Financial Meltdown

http://www.sentientmoney.com/92/why-is-the-financial-meltd take-happening/ Why is the Financial Meltdown hazard? By Chad on Sep 18, 2008 in Current Events, Uncategorized [pic]Every intelligence information program has some half-wit finance expert with their own theory of how this all happened (CNBC being one of the most egregious offenders). Most of these theories are only vaguely based in fact and look for someone outside of the financial manufacture to blame.  Well, I plan on providing a simple history of the major factors behind this crisis. First, I will start with the ducky excuse of the financial pundits…short selling.  This is a very sorry reason for the current financial crisis.  Short selling has been close to forever and if done legally, a short seller has to pass someone who already owns the shares to lend them the shares for the short sale.  The mechanics of this adjoin makes it almost impossible for someone to come about a club with a solid balance sheet. The one exception is bleak short selling, which has been occurring.  This essentially means the short seller is shorting shares he/she has not borrowed from a current owner.



  This allows a short seller to build up a short position that is often larger than normal, over a shorter period of time, which can erect extra pressure on the company’s post price.  This pressure by itself is still not plenty to sink a fiber company, but it might be enough to push a bad company over the edge. The routine and more important reason for this financial calamity is the quality of the financial products owned by these institutions.  This has been covered ad nauseam, so I will just say they (Wall Street) had a nap of really bad loans on their books. Now we come to the concluding and most important reason by far, which is excessive supplement (poor management).  All banks/financial institutions are required to have a certain ratio of debt-to-net capital.  This keeps risk in check and prevents a major economic catastrophe, like bad... If you want to get a full essay, order it on our website: Ordercustompaper.com



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