Neha Gupta

MBA(IT) Semester -III

Indian Institute of Information Technology-Allahabad


Sub-Prime Crisis:

First let’s talk on the global front, with the sub-prime lending crisis reaching its peak in US, the impact could be seen throughout the world financial markets. With home prices first being hit, followed by mortgage investments, this confidence crisis has swept away many a giants of the Wall Street. The Real Estate bubble, that had built up in US initiated due to the interest rate policies followed by the Federal Reserve since 2000, resulted in Lehman Brothers declaring bankruptcy, Merrill Lynch selling itself to Bank of America(BoA). These investment giants were not bailed-out as was done by the US government for Bear Stearns, Fannie Mae and Freddie Mac. Bear Stearns’ doomed fortunes did not stay there, trouble was spread to other lenders of the Wall Street majors, who had lended to the company, including JP Morgan Chase, Citi Group, GoldMan Sach.

Personally if I have to hold someone responsible for the credit crunch facing the US market, it would be Alan Greenspan, former Fed Chairman. It was he who during his term of office propagated low interest rates for loans, giving impetus to credit lending. This led to a housing boom as more and more people started taking loans. The rates were kept low till the end of 2004 and then increased from rock-bottom levels of 1% and then increased. Now the banks had started giving credit to even low credibility loaners (people with high risk of default) at high interest rates. These loaners took property from this credit in the hope that they could use the increase in property prices to pay off their debts. But in 2007 the Real Estate bubble burst with property prices dropping exponentially as many people who had taken loan against these properties started to default on their loan payments. Meanwhile banks had converted these mortgages into marketable securities as sold them to firms, who in turn collected a gamut of such securities and bundled them into, what were termed as, collateral debt obligations (CDOs). These CDOs were then traded in open market and generally bought by investment firms like Lehman Brothers. As loan-payments defaulted, these CDOs became valueless and the unbalanced risky assets tally of their holders led them to grounds. Banks were now faced with shortage of finance so much so that even interbank lending had taken a stop. This whole breakdown of the US financial system is being deliberated by many as the death of capitalism and free market system. This impact of this crunch is comparable to the Great Depression of 1930s, or even more as this has impacted the world economies since US is the major trading partner for many developing as well developed firms. To know more as to the causes, events and impacts of this confidence breakdown following are some links that you can refer.

This is the official website of 2008 US Presidential Candidate (and now the next elected President), Barack Hussein Obama. A law graduate from Harvard and a civil rights attorney in the Illinois Senate, he was a constitutional law teacher at the University of Chicago. Obama’s victory is a new era in the white dominated political scene of the USA. He one the first battle in his race to the White House on May 31, 2008, when the Democratic Committee chose him as their presidential candidate over Hillary Clinton, to face his republican counterpart John McCain. Everything about his campaign has been powerfully delivered; be it his speeches, his policies or even his advertising strategies. Many innovative approaches had been used by the campaign designers so that Obama seemed to be omnipresent; whether one was on streets, reading newspapers, watching television, surfing the net or even playing video games, Obama never seemed to leave you alone. This campaign could be a very gainful study for marketers in making. To know more on Barack Obama and his policies refer to the website


Unmanned to MoonCHANDRAYAAN

At 6:22am, October 22, 2008 when the PSLV-XL(PSLV-C11) launched the Chadrayaan-I from the grounds of Sriharikota into an elliptical initial orbit, India secured a place for itself in the new age of space missions. Chandrayaan, ISRO’s highly rated unmanned space mission received the green signal from GOI in November 2003. After 22 days journey the space craft finally made it last leap into the lunar orbit, reaching its intended final circular lunar orbit at a height of 100 km above the lunar surface and will now orbit the moon once every two hours. Now is the time when it will conduct chemical, mineralogical and photo geological mapping of the moon using 11 scientific instruments (payloads) onboard. The Terrain Mapping Camera (TMC) and Radiation Dose Monitor (RADOM) have been reported to be successfully operating. Now everyone is awaiting the happening of the next scheduled event of the release of Moon Impact Probe (MIP) and it hitting the moon surface so as to gather information to help in preparation of the 2015 slated manned Indian Lunar mission. Chandrayaan will remain in lunar orbit for the next two years.