Bankers Should Learn What “Malus” Is
New York Times
Published: November 17, 2008
All business has to have some kind of role and regulation to improve
their business. If they don’t follow the laws, the business won’t get enough
profits. Also, they will losses big amount of money. Therefore, the Swiss
bank is trying to change compensation plan for top executives. The Swiss
bank uses this term as a major concept in their business industries.
Firs of all, many banks are going close their business because of bad
economy and mortgage crisis, so they are trying to reduce some kind of
financial expenses especially hefty bonuses are paid out for risky bets that
will better employees but it is not returned anything later fail business.
According to the New York Times “that’s no longer going to be the case at
the top of UBS. Starting next year, no more than one-third of any cash bonus
will be paid out the year it is earned. The rest will be held in reserve and can
be reduced by future losses, risky trading or compliance shortcomings. Share
awards will also be handed over only after three years. The share amount
can also be reduced by a “Malus” or negative bonus”. The bank is only
giving a certain amount of bonus which is one-third of amount from their
earning in a fiscal year and the rest of the money they are going reserve for
the future losses. Also they are going to give a share awards only after three
years so the shares money can be reduced some risk by a ‘Malus’ in the
banking business.
Finally, if the banks safe some money by following ‘Malus’, they
won’t get any financial crisis in the future. Also, all banks will get benefit
from this term. Therefore, we should use this method in all kind of
businesses, so that all companies can get more success. In this way, people
can improve their business and avoid global economical crisis.
Commercial Loans Are Looking Risky
By DWIGHT CASS and JOHN FOLEY
Published: November 19, 2008
New York Times
Commercial loans are very important in this business world. Most of the
times, people can not start their business without getting a commercial loan because
people need enough money at the beginning. Otherwise, they wouldn’t be able to get
to start a business, but now many companies are getting financial problems because
of the global economical crisis and there are many reasons these days’ commercial
loans crisis such as a bad mortgage loan.
First of all, many people got their businesses and mortgages loans very easily
a few years ago because that time was not this kind of economic problems. The main
problems were the banks did not verify the peoples’ background and their annual
income perfectly. Also, the brokers just tried to get the loan from the bank and to
get their commission from the bowers. Now, many people are not able to pay back
which were taking from the banks because many of them don’t have enough income.
According to author Dwight Cass and John Foley “Rather, the C.M.B.S. slide
gained steam after the Treasury secretary, Henry M. Paulson Jr., said last week that
the “troubled asset relief program” wouldn’t buy dodgy mortgage securities off
banks’ balance sheets”. Thus, the main financial risk comes from this kind of bad
mortgages in the United State.
Finally, if all the loans companies verify people background perfectly, they
would get more benefit from their customers because the customers would pay back
on time. Therefore, all the banks will get more benefit from the bowers and the
banks will get more success in the business.
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Gloom Everywhere Except the Stock Market
New York Times
November 7, 2008
Currently, we are facing so many problems for bad economy, but not only in
the United State it also around the world. People are worrying about their jobs and
their business. Many companies already are given layoff to save their business, but
they still are not able to solve their difficulty because the consumers are not
spending enough money. On the other hand, all companies are trying to cut
employees hours so employees can not making more money than they did. If you
look back a couple of years from now, you can see that our economy was not bad.
However, the unemployment rate is all most leading seven percent, and we couldn’t
have this number of unemployment sine 1983. In 1983 the unemployment rate was
over nine percent, and they built up better economy by working hard. Also, they did
not lose their hope. According to New York Times article “Meanwhile, stocks are
up, evidently on expectations of more Federal rate cuts. It is good to see that there
still is faith that the government can do something to save this situation, but the rate
cuts so far have not accomplished”. We are still alive and the government is working
hard to make our economy system stronger. This is a temporary situation that we
have to fight for unemployment rate get back on track. Also it is depending on the
government that how significantly they want to solve this problem because the
government has to create more jobs. Now, it is very difficult time to do that because
most of the companies are going cut more employees such as General Motors and
Ford.
Finally, people are not hopping better economy very soon, but if the government cut
more federal interest, the money wills more circulation around the people. Then the
economy will get stronger, so people will spend more money. In this way, we can
develop our business
Black Friday Could Be Black for another Reason
By the Associated press
Published, November 26, 2088
New York Times
Black Friday is a biggest day for American consumers because many people
wait whole year for the day to buy some things they need. Most of the retailers give
surplus discount on their products to eliminate inventories, and get more profit
from their business. For example, last year, one of my friends bought a big flatpanel TV with in $2000, but it is usually cost of those products over $4000.
Therefore, many people like to spend more money in the black Friday to get
cheaper merchandises. However, this black Friday is different than the last black
Friday because of the economical crisis.
These days, many retails industry are going to close their business such as
circuit city because they are not making enough profit. Already many business
companies filed for bankruptcy, and it will also dramatically increase after the
black Friday if the retailers don’t make enough profit many business analysis’s
think. According to New York Times written by associated press “this year, black
Friday might also mark the beginning of the end for a growing number of
struggling retailers who could file for chapter 11 bankruptcy protection after the
holidays if the don’t make their sales and profit goals”. Therefore, the retailers
think that they will increase their sales from the black Friday to the holiday period.
From this reason, the economy may be get starting better. If not than we will have
more depression, after the holiday reasons.
Finally, most of the businesses always want to sales increase by giving some
of the expensive products as a discount rate because they need to reduce their
inventories. Also, they need to keep running their business when consumers do not
want to spend or have financial problem in the business. After that, if retailers still
do not achieve their goals, they need to close their business. As a result, our business
markets will get worst, so we need to give promotional sales to get more benefit from
the consumers.
Another Month of Miserable Auto Sales
By NICK BUNKLEY
Published, December 2, 2008
New York Times
The economical crisis is making trouble for the auto makers in the street
because people are not buying enough vehicles. These days, consumers are losing
confidence to buy some things that is very expensive because they are getting layoff
from their jobs and cutting their working hours from their employers, so people
don’t feeling secure to buy a valuable thing. If people wanted to buy a very
expensive item, they needed to over confidence that they would pay back. When
people think that they will able to pay back, then they want to purchase some things
expensive. According to author Nick Bunkley “It’s not a question of what the
automakers can do,” Mr. Pinelli said. “It’s a question of consumer confidence. You
can’t induce someone to buy something if they don’t feel good about the purchase. If
it’s just not the right time to buy or they can’t get financing for it.” On other hand,
when people want to buy very expensive item, they need a big amount loan from
banks, but they are not getting loan from the bank easily because many people don’t
have enough income. Therefore, Vehicle sales in the United States sank 36.7 percent
in November to the lowest rate in 26 years, as the dour economy and tight credit
markets made for another lonely month at dealerships around the country.
Over all, vehicle sales are 16.3 percent lower than they were for the first 11
months of 2007. In November, the decline for cars and trucks was roughly the same:
down 36.9 percent for trucks and 36.5 percent for passenger cars. As a result, the
economy is going more down and it’s effecting very badly our in our business
industries, so people need all kind of loans to do important works, and then people
will spend more money in the business industries, and we will have better economy
in the United States.
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