The Big Short #4

Every year over winter break, my family and I drive up to Menasha, Wisconsin to spend time with my grandparents and cousins. At the dinners, the adults always talked about the economy and what was wrong with America. I could hardly keep up because of my limited knowledge of the economy. I sat down with my grandpa, and interviewed him about what he thinks the main causes for the problems of the economy are. He responded, "Loans." I asked him for more specifics and he responded, "Hyper inflated bubble with the housing market." He explained that people were taking loans that were too big for them to pay off. I asked him why the banks would keep giving those people money. He immediately started to talk about a specific bill that changed the way banks gave loans drastically. In 1978, congress passed the CRA (community reinvestment act). This bill, finally enforced around the year 2000, made banks take between 5-10% of their mortgage portfolio and give it to people who would not otherwise been eligible to receive a loan. But this wasn't the big problem. Fannie May and Freddie Mac, mortgage investment underwriters, allowed banks to sell them bundles of these CRA loans. Because these loans were high risk, low reward, the banks continued to sell May and Mac their bundles. May and Mac then sold these bundles to Wall Street. The buyers of these bundles were told that the loans were in much better financial standing than they actually were. Therefore, it created a circle of buying bundles and selling them back to wall street which created a deeper and deeper financial hole. In addition, the bundles of loans were not insured by the government. This means, if the loans were to crash, the buyers would not get any insurance money. It was only a matter of time before the economy crashed.

The Big Short #3

Having little knowledge about Wall Street prior to reading this book, my best answer for "why did the stock market crash?" would be: It's common for the economy to go through cycles. If I had spent the time to think through that answer, I would have quickly realized that the economy isn't mother nature. It's a complex system of capital and investors that have control over what they do with their money. After reading through the book for several chapters having basically no idea what was going on, I decided to highlight the words and phrases that I didn't understand. I realized that the business vocabulary is very small. After quickly learning terms like, hedge fund, allocate...the book became much easier to understand. I quickly picked up on the point of the book (finally...). Part of the reason for the meltdown of the stock market was the face that America was living on paper wealth and not material wealth. Most manufacturers are based outside the U.S. therefore making the U.S. a huge buyer and less of a seller. A lot of big companies in  America were based around Americans' wealth and how to organize it. This is why President Obama is making such a big deal over getting people jobs. Our main goal should be to create our own wealth, instead of living off the paper wealth from past generations.

Invisible Children

It was one of the most powerful movies I've ever seen. We talked about what it meant to us during class, but as the producers said, the true meaning of what goes on there is almost impossible to comprehend without first hand experience. The producers did a fantastic job imitating the normal American kid: Innocent and arrogant at the start, with the ability to immediately grow up and think.

In the middle of our class discussion, I came up with this really good discussion idea. The only problem was arranging it in a way that made sense. I was really close to raising my hand when Mr. Kramer called on Jett. She said the exact thing I was going to say (except in a much sharper and to the point way). If you're reading this Mr. Kramer, then I figured this blog would be the best way to let you know that I was listening and engaged. I was trying to think of a way to add on to what Jett said but...she rarely leaves anything to add on to. Okay, back to the invisible children, deeper meaning stuff.

If a kid ever got abducted in Deerfield, everyone would know about it. For example, a few years ago a girl named Caroline went missing. Hundreds if not thousands of people over the span of about a day and a half, took their ever so important time to look for her in the freezing cold. Caroline showed up at her house the next day. The name invisible children is very literal. These African children, who are invisible to the rest of the world, are getting abducted daily. Their names are swiped off the record, almost as fast as they are dragged away by the LRA. Usually, no one goes looking for them....They are invisible.

Death Penalty Final Blog

My thoughts on the death penalty are very similar to that of Governor Ryan. Before our unit, I was a strong believer in the death penalty because I felt as though the system was solid. After weeks of research, videos, and articles, I have gained a strong dislike for the death penalty. The turning point in my point of view was the article I analyzed that gave graphic details of people killed by each type of punishment. Each of them contained graphics that are far beyond anything I'd imagined prior to the unit. Even hanging someone, which I thought was the most simple way of killing someone, described it as completely inhumane and disgusting. The peoples faces turned purple, their eyes bulged out...that's all I needed to hear. No matter how bad the person was, no one should deserve to die like that. I urge you to check this website out. If for some reason you really want to stay pro-death penalty, then don't: http://deathpenaltycurriculum.org/student/c/about/methods/contents.htm

I absolutely agree with Illinois' decision to abolish the death penalty. Along with being inhumane, the justice system is not entirely mistake free. Every day, people are accused of crimes they didn't do. The abolishment of the death penalty, therefore, gives innocent people a chance to be free once again. Once someone receives the death penalty, there is obviously no way to get them back. Because of articles like the one I've posted, Governor Ryan's speech, and videos about the disgusting and inhumane nature of the death penalty, I have forever been changed to anti-death penalty.

Abortion

One of the most debatable topics in American history. There are very equal arguments to both sides. The pro-life side believes that people who use abortion consistently are taking advantage of it. The pro-choice side believes that the government does not have to right to make decisions for the people. After reviewing both websites, I still cannot find a favorable side. I would like to think that people have the right to their own decisions, however, I do not think it's right to kill unborn children. I believe that the people should have the right to make their own decisions for a maximum of 3 children. After three, because they seem to be taking advantage of the situation, the government should have some control in order to discipline the person. As a 17 or 18 year old student, I believe that the family should have the right to know if their kid is having an abortion. At that age, the kid may be considered an adult, but I believe that very few are actually mature enough to fill that role. The same rule applies for the father. Everyone involved in the situation should be educated and allowed to make suggestions.

The Big Short Chapter 2

The very first line in the chapter:

"Writing a check separates a commitment from a conversation" (Warren Buffet).

My first thought:

"Finally, we might be getting into the athletes and their financial situations."

After reading the chapter:

"Crap."

It's not that I don't enjoy the book, I believe that it is really well written, it's just that I don't understand it. If worst comes to worst, I might have to ask my dad for some help. With him, I'm suddenly looking at a 1 hour assignment turning into 3 or 4. Based on what I got from the second chapter, this guy named Michael Burry was a successful finance guy. The more I think about it, the more I realize that I have no idea what's going on. Therefore, I'm starting to dread the fact that my dad's gonna need to step in. Hopefully for the next chapter I'll write about something meaningful.

The Big Short Chapter 1

Having a limited economics background, figuring out what's going on in this book was a challenge, although I do think I've got the hang of it. The first chapter of The Big Short was an introduction to a very smart and strange person, Eisman. The first thing I noticed was that he was Jewish. I'm not exactly sure why this is, but for example, my dad and I would look through rosters of College baseball teams and look for Jewish baseball players. Don't get me wrong, our strange search has a purpose, it's not like we just sit down and look through random rosters counting the number of Jewish athletes. Because I want to play baseball in college, we want to make sure that I would feel comfortable. Also, I became interested in reading this book because it's about sports. I must say, I wasn't expecting it to be all about finance, but hopefully in the second chapter it'll shift to a more sporty feel.