The Great Depression - Presentation (Macroeconomics Perspective)Arjun Parekh
This brief presentation on 'The Great Depression' has been made from the point of view of understanding Macroeconomic factors that played an important role.
[SERIES 4/4] The Global Financial Crisis (2007 - 2009)
from the Frederic Mishkin's The Economics of Money, Banking, and Financial Markets
Financial Crises on Advanced Economies Chapter
Outline:
SERIES 1: Factors Causing Financial Crises
SERIES 2: Dynamics of Financial Crises in Advanced Economies
Series 3: The Great Depression
SERIES 4: The Global Financial Crisis of 2007 - 2009 (The Great Recession)
Other Sources:
The Causes and Effects of the 2008 Financial Crisis
https://www.youtube.com/watch?v=N9YLta5Tr2A
Overview about The financial Crisis in 2008. The presentation with 4 main points: reasons, development (also including responses), and consequences.
We hope that this is an easy source of information for you to understand this crisis.
The global financial crisis, brewing for a while, really started to show its effects in the middle of 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.
On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.
This presentation provides an overview of the crisis with links for further, more detailed, coverage at the end.
A crisis so severe, the world financial system is shaken…
Attached is a wonderful presentation by the wizard financial analyst and writer Arif Anees. Hope you'd all relish this rare stuff..
This presentation explains the events and causes that led to Global Financial Crisis in 2007-08, mainly focused on Collateralized Debt Obligations, Sub-Prime Mortgages, Credit Default Swaps and Housing Bubble.
The Great Depression - Presentation (Macroeconomics Perspective)Arjun Parekh
This brief presentation on 'The Great Depression' has been made from the point of view of understanding Macroeconomic factors that played an important role.
[SERIES 4/4] The Global Financial Crisis (2007 - 2009)
from the Frederic Mishkin's The Economics of Money, Banking, and Financial Markets
Financial Crises on Advanced Economies Chapter
Outline:
SERIES 1: Factors Causing Financial Crises
SERIES 2: Dynamics of Financial Crises in Advanced Economies
Series 3: The Great Depression
SERIES 4: The Global Financial Crisis of 2007 - 2009 (The Great Recession)
Other Sources:
The Causes and Effects of the 2008 Financial Crisis
https://www.youtube.com/watch?v=N9YLta5Tr2A
Overview about The financial Crisis in 2008. The presentation with 4 main points: reasons, development (also including responses), and consequences.
We hope that this is an easy source of information for you to understand this crisis.
The global financial crisis, brewing for a while, really started to show its effects in the middle of 2008. Around the world stock markets have fallen, large financial institutions have collapsed or been bought out, and governments in even the wealthiest nations have had to come up with rescue packages to bail out their financial systems.
On the one hand many people are concerned that those responsible for the financial problems are the ones being bailed out, while on the other hand, a global financial meltdown will affect the livelihoods of almost everyone in an increasingly inter-connected world. The problem could have been avoided, if ideologues supporting the current economics models weren’t so vocal, influential and inconsiderate of others’ viewpoints and concerns.
This presentation provides an overview of the crisis with links for further, more detailed, coverage at the end.
A crisis so severe, the world financial system is shaken…
Attached is a wonderful presentation by the wizard financial analyst and writer Arif Anees. Hope you'd all relish this rare stuff..
This presentation explains the events and causes that led to Global Financial Crisis in 2007-08, mainly focused on Collateralized Debt Obligations, Sub-Prime Mortgages, Credit Default Swaps and Housing Bubble.
Social Technology
by Marti A. Hearst
We are in the midst of extraordinary
change in how people interact with one
another and with information. A
combination of advances in technology
and change in people's expectations is
altering the way products are sold,
scientific problems are solved, software
is written, elections are conducted, and
government is run.
People are social animals, and as Shirky
notes, we now have tools that are
flexible enough to match our in-built
social capabilities. Things can get
done that weren't possible before
because the right expertise, the missing
information, or a large enough group of
people can now be gathered together at
low cost.
These developments open a number of
interesting questions for NSF and CISE.
What are the key research problems? How
should these developments change how
research is conducted? How can the
intersection of social science and
technology research be aided or
improved? And how should this effect
how NSF researchers get involved with
relevant government efforts, including
transparent government, emergency
response, and citizen science?
