financial bankers to “gamble on anything.” When a proposal was issued to regulate these derivates‚ Clinton’s administration quickly shut it down. Perhaps the most startling practice on Wall Street is the creation of CDOs – “collateralized debt obligations” and the false ratings they were given. First‚ home buyers took out loans. Lenders then sold these mortgages to investment banks. Investment banks combined these mortgages with other loans and debts (such as car loans‚ student loans‚ and credit
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National Obligations If someone is hurt and there are others nearby who could be of some help‚ generally they are obligated to do so. Generally‚ at no cost to themselves‚ they can help someone else whenever the need arises. However‚ there are sometimes circumstances in which the helper must do more than just care enough to help. Sometimes‚ they will need to commit more time and effort than it could be worth. Sometimes‚ helping someone else could cost them dearly. In even worse case‚ helping could
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Securitization is a structured finance process that distributes risk by aggregating assets in a pool ‚often by selling assets to a special purpose entity‚ then issuing new securities backed by the assets and their cash flows. The securities are sold to investors who share the risk and reward from those assets. Securitization is similar to a sale of a profitable business into a separate entity. The previous owner trades the ownership of that unit‚ and all the profit and loss that might come in the
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idea which the lenders sell their mortgage from the borrowers to investment banks like Morgan Stanley‚ Lehman Brothers‚ and Goldman Sachs‚ then the investment bank combine those mortgage to create a complex derivatives called a Collateralized Debt Obligation (CDO) and sell the CDO to investors around the world. Investment bank pay rating agency to evaluate CDO and many of them are given a triple A rating so that the CDO is pretty popular among the investors. However‚ problems emerge when the lenders
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Abstract AIG traces its root to 1919‚ when American Cornelius Vander Starr established a general insurance agency‚ American Asiatic Underwriters‚ in Shanghai‚ China. Since then‚ an enterprising spirit‚ ingenuity‚ and tenacity have built the company into one of the world’s leading insurers. Today‚ AIG is focused on what it has been known for since the beginning: the willingness and ability to provide insurance coverage to meet the diverse needs of its clients. American International Group‚ Inc
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The Giant Pool of Money Analysis The housing crisis that occurred less than a decade ago is a great example‚ and has become an extensively covered case study‚ of how dangerous certain biases and heuristics can become if left unchecked on a massive scale. Alex Blumberg and Adam Davidson‚ in collaboration with NPR News‚ put together a special program titled “The Giant Pool of Money‚” where they explore just how the phenomenon occurred and the underlying factors that contributed through sound bites
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decision though‚ because their money is rightfully theirs. There is no reason for the wealthy to be obliged to help the poor. The wealthy should only help the poor if they feel compelled to do so. It is not a law that they must do so‚ rather a social obligation and even with that they do not have to. We need to show the poor how to help themselves‚ rather than being dependent on other people in
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to the idea of genetically modified foods. (McLean). However the process of genetic modification was not very well perceived by UK consumers‚ as agreed upon by Bryan Endres‚ the author of “GMO: Genetically Modified Organism or Gigantic Monetary Obligation? The Liability Schemes for GMO Damage in the United States and the European Union.” This sparked the initial controversy about whether or not genetically
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BA 161 Obligations and Contracts Midterm Summary: Title I – OBLIGATIONS Chapter 1: General Provisions Definition Article 1156. An obligation is a juridical necessity to give‚ to do‚ or not to do. (n) Sources of obligation Article 1157. Obligations arise from (1) Law; (2) Contracts; (3) Quasi-contracts; (4) Acts or omissions punished by law; and (5) Quasi-delicts. (1089a) Article 1158. Obligations derived from law are not presumed. Only those expressly determined in this
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than most of the traditional bonds and securities that CRAs have been rating for more than 100 years. CRAs have been criticized for not fully understanding the risks and complexity of the mortgage-backed securities (MBSs) and collateralized debt obligations (CDOs) that they rated. In the CRAs’ defense‚ it would be irrational to expect them to fully understand the highly innovative and complex
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