StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Sub-Prime Mortgage Crisis and the East Asia - Research Paper Example

Comments (0) Cite this document
Summary
Name Professor Course Date Introduction The global economy is affected by the world financial and economic crisis that has become harsh since the mid of 2008. This crisis is as a result of the introduction of the subprime mortgage issues in the United States that manifested in the mid of 2007…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.5% of users find it useful
Sub-Prime Mortgage Crisis and the East Asia
Read TextPreview

Extract of sample "Sub-Prime Mortgage Crisis and the East Asia"

Download file to see previous pages The subprime mortgage crisis in the United State was more severe than the great depression because several assets and derivatives had been purchased and sold in the unstable market. Moreover, the subprime mortgage crisis had several liquidity risks compared with that of the exchange traded products. According to Justin and Boris (2011), commercial banks finance in the East Asia asks for the mortgages without considering the credit evaluation of the borrowers. Thus, the paper will evaluate the financial crisis issues that were triggered from the U.S sub-prime mortgage crisis, and affected the East Asian economy. The sub-prime mortgage crisis The sub-prime mortgage crisis was a result of the speculative issues in the housing market that commenced in the United State in 2006. It has caused severe impact across the East Asia countries in the form of financial crisis and the country’s credit crisis. Justin and Boris (2011) indicate that the forces caused by the sub-prime mortgage crisis will probably run out of control for years, causing the collateral damage. The disruption in the East Asia countries credit market is of historic proportions and will have significant economic impacts. Moreover, the crisis has caused essential societal changes that affect the consumer habits and the values. Justin and Boris (2011) indicate that the East Asia economy was affected where the GDP was recorded 4.2, 4.8, 5.7 and 1.9 per cent from 2005 to 2008. This led to the ever recorded a decrease in GDP in 2009 that amounted to -4.0 since 1980. Therefore, this crisis has significantly affected the Europe and Asian countries, and most of the Asian countries have rearranged their financial and banking industry. Delgado and Burge (2009) claim that the proximate cause of the sub-prime mortgage crisis was the busting of the housing issues in the East Asia during the summer of 2007 when subprime defaults commenced to rise and foreclosures increased. It then spread to prime loans and other types of consumer credit, and the financial institutions with the subprime related products were severely affected. The Asian countries were severely affected by the sub-prime mortgage crisis during the early stage of the crisis because the banks were not exposed to the dangerous assets that were engineered and crafted in the United State. According to Delgado and Burge (2009), the data gathered in the Economist and Financial Times, the $500 billion was written off by banks globally in the 2008. The financial institutions in Japan accounted for only five percent, and its sectors were relatively resilient. The global financial crisis has affected the China and Japan very strongly as they stand among the most opens in the world. Foreign capital inflows declined significantly as commercial banks and foreign institutional investors withdrew funds to meet redemptions in their countries. According to Delgado and Burge (2009), private capital flows in China slowed from $516.7 billion to 2007 to an estimated $134.4 billion in 2008. Table of the GDP of the East Asia countries 2007 2008 2009 China 11.9 9.7 8.5 Japan 2.1 0.5 -0.2 Korea 5.6 3 3.9 2.1 Modified from: IMF (2008a) According to Ghon (2008), the Banking leading declined that was as a result of the direct and indirect equities. During 2009, the capital flows were estimated to be only $44.1 billion, and in the beginning of 2008, stock markets declined by about 62 percent in China (Ghon, 2008). Thus, the Chinese stocks markets had been the worst performer in ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Sub-Prime Mortgage Crisis and the East Asia Research Paper”, n.d.)
Sub-Prime Mortgage Crisis and the East Asia Research Paper. Retrieved from https://studentshare.org/macro-microeconomics/1445847-macro-theory-of-current-topics-sub-prime-mortgage
(Sub-Prime Mortgage Crisis and the East Asia Research Paper)
Sub-Prime Mortgage Crisis and the East Asia Research Paper. https://studentshare.org/macro-microeconomics/1445847-macro-theory-of-current-topics-sub-prime-mortgage.
“Sub-Prime Mortgage Crisis and the East Asia Research Paper”, n.d. https://studentshare.org/macro-microeconomics/1445847-macro-theory-of-current-topics-sub-prime-mortgage.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Sub-Prime Mortgage Crisis and the East Asia

The International Debt Crisis

...Development Economics аnd internаtionаl debt crisis Introduction Debt is one of the most contentious аnd emotionаlly chаrged issues in the debаte аbout globаlizаtion аnd development. It hаs become more of а morаl crusаde thаn а question of globаl politicаl economy. It is аlso technicаlly complex, involving dynаmic interplаy of the weаk (debtors) аnd strong (creditors), under the influence of globаl аnd domestic mаcroeconomic аnd microeconomic forces, geopolitics, history, аnd governаnce systems аt home аnd аbroаd. It hаs generаted а series of intrаctаble problems with no eаsy solutions. Аccordingly, аlthough аll world leаders, including the Pope аnd Nelson Mаndelа, hаve cаlled for the eliminаtion of debt, techniciаns hаve not found...
15 Pages(3750 words)Coursework