In this talk I attempt to summarize
and put some structure around some of
these developments.
The Evolving Role of Social Media Technology in Delivering Improved Resultsrazorsocial
The social media technology industry has changed significantly over the last year and further significant developments will take place this year and in the years to come. In this presentation, Ian Cleary from RazorSocial.com explains how the landscape is changing and how this will affect your business.
You will also discover the tools that are leading the way and how they can be leveraged by your organisation for improved results from social media.
Background images on the slldes are courtesy of Shutterstock
Revista de Economia Política 30 (1), 2010 3The 2008 finan.docxronak56
Revista de Economia Política 30 (1), 2010 3
The 2008 financial crisis and
neoclassical economics
Luiz CaRLos BResseR-PeReiRa*
The 2008 global financial crisis was the consequence of the process of finan-
cialization, or the creation of massive fictitious financial wealth, that began in the
1980s, and of the hegemony of a reactionary ideology, namely, neoliberalism, based
on self-regulated and efficient markets. Although capitalism is intrinsically unstable,
the lessons from the stock-market crash of 1929 and the Great Depression of the
1930s were transformed into theories and institutions or regulations that led to
the “30 glorious years of capitalism” (1948-1977) and that could have avoided
a financial crisis as profound as the present one. It did not because a coalition of
rentiers and “financists” achieved hegemony and, while deregulating the existing
financial operations, refused to regulate the financial innovations that made these
markets even more risky. Neoclassical economics played the role of a meta-ideology
as it legitimized, mathematically and “scientifically”, neoliberal ideology and de-
regulation. From this crisis a new capitalism will emerge, though its character is
difficult to predict. It will not be financialized but the tendencies present in the 30
glorious years toward global and knowledge-based capitalism, where professionals
will have more say than rentier capitalists, as well as the tendency to improve de-
mocracy by making it more social and participative, will be resumed.
Keywords: financial crisis; neoliberalism; deregulation; financialization; political
coalition
JEL Classification: E30; P1.
The 2008 global financial crisis will remain in the history of capitalist develop-
ment not only for its depth and scope, but also for the radical fiscal and monetary
policies that were adopted to reduce its economic consequences and avoid a depres-
sion. Why did it happen? Why did the theories, organizations, and institutions that
emerged from previous crises fail to prevent this one? Was it inevitable given the
* Emeritus professor of Getulio Vargas Foundation. E-mail: [email protected]
Brazilian Journal of political Economy, vol 30, nº 1 (117), pp 3-26, January-March/2010
Revista de Economia Política 30 (1), 20104
unstable nature of capitalism, or was it a consequence of perverse ideological de-
velopments since the 1980s? Given that capitalism is essentially an unstable eco-
nomic system, we are tempted to respond to this last question in the affirmative,
but we would be wrong to do so. In this essay, I will, first, summarize the major
change to world financial markets that occurred after the end of the Bretton Woods
system in 1971, and associate it with financialization and with the hegemony of a
reactionary ideology, namely, neoliberalism Financialization will be understood
here as a distorted financial arrangement based on the creation of artificial financial
wealth, that is, fi ...
Chapter 7 The Global Financial CrisisTHE GLOBAL FINANCIAL CRIS.docxbissacr
Chapter 7 The Global Financial Crisis
THE GLOBAL FINANCIAL CRISIS HAD WIDESPREAD EFFECTS. In its early days in September 2008, a trader reacted to the numbers on the floor of the New York Stock Exchange as the Dow plummeted.
Learning Objectives
1. 7.1Evaluate the causes that contributed to creating the financial crisis
2. 7.2Review the impact of the global financial crisis on different world economies, business, employment, and global power shifts
3. 7.3Evaluate the concerns that made different countries respond in different ways to the financial crisis
Financial crises and accompanying economic recessions have occurred throughout history. Periodic crises appear to be part of financial systems of dominant or global powers. The United States was at the epicenter of the financial crisis of 2008–2009. Enjoying a unipolar moment following the collapse of the Soviet Union and the failure of Communism, the United States was confident that economic liberalization and the proliferation of computer and communications technologies would contribute to ever-increasing global economic growth and prosperity. Globalization contributed to the extraordinary accumulation of wealth by a relatively few individuals and created greater inequality. In an effort to reduce inequality in the United States, the government implemented policies that engendered the financial crisis.
