Describing The Various Aspects Of Derivative Failures - 825 Words

Describing The Various Aspects Of Derivative Failures (Research Paper Sample) Content: Derivative FailuresStudents NameInstitutional AffiliationDerivative FailuresIntroductionThe derivative can be referred to something that exists in terms of a security, or rather a contract that acquires value from its association with the stream that involves cash flows or the other assets (Colander et al, 2009). There exist various examples of derivatives that are good or bad and they are used as speculative tools or things that can be productive. In addition, the derivatives help in ensuring the stability of a certain country economy. At the same time they can cause the fall of the economy in case it does not identify the risks and hence does not help organizations protect against them. This paper outlines the derivative failure that was experienced in the United States and caused a financial crisis 2007-2009, hence the period was also referred to as the period of great depression. There existed four derivative failures that caused the various implications of the fi nancial crisis within the nation as outlined in this paper.Financial ImplicationsTo begin with, the government mispriced the guarantees hence putting the financial sector at a risk. In addition, the firms paid concern regarding the risks experienced in the individual institution instead of focusing on the systematic risks experienced in the individual firms. It is evident that the opacity positions existing in the financial derivatives caused the externalities, and there also existed the runs on the banking sector which was unregulated hence threatened to cause the fall of the whole financial sector (Omarova, 2008). Other ways in which the institutions obtained the derivative position is by taking the roles of establishing the contracts with the clients to earn fees, and the speculators in the derivative situations aimed to acquire profit. During the great depression, the commercial banks also acquired derivatives as dealers or as hedges where most of them used the interest rates fo r the contracts which later failed.The derivative failure has been used to give an illustration on the failure of the market-driven strategies when viewing the state of the economy. Viewing the failure in the market-driven perspective, the liberalization of the markets, removal of the regulatory restrictions, and the state where the market trusts are unintended contributed to the destabilization of the financial segment. For this reason, derivative failure caused shock in the macroeconomic sector and at the same time the banks at the nationwide incurred losses. This influenced the individual perception about the banks hence there were the massive runs due to the insolvency that prevailed. Various investors from the New York City were scared due to the great depression. The banks in the United States experienced pressure hence it contributed to the closure of some financial institutions.Impacts on the OrganizationThe derivative failure impacted various financial institutions and broa dly impacted the banks and the state of the economy in the nation. The institutions had insufficient funds when depositors claimed their money. However, the organizations had to reduce the prices of their products and services. The unemployment rates increased within the nations due to the closure of some institutions (Moser, 2013). In fact the borrowers from the organizations were not in the position to make payments due to the state that prevailed in the banks and other financial institutions. Notably, the institutions lacked ways to cater for the needs of the depositors and hence the public lacked confidence in the remaining banks. It was not easy for the consumers to assess the risks that existed within the institutions.Cause of the FailureThe derivative failure was caused by recession hence the money shrank influencing the economic state. The historians in the economy and the economists split to search for a better explanation on the occurrence of the derivative failure which c ontributed to the great recession. There was a failure in the autonomous spending particularly regarding the investments hence set the occurrence of the problem.Value of the LossDue to the failure in the stock prices, the worldwide Gross Domestic Product declined by 15% (Ohanian, 2009). Significantly, the rich and the poor individuals experienced the devastating effects including the financial institutions and the banks. The individual incomes, profits, the prices of the products and the tax revenue declined with 50% estimates (Ohanian, 2009). The United States unemployment increased to 25% and in the other countries it increased to 33%.the stock market experienced 3o% losses and...

Medicine Level During The Civil War - Free Essay Example

Today, many people are blessed with the growing advancement of the medical field and put many of its perks to use whether its antibiotics or major surgeries. Some may find it hard to believe, but nearly two centuries ago, people did not have the same privileges that are offered today. The American Civil War was a key factor in expanding the growth and knowledge of modern medicine. The United States Civil War began in 1861, after years of tension and racism between the northern and southern states of the country. The War ended in 1865 with the surrender of the South and abolishment of slavery. This conflict was one of the bloodiest and brutalist wars in America and even winded up taking the lives of 2.4 million American soldiers. Although a majority of the deaths caused by this war were due to violent combat, many of the deaths were a result of unsanitary medical procedures. Medicine played a key factor in the civil war whether it was notable doctors, disease, and war hospitals. Given that the country was split into two, the Norths outlook on medicine differed from the Souths. The North was more experienced than the South, but it took the region more time to establish proper tactics, doctors, and hospitals. At the beginning of the war, there were no plans to treat wounded or sick Union soldiers. The hygiene of the camps was poor, especially at the beginning of the war when men had been brought from all over with little to no knowledge of their background. One of the first epidemics that arrived in the North was the widespread growth of the childhood diseases of chickenpox, mumps, whooping cough, and measles. There were no antibiotics, so the surgeons prescribed coffee, whiskey, and quinine to treat these infections. Harsh weather, bad water, inadequate shelter in winter quarters, poor policing of camps and dirty camp hospitals took their toll. This was a common scenario in wars from time immemorial, and conditions faced by the Confederate army were even wors e. After the Battle of Bull Run, the government adopted several private hospitals in Washington, D.C., Alexandria, Virginia, and surrounding towns to accommodate both sides. The Northern army officers believed the war would be short and that they would not need to create or provide a long term care plan for wounded or sick soldiers. Although they had differences from the North, the South was quick to establish a long term medical plan for their soldiers with the start of the war. Even though the Souths medical corp began before the Norths, their medical corp was at a disadvantage during the war given that they did not have near as many resources that the North did. The Souths first Medical Department was created by the Confederate government on February 26, 1861 with the intent to harbor to the Confederate armys needs. Field hospitals were located in an open area behind the lines of battle and were usually staffed by two surgeons. It was the responsibility of the surgeons to determine which soldiers could return to duty and which should be sent to the general hospitals for further treatment. There were no intermediary hospitals, and each regiment was responsible for transporting its wounded to the nearest rail depot. At the rail depot, the injured were transported to the general hospitals for longer term care, u sually resulting in death. In some of the lengthier battles, buildings were used as a temporary hospital where the severely wounded could be held when they could not transport the soldiers. Many of the soldiers, on both sides, during the civil war faced many outcomes of death whether it was enemy fire, disease, or antiseptic surgeries. The most common injury was enemy fire. Unless a soldiers wounds were minor, this often led to amputation of limbs to prevent infection from setting in, because antibiotics had not been made mainstream yet. Other contributing factors to combat-related deaths were inexperienced surgeons that worked on the battlefield. There was no coordinated system to get the injured off the battlefield quickly, which often resulted in death of the wounded and death of the doctors who were responsible of retrieving the hurt soldier. Since sterile techniques were not important yet, many soldiers died from the lack of antiseptics and the bacteria that quickly found a way into wounds. Amputations had to be made at the point above where the wound occurred, often leaving men with stubby limbs. Another one of the deadliest things that faced the Civil War soldier was disease. The unhygienic camps, close proximity of soldiers, and septic surgeries often lead to disease among soldiers. In fact, for every one soldier that died of a battle-related injury, two died from disease. In particular, diarrhea and dysentery alone claimed more men than did battle wounds. Although many soldiers died from medical inefficiencies during the time of the Civil War, there were still many positives that outshone the negatives. Following this dark time in medicine, the modern medical world of the United States was shaped by the event with the exploration of antiseptics and antibiotics.