332 final
Soft currency
Affects exchange rates Not widely accepted outside of its home country, usually because foreigners believe that the political and economic conditions in the country will make the value of the currency unstable or because the volume of international trade in that currency is too small to establish a reliable market value Countries with soft currencies must acquire hard currencies by exporting or borrowing in order to purchase goods or services from other nations
Depreciation
Affects exchange rates When exchange price becomes less valuable to other currencies it depreciates When the euro depreciated, it became much more expensive for a european travelling to america holding euros A nation's currency tends to depreciate when that nation experiences a higher inflation rate than other countries Inflation makes currency less attractive to foreign buyers and cause its foreign exchange rate to depreciate When investors stampeded out of mexico during the mexican financial crisis, it triggered a drastic depreciation of the peso in late 1994 and a severe recession in 1995
Sylvia landis
Civilian with a personal interest in how the courts were handling the torrent of foreclosures and the people swept up in them Sat in on court proceedings Sylvia had began to prepare for her retirement by joining the growing subculture of middle class people who got involved in real estate When she lost all of her homes, she got a bunch of robosigned documents; was the eyes and ears of many florida lawyers handling foreclosures; helped weidner; joined a movement of angry middle class homeowners
CDS's
Credit default swaps These are contracts that insure banks against borrower defaults. These contracts also allowed investors to bet on the possibilities that companies would default on their loans. CDSs are not traded on an exchange and there is no required reporting of transactions to a government agency.[7] During the 2007-2010 financial crisis the lack of transparency in this large market became a concern to regulators as it could pose a systemic risk. In 2008, the fed did rescue the american international group, one of the world's largest bank insurers. AIG had been heavily involved in issuing credit default swaps.
Nigel Farage
Flamboyant brexiteer and friend of donald trump For years has used his seat in the european parliament to merrily trash the EU and its institutions Has been a member of the european parliament since 1999 and has sat as a member of the brexit party since 2019 Vice chairman of pro brexit organization leave means leave Former leader of the UK independence party Long time prominent euroskeptic, strong critic of euro Stated that a failure for the EU to forge a trade deal with an exiting UK would be far worse for the EU than it would be for britain
Troika,
Four eurozone states had to be rescued by sovereign bailout programs, which were provided jointly by the International Monetary Fund and the European Commission, with additional support at the technical level from the European Central Bank. When the 2008 US financial crisis started bleeding into the EU, investors started targeting the PIIGS and driving up their borrowing costs In 2009, greek president announced that greece's level of debt was much higher than previously stated, which led some to believe that greece may have gotten into the EMU under false pretenses In may 2010, greece was granted a bailout which became known as the troika Had controversial IMF imposed conditions that required deep cuts in state pensions, aid to the elderly, and educational programs Led to huge demonstrations Before the crisis began, banks and investors had profited greatly from investment opportunities in the south and throughout the eurozone Many charged that responsibility for debt problems must be shared by both lenders and debtors Yet EMU policies involving germany and the troika favored the IMF and investors the most Raises the questions of why germany and the troika, and the investors they supported, benefited so much while the masses in debtor states paid such a high price The troika delayed until 2018 negotiations on providing greece real debt relief A major factor contributing to growing skepticism of the EU has been its failure to solve key economic problems related to the financial crisis and the eurozone Troika's policies helped produce short term financial stability for northern states but long term political economic instability in the south Tough austerity measures that the troika imposed on heavily indebted states drove them deeper into debt
Economic giant on steroids
US remains hegemon by default US economy is an economic giant on steroids: new grand bargain, US provides collective goods. US debt rising- tax cuts leads to record levels of debt Dependent on investment shots from countries with surplus capital Similar to the grand bargain between the united states and its allies during the cold war, the US still provided collective security goods for the international community by combating terrorism, assuming much of the costs of intelligence gathering, and providing forces and weapons to attack suspected terrorists Allies and others help pay for these services and prop up the US dollar in the global economy to the extent that they continued to invest in and purchase us goods and services
Appreciation
When a currency's exchange price rises (when the currency becomes more valuable relative to other currencies), it appreciates If a nation's currency appreciates, companies that export goods and service will be hurt as their products become relatively more expensive internationally However, importers in the same country will benefit because imports become cheaper Affects exchange rates
Treaty of Maastricht,
With the fall of the berlin wall and the collapse of socialist regimes in central and eastern europe, the western european countries faced a double challenge: reunification of the formerly socialist germany and applications for membership from most of the ex-soviet bloc countries In 1992, the treaty of maastricht formally established the european union Was mainly a result of negotiations during the process of german reunification France proposed a monetary union that it believed would chain germany to the rest of the EU through a common currency and force germany to give up the most powerful symbol of its economic strength- the deutsche mark Worked to transform the european community into a european union Established the economic and monetary union to replace members' national currencies with one common currency Establish the ECB that would be independent in its monetary policies from other european institutions and national governments that would be committed to the objective of price stability Establish 3 foundational pillars of the EU dealing with different policy areas and different decision making processes Opt out clauses were inserted to help insure that states would approve the agreement Many believed that the maastricht treaty was bloated
Hartzells
Worked at wal mart Thought that wal-mart and big oil ruled the world Believed a poor person should be in office
Foreclosures
the action of taking possession of a mortgaged property when the mortgagor fails to keep up their mortgage payments. Foreclosure epidemic Clustered in the older city slums and the ghost subdivisions Came thousands by thousands in tampa Houses, motels Filed by transparently named financial institutions Personally served, nailed on doors, left with neighbors, tossed in trash cans Pressure from the state supreme court to dispose of them was huge People never showed up for court The cases were overwhelmingly uncontested