As we discussed in Chapter1, is usually the leading force in the growth of globalization. The rise of great powers is inextricably linked to access to investments and their ability to function as leading financial centers, as we saw in Chapter2. Their decline is also closely linked to financial problems. Finance enables entrepreneurs to start various enterprises and to become competitors of established companies. It is also essential to innovation and scientific discoveries. Finance also facilitates risk sharing and provides insurance for risk takers. Countries that have large financial sectors tend to grow faster, their inhabitants are generally richer, and there are more opportunities. Financial globalization contributed to unprecedented growth and prosperity around the world. China and India became significant economic powers, and the industrialized countries grew even richer. Closely integrated into the financial system are banks and investment firms. When the financial system is in crisis, banks reduce lending, companies often face bankruptcy, and unemployment rises. Ultimately, as we saw in the financial crisis of 2008–2009, many banks fail.
The financial crisis triggered a global economic recession that resulted in more than $4.1 trillion in losses, saw unemployment rates that climbed to more than 10 percent in the United States and higher elsewhere, and increased poverty. Stock markets around the world crashed. American investors lost roughly 40 percent of the value of their savings. Housing prices plummeted from their record highs in 2006. Consumers reduced their spending, manufactu.
1
Your Name:
Instructor’s Name:
Class Information:
Date:
Great Depression of the American Economy
Great Depression was an austerely down trend in the economic activity of the world in the decade foregoing World War II. The time duration or rather the time for the Great Depression Was not fixed. It varied from countries to countries. However, in many countries it was experienced in the year 1930 and it lasted till the midst of 1940. The time duration for the Great Depression was for a longer period of time and it was considered the longest as well as the deepest depression of the twentieth century
The beginning point of the Depression was the fall or the crash in the stock market in U.S. The fall in the prices of stock began in the year 1929 on 4th September and the stock market crashed on the 29th of October in the year 1929. This day was known as the Black Tuesday.
The Great Depression affected severely all the sections and the class of the society in the countries including the rich and the poor. Profit Margin and the prices of the goods and services severely dropped and if the amount of revenue and taxes collected also had a devastating fall which had severe negative effect on the economy. The level of Unemployment rose in U.S. and it was depicted that around twenty percent of unemployment rate increased in U.S. whereas, in other countries the level of Unemployment rose to thirty three percent which was the highest ever increase in the rate of the unemployment process.
All the cities around the world were suffering due to this depression and especially those cities or countries whose backbone was heavy industry, construction industries because this industry totally turned downed and halted in various countries. Due to the depression the agriculture sector was also effected as because the prices of the crop also fell to around sixty percent.
Due to unemployment the primary sector was also affected, activities such as mining, logging and cash cropping was effected a lot.
There were various causes for the depression in the year 1929. These comprised of the primary weaknesses and definite events that led to a major depression and the way in which the severe depression profused from country to country was simply devastating. According to the historians the main cause or the real reason behind the great depression was failure of the bank and the crash or the fall of the stock market. However, the various monetarist economist such as Milton Friedman, Peter Temin and Barry Eichengreen states that the major cause behind the depression was the inappropriate action considered or adopted by the US Federal Reserve and the limited supply of the money and the decision of Britain for returning of gold standard before the World War.
The activity of business and the period of Boom and depression in the business and recession are considered or rather regarded as the normal activity for the business and are considered normal. However, what are t.
12913, 515 PMGlobal financial crisis five key stages 2007-.docxhyacinthshackley2629
12/9/13, 5:15 PMGlobal financial crisis: five key stages 2007-2011 | Business | The Guardian
Page 1 of 5http://www.theguardian.com/business/2011/aug/07/global-financial-crisis-key-stages
Search
A trader at the New York stock exchange. The last four years have seen five key stages of the global financial crisis,
with more likely to come. Photograph: Brendan Mcdermid/Reuters
9 August 2007. 15 September 2008. 2 April 2009. 9 May 2010. 5 August 2011. From
sub-prime to downgrade, the five stages of the most serious crisis to hit the global
economy since the Great Depression can be found in those dates.
