 2008, p. 208). Stimulus spending is supported by the Keynesian economic theory which states that w hen the government seeks to spend a huge chunk of borrowed money, this helps to boost the economy (Davidson 2009 p.18). Economic historians have maintained that the US made it through the Great Depression thanks to Keynesian-style spending. Besides stimulating the economy, there is the need also to ensure that we reduce deficits especially when faced with shrinking revenues. A stimulus package pumps money into the economy albeit temporarily, thus encouraging consumer spending. Businesses are also encouraged to hire more employees. Otherwise, businesses may be forced to consider relocating their business to other economies that have not borne the full consequence of a global economic crisis. This is the case with Wotif.com, when it decided to venture into the Asian market when domestic travel in Australia was no longer attractive to help the company maintain its hitherto spectacular growth.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Reference List Calmes, J., 2011. Obama to push for jobs, tax cuts. The New York Times, Web. Colin, B., 2008. Consumer confidence- global monitor of consumer sentiment index reports and country update on consumer confidence changes. Marshal Place  Associates, Web. Cooper, G., 2008. The origin of financial crises: central banks, credit bubbles and the  efficient market fallacy. Petersfield, Hampshire, U.K.: Harriman House. Davidson, P., 2009. The Keynes Solution: The Path to Global Economic Prosperity. London: Palgrave=McMillan. LaFrenz, C., 2011. Dollar drives wotif.com’s Asia focus. The Australian Financial  Review, 11 August. p. 39. Story, L., Morgenson, G., 2011. AIG sues bank for GFC losses. The New  York Times, Web. Willis, B., 2011. US growth forecast revised down. The Australian Financial Times, 9 August 2011. p. 56.

Biography of Chiang Kai-shek

Biography of Chiang Kai-shek Chiang Kai-shek (1887 to 1975), also known as Generalissimo, was a Chinese political and military leader who served as head of the Republic of China from 1928 to 1949. After being forced from power and exiled by Chinese Communists after World War II, he continued to serve as president of the Republic of China on Taiwan. Fast Facts: Chiang Kai-shek Also Known As: GeneralissimoKnown For: Chinese military and political leader from 1928 to 1975Born: October 31, 1887 in Xikou, Zhejiang Province, ChinaDied: April 5, 1975 in Taipei, TaiwanParents: Jiang Zhaocong (father) and Wang Caiyu (mother)Education: Baoding Military Academy, Imperial Japanese Army Academy Preparatory SchoolKey Accomplishments: Along with Sun Yat-sen, founded the Kuomintang (KMT) political party. In exile, Director General of the Kuomintang government on TaiwanMajor Awards and Honors: Recognized as one of the Big Four allied victors of WWIISpouses: Mao Fumei, Yao Yecheng, Chen Jieru, Soong Mei-lingChildren: Chiang Ching-kuo (son), Chiang Wei-kuo (adopted son)Notable Quote: â€Å"There are three essential factors in all human activity: spirit, materials, and action.† In 1925, Chiang succeeded Sun Yat-sen as leader of the Chinese Nationalist Party, known as the Kuomintang, or KMT. As head of the KMT, Chiang expelled the communist arm of the party and succeeded in unifying China. Under Chiang, the KMT focused on preventing the spread of Communism in China and fighting increasing Japanese aggression. When the United States declared war on Japan in 1941, Chiang and China swore their allegiance and assistance to the Allies. In 1946, Communist forces led by Mao Zedong, a.k.a. Chairman Mao, overthrew Chiang and created the People’s Republic of China. From 1949 until his death in 1975, the exiled Chiang continued to lead the KMT government in Taiwan, recognized by the United Nations as the legitimate government of China. Early Life: Chinese Revolutionary Chiang Kai-shek was born on October 31, 1887, in Xikou, a town now in the Zhejiang province of the People’s Republic of China, to a well-off family of merchants and farmers. In 1906, at age 19, he began his preparations for a military career at the Paoting Military Academy in North China, later serving in the Japanese army from 1909 to 1911, where he adopted the Spartan ideals of the Japanese Samurai warriors. In Tokyo, Chiang fell in with a group of young revolutionaries plotting to overthrow China’s Qing dynasty ruled over by the Manchu clan. Chinese political and military leader Chiang Kai-shek (1887 - 1975), circa 1910. FPG / Getty Images When the Qing Revolution of 1911 broke out, Chiang returned to China where he took part in fighting that succeeded in overthrowing the Manchus in 1912. With the fall of China’s last dynastic order, Chiang joined with other republican revolutionaries to oppose former Qing dynasty general Yuan Shikai, China’s new president, and eventual emperor. Association With Sun Yat-sen After an attempt to overthrow Yuan Shikai failed in 1913, Chiang helped found the Kuomintang (KMT) party. Largely withdrawing from public life from 1916 to 1917, he lived in Shanghai where he reportedly belonged to an organized financial crime syndicate known as Qing Bang, or Green Gang.  