Economic Fallout

Research Paper # 105262

Economics > Macro

Economic Fallout

An analysis of the fallout from the delayed action of the Federal Reserve with regards to changes in macro economics.

1,004 words () | 5 sources | APA | 2008 United States

Paper Summary:

This paper discusses the importance of economics and how it affects daily life. It looks at changes in economic activity and how these affect daily life as well. The paper specifically focuses on mortgages and housing and oil prices. Finally, the paper discusses the fallout from the delayed action of the Federal Reserve and how this fallout will be seen for several more months.

Table of Contents:
Economics
Recent Economic Events
Mortgages and the Key Rate
You Have to Wonder is it "Too Little, Too Late?"
Oil Prices
Conclusion

From the Paper:

"In all economies, one of the most important issues to deal with is finding affordable housing. In order to supply such demand the mortgage industry developed what is known as a sub-prime mortgage. This loan was laced with teaser rates which were well below the key rate and when adjustment were made, usually after five years, the rates could potentially go up by several base points. Agreeably this does not sound like much but to a mortgage loan payee it could be devastating. Of course we should say, "Well didn't they realize that the issue of payment adjustments would occur?" Perhaps they did, but unfortunately, after the prime rate adjusted in July of 2007, several thousand mortgages followed suit. The foreclosure levels soaring to an all time new high were the result. Additionally late payment levels have also spiked and the fear is that the increases represent a brand new and larger group that will be foreclosed on in coming months (Aversa, 2007, p. 2)."

Sample of Sources Used:

Aversa, J. (2007, September, 18). Fed is poised to cut key rate. Philadelphia Inquirer. Retrieved on September 18, 2007, from http://www.philly.com/inquirer/business/ 20070917_Fed_is_poised_to_cut_key_rate.html
Blaine, C. and Strott E. (2007, September 18). Fed cuts key rate to 4.75%: stocks soar. MSN Money. Retrieved September 18, 2007, from http://articles.moneycentral.msn.com/Investing/ Dispatch/070918markets.aspx
Light Crude Oil Chart. Retrieved on September 18, 2007 from http://futures.tradingcharts.com/printchart/COM.
Toscano, R. (2007, September 16). Housing Market. Pittington's Econo-Almanac. Retrieved on September 18, 2007 from http://piggington.com/commentary/housing_market.
Zuckerman, M. (2007, September 10). The Energy Emergency. U.S. News & World Report, pp. 72,71. Retrieved September 15, 2007, from Business Source Elite database.