neo-multilateralism
-organized around maximizing each country's comparative advantages instead of standard rules for all -trade agreements are customized to the economic stage of each country, rather than by regional groups -the us develops a technology and innovation strategy that defines core competencies that will provide the country a sustainable comparative advantage for the next generation (IoT, AI, clean energy, smart energy, intelligent transport technologies) -technology and innovation strategy yields massive growth -us regains competitive advantage by defining a knowledge based economic strategy to replace the industrial strategies that have been the main strategic planning tool for the past century and a half; creating a culture that values innovation, rewards making mistakes, and thinks long-term -we recommit to nafta, acknowledging that lower value added jobs are better in mexico than in america -us rejoins paris climate accord; symbolizes the end of us political isolation -us dollar remains the most dominant international currency, as a result of resurgent US leadership and trade volume and value -the UK public reassesses the decision to exit the EU; revokes its decision to leave the EU; intra eu trade increases, many countries benefit -wto is able to close doha round
bilateralism
-world that has rejected multilateralism but not trade altogether -specific bilateral agreements, each operating on its own assumptions and rules, without any common governing frameworks -trump admin dismantles high profile trade and climate agreements and seeks a number of one on one trade agreements -us and uk create a trade agreement that adds no value, just maintains standards for when britain was in the EU -us erects prohibitive customs duties on the importation of steel, coal, oil and gas, automotive components and products, and manufactured machinery and equipment products, buttressing its last generation competitive advantage in low skilled manufacturing -uk uses norwegian model, but the benefits of withdrawal fail to meet expectations due to the cost of developing and maintaining standards that are redundant with EU standards; UK joins the EFTA, an economic model that is based on low taxes and government intervention -germany does not elect the alt right party, but the party does create enough political pressure to force a curtailment of immigration and a reduction in the free movement of labor across the german border -wto changes its mission to only focus on trade between developing countries -uk withdraws from the eu and triggers a devolution from a central, bureaucratic organization to a more limited set of core countries organized into a basic EEA and industry specific trade agreements
Next great city
1982 book megatrends said that tampa would be one of ten new cities of opportunity Sunbelt city In 1985, tampa's chamber of commerce decided to aim higher and made the cities motto "america's next great city" New international airport, nfl buccaneers, super bowl, sunshine and beaches, westshore business and shopping center, was growing hella fast Grew throughout the 80s and 90s Hillsborough county had way more people than tampa itself Selling point wasn't america's next great city after all- the growth rate was actually hostile to urban life What it offered was the american dream in a subdivision, the splendid isolation of a new homestead an hour's drive from downtown A comfortable distance from higher prices, taxes, and congestion of big city living That was the ethos of the sunbelt New schools and fire stations funded by bond issues floated on the projection of future growth Took a shortcut to greatness
Lender of last resort
After the financial crisis, the US federal reserve continued to play the role of lender of last resort by extending hundreds of billions of dollars in emergency credit to banks in the hopes that this new money would resolve their liquidity problems and encourage them to make more home, student, auto, and small business loans Eric helleiner argued that the financial crisis did not significantly transform global governance Reason: no other country has the level of military power, importance in trade, or deep financial markets as the US Also bc US financial markets are so big, the US was able to ensure that reforms to international financial standards reflected US interests The US is the only country capable of acting as a lender of last resort in times of financial instability, as was made clear during the global financial crisis
AIG
American international group In september, stock markets plunged and global credit markets froze up, almost overnight when the US govt refused to rescue lehman brothers and it collapsed and filed for bankruptcy The fed did rescue the AIG, one of the world's largest bank insurers, pumping in 85 billion to become an 80 percent owner of the company AIG had been heavily involved in issuing CDS's The fed's help to AIG- which eventually became a nearly 150 billion dollar bailout package- was a hedge against the possibility that its failure would cause the entire global financial system to collapse On october 3rd 2008, bush signed the ECSA to create the TARP, which authorized 700 billion dollars of taxpayer money to buy up bad assets in banks in the hopes of keeping credit moving Injected 70 billion more into AIG TARP money was not a government giveaway: banks eventually repaid loans to the US treasury, and the government sold the last of its shares and equity stakes in automobile companies by 2015
Alan greenspan
American who served as the chair of the federal reserve from 1987 to 2006. Critics argued that policies and beliefs that emerged in the 1990s and spread in the 2000s needed to be changed. Many blamed officials in the federal reserve under greenspan for believing that markets were efficient, self regulating, and capable of accurately assessing financial risks and setting prices. Many said in retrospect that these beliefs were dangerously simplistic, naive and ahistorical. Once officials lifted regulations, financial institutions proceeded to take on excessive debt and engage in imprudent lending. Repealed the glass steagall act. Deregulated system opened the door for individuals and companies to engage in irrational, unethical and even illegal behavior with seeming impunity. Deregulated system opened the door for individuals and companies to engage in irrational, unethical and even illegal behavior with seeming impunity
Eurozone
Another word for EMU When the world financial crisis started in 2008, numerous cracks appeared in the eurozone
AI
Artificial intelligence Also known as machine learning, whereby technology can begin to make predictions and assumptions and think more like humans. Machine learning and artificial intelligence can help guard against cyberattacks. Artificial intelligence is a critical component of cybersecurity, and some would argue it is the overriding domain of which cybersecurity is only a part. The targets and ramifications of hacking have become more onerous over time; costs of cyber attacks are massive; have the potential to sway election results. Necessary and urgent activities for which mature markets, such as the united states and the united kingdom, need to develop skills, resources, and products.
