Monday, November 10, 2008

Debate This, Ole Miss Entries (Economic Crisis)

This is a general coverage of the current economic crisis and Wall Street. I'll cut to the chase about the moral of these three blogs... STAY IN SCHOOL!
The Reasons Three and the Future After
So in a recent New York Times article 'Three Trends and a Train Wreck' by TYLER COWEN, he covers three basic elements to the economic crisis.

He first goes on to state that "The crisis is global in nature and its causes are more general and less country-specific than is commonly reflected in the political discourse of any single nation. Many countries — not just the United States — came to have fundamentally unsound banking systems. If Japan remains an exception, it is only because it already suffered through similar problems in the 1990s."

The effects are global and just about everyone is suffering. In the article he gives the 3 underlyng resons. His first trend is cited as a positive one: an enormous growth in wealth that needed to be moved into investments. Of course, the trouble is whether that wealth has been invested in an effective and prudent way. This leads to the second trend, the greater willingness of both individuals and financial institutions to take on risk. The third component has been weak governance and oversight, including inadequate control and monitoring. In the end, the government's and the market's fail!

So what does this mean for us? Stay in school!!! The world just got alot scarier. Actually, in light of all that has happened I have taken a much more specific interest in my own future. From what classes I have to take to graduate, to what I have to do and where to go for graduate school. I've taken a long hard look at exactly what I have to do in the five years after I've finished all of my schooling. I hope the effects of this current crisis have done the same for my fellow classmates, because the day is coming!
Posted by Andrew M. Scott 10/18/2008 10:17:00 PM

Bailout of the Future?
In the words of Dr. Emmett Brown from the movie Back to the Future, "GREAT SCOTT!"

Since the government's landmark $700 billion bank bailout on October 3, I've had alot of time to watch the continued lack of effectiveness and a still faultering economy.

To be honest the U.S. is not really in a position to rescue bankrupt companies. The fact of the matter is that it is itself bankrupt. And just as the financial industry has been an enabler of consumer deficit spending, foreign governments have enabled the U.S. government to spend more than it brings in, by buying up U.S. debt. Foreign countries now own more than half of U.S. debt, compared with 5 percent 20 years ago. The biggest outside holder of U.S. debt is China.

A $700 billion bailout only scratchs the surface of our debt. We cannot continue to grow, based on borrowing against the future. The domestic finance is lack, and our foreign enablers are picking up on it. The economy will sqeeze, our standard of living will decline, and more people will become poor and unemployed. Unfortunetally, we're in for tough times and the road is rough ahead.
Posted by Andrew M. Scott 10/28/2008 02:22:00 PM

Bailout of the Future? Part II
In the words of Marty McFly from the movie Back to the Future, "This is heavy!"

In the blog precursing to this, I addressed the bleak aspect of the economy's fate. But what about "us" as individuals? What about us in the general college bracket of 18-25?

The best advise that I have gotten from my teachers is simple and to the point. Stay in school! With the economy and stock market in a constant state of flux, the best thing for students in college to do in order to insure a financially secure future is to focus on building our qualifications for the job market. Get a degree that will get you somewhere in life. Go further and get a Master's that will push you above the crowd. And by all means, find good, quality internships. I'm not talking about working at McDonalds or Burger King for the summer. I'm talking about something that will strengthen you in your career path. This all may sound redundant but it's true.

With financing almost impossible, the homeowning market slowing to a hault, corporations going bankrupt, and a constant increase in cost of living; it is time to hold our ground as individuals to determine our own fate. Think smart. Build a better future. Stay in school!
Posted by Andrew M. Scott 10/28/2008 08:53:00 PM

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