Question 2 =(comment)
The African nation of Burundi is in danger of political chaos. Its current president announced recently that he has decided to run for another term. This is in violation of the country’s constitution to limit presidential terms to two. Protests have errupted calling for the president to not run again. The Hutus and the Tutsis are coming together in opposition to the president. Foreign embassies have also voiced their opinion that the president should not run again. Burundi’s fragile democracy is at stake by the president ignoring the constitution.
St Cellular SA is a mobile phone company operating in Burundi. Based out of Zimbabwe, the company has invested substantially in Burundi. If Burundi were to experience instability, that investment would be at great risk. Violence could lead to the company not being able to maintain its towers and thus experiencing service interruptions. Communication during times of crisis is critical. If the company can not maintain service, it may have to pull out of the country all together.
Retrieved from: http://www.balancingact-africa.com/news/en/issue-no-307/telecoms/econet-acquires-stak/en
Please respond to the following:
Determine and discuss how the major factors of the credit crunch beginning in the U.S. in 2007 blossomed into a global financial crisis. Explain your rationale. Provide specific examples. Be sure to cite your sources.
Question 4= (comment)
The term credit crunch means simply that banks aren’t lending out as much money and even then, it lends only to those (individuals and businesses) that have very high credit ratings and/or substantial collateral (www.creditcrunch.org). The credit crisis that began in 2007 started with the mortgage industry lending to subprime customers and other predatory lending. Those mortgages were used to back securities. Investors trusted the banks and credit ratings, hoping to gain high returns on these securities. Banks then sought out more of these risky securities that yielded high returns. Then in 2008, Lehman Brothers went bankrupt and the system started to collapse. Banks held less collateral to finance debt, but continued to borrow and accrue more debt. Banks were allowed to “bet on themselves with borrowed money” (www.economist.com). Faulty account balances fueled by greed led us to such a financial crisis.