Principles of Finance_Biederman_Date_021510

Principles of Finance_Biederman_Date_021510 - Experts are...

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Experts are knowledgeable but can be wrong Recent history—finance event and observations: - 2 years ago: market disconnect (news/information one way, stock market another way) - Last year: market connect (reconnected after the market plunged) - This year: slipped a few percentages, so far nothing but bias towards negative trend - (subprime) housing mess: giving loans to individuals that do not qualify without the correct interest rates and risk was not recognized o Prime housing market: interest rates are based on best quality - Banking mess: invested in housing related loans o Caused by the subprime housing mess - Wall street mess - There are (still) bears in the house o Bear: think the market will go down o Bull: think the market will go up Commercial loans falling in default and hundreds of regional banks predicted to fail because of falling loans next year Congressional Follies - Energy - Rebates (golf cars/cash for clunkers) - Fannie & Freddie (government sponsored enterprises) - Bailouts/stimulus
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This note was uploaded on 08/30/2010 for the course FINC 311 taught by Professor Murphy during the Spring '08 term at University of Delaware.

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Principles of Finance_Biederman_Date_021510 - Experts are...

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