Hedge Fund Bail Outs Essay Example | Topics and Well Written Essays - 500 words

Hedge Fund Bail Outs - Essay Example Public money is not being used to help Americans for losing their homes. 2. What is â€Å"Moral Hazard?† How does Moral Hazard relate to this current issue? A Moral Hazard is the theory that when people know that they will be bailed out are less cautious. Moral Hazard relates to this issue because the financial institutions know if they get into major trouble, the government will use public funds to bail them out. The recent Bear Stearns brokered bail out from the Federal Reserve Bank of up to 30 billion dollars of public money in order that JPMorgan Chase may purchase the beleaguered investment bank is an example of Moral Hazard. If an American small business owner or homeowner fails on a loan due to bad business or money management, they lose their collateral. Bear Stearns received 30 billion dollars to make their business more attractive for purchase. That is a Moral Hazard. 3. If one is a â€Å"True Believer† in the market mechanism does one insist on allowing all firms the ability to fail? Yes. If all firms are allowed to fail, the market mechanism is fulfilled. Market mechanism is where buyers and sellers have an open and understood system of value and time trade offs to produce the best distribution of goods and services. Market mechanism assumes perfect competition. If failure is not allowed, than one can not be a â€Å"True Believer† in market mechanism. 4. How does firm â€Å"failure† lead to â€Å"efficiency?† A firm’s failure leads to efficiency through the opposite attitude of Moral Hazard. If a firm’s executives realized that they will not be bailed out if their company goes bankrupt or fails, they would be more cautious. Executives that realize they will not only lose their jobs, but will not receive big severance checks, might think twice about gambling with their company’s future. This would result in firms, financial and others, to operate efficiently as possible. Competition to be efficient would bloom. Instead of

One page reflective Ecercise and 10 pages for case study questions Essay

One page reflective Ecercise and 10 pages for case study questions - Essay Example Adult years Had become a professional Mining Engineer. Had travelled and worked in Portugal, Greece, Finland, Morocco, Algeria and Mozambique. Had been fluent in 11 different languages. Had been a successful single parent of 2 Children, acting practically both as father and mother. 1988 Had migrated to WA with his kids filled with high hopes for a better life for his children. Had been out of worked and was forced to receive handouts of second hand clothes and food. Had suffered racism at work, while his kids were isolated in the school. His dream turned into a curse. Had felt miserably a failure. Had felt trapped. Had felt completely isolated and disillusioned. Had felt despair, unwelcome and betrayed. 1- Formulation Form Client: Julio Nunes Nesto UMRN: ....................................... Date: ........ / ........ / ........ Predisposing Factors: Possible Sources of Biological Vulnerability Neurological development or other neurological problem: Had polio at the age of two, had become partially paralysed and unable to speak and walk Maternal viral infection during pregnancy: N/A Family history: N/A Birth trauma: Born stigmatized to be an inferior race equivalent to a slave. Possible Sources of Physiological Vulnerability Physical abuse experienced or threatened: Grew up in an environment of oppression and inequality Witnessed family violence: N/A Emotional/psychological abuse: Work discrimination; unwelcomed; frightened; betrayed; disillusioned Sexual abuse: N/A Physical or emotional neglect: Single parent of two; without wife to care for him; without relatives to run to Other trauma: Culture shock in WA; living alone in a foreign cruel society Bullying in school/community: Isolation of children in the school; lack of social support in the community possible Sources of Social Vulnerability: Poverty/deprivation: Uncertain life in a foreign highly discriminating land Alcohol and other drug use (self/others prior teens): N/A Migration (international or intra- national): Migrated to Western Australia Cultural conflict/ alienation/stigma/ lack of supports: Experiences worse condition in WA Racism: Suffered racism in the workforce, in social settings and his 2 children suffered racism at school. Other forms of discrimination: No assistance to single father parent making it almost impossible for him to find work; his children are isolated because of their skin color. Precipitating Factors: (what stressors were happening prior to becoming unwell) Oppression and discrimination in his own land Stigmatized by his Portuguese name Single parent of two growing kids Perpetuating Factors: (what stressors are still operating or what helps keep the stress going). Racial discrimination of his family in a foreign land Joblessness and lack of opportunity for a decent living for a black single-father parent in WA Shattered dream for his two kids Humiliated and frustrated Trapped in a cruelly discriminating society Current Problem List as Identified by Clie nt: 1. Depression 2. Anxiety due to joblessness 3. Prejudice due to racial experienced discrimination 4. Frustration and anger because of failed high expectation Thoughts: This society is so cruel; it could treat children too unfairly. Racism is a large factor in mental health deterioration. I am trapped; we can no longer go back to Mozambique. Feelings: He felt completely isolated, unwelcome and betrayed. He felt despair, angry, helpless, depressed and disillusioned. He felt humiliated and a miserable failure. Behaviour: