What is the main cause of the subprime crisis and the challenges of US economy in the future?

What is the main cause of the subprime crisis and the challenges of US economy in the future?

In 2008, US economy, the world largest economy, experienced the worst financial crisis since the Great Depression in 1930s. During that time, the unemployment rate reached 10.1%, and million of American families lost their houses. The trigger of this economic disaster was the bursting of housing bubble resulting in the plummeting in value of collateralized debt obligation (CDO), which is “a structured financial product that pools together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors” (Collateralized Debt).

Before the financial crisis took place, CDO that had bundled the housing debt of million American families was popular among banks and financial institutions in the US because CDO could generate high profitability to those institutions in term of interest rate. During that period, real-estate value was estimated to perpetually grow. The housing market was booming and crowded with speculators who aim to make profit in a short-term trade. The price of real estate went up continuously and reached the peak in 2007 (As it showed on the following chart).

 However, when the real-estate prices reached the peak where no one could make profit, the prices started slumping down. When the housing prices was lower than the point that is worth for people to pay their mortgage, people stopped paying their mortgage and sell their homes. The housing price dropped like a spiral until hitting the bottom. Because the bursting of housing bubble led to the drastic decrease in CDO value, the CDO holders, who were mostly giant banks and financial institutions, encountered with the financial problem because the huge loss on their account. One the biggest financial service firms in the US, Lehman Brothers went bankrupt and caused the turmoil in worldwide stock markets and financial markets. As a result, the Federal Reserve needed to inflate billion and billion dollars to stabilize the interest rate and to minimize the effect to the real sector.

Since 2008, the Federal Reserve has spent more than 2,000 billion dollars on buying long-term bonds in the purpose of inflating money into the economy. The economy seems addicted to this financial policy. The stock prices have increased overtime due to enormous money supply in the financial market. However, the challenges of US economy are whether the financial market would slump down again if Federal Reserve stopped injecting money into the economy and whether the US government has any potential plan to cope with the future situation. 

Works Cited

"Collateralized Debt Obligation (CDO) Definition." Investopedia. Investopedia, n.d. Web. 29 July 2014.                <http://www.investopedia.com/terms/c/cdo.asp>.

How MBA help you succeed in business world?

How MBA help you succeed in business world?

MBA is generally known as an expensive program with the curiosity about whether it helps people succeed or not. Some people claim that people do not need an MBA degree to succeed in business world because many successful businessmen, such as Steve Job, Mark Zuckerberg, and Bill Gates do not have an MBA but succeed in their business. However, this argument takes only one side of the fact. In fact, there are many successful businessmen who have MBA, such as Warren Buffett, the most successful investor. Indeed, business schools provide their students many valuable opportunities that will support them to succeed in business world.

Attending a business school is a great step out of the comfortable zone. During the degree program, MBA students need to intensively study ton of case studies, think critically, argue their points, and work in teams. People have never experienced these things in undergraduate school or even in some kinds of jobs. MBA is like a simulation of business environment, which prepare you before stepping back to the intense business world.

Not only does the getting an MBA provide you those mentioned needed skills for business area, but also good connection and lifelong friends are valuable to get. Going through the tough experience like pursuing an MBA degree tightens your friendship. These friends are not only who you can hangout with but also who will be succeed concurrently with you. They are potential friends who will support you throughout your life.

Why do Christians and Islam fight to each other although they believe in the same god?

Why do Christians and Islam fight to each other although they believe in the same god?

Generally, religions are the instruments for mankind to access the happiness in their life. The core of each religion consist of good purposes to bring happiness to participants as a whole. The true happiness of someone should intimidate those of others. However, I have seen many violent events that has resulted from the conflict between christianity and islam. As a viewpoint of a man who is neither christians nor islam, I am curious why christians and islam have resisted each other and led to several wars and violences although they have the same god and share apart of the belief. 

A root of conflict between christianity and islam is “Crusades War”, one of the greatest war in the world’s history. In 1095, the christians desired to get back the holy city, Jerusalem, from muslims who also believe in the holy city. There were countless deaths related to the wars. In my opinion, the actual reasons behind the religions that created conflict between christianity and islam are political power. In fact, because religionists want to expand their own political power over the other, they just find some excuses related to religions to prove their right to destroy their enemy. 

Personally, I don’t agree with any religion leader who claims that killing other people who have different beliefs is right. I believe that the core of every religion is pure and good. No religion accepts that killing other people is not guilty. In some extend, people might forget why they believe in a particular religion and how that religion is supposed to influence their life. Is it not the happiness that people need?

Hopi Kachina Dolls

Visiting Heard Museum last Friday, I perceived the civilization of Native Americans and understood more deeply about their background. In the museum, Native-American stuffs are separated and shown in a number of rooms. In a room, some strange stuffs that captured my attention was the numerous colorful dolls beautifully arranged on the shelves. I stopped to take a look at the objects closely, and I saw that they are detailed and elaborate. The objects look like a half-human half-animal men, most of which are half-bird. At that time, I was curious what the meaning of these dolls was. I read the description in front of the shelve, which told me that these figures called “Hopi Kachina”.

These strange dolls represents the spirits of deities, natural, and ancestors of the Hopi. Hopi Kachina dolls were generally made before Kachina ceremony by men of the village. The dolls would be passed to their offsprings as a gift and a means of education. In addition, each doll can tell us where it comes from by its materials. For example, a doll made of fur indicates that it comes from a tribe who lived in a cold climate. Dolls decorated with turquoise came from Navajo. For this reason, these dolls can reflect the culture and life of Native Americans from several tribes.

Because Hopi Kachina dolls are beautiful and fascinating, modern artists try to use the same material as Native American use in order to make them as authentic as the originals. Actually, I would like to buy a Kachina doll, but the dolls are too expensive to be afforded. However, they all are valuable and fascinating art.