The fixed (bretton woods) financial system
As it became apparent that the allied powers would prevail in world war 2, the US and its allies met in bretton woods to devise a plan for european recovery as well as a new postwar international monetary and trade system that would encourage growth and development. The organizers wanted to avoid a return to high unemployment rates and malevolent currency devaluations of the 1930s. Keynes, an influential figure at the convention believed that unless states coordinated their actions for mutual benefit their individual efforts to gain at the expense of their competitors would eventually hurt everyone and return the world to conflict. Bretton woods convention created the IMF, world bank and GATT. The IMF adopted a modified version of the former gold standards fixed exchange rate system that was more open to market forces, but not divorced from politics. Confidence in the system relied on the fact that the US dollar could be converted into gold at a set and guaranteed price. This arrangement stabilized the western monetary system, which desperately needed the members' confidence and a source of liquidity to boost recovery in europe and japan. Based on liberal ideas. The keynesian compromise allowed individual nation states to continue regulating domestic economic activities within their own geographic borders. Bretton woods goals complemented US liberal values and policy preferences at very little cost to us. Also wanted to prevent a repeat of the brutal and destructive terms the victors imposed on the losers at the end of ww1. This system opened up opportunities for US exports and investments while advancing the broader objective of preserving capitalism and western europe and japan. Dollar top currency obviously. Europeans increasingly criticized the US for abusing its hegemony over its allies without immediate penalty. Ended when nixon unilaterally decided to make us dollars nonconvertible to gold in 1971.
Fannie/freddie
Banks who were dealing out loans to straw buyers Also dealt out most foreclosures in tampa
Theresa May
British prime minister who has served since david cameron resigned in 2016 There has been much wrangling between prime minister may and parliament about may and the EU commission getting the best deal in trade. In 2017, may called for a snap election to determine how firm a mandate she had to negotiate the terms of brexit with the EU. May's conservative party lost seats in parliament, leaving officials and the public even more concerned about the UK's future. May has promised to carry on with a hard brexit, meaning a complete break from the EU. By late 2017 it was clear that EU negotiators had the upper hand- forced may to agree that in transitioning out of the EU, GB would pay EU a shit ton, protect EU's citizens rights to work in GB, and keep border between northern ireland and the republic of ireland relatively unrestricted.
Hot money
Capital that moves quickly in and out of a country When foreign investments pour money into a country, they often push prices for stock bonds and houses beyond what is reasonable Price bubbles can burst when investors rapidly pull their money out in anticipation that markets will fail After the cold war ended in 1990, continued liberalization enabled large increases in flows of investments around the world, including foreign direct investment and purchases of stocks and government bonds in emerging markets Hot money and international speculation helped trigger major financial crises in mexico, southeast asia and russia
Cybersecurity
Cybersecurity is the protection of internet-connected systems, including hardware, software and data, from cyberattacks. The targets and ramifications of hacking have become more onerous over time; costs of cyber attacks are massive; have the potential to sway election results Necessary and urgent activities for which mature markets, such as the united states and the united kingdom, need to develop skills, resources, and products Cybersecurity of banking money transactions is urgently needed Governments should incentivize and support, but not directly take equity stakes in, private sector technology trailblazers
Karen jaroch
Definition: Co-Founder of the tea party movement in tampa Significance: Karen was an engineer who grew up in tampa. She got involved in politics late in her life, and co-founded the 9/12 chapter in tampa, an offshoot of the tea party movement. She was an advocate of small government, minimal taxation, and the american dream. She was one of many people who vigorously opposed the light rail in tampa. She became the hillsborough county field director for americans for prosperity, a pro free enterprise group.