Returning to public life in 1918, Chiang began a close political association with influential KMT leader Sun Yat-sen. Generalissimo Chiang Kai-Shek speaking at meeting of Chinese National Assembly. A picture of the father of Chinese Democracy, Dr. Sun Yat-Sen, behind him. The LIFE Picture Collection/Getty Images / Getty Images Attempting to reorganize the KMT along communist lines, Sun Yat-sen sent Chiang to the Soviet Union in 1923 to study the policies and tactics of its Red Army. After returning to China, he was appointed as commandant of Whampoa Military Academy near Canton. As Soviet military advisers streamed into Canton to teach at Whampoa, Chinese communists were admitted into the KMT for the first time. Anti-Communist Leader of the KMT When Sun Yat-sen died in 1925, Chiang inherited leadership of the KMT and began trying to stem the rapidly growing influence of the Chinese communists within the party without losing the support of the Soviet government and military. He succeeded until 1927, when in a violent coup, he expelled the communists from the KMT and quashed the Chinese labor unions they had created. Hoping his communist purge would please U.S. President Calvin Coolidge, Chiang succeeded in establishing closer relations between China and the U.S. government.   Chiang now continued to reunify China. As supreme commander of the Nationalist revolutionary army, he directed massive attacks against northern tribal warlords in 1926. In 1928, his armies occupied the capital in Beijing and established a new Nationalist central government in Nanking headed by Chiang. The Xian Incident and World War II In 1935, even as the Empire of Japan threatened to occupy Northeast China, Chiang and his KMT continued to focus on fighting Communists within China rather than the external threat of the Japanese. In December 1936, Chiang was seized by two of his own generals and held hostage in China’s Xian Province in an attempt to force the KMT to change its policies regarding Japan. Held captive for two weeks, Chiang was released after agreeing to actively prepare his armies for war with Japan and to form an at least temporary alliance with the Chinese communists to help fight the Japanese invaders. With the horrific Japanese Rape of Nanking massacre in 1937, all-out war between the two countries erupted. Chiang and his armies defended China alone until 1941, when the U.S. and other Allies declared war on Japan. Post-World War II and Taiwan While China held an honored place among the Big Four allied victors of WWII, Chiang’s government began to decay as it resumed its pre-war struggle against internal communists. In 1946, the civil war resumed and by 1949, the communists had taken control of continental China and established the People’s Republic of China. 1943-Cairo, Egypt: President Roosevelt seated outside during the Cairo Conference with Mr. and Mrs. Chiang Kai Shek, and Winston Churchill. Bettmann Archive / Getty Images Exiled to the province of Taiwan, Chiang, along with his remaining Nationalist forces established a weak dictatorship on the island. Over the next two decades, Chiang reformed his Nationalist Party, and with ample American aid began Taiwan’s transition to a modern and successful economy. In 1955, the U.S. agreed to defend Chiang’s Nationalist government on Taiwan against future communist threats. However, the pact was weakened in the early 1970s by improving relationships between the U.S and the People’s Republic of China. In 1979, four years after Chiang’s death, the U.S. finally broke off diplomatic relations with Taiwan in order to establish full relations with the People’s Republic of China. Personal Life Chiang had four wives during his lifetime: Mao Fumei, Yao Yecheng, Chen Jieru, and Soong Mei-ling. Chiang had two sons: Chiang Ching-Kuo with Mao Fumei, and Chiang Wei-Kuo, whom he adopted along with Yao Yecheng. Both sons went on to hold important political and military positions in the Kuomintang government in Taiwan. Born and raised a Buddhist, Chiang converted to Christianity when he married his fourth wife, Soong Mei-ling, popularly called â€Å"Madam Chiang† in 1927. He spent the rest of his life as a devout Methodist. Death Months after suffering a heart attack and pneumonia, Chiang died of cardiac malfunction and renal failure on April 5, 1975, in Taipei at the age of 87. While he was mourned for over a month on Taiwan, Communist state-run newspapers in mainland China briefly noted his death with the simple headline â€Å"Chiang Kai-shek Has Died.† Today, Chiang Kai-shek is buried along with his son Chiang Ching-Kuo at Wuzhi Mountain Military Cemetery in Xizhi, Taipei City. Sources Fenby, Jonathan (2005). Chiang Kai Shek: Chinas Generalissimo and the Nation He Lost. Carroll Graf Publisher. P. 205. ISBN 0-7867-1484-0.Watkins, Thayer. The Guomindang (Kuomintang), the Nationalist Party of China. San Jose State University.Coppa, Frank J. (2006). â€Å"Encyclopedia of modern dictators: from Napoleon to the present.† Peter Lang. ISBN 0-8204-5010-3.Van de Ven, Hans (2003). War and Nationalism in China: 1925-1945. Studies in the Modern History of Asia, London: RoutledgeCurzon, ISBN 978-0415145718.Teon, Aris. The Green Gang, Chiang Kai-shek, and the Republic of China. Greater China Journal (2018).