Business fun facts!

Recent US News survey placed Harvard, Princeton, Yale, MIT, and Stanford at the top five best national universities.

Do you know that one out of three mortgage applications are rejected because of poor credit history? Read why it is important to be responsible with money? Volume 12

Average American spends $100 more on shoes than food.

Average labor cost in China and India is less than $3 an hour.

Did you know that there are over 500 people in the US who are worth more than one billion dollar?

Americans drink over 50 gallons of soft drinks per year and buys over 800 gallons of gas per year.

There are over 110 million households in the US. Two thirds of the households are families and one third are singles. The average household size is 2.6 people.

Six out of 10 teens consider learning about managing money their top priority.

Financial systems shaken to its core due to bad banking loans Banking sector was shaken to the core when banks and insurance companies with bad home loans problem faced the prospects of going out of business. This problem has been brewing for some time. How did it all start? The trouble started, when a few years back the world investment monies grew from ~$37 trillion to almost $70 trillion in less than seven years. Think about this number with respect to the world economy which is estimated to be ~$65 trillion. This rise in available money came due to fast growing economies like China, India, Middle East, Russia, etc. With all that money on hand, investors started to look for new places to invest. Soon there was more money available with less good investment opportunities for investors. Then the housing bubble! Investors looking to invest started to put monies in the housing loans packages or Mortgage Backed Securities (MBS). These MBS were sold by the investment banks to the willing investors at higher interest rates than available elsewhere. Housing prices were going up and most thought that prices will keep going up. Soon banks and brokers lost touch with reality and ignored the required checks for bad credit history for the home loans. For example, people with little to no skills started to sell the mortgages to people with little to no credit history. Housing prices could not keep going up and have since dropped. Large amounts of loans were given out which are now creating this serious credit crisis. See below a simple way to show how good times soured? Start from the bottom to the top. Blue arrows show the monthly loan payments to the bank and so on, and the green arrows show the loan from the investors on the top to buy home.
...through out the news there are links and pop-ups for additonal information...move your cursor/mouse on to the links...
Day by day explanation of the crisis This week’s market summary has to be day by day to explain the dramatic turn of events. Problems started over the weekend. Monday – DOW dropped close to 500 points on the news that - · Lehman Brothers (Ticker LEH), filed for bankruptcy or going out of business – This time around US government decided to play tough with Lehman and refused to provide loans to the potential buyers. Considering that just a week ago the government had bailed out Fannie Mae (Ticker FNM) and Freddie Mac (Ticker FRE) and it had earlier helped the sale of Bear Sterns (Ticker BSC) to JPMorgan (Ticker JPM). · Merrill Lynch (Ticker MER) agreed to be bought by Bank of America (Ticker BAC) · American International Group (Ticker AIG) seemed close to filing for bankruptcy if it was unable to find the loans. AIG insured the bad home loans and found itself in trouble when too many home loans stopped paying. · 10 major banks announced that they will join hands to provide $70 billion of loans to other banks who need it. Tuesday – DOW gained 153, however, investors were in complete disarray - US government decided to take over AIG in $85 billion rescue plan to save one of the largest insurance companies in the world. US government realized AIG is too big to fail and its failure could create bigger chaos in the financial markets. The chaos spread making loan between the banks impossible, and therefore, the financial system seized to a halt. Federal Reserve decided to leave the fed funds rate and discount rate unchanged at 2% on the consensus that interest rate cut will do little at this stage to help the financial market panic. Wednesday – DOW dropped close to 450 points on the news of- · Credit crisis was growing and there was no end in sight to this problem. · Rumors of other banks could fall spread and the borrowing cost for the US companies skyrocketed. · Bank loans were close to impossible to get even with a good credit history. · Even the safer areas, like money market funds, mostly considered to be safe, ran in to turmoil when investors in a panic mode withdrew $80 billion out of the accounts. This created further shortage of money. Thursday– DOW gained over 410 points, on the news that - · Federal Reserve and several other foreign government banks injected $180 billion of cash into the markets which seemed to calm the investors. . Friday– DOW gained over 360 points, on the news that - · US Security and Exchange Commission (SEC), a government watch dog for the stock markets, took emergency action to temporarily ban investors from "Short Selling" close to 800 financial company stocks. . Finally, the DOW closed down 28 points, or 0.2%, the S&P500 was up 4 points, or 0.3% and NASDAQ up 72 points, or 3.3%, for the week ending September 19^th. Year-To-Date (YTD) S&P500 is -14.5%, DOW is -14.1% and NASDAQ is -14.3%. Oil closed at $104.55 per barrel this week.

STARTING NEW SERIES! What do you want to be when you grow up? . Based on the feedback, we are starting a short series where we will take some key professions and discuss what it takes to become one. For example, what does it take to become a investment banker, doctor, engineer, lawyer, teacher, programmer, stock trader, etc.
Learn more about... What is Credit History? Why is it important to have a good credit history? Volume 12. What is Economy, Business, Workers, Goods, Services, Stock, DOW, S&P500, and NASDAQ in Volume 16. Does it pay to study hard? Volume 17. What is Currency and Foreign Currency Exchange rate? Volume 14. What is stronger or weaker currency? Volume 20. What does the dollar slide mean? Volume 32. How does money grow in a bank? Volume 21. What is Fed Funds rate and Discount rate? Volume 22 What does the interest rate cut mean for you? What is APR? Volume 23. How to read stock information? Volume 25. What is "Black Monday"...Crash of 87"? Volume 31. Who are CEO, CFO, Shareholders, and the Board of Directors? What is SOX? Volume 33 What does "$4.95 + Tax" means? Volume 47. What is a Recession? What is a Depression? Volume 48. What is Mergers & Acquisition (M&A)? What is a Merger? Volume 49. What is ADR? Volume 62. What does buying back of shares means? Volume 63. Why is consumer confidence so important? Volume 64.

Sep 15-19, 2008

Weekly Stock Market

Markets MIxed

Index

Change

Last

DOW

Down 28

11,388

S&P500

Up 4

1,255

NASDAQ

Up 72

2,274

**Foreign Exchange Rate**

**$1 is equal to**
Currency	Change	Last
Euro (€)	-0.01	0.69
Yen (¥)	-0.38	107.58
Pound (£)	-0.01	0.55
Yuan ()	-0.02	6.82
Rupee (Rs.)	-0.45	45.26
Canadian (C$)	-0.02	1.04

**Your Favorite Stocks**
Company	Bought one stock in Jan-08	This week stock is?	Your gain or loss?
	$31.84	$34.39	$2.55
	$51.57	$56.68	$5.11
	$58.10	$63.98	$5.88

Resources

Teaching Kids Entrepreneurship

We use multiple information resources, such as, websites, companies, stock exchanges, newspapers, text books, and others.