Glass steagall act
Depression era act that separated investment and commercial banking activities. By repealing this act in 1999, congress allowed commercial banks with deposits ensured by the FDIC to become affiliated with investment banks that made many high risk investments. Many argued that such policies that had emerged in the 1990s and spread in the 2000s needed to be changed. Once officials lifted many regulations, financial institutions proceeded to take on excessive debt and engage in imprudent lending. A deregulated system opened the door for individuals and companies to engage in irrational, unethical and even illegal behavior with seeming impunity.
Robo Signing
Documents that didn't seem authentic- computer generated copies with erroneous dates and suspicious signatures Paperwork with fraudulent signatures, phony dates, bogus seals
"Jackboot"
During negotiations for the second loan to greece, relations between officials became acrimonious and personal French president sarkozy criticized angela merkel, suggesting that france would support the interests of the southern states At one point in 2012, german officials suggested the greece leave the EMU and construct a new financial system based on its own currency; hoped greece would take an orderly exit from the eurozone so as not to spook markets and risk another recession Greeks doctored a photo of merkel in a nazi uniform; accused her of using jackboot, or strong arm tactics to suppress the greek people like the germans did when they occupied greece in world war 2
Subprime mortgages
During the 2000s many mortgage companies and big banks earned big profits from the fast growing real estate market Offered a wide range of products such as subprime mortgage loans to attract first time buyers Many of the buyers had weak credit scores and unstable incomes Banks and lenders packaged these risky loans into mortgage backed securities and then resold them to other banks, hedge funds, and foreign financial institutions A few experts warned about the growing real estate bubble, but didnt attract real attention until the subprime mortgage market started to crumble By early 2007 a slew of mortgage companies with portfolios of subprime loans worth trillions filed for bankruptcy Merrill lynch, citigroup, and other large financial institutions reported billions of dollars of losses on subprime mortgage investments
Goldman sachs
During the subprime mortgage crisis, goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage backed securities Huge controversy But they have denied any wrongdoing
Mario Draghi
Ecb president Famously said in 2012 that he would do whatever it took to preserve the euro; comment soon boosted the value of the euro Replaced the EFSF with ESM Draghi also proposed that the ECB should buy unlimited government bonds to help countries that abided by IMF conditions
The flexible financial systems
Effort to reform monetary system in 1973 led to the flexible exchange rate system, or managed float system Major powers authorized the IMF to widen trading bands so that market forces could more easily determine changes in currency values Connection between the diffusion of international wealth at the time and the emergence of a new multipolar security structure that would be cooperatively managed by US, soviet union, the EU, japan and later china Dollar still top currency Debt of non oil exporting developing nations increased generating debt crises in latin america and africa In the 1970s and 80s trade imbalances in the developed countries contributed to stagflation (slow economic growth accompanied by high unemployment and inflation) Prevailing keynesian orthodoxy was swept aside in favor of neoliberal ideas Thatcher and reagan privatized national industries, deregulated financial and currency exchange markets, took steps to weaken labor unions, cut taxes at home, and liberalize trade policy Economic and liberal policies and development strategies served as the basis of the washington consensus and the globalization campaign By 1990 many controls on private capital flows had been removed Increased public and private finance also helped generate tremendous increases in the volume and value of international trade
ECB
European central bank The ecb is the central bank for the euro and administers monetary policies in the eurozone. Established by the maastricht treaty, this institution was to be independent in its monetary policies from other european institutions and national governments, and would be committed to the objective of price stability. At its inception, the new ECB and its president were given limited powers. Because of its economic supremacy, germany played a major role in choosing the bank's president, who was expected to emphasize controlling inflation over stimulating economic growth by pumping more money into the economy. In 2012, ecb president mario draghi proposed that the ECB should buy unlimited government bonds to help countries that abided by IMF conditions in response to the greek crisis.
EMU
European monetary union Created by maastricht treaty, the EMU was established to replace members' national currencies with one common currency in 2002. This move was meant to save money by eliminating the cost of currency exchanges, but central banks would no longer be able to fine tune their economies via interest rate adjustments. This provided its original members with a detailed timetable to phase out their national currencies and introduce the euro in 2002. Although many realized early on that the EMU lacked conditions that economists consider necessary for an OCA, officials largely disregarded warnings about potential problems with the EMU, in part because of their beliefs that markets wouldn't fail.
ESM
European stability mechanism A permanent rescue fund that can loan up to 500 billion euros to countries in need. After 3 bailout loans in 2012 and 2015, greece remained the southern mediterranean state with the highest level of debt. Austerity was not working, and economically stronger states such as germany, austria, and the netherlands began to fear that rescuing weaker states would perpetuate moral hazard or encourage these states to continue their carefree ways with the confidence that the eurozone would bail them out. In response to the crises, the small EFSF was replaced by the ESM, a permanent rescue fund. This assistance is granted only if it is proven necessary to safeguard the financial stability of the euro area as a whole and of ESM Members.
