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Monday, April 23, 2012

RS: The last one

Are you impressed with the work you have done? What was really great? What could have been better? How do you plan to retain all of this wonderful information you have learned? How do you plan to be a genius?

Wow, its already the end of the semester? How did this happen? How is it that im actually graduating college next spring? Time has deffinetly been flying over the past few years, and I even with all the stress and worries, I’d go back and slow down time just to experience it all over again. Eveyone always says college is the best time of your life, cherish it. But I’ve been preoccupied with learning and getting to class and going to work and finding an internship and making sure I don’t fail out of school for the past four years.

When it comes to macroeconomics, im totally impresed with the work I’ve done. When I saw micro and macro economics listed as required courses for a finance major, I thought, great, just another class to try to understand and retain only 0.05% of it. But I’ve actually learned so much, probably more than I wanted to, but definetly learned. The best part about this class has to be Professor Engel’s teaching method. He never made it feel like learning, and actually knew how to get and hold onto our attention during class. If he saw us getting annoyed he changed the subject for a few minutes or made us do something interactive with eachother. I don’t think anythign could have been better. I mean, come on. For a macroeconomics class? This one was pretty much on the dot. I never dreaded the class even though it started later than I would like (5 pm to 6:15 pm Mondays and Wednesdays), and that’s a pretty big deal. If I, Asma Sabrina Vohra, the greatest complainer on earth, don’t have something to complain about, then you’ve done a good job!

Retaining the information learned in both macro and micro shouldn’t be difficult. i don’t think I could forget it even if I tried, with all the memorization done to get good grades on the in class tests, and the hard work and effort it took to actually find some of the answers in the text book, I don’t think this information will be leaving me any time soon.

How do I plan to be a genius? Well, the very first blog post was about the article “how to be a genius”, where I came to the realization that its not about being born “smart”, but training your brain on a regular basis, making time for studying, and putting in 100% effort daily is the key to being the best student I can be. And also, to never think I have the answers to everything.

It’s been great, Russ.

Monday, April 16, 2012

RS Interview Project Reflection

This blog post is a reflection of my post on the Interview Project.

When we were first told about this project, I did an internal groan. C’mon Engel, are you really going to make me ask people questions about economics? But as we discussed the assignment further, I got a bit more into it. I realized this was more of a survey than an economics test I was to proctor to two other innocent, unassuming individuals, and myself. The questions were actually really interesting and I was starting to get really interested in what the others answers might be.

When I answered the questions myself, it wasn’t too much of a big deal. I mean, this information was nothing new to me obviously, so it was more of a reflection on how I really felt.

When I asked these questions first to Tony, a 56 year old piano teacher, I was really excited. I’ve known Tony for a year now, he’s a member at the gym where I work, and we always have interesting conversations on history, econ, politics, etc. From what I have taken in from him, he’s super intelligent and knows a lot more than he lets on since most of the time he covers up his intelligence with jokes.  I knew his answers wouldn’t be anything close to “predictable” and that’s why I chose him. The most interesting thing he talked about was the Gas Crisis of 1974, when there was an oil/gas “shortage”, making gas prices sky rocket, and causing long lines at the gas station and the act of getting gas to be more of a times event then something you did casually. He told me specifically to write shortage in quotations because he says there wasn’t a shortage at all, but just a myth of it to increase spending on gasoline. He told me of how during this crisis, his older brother would give him a five dollar bill, and tell him he could take the car out only if he filled up the tank first. With a five dollar bill. Some crisis, huh? If I could fill up my tank for five dollars during this economy, I wouldn’t mind standing in line for 2 hours in my free time!