Phase one on 9 August 2007 began with the seizure in the banking system precipitated
by BNP Paribas announcing that it was ceasing activity in three hedge funds that
specialised in US mortgage debt. This was the moment it became clear that there were
tens of trillions of dollars worth of dodgy derivatives swilling round which were worth a
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Global financial crisis: five key stages
2007-2011
From sub-prime mortgages in 2007 to the newly downgraded US
debt status, the latest crisis point is unlikely to be the last
Larry Elliott, Economics editor
The Guardian, Sunday 7 August 2011 16.49 BST
http://www.theguardian.com/uk
http://www.theguardian.com/business/global-economy
http://www.theguardian.com/info/cookies
http://www.theguardian.com/profile/larryelliott
http://www.theguardian.com/profile/larryelliott
http://www.guardian.co.uk/theguardian
12/9/13, 5:15 PMGlobal financial crisis: five key stages 2007-2011 | Business | The Guardian
Page 2 of 5http://www.theguardian.com/business/2011/aug/07/global-financial-crisis-key-stages
lot less than the bankers had previously imagined.
Nobody knew how big the losses were or how great the exposure of individual banks
actually was, so trust evaporated overnight and banks stopped doing business with each
other.
It took a year for the financial crisis to come to a head but it did so on 15 September
2008 when the US government allowed the investment bank Lehman Brothers to go
bankrupt. Up to that point, it had been assumed that governments would always step in
to bail out any bank that got into serious trouble: the US had done so by finding a buyer
for Bear Stearns while the UK had nationalised Northern Rock.
When Lehman Brothers went down, the notion that all banks were "too big to fail" no
longer held true, with the result that every bank was deemed to be risky. Within a
month, the threat of a domino effect through the global financial system forced western
governments to inject vast sums of capital into their banks to prevent them collapsing.
The banks were rescued in the nick of time, but it was too late to prevent the global
economy from going into freefall. Credit flows to the private sector were choked off at
the same time as consumer and business confidence collapsed. All this came a.
Accelerate your Kubernetes clusters with Varnish CachingThijs Feryn
A presentation about the usage and availability of Varnish on Kubernetes. This talk explores the capabilities of Varnish caching and shows how to use the Varnish Helm chart to deploy it to Kubernetes.
This presentation was delivered at K8SUG Singapore. See https://feryn.eu/presentations/accelerate-your-kubernetes-clusters-with-varnish-caching-k8sug-singapore-28-2024 for more details.
Software Delivery At the Speed of AI: Inflectra Invests In AI-Powered QualityInflectra
In this insightful webinar, Inflectra explores how artificial intelligence (AI) is transforming software development and testing. Discover how AI-powered tools are revolutionizing every stage of the software development lifecycle (SDLC), from design and prototyping to testing, deployment, and monitoring.
Learn about:
• The Future of Testing: How AI is shifting testing towards verification, analysis, and higher-level skills, while reducing repetitive tasks.
• Test Automation: How AI-powered test case generation, optimization, and self-healing tests are making testing more efficient and effective.
• Visual Testing: Explore the emerging capabilities of AI in visual testing and how it's set to revolutionize UI verification.
• Inflectra's AI Solutions: See demonstrations of Inflectra's cutting-edge AI tools like the ChatGPT plugin and Azure Open AI platform, designed to streamline your testing process.
Whether you're a developer, tester, or QA professional, this webinar will give you valuable insights into how AI is shaping the future of software delivery.
Dev Dives: Train smarter, not harder – active learning and UiPath LLMs for do...UiPathCommunity
💥 Speed, accuracy, and scaling – discover the superpowers of GenAI in action with UiPath Document Understanding and Communications Mining™:
See how to accelerate model training and optimize model performance with active learning
Learn about the latest enhancements to out-of-the-box document processing – with little to no training required
Get an exclusive demo of the new family of UiPath LLMs – GenAI models specialized for processing different types of documents and messages
This is a hands-on session specifically designed for automation developers and AI enthusiasts seeking to enhance their knowledge in leveraging the latest intelligent document processing capabilities offered by UiPath.