Overstretch/economic overextension
Excessive spending which often accompanies imperial policies and gradually weakens an imperial power. Before the financial crisis, many officials and experts were worried that high levels of US domestic spending, continued US trade deficits, and the costly wars in iraq and afghanistan would cause excessive spending, more US debt, and a weakening value of the dollar. Rather than sharply cutting spending, the US relied chiefly on external sources of finance to cover its budget deficits, something that was risky and unstable.
Angela Merkl
German chancellor since 2005. During grexit, merkel did not want greece to stay in the european union. Many convinced her of using jackboot, or strong arm tactics, to suppress the greek people the way that the germans did in ww2. One greek economist suggested that much of the problem surrounding the grexit situation was merkel's fault, arguing that she waited too long to address the crisis, is obsessed with austerity, has no empathy for the greeks, lacks leadership and has no advisors who cannot speak with one voice, and faced a lot of domestic pressure from her party and others. Merkel was concerned that the troika deal might affect her own domestic support. During the EU immigration crisis, merkel was looked to once again for regional leadership, as with the financial crisis. In this situation, she wanted to keep the EU open to migrants and argued that the EU was morally obliged to take them in. she worked with turkey on an agreement to relieve the humanitarian crisis and was repeatedly criticized for her open door policy during the crisis.
Syriza
Greece's continuing economic recession, high level of unemployment, and political conflict led to the need for still another loan in 2015 to deal with its debt In the run up to the election in 2015 to replace the outgoing president, the left wing syriza party led by alexis tsipras promised to reverse the austerity measures under which greece was living In 2015, syriza won enough votes to organize a coalition government headed by prime minister tsipras and his finance minister yanis varoufakis After failing to collect taxes and a referendum to support austerity measures failed, finance minister resigned Tsipras negotiated another bailout deal with even harsher austerity measures, saying that he did not want greece to leave the eurozone Resigned but was brought back into power in a snap election and began implementing the new loan agreement Higher taxes for high and middle classes, increased deregulation, more pension cuts and new taxes on commodities Austerity measures incited protests and demonstrations In 2017, greece was in trouble again; EU agreed to give them more loans
hard/soft Brexit
Hard brexit: complete break with the EU Soft brexit: maintain some residues of EU policies that benefit the UK
Speculation
Impacts exchange rates Betting that the value of a currency will go up or down in the future The asian financial crisis demonstrated how easily crises could occur, even in states with otherwise sound economic policies, when global market actors lose confidence in a government's ability to manage its finances or live up to external expectations Int investors became concerned about the health of the thai economy, and began to pull their funds out, causing thai governments supply of dollar reserves to be drawn down Conditions were perfect for a speculative attack- confrontation between a central bank, which pledges to maintain its country's exchange rate at a certain level, and international currency speculators, who are willing to wager that the central bank is not fully committed to its exchange rate goal Many individuals and financial institutions look to make profits by trading in currencies based on expectations of future foreign exchange rates Speculation, along with hot money, helped trigger major financial crises in mexico, southeast asia and russia
hard currency
Money issues by large, wealthy countries with stable political systems, well governed economies and strong militaries US, canada, japan, GB, switzerland, and members of the eurozone Hard currency countries can generally exchange its own currency directly for other hard currencies and therefore for foreign goods and services- giving that country and its businesses a direct advantage in world markets Affects exchange rates
Jeremy Corbyn,
In 1975 he opposed britain membership of the EEC; also opposed the ratification of the maastricht treaty in 1993 Thought it didnt have checks and balances Backed a proposed referendum on british withdrawal from the european union in 2011 Accused the institution of acting brutally in the 2015 greek crisis, accusing the EU of allowing financiers to destroy its economy In 2015 corbyn said that if prime minister david cameron negotiated away workers' rights and environmental protection as part of his renegotiation of britain's membership on the european union, he would not rule out advocating for a british exit Pro european labour MPs and campaigners expressed fear that corbyn's lukewarm attitude towards the EU would convince labour voters towards withdrawal In september 2015, corbyn said that labour would campaign for britain to stay in the EU regardless of the result of cameron's negotiations, and instead pledged to reverse any changes if cameron reduced the rights of workers or citizens 2016, supported staying in the EU but also repeated some of his earlier complaints of EU structures Stance is remain and reform Corbyn then said that there was an overwhelming case for staying in the EU Said the debate had been dominated by myth making and prophecies of doom
Lehman brothers
In 2008, when the US govt refused to rescue lehman brothers, a big investment bank, it collapsed and filed for bankruptcy, scaring investors Stock markets plunged and global credit markets froze up, almost over night The fed did rescue AIG, one of the world's largest bank insurers, pumping in $85 billion to become an 80 per cent owner of the company
isolationism trade scenario
In this trade scenario, the world fragments into regional and national interests. Developed countries face increased competitive pressure and reduced growth due to the competitive impact of globalization, while developing countries increasingly see their trading opportunities with rich countries limited by the closing of doors and the erection of tariff and nontariff barriers. The US continues to send abrasive and divisive signals to its trading partners, and states move towards secession or the redrawing of borders. The us imposes high tariffs on offshore production to bring manufacturing back, and US GDP decreases. US drops out of trade agreements and eventually the dollar is replaced by the euro and yuan. Britain does not achieve a fruitful agreement with the EU about future commerce, but uses the norwegian model; the establishment of parallel structures takes years due to internal debates about the extent of deviation that is acceptable regarding work rules, social costs, immigration, and the mobility of labor, and environmental standards and targets. Germany elects a far right party which agitates and stimulates anti-immigration and trade isolationism, and country eventually opts out of the EU as well. The wto becomes increasingly irrelevant, as nations everywhere create bilateral trade agreements only focused on their own wealth which undermine the wto's effectiveness. Because no wto, nations pursue more unilateral and aggressive means of retaliation. Possible return to the gold standard, disintegration of the EU.