Effects of El Nino in Asia

The warm current off the coast of South America appears after Christmas which led the Spanish sailors in Peru to call it El Nino. El Nino means little child in Spanish (WHO, 2000).
El Nino is caused when the winds that push the water get weaker. Due to the weaker winds, the warm water that has been accumulated in the west comes back towards the east. At the same time, sufficient cold water is not pulled up from the bottom. These two factors contribute to the warming up of the water and the growth of El Nino. The winds get weaker and the ocean gets warmer and the warmer ocean further makes the winds weaker. The process continues and the El Nino continues to grow (Scripps Institution of Oceanography, 1997). The warming continue...
11 Pages(2750 words)Assignment

Job Prime Cost

The limitation with fixed costs is that these are uncontrollable as these are normally ‘policy costs’. Fixed cost help in marginal costing in the sense that these costs enable us to identify break-even point, that the contribution needs to cover to reach at ‘no profit no loss’ level.

Variable costs are those costs that change within the same ratio in which the output or production changes. For example, in our study the direct Material cost and direct labour costs are variable cost. We have first calculated the these costs on per cabinet basis and then found total direct material or direct labour cost by multiplying per cabinet cost with total production of400 cabinets. This cost is called ‘...
6 Pages(1500 words)Case Study

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages(5000 words)Literature review

Russia Influence in the Asia Pacific Region

...Assess whether Russia been successful in using its resources to maximise its influence in the Asia-Pacific The economy of Russia is indeed suffering, and its status as a superpower region has diminished- status enjoyed by the Soviet Union in previous years. Due to the introduction of new political issues, Russia’s economy has been trending downward, and exercising foreign policy with Asian countries is not an easy task. On the other hand, countries located in East Asia are leaning more and more towards democracy. It must be noted that in order to describe a nation as being powerful, there are a number of factors that have to be considered. The power of a nation has been said to be characterized with richness in human and natural resources...
7 Pages(1750 words)Case Study

Women in the Middle East Did Not Have Access to Formal Education

... Women in the Middle East did not have access to formal educationwomen have always been a controversial subject since the history of mankind. The status, power of women and human rights are very new concepts that do not have a very long persistence. Before the advent of these concepts women were considered to be sheeps in a herd that had to obey their shepherds commands irrespective of their own will or personal choice. They were not considered mortal and were dwelling on the mercy of their males that were considered to be supreme power in their male governed society. It is not wrong to say that the status of women particularly in Asia was very depressing. They were oppressed and were...
6 Pages(1500 words)Coursework

The Role of Strategic Planning in Crisis Management in the Organizations of Civil Society

The objectives of this thesis could be described as follows: a) to show that strategic planning can be valuable in organizations of civil society, b) to show how strategic planning can be used in crisis management and c) to make clear that crisis management in organizations of civil society can be effective only if a specific process, i.e. strategic planning is employed.

For achieving the objectives described above the following research questions need to be answered: a) which is the role of strategic planning in organizations of civil society, b) which are the most common forms of strategic planning in these organizations, c) is strategic planning able to support crisis management in general? If yes, would this role of...
10 Pages(2500 words)Thesis Proposal

Securing a Legacy for Disabled Young People in East London

Handicap has since a long time ago ruled research in-game and incapacity. Understanding the movement "issues" which the individual has by the goodness of a physical, tactile or intelligent "catastrophe" has been the area of much research that concentrates on inability and game. Subsequently, the estimation of the game for incapacitated individuals has gotten to be perceived as one that fits a restoration methodology to incapacity.
East London has been known to set the phase when it comes to sports concerning the disabled. They have set up numerous Paralympic games that encourage the disabled participants to express their abilities within these games. There are several organizations that have come up to ensure that there is in...
6 Pages(1500 words)Assignment

Towards Solutions to the US Debt Crisis

The national debt became 32% of a gross domestic product after the First World War (Chantrill, 2014, Para 1).
The Great Depression then followed, where the then President decided to boost the national debt to 40% of the gross domestic product. He did this by using his way; the local governments also did the same thus improving the state debt by over 5% of the gross domestic product. In 1993, the domestic public debt was over 28%. The state, federal, and government debts all rose by seventy percent of the GDP (Chantrill, 2014, Para 2).

Unfortunately the United States into a new debt in the Second World War. In 1941, the gross domestic product was 45 percent; it rose up to 119 percent in 1946 probably at the end of t...
6 Pages(1500 words)Assignment

Reasons for Debt Crisis

... Reasons for Debt Crisis The ‘Moment of Truth report’ outlines the looming economic crisis that is bound to hit the American nation if certain policies are not changed. Debt is steadily increasing with most citizens unwilling to sacrifice their spending to guarantee sustainable growth of the country. This aspect jeopardizes the ability of future generations to acquire resources for their survival. Apart from this the report formulates proposals that could ensure change is implemented and appreciated by the American people. It calls for political unity and advocacy to come up with better ideas to change the current debt situation. Federal debt is one of the very few, but crucial reason that is leading to the looming fiscal crisis...
6 Pages(1500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Research Paper on topic Sub-Prime Mortgage Crisis and the East Asia for FREE!

Contact Us