Speakers:
👨🏫 Andras Palfi, Senior Product Manager, UiPath
👩🏫 Lenka Dulovicova, Product Program Manager, UiPath
Key Trends Shaping the Future of Infrastructure.pdfCheryl Hung
Keynote at DIGIT West Expo, Glasgow on 29 May 2024.
Cheryl Hung, ochery.com
Sr Director, Infrastructure Ecosystem, Arm.
The key trends across hardware, cloud and open-source; exploring how these areas are likely to mature and develop over the short and long-term, and then considering how organisations can position themselves to adapt and thrive.
GraphRAG is All You need? LLM & Knowledge GraphGuy Korland
Guy Korland, CEO and Co-founder of FalkorDB, will review two articles on the integration of language models with knowledge graphs.
1. Unifying Large Language Models and Knowledge Graphs: A Roadmap.
https://arxiv.org/abs/2306.08302
2. Microsoft Research's GraphRAG paper and a review paper on various uses of knowledge graphs:
https://www.microsoft.com/en-us/research/blog/graphrag-unlocking-llm-discovery-on-narrative-private-data/
UiPath Test Automation using UiPath Test Suite series, part 3DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 3. In this session, we will cover desktop automation along with UI automation.
Topics covered:
UI automation Introduction,
UI automation Sample
Desktop automation flow
Pradeep Chinnala, Senior Consultant Automation Developer @WonderBotz and UiPath MVP
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
Transcript: Selling digital books in 2024: Insights from industry leaders - T...BookNet Canada
The publishing industry has been selling digital audiobooks and ebooks for over a decade and has found its groove. What’s changed? What has stayed the same? Where do we go from here? Join a group of leading sales peers from across the industry for a conversation about the lessons learned since the popularization of digital books, best practices, digital book supply chain management, and more.
Link to video recording: https://bnctechforum.ca/sessions/selling-digital-books-in-2024-insights-from-industry-leaders/
Presented by BookNet Canada on May 28, 2024, with support from the Department of Canadian Heritage.
Slack (or Teams) Automation for Bonterra Impact Management (fka Social Soluti...Jeffrey Haguewood
Sidekick Solutions uses Bonterra Impact Management (fka Social Solutions Apricot) and automation solutions to integrate data for business workflows.
We believe integration and automation are essential to user experience and the promise of efficient work through technology. Automation is the critical ingredient to realizing that full vision. We develop integration products and services for Bonterra Case Management software to support the deployment of automations for a variety of use cases.
This video focuses on the notifications, alerts, and approval requests using Slack for Bonterra Impact Management. The solutions covered in this webinar can also be deployed for Microsoft Teams.
Interested in deploying notification automations for Bonterra Impact Management? Contact us at sales@sidekicksolutionsllc.com to discuss next steps.
Let's dive deeper into the world of ODC! Ricardo Alves (OutSystems) will join us to tell all about the new Data Fabric. After that, Sezen de Bruijn (OutSystems) will get into the details on how to best design a sturdy architecture within ODC.
Search and Society: Reimagining Information Access for Radical FuturesBhaskar Mitra
The field of Information retrieval (IR) is currently undergoing a transformative shift, at least partly due to the emerging applications of generative AI to information access. In this talk, we will deliberate on the sociotechnical implications of generative AI for information access. We will argue that there is both a critical necessity and an exciting opportunity for the IR community to re-center our research agendas on societal needs while dismantling the artificial separation between the work on fairness, accountability, transparency, and ethics in IR and the rest of IR research. Instead of adopting a reactionary strategy of trying to mitigate potential social harms from emerging technologies, the community should aim to proactively set the research agenda for the kinds of systems we should build inspired by diverse explicitly stated sociotechnical imaginaries. The sociotechnical imaginaries that underpin the design and development of information access technologies needs to be explicitly articulated, and we need to develop theories of change in context of these diverse perspectives. Our guiding future imaginaries must be informed by other academic fields, such as democratic theory and critical theory, and should be co-developed with social science scholars, legal scholars, civil rights and social justice activists, and artists, among others.
Essentials of Automations: Optimizing FME Workflows with ParametersSafe Software
Are you looking to streamline your workflows and boost your projects’ efficiency? Do you find yourself searching for ways to add flexibility and control over your FME workflows? If so, you’re in the right place.