IMF
International monetary fund International institution created by the US and its allies at bretton woods meant to ensure a stable international monetary system. Since the 1970s, the IMFs main roles have been to loan money to countries with balance of payments problems and to monitor the financial and economic policies of individual states. The IMF, upon its inception, adopted a modified version of the former gold standard's fixed exchange rate system that was more open to market forces, but not divorced from politics. It collectively managed fiscal policies with the eventual goal of expanding international financial markets and trade. Sought to ensure nondiscrimination in the conversion of currencies. Provided temporary assistance to all debtor countries while they adjusted their economic structures to the emerging international economy. Conditionalities and SAPs attached to loans aggrevated economic downturns however, tarnishing the IMFs credibility as a good manager of the global financial system. Throughout the 2000s, many developing countries shunned the IMF as best they could by building up foreign currency reserves in case they faced financial problems. The IMF has roles in managing the floating exchange rate regime.
Capital controls
Limits on how much money can move into and out of a country During gold standard, states tried to insulate their economies from international finance forces by adopting capital controls During bretton woods, states maintained capital controls During flexible exchange rate, by 1990s many controls on private capital flows had been removed
Christine Lagarde
Managing director of the IMF Commended greece and its european partners on the completion of the fourth and final review under the ESM program Additional debt relief measures announced today will mitigate greece's medium term financial refinancing risks and improve its medium term debt prospects Imposed troika?
Flippers
Many of the people buying properties and driving growth in tampa are flippers Many middle class people got involved in flipping- it was super easy money
SAP's
Neoliberal policies imposed on countries as conditionalities for loans from the IMF- ie budget cuts, higher taxes, unregulated financial flows, and privatization. Creators of the Bretton Woods institutions were adamant that creditors should help debtors make adjustments in their economies. The plan for the IMF and world bank nearly put all of the adjustments pressure on debtor countries, without any symmetric obligation for creditors to make sacrifices. When the IMF extended loans to countries who were affected by the asian, russian, and argentina crises, the structural adjustment policies aggravated economic downturns, tarnishing the IMF's credibility as a good manager of the global financial system. Policies were considered inappropriate for a country during a financial crisis.
Grand bargain
Once the cold war began in 1947, the US consciously embraced the role of the western hegemon by providing collective goods such as economic assistance and security for its allies In the emerging grand bargain, the united states provided financial assistance to japan and europe via the marshall plan Moreover, many US corporations invested in western europe, providing the allies with scarce liquidity The united states also protected the europeans from a possible soviet invasion and from soviet efforts to help communist parties to get voted into power legally in italy or france The united states deployed US troops, heavy armaments, and eventually short and medium range nuclear missiles to bases in great britain, west germany, and turkey to contain the USSR Similar to the grand bargain between the united states and its allies during the cold war, the united states still provided collective security goods for the international community by combating terrorism, assuming much of the costs of intelligence gathering, and providing forces and weapons to attack suspected terrorists Allies and others help pay for these services and prop up the US dollar in the global economy to the extent that they continued to invest in and purchase US goods and services
OCA
Optimal currency area a geographical region in which it would maximize economic efficiency to have the entire region share a single currency At the beginning of european integration, many believed that the EMU lacked the conditions that economists consider necessary for an optimal currency area. Although the EU had a single monetary policy when the financial crisis started in 2008, its lack of a common fiscal policy prevented it from raising taxes to cover state debt. Differences in industrial specialization, lack of labor mobility and lack of a debt relief program also threatened the EMU's viability.
Austerity
Policies that are meant to help heavily indebted countries achieve financial stability; measures often include deep cuts in state spending, reform of political and economic institutions to make them more efficient and effective. These measures often hurt the working class and the poor. In greece, these policies led to huge demonstrations, and in many cases, riots and violence. Debates between pro austerity supporters and those who favored keynesian policies that would supposedly help create jobs and preserve more social welfare benefits. Failed to achieve positive results in many cases. Austerity raised unemployment rates in portugal, ireland and greece. During debt negotiations, international lenders and some northern states (germany in particular) argued that reform and austerity measures were the best way to reduce the levels of sovereign debt, stabilize credit markets, and restore investor confidence in the poorer EMU countries. Borrowers argued for keynesian measures to stimulate the economy and put money into the pockets of the workers and the poor. Many officials praised portugal for being a model case for austerity.