My second interviewee was a friend’s grandmother, Joanie. A former school teacher, I thought she would have lots of insight into the years where neither I nor my parents were even in existence yet. The most interesting thing she said was how minimum wage was one dollar an hour during the time she got her first job. I can’t even imagine working 8 hours a day and getting less than 8 dollars of a paycheck after taxes. It’s funny how inflation hits us, especially with gas prices. Joanie paid less than twenty cents a gallon! That sounds amazing because I’m comparing it to the over four dollar a gallon price that I’m paying now! Although, I’m sure that price was considered expensive back then too, especially while making one dollar an hour. I also found it interesting how within her 72 years of life, her first memory of economics affecting her life was quite recently, within the past 10 years of the war in the Middle East.

Friday, April 13, 2012

RS Interview Project

Interview Project

Asma V. : 21 year old college student
Tony D. : 56 year old piano teacher
Joanie A. : 72 year old retiree

1.     In your lifetime, what city that you are familiar with has changed the most (both positive and negative)?

Asma V. : In my lifetime the city that has changed the most would be my home town, Bridgeport, CT. Over the years, things have gone both ways. I remember when downtown Bridgeport was a place where you could do great shopping, and then all of a sudden the big mall was gone and downtown turned into a place that you wouldn’t dare go. But now a days, downtown Bridgeport has turned into a cultural and arts center, there are many small shops opening up, and a lot more people venture into downtown instead of staying away from it.

Tony D.  Bridgeport, CT – there is higher crime, a collapsing infrastructure, and corrupt politics

Joanie A. Bridgeport, CT, which was a major industrial city for most of the last century and was where my family from both sides moved to live and work, has become the place where no one wants to be…no jobs, no industry, high taxes, bad schools, slums and for the most part, corrupt politicians running the city. 

2.     In your opinion, what president had the biggest positive impact on the economy? Why?

Asma V. From what I can remember, the time of President Clinton was very economically positive. Everything was just in the right place. It was during the 90’s that my family was doing so well that we were able to move out of our two bedroom apartment in the ghetto of Bridgeport to our current home in the north end of the city. I remember family vacations and road trips during the summer. Everything was priced just right and there was no reason to worry about the cost of something.

Tony D. Franklin D. Roosevelt, because he got the country out of the depression

Joanie A. Ronald Reagan…he was lucky enough to be governing in the good times

3.     What is your first memory of a major economic event impacting your life?

Asma V. My first memory of the economy being bad was during the summer of 2008.This was the summer that my first semester college tuition was due, and even with all the financial aid I was getting, we still had a hard time coming up with the money. I even considered, after my third semester at my school, transferring to a state school which had a cheaper tuition

Tony D. The Gas Crisis of 1974 when there was an oil/gas “shortage”, making gas prices sky rocket, and causing long lines at the gas station and the act of getting gas to be more of a times event then something you did casually.

Joanie A.  The war in the Middle East

4.     How do you get economic news? How has this changed over your life
Asma V. I usually get my economic news from the internet or from hearing about things from my professors. I never really paid too much attention to economic news until the past few years, and it’s always been the same way.

Tony D. Television news broadcasts, the internet, the New York Times, and general reading. The only thing that has changed over time is the internet.

Joanie A.  I get it from the newspapers, television and people smarter than myself and it has not changed much over my life.
5.     What is your definition of economics (when you hear the word economy or economics what do you think about)?
Asma V. Economics is the study of the consumption of goods and spending of money.

Tony D. The root of the word “economy” comes from the Greek. It means efficient management of the household and scarce resources.
(I swear that was off the top of his head!)

Joanie A.  Having a good job and being able to afford to live well, now and in the future    
6.     How do you deal will rising prices e.g. substitute cheaper brand, stop buying? Any examples?

Asma V. To deal with raising prices, for example gas for the car, I try to use less, and try not to drive unnecessarily. 

Tony D. Buy store brand instead of brand name.

Joanie A Stop buying what is unnecessary, cheaper brands aren’t always bad, eat out less, don’t waste money on things you don’t really need.  Keep it simple

7.     What product or service has most changed over your lifetime?

Asma V. The service that has changed most during my life is the internet. I remember trying to get online when I was nine or ten, waiting for the AOL dial up to connect, then having to get off ten minutes later because I was tying up the phone line. There was