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assignment 2

For the past 100 years america has been seen as one

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looked to America as a safe place to invest their savings. For the past 100 years America has been seen as one of the safest places in the world to invest your money. In order to meet the demand for American investments, American bankers and financial organizations basically started creating very "sophisticated" investment securities, bonds, to sell to these foreign investors. What were these bonds? These bonds were created out of American debt, largely home mortgage debt, but really all kinds of debt. It cause this credit Crisis. c. What were other causes of the crisis? What are possible regulatory responses from the federal government? Did a lack of government oversight contribute to the crisis? The CDOs, wrong data used by credit rating agencies. The lack checking requirements, lack of background researches. Tight up the scrutiny and background check of a loan lender. Tight it up and make wiser investment. Yes, the Fed kept the lot interest rate of Federal funds so it stimulated the more and more dramatic increases of the mortgages and securities. So it causes the lack of background checks by the banks and ultimately caused the credit crisis.
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(If you have already listened to the program for Econ 162B, it won’t hurt to hear it again. You’ll learn something new.) 4. BOND SALE - SERIES A Series A bonds will pay $12 when they mature on January 12. 100 bonds will be sold. They will be sold using a Dutch auction. All bids will be ranked in order from highest to lowest, and the price of the 100th bond becomes the market-clearing price. All bids at the market-clearing price or higher will receive their requested allocation at the market- clearing price. So you may not necessarily pay the price that you bid if your bid is high. However, if your bid is too low, you will not be able to participate in the market for that sale. 8 bucks pre-share for 5 shares of bonds, Series A Please tell me your bid price and the quantity of bonds that you would like to purchase as part of your problem set. Remember that you only have $50 in ClassCash to spend unless you can borrow from other classmates. To borrow, just let me know and I will record the transaction. The bond markets count both as part of the problem set and as participation. I will post the market results in "ClassCash Markets" and your financial position in “ClassCash Ledger”. Good luck, Kenny
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