Join us for an insightful dive into the world of FME parameters, a critical element in optimizing workflow efficiency. This webinar marks the beginning of our three-part “Essentials of Automation” series. This first webinar is designed to equip you with the knowledge and skills to utilize parameters effectively: enhancing the flexibility, maintainability, and user control of your FME projects.
Here’s what you’ll gain:
- Essentials of FME Parameters: Understand the pivotal role of parameters, including Reader/Writer, Transformer, User, and FME Flow categories. Discover how they are the key to unlocking automation and optimization within your workflows.
- Practical Applications in FME Form: Delve into key user parameter types including choice, connections, and file URLs. Allow users to control how a workflow runs, making your workflows more reusable. Learn to import values and deliver the best user experience for your workflows while enhancing accuracy.
- Optimization Strategies in FME Flow: Explore the creation and strategic deployment of parameters in FME Flow, including the use of deployment and geometry parameters, to maximize workflow efficiency.
- Pro Tips for Success: Gain insights on parameterizing connections and leveraging new features like Conditional Visibility for clarity and simplicity.
We’ll wrap up with a glimpse into future webinars, followed by a Q&A session to address your specific questions surrounding this topic.
Don’t miss this opportunity to elevate your FME expertise and drive your projects to new heights of efficiency.
Essentials of Automations: Optimizing FME Workflows with Parameters
Why Today Is Different From The Great Depression
1. Why Today is Different from the Great Depression? 2008 GLOBAL FINANCIAL CRISES AND THE GREAT DEPRESSION November 25, 2008 2008 Global Financial Crises and its Magnitude
2. With headlines featuring awful economic news and carnage in the securities markets, more and more commentary is drawing comparisons between current market conditions and those that followed the stock market crash of 1929. Perhaps when so many things are going so wrong on so many fronts, it is natural to gravitate toward this most dire historical analogy. After all, there are some similarities between today and the 1930s, including a preceding period of excessive debt, subsequent massive deflation in asset prices, corresponding trauma in the banking and financial system, and a resulting economic slowdown that spread quickly and dramatically throughout the rest of the world. However, in times of great distress and universal pessimism, it is relatively easy to confuse the possibility of the worst-case scenario with the probability that it will actually occur. So while no one can predict with complete certainty that the next Great Depression will not happen in the near future, it is important to move beyond historical sound bites in making comparisons between 2008 and the worst economic catastrophe in the past 100 years. The following are key differences between the current environment and the early years of the Great Depression (1929-1932), when the economy was at its worst. 2008 Global Financial Crises and its Magnitude
3.
4. EXHIBIT 1: Major differences between 2008 and the Great Depression include less severe economic conditions, and more aggressive and robust government and monetary policy responses 9.7% as of October 2009 2008 Global Financial Crises and its Magnitude
5. As of October 31, 2008, the U.S. unemployment rate was 6.5%. 2 It has risen nearly two percentage points during the past year, and all indications are that it could go much higher in the months ahead. However, even more bearish economists tend to estimate unemployment to peak somewhere around 10%, which would leave it nowhere near the neighborhood reached in the 1930s. Even if these estimates prove too sanguine, it would likely take a series of unforeseen catastrophes, well beyond the current pessimistic outlook, to achieve such a deep economic contraction. In other words, as bad as things seem right now, they would have to deteriorate at a completely different degree of magnitude to reach the economic devastation of the 1930s. 2008 Global Financial Crises and its Magnitude
6. 2. Banking system: Not near collapse During the early 1930s, with no deposit insurance to reassure them, nervousness among depositors caused many to withdraw funds from banks. The runs on banks in many cases became self-fulfilling prophecies, as recognition that other depositors may withdraw their funds first became a threat to all. A series of banking panics followed, with hundreds and eventually thousands of banks failing, causing the U.S. financial system to essentially collapse. Today, the U.S. credit markets are in crisis. Confidence has plunged, and financial institutions are struggling to dispose of troubled assets. However, only 22 banks have failed so far. The federal government raised the level of deposit insurance in October to further guard against any potential seeds of public panic. Financial firms that depended on non-deposit funding, such as independent investment banks, have gone bankrupt, been merged away, or converted themselves to banks. So while the banking system remains in distress, we are not experiencing an all-out banking panic in the vein of the 1930s.
7. 3. Monetary policy: Extraordinary fed action Whether or not you agree with the assertion in Nobel laureate economist Milton Friedman's landmark book, A Monetary History of the United States, 1867-1960, that the Great Depression was caused mostly by monetary policy errors, there is plenty of evidence that the Federal Reserve (Fed) in the 1930s was not particularly helpful. As asset prices spiraled downward after the 1929 stock market crash, the Fed allowed the money supply to decline. Thus the Fed accommodated the deflationary forces that had taken effect, resulting in prices that fell 10% per year during the early 1930s. In contrast, the current Federal Reserve has embarked on the most ambitious monetary action in its history. Due to the trauma in the financial system, the Fed has been unable to drive market interest rates lower simply by easing its policy interest rate, so it has established multiple facilities and policies to inject liquidity into the financial system. The Fed has doubled its balance sheet since September, rapidly expanding the money supply. While its efforts to counter deflationary forces remain ongoing, they stand in sharp contrast to the passive role played by monetary authorities in the 1930s.
8. 4. U.S. government policy: Stimulative prescription Some historians assert that Herbert Hoover has received a bum rap, and it is probably true his administration was not as passive in the face of economic calamity as sometimes portrayed. However, the government response before Franklin Delano Roosevelt took over in 1933 was simply too scattered and small in scope, given the financial ruin and economic catastrophe it confronted. Some policies proved counterproductive and probably served to worsen the downturn, such as raising tariffs (through the 1930 Smoot-Hawley Tariff Act) and hiking income taxes. 2008 Global Financial Crises and its Magnitude
9. Today, it is not difficult to argue that the U.S. government has already been more forceful in its economic response during the past several months than during the entire three-and-a-half years before the New Deal began in 1933. In an effort to staunch panic in the financial markets, the government took over mortgage giants Fannie Mae and Freddie Mac, in addition to insurance giant AIG. It approved $700 billion to re-capitalize the banking system. It provided $100 billion of tax rebates to consumers, and has rolled out a number of initiatives to help struggling homeowners. There is likely much more to come, as the incoming Obama Administration has signaled its intent to pursue an additional economic stimulus program in the neighborhood of $500 billion. While government intervention of this magnitude raises many challenges about financing the efforts as well as ensuring they do not stifle private sector activity in the long run, it provides an effort to counter plunging private demand that was absent at the outset of the Great Depression. 2008 Global Financial Crises and its Magnitude
10. 5. Global response: Rush to rescue In the 1930s, the economic devastation spread from the United States -- then the world's largest economy as it still is today -- to the rest of the globe. On the heels of the disastrous Smoot-Hawley Tariff Act, which placed tariffs on more than 20,000 imported goods of up to 60% of purchase prices, countries around the world responded by raising their own tariffs and shutting out imports from abroad ("beggar thy neighbor" policies). This effectively led to the collapse of global trade.
11. More recently, such protectionist measures have been few and far between, and they have been overwhelmed by a rush to rescue ailing banks and stimulate weakening economies. Every large European country has injected capital into its banking system and increased government deposit guarantees. Many countries have announced large economic stimulus programs, including China, Japan and Germany, and almost every major economy in the world has cut interest rates. The International Monetary Fund has disbursed billions in rescue financing to countries in crisis. The scope of the global policy response has been massive and shows few signs of slowing.
12. Investment implications The challenges faced today by the global economy and financial system are staggering. For the United States, all economic indicators point to an economic downturn that will at least rival any in the post-war period. However, all historical analogies are imperfect. The world changes too much over periods of decades, particularly economies powered by constantly changing technologies, to find a precise fit for any historical parallel. While there are admittedly some similarities between today's environment and the 1930s, those similarities do not mandate that the world is predestined to follow a path into a decade-long depression. The dramatic response by central banks and governments around the world faces challenges and potential ill side-effects of its own. But this response underscores that we are living today in very different times than the world experienced 80 years ago, and it may serve investors well to take those differences into account.
13. Dirk Hofschire, Fidelity's Market Analysis, Research and Education group Fidelity's Market Analysis, Research and Education group — 11/25/08 2008 Global Financial Crises and its Magnitude