PIIGS
Portgual, italy, ireland, greece, spain Definition: PIIGS is an (often derogatory) acronym for five of the most economically weak eurozone nations during the European debt crisis that started in 2008-2009. Once the recession started in 2008, rating agencies quickly downgraded the PIIGS and before long, investors were targeting these states and driving up their borrowing costs. These EU member states that were unable to refinance their government debt or to bail out over-indebted banks on their own during the crisis. While the debt of the PIIGS and other states did reach high levels, officials did not view it as a problem until the recession crisis started in 2008. Aside from greece and italy, the other PIIGS gradually recovered
David Cameron
Previous prime minister of the UK Britons felt strongly that even though the UK had a lot at stake if they left the EU, they were ready to accept the risks. Many were critical of the handling of the financial crisis and the lack of a solution for the immigration crisis. In 2013, then prime minister david cameron, in exchange for support for a conservative bill, allowed for a referendum on UK membership in the EU to be held in 2016. One day after the referendum, cameron resigned.
"Norway model"
Primary economic concern of many UK officials and the public in the near term is whether or not britain will have tariff free access to the EU's single market Some would like to see the UK get the same deal that norway has with the EU, whereby it has full access to the common market but no power in EU institutions Must be noted however that iceland norway and switzerland all have different trade agreements with the EU, contribute to its budget and accept the principle of free movement of people, principles that pushed many britons to leave in the first place Includes two key european organizations: the EFTA and the EEA EEA and EFTA members enjoy access to the european single market- would mean reduced barriers to UK-EU trade and continued single market treatment for services, which account for around 80% of the UK economy Wouldn't be forced to sign up for more contentious policies ECJ would have no jurisdiction Would have to answer to the EFTA court Have much less say in shaping the common markets' rules than it does not as an EU member EEA members are required to accept the four freedoms, including the free movement of people
Moon shot
Projects that define where big successful technology companies think the market will be in 10 years By creating a culture that values innovation, rewards making mistakes, and thinks long term Creativity and entrepreneurialism are needed to excel in this atmosphere Very different skill set than the engineering-centric, next-quarter driven, sales culture that pervades most companies today
Dollarocracy
Some critics blamed the banking industry for blocking major financial reforms Critics pointed out that a new american oligarchy of six megabanks spent tens of millions of dollars opposing strong regulations Structuralists argued that the US was stuck with an undemocratic system of influence peddling- a dollarocracy- whereby corporate lobbies got favorable treatment from lawmakers that exacerbated political and economic inequality
Thai Baht
Sudden collapse of thailand's currency started a chain reaction of economic, political and social effects in indonesia, malaysia, taiwan, hong kong, and south korea One of the main causes was an inflow of investment capital to thailand Banks and borrowers used the funds to expand business, purchase property and speculate in thai stocks- inflated prices led to business bubbles Problems developed when thai banks were found to have many bad loans on their books- loans that were unlikely to be repaid on time and perhaps could never be repaid at all Intl investors became concerned about the health of the thai economy and began to pull their funds out, causing the thai govts supply of dollar reserves to be drawn down Thai govt was forced to abandon its fixed exchange rate, investors started to pull funds out of malaysia, indonesia and the philippines and south korea
Mike van seckler
Tampa journalist who worked for the st. petersburg times Super honest guy, found the whole next great city thing suspect Hated sprawled out cities Believed tampa had tried to take a shortcut to greatness Journalist who uncovered wrongdoing His reporting led him to believe that the bust wasn't all the fault of reckless homeowners, wrote exposing the role of developers and elected officials in creating the disaster
Too big to fail
The "too big to fail" theory asserts that certain corporations, particularly financial institutions, are so large and so interconnected that their failure would be disastrous to the greater economic system, and that they therefore must be supported by government when they face potential failure After the crisis, big banks merged This process made too big to fail banks even bigger Most of them had billions of dollars of toxic assets (mainly home mortgages) on their books Many were also overleveraged- they had borrowed too much in relation to their own capital held in reserve and were reluctant to lend to one another or to smaller banks on main street that financed local businesses and home sales When manufacturers and services providers could not find capital to borrow, they started laying off workers
Mortgage backed securities
The banks had thrown money at fraudulent borrowers to overpay for crappy houses because the risk was immediately passed on to someone else Bundles of loans that were sold by the lenders to wall street, where they were packaged as bonds and resold to investors for huge profits Defaulted loans that were threatening to bring down the global financial system
IoT
The internet of things, broadly defined as all smart applications and technologies that make objects, devices, appliances or machinery respond to information from another device Dramatically improving the productivity of the things in our world and changing the way we interface with them Central to the mission and core competence of of the technology and innovation strategy for the US and other rich countries Opens up new possibilities and ideas for programming and sensor based intelligent behavior, which can extend the life of machines, decrease their energy use, and make them do exactly what we want at any given time Interoperability: the ability of machines, devices, sensors, and people to connect and communicate with each other via the IoT framework The internet of things, including the industrial internet of things, has transformed manufacturing and production over the past 20 years Process and product technology are shifting from being a differentiator to a requirement in business Industrial digitization initiatives have created unprecedented economic growth opportunities for manufacturers The IoT is making every piece of equipment, and every system of equipment, able to be monitored, controlled, synchronized, and in some cases, even remotely repaired before they need maintenance The ability to intelligently control devices in real time, according to their operational parameters, is creating windfall gains in production Intelligent controlling, such as variable speed control, improves energy efficiency many times over while simultaneously improving machine effectiveness and life span Game changing cost reductions Creating a true digital revolution in manufacturing Operational efficiency, safety, and even a self-learning factory
Tequila hangover
The negative effects of the Mexican Financial Crisis, which involved a credit crunch, higher poverty rates, spiked unemployment and raised inflation. A bailout from US and IMF saved them from total economic collapse, however. When globalization took off, investors started pouring money into a select group of developing nations that were ill prepared to regulate their booming financial markets; the Mexican Financial crisis was the first crisis in the new era of global finance as a result of these changes. In anticipation that NAFTA would improve mexico's prospects for political instability and economic growth, large investors jumped into mexican real estate, stocks, and bonds, driving up prices sharply. These economic ambitions were disconnected from political and social realities in Mexico, however, and when a rebellion broke out and the ruling party's presidential candidate was assassinated, investors began shifting funds out of mexico. The mexican economy slowed down due to adjustments made by government officials, and investors continued to stampede out of mexico, triggering a drastic depreciation of the peso and a severe recession.
QE
The obama administration's 2009 stimulus bill and bailouts of banks and automobile companies helped bring US economy out of recession The federal reserve also pumped money into the US economy through three rounds of quantitative easing (QE) between 2008 and 2014 Through the QE the fed bought large amounts of US treasury bonds and mortgage backed securities Only in 2017, when the fed had accumulated 4.5 billion in assets, did it announce plans to taper off the QE program Fed also kept interest rates low to encourage investment Republicans worried that inflation would rise significantly, it averaged less than 2 percent annually from 2013 to 2016 By the time obama left office, the unemployment rate had steadily fallen from 10 percent in late 2009 to 4.8 percent in january 2017 Although a strengthening dollar benefited the wealthy, it increasingly hurt US exporters and caused US manufacturers to face stiffer competition from imports
The gold standard
Tightly integrated international order managed by GB that existed until the end of WW1 Large cross border flows of money made it hard for countries to buffer their domestic policies from the consequences of international financial and monetary changes Leading european powers invested heavily in their colonies, building infrastructure to tie those societies to world markets The currencies of most nations were part of a fixed exchange rate system that linked currency values to the price of gold Some countries in specific geographic regions created monetary unions Self-regulating international monetary order rooted in classical liberal ideas If a country experiences a balance of payments deficit, corrections occurred almost automatically via wage and price adjustments Selling gold, raising interest rates, cutting government spending Domestic monetary and fiscal policy was geared to the external goal of maintaining the convertibility of the national currency into gold Pound was strongest currency Largely self regulating system Stabilizing, equilibrating and confidence building effect on the system Died by end of ww1 Gold standard faced problems when the extension of the electoral franchise in industrialized countries and the growth of organized labor created pressures on governments to avoid the automatic policy adjustments that the gold standard required in order to meet domestic needs States preferred to depreciate their currencies to stimulate exports rather than slow the growth of their economies or cut state spending States tried to insulate their economies from international finance forces by adopting capital controls By the end of ww1, political and economic stability ended when economic liberal ideas no longer seemed appropriate given world events and social conditions Negative effects of the gold standard, combined with the profound social and economic disruptions of ww1, led to increased demands for relief of a brand of capitalism that periodically failed, as evidenced by the great depression
The dodd frank bill
To critics, measures that congress adopted to reform the banking and finance sectors were quite timid Despite senate republican opposition, a consumer protection financial bureau (CPFB) was finally set up to conduct risk assessment of the financial system In 2010, congress approved the dodd-frank act, a law that, among other things, required banks to keep more capital and collateral in reserve and to allow the commodity futures trading commission to regulate some types of derivative trading One of the law's most controversial proposals was the volcker rule, which prohibited banks from owning hedge funds and engaging in certain irsky trading Despite these changes, in 2012 jpMorgan chase lost at least 6.2 billion on a complicated hedging strategy that went bust CEO jamie dimon had bitterly opposed regulations of the banking system that would limit the use of derivatives, at one point calling them un american
TARP
Troubled assets relief program Program signed by bush, created by the emergency economic stabilization act in october 2008. This program authorized 700 billion dollars of taxpayer money to buy up bad assets in banks in the hopes of keeping credit moving. Money was injected into US banks, but it is important to note that tarp was not a government giveaway: banks eventually repaid loans to the US treasury, and the government sold the last of its shares and equity stakes in automobile companies by 2015, earning a small 5 billion dollar profit from the program.
