Many have been talking about how the economy seems to be slowly but surely growing back to what it was before the recession. One of the industries people have been pointing fingers at is the housing market. Two major companies that are often used to predict the outcome of the housing market, JPMorgan Chase and Wells Fargo, the latter being America’s largest mortgage lender, seems to cast a shadow on these optimistic thoughts. This could affect how the next generation buys their houses, and may mean a slower economic growth pattern than expected across the board.
JPMorgan Chase released the fact that their first quarter earnings dropped twenty percent. Much in the same way, Wells Fargo reported a loss of fourteen percent in its first quarter. This is said to be due to less mortgage revenue. These two companies, particularly Wells Fargo, are used often to judge how the mortgage and housing markets are faring in the economy. The fact that they are not doing very well these first few months of the year could be grim news for anyone looking to get a mortgage in the next year. For insta...
These ratios can be used to determine the most desirable company to grant a loan to between Wendy’s and Bob Evans. Wendy’s has a debt to assets ratio of 34.93% while Bob Evans is 43.68%. When it comes to debt to asset ratios, the company with the lower percentage has the lowest risk. Therefore, Wendy’s is more desirable than Bob Evans. In the area of debt to equity ratios, Wendy’s comes in at 84.31% while Bob Evans comes in at 118.71%. Like debt to assets, a low debt to equity ratio indicates less risk in a company. Again, Wendy’s is the less risky company. Finally, Wendy’s has a times interest earned ratio of 4.86 while Bob Evans owns a 3.78. Unlike the previous two ratios, times interest earned ratio is measured on a scale of 1 to 5. The closer the ratio is to 5, the less risky a company is. From the view of a banker, any ratio over 2.5 is an acceptable risk. Both companies are an acceptable risk, however, Wendy’s is once again more desirable. Based on these findings, Wendy’s is the better choice for banks to loan money to because of the lower level of
Sase, J. F., and Gerard Senick. Another Mortgage Tsunami? “Let Them Eat Cake” (Part Two). 2010. Print.
The new millennium brought with it a housing boom which had reached an unsustainable level (Pollock, 2011). Housing prices grew rapidly, and Baker (2010) noted a rise in house prices of over 70% from 1995 to 2006. For example, he noted average home prices in Los Angeles rose more than $400,000 over the period of 1995 to 2006 and approximately $519,000 in San Francisco. Prices around the country increased substantially as well (Baker, 2010). To encourage homeownership, banks promoted creative financing options (i.e. adjustable rate, interest only,...
“The housing market will get worse before it gets better” –James Wilson. The collapse of the United States housing market in in 2008 was one of the most devastating moments for the world economy. The United Sates being arguably the most important and powerful nation in the world really brought everyone down with this event. Canada was very lucky, thanks to good planning and proper preventatives to avoid what happened to the United States. There were many precursor events that occurred that showed a distinct path that led to the collapse of the housing market. People were buying house way out of their range because of low interest rates, the banks seemingly easily giving out massive loans and banks betting against the housing market. There were
It can be argued that the economic hardships of the great recession began when interest rates were lowered by the Federal Reserve. This caused a bubble in the housing market. Housing prices plummeted, home prices plummeted, then thousands of borrowers could no longer afford to pay on their loans (Koba, 2011). The bubble forced banks to give out homes loans with unreasonably high risk rates. The response of the banks caused a decline in the amount of houses purchased and “a crisis involving mortgage loans and the financial securities built on them” (McConnell, 2012 p.479). The effect on the economy was catastrophic and caused a “pandemic” of foreclosures that effected tens of thousands home owners across the U.S. (Scaliger, 2013). The debt burden eventually became unsustainable and the U.S. crisis deepened as the long-term effect on bank loans would affect not only the housing market, but also the job market.
Company has been losing money since the first quarter of 1992. Financial fundamentals are sagging:
From 1870 to 1890, the laborers of America came to realize the dangerous conditions and unfair pay they were working for. These conditions developed out of the expansion of industry which required more laborers to work for less pay in order for the employer to achieve the same profit. Employers were in a sense, cheating their workers with long work days and very few benefits. In response, workers began to form large unions, both nonviolent and violent, such as the Knights of Labor and the American Federation of Labor (AFL). Smaller unions were also formed but they were short lived and held no substantial power to improve the working environment of the laborer. Strikes were frequent and when laborers became aware of them, the strikes spread to different cities. The Haymarket Riot and the Great Railroad Strikes are prime examples of violent strikes that ultimately led to the improvement of labor conditions. Of all the efforts on part of the laborers, it was the violent strikes in the 1870’s - 1890’s, such as the Haymarket Riot, that caught the attention of employers and motivated them to listen to the laborers and improve working conditions and wages.
The main contributing factor to the decline in the return on stockholders’ equity (25.37% to 8.73%) was the decline in the profit margin (11.79% vs. 5.08%). The decrease in asset turnover (1.11 to 1.00) made a small contribution to the decline, as did the decline in the debt ratio (48.4% to 41.8%).
dropped 10.9% causing the home market to suffer. Individuals who have subprime mortgagees to finance these less expensive homes are often times forced into foreclosure due to substantial rate changes. In affect, the economy faces acontinuing negative cycle of subprime delinquencies that result in tighter credit and lower home prices.17 A worsening of the American housing market will negatively affect the consumers confidence while at the same time worsening the American economy.18
Politics is the art or science of government or governing, especially the governing of a political entity, such as a nation, and the administration and control of its internal and external affairs. The Olympic Games is an event held every 4 years, which includes a variety of sport activities in which different countries compete against one another. “Sport is frequently a tool of diplomacy. By sending delegations of athletes abroad, states can establish a first basis for diplomatic relations or can more effectively maintain such relations” (Espy 3). One might think that politics and the Olympics have nothing to do with each other, but in fact they do have a lot in common. How did politics affect the Olympic Games in 1936, 1968 and 1972?
... middle of paper ... ... It is now currently 5.24%, which is a big jump for only four weeks. Mortgages are through banks, so that is money they are losing since it is so low right now.
Mortgage loans are a substantial form of revenue for the financial industry. Mortgage loans generate billions of dollars in the financial industry. It is no secret that companies have the ability to make a lot of money by offering a variety of mortgage loan products. The problem was not mortgage loans but that mortgage companies were using unethical behavior to get consumer mortgage loans approved. Unfortunately, the Countrywide Financial case was not an isolated case. Many top name mortgage companies have been guilty of unethical behavior. Just as the American housing market was starting to recover from its worst battering since the Great Depression, a new scandal, an epidemic of flawed or fraudulent mortgage documents, threatens to send not just the housing market but the entire economy back into a tailspin (Nation, 2010).
What is politics? Throughout history, people have participated in politics on many different levels. They may have participated through a direct democracy, in which they directly governed, or they may have participated through a representative democracy, in which they participated by electing representatives. As citizens’, people have participated in politics to attain the things they needed or wanted, the valued things. Participation in politics has been the way that people have a voice and change the things that directly affect their lives. Throughout the course of history, politics has been the competition of ideas; they decide who gets what, when, where and how.
Several financial statements have been prepared to describe the causes of this current financial failure. There are a variety of factors that has resulted in the explosion of this financial crisis. Downfall of the US housing market; highly benefited financial dealings and a low interest-rate promoting borrowings, have all contributed to the recession monetary market. Let us now consider these various reasons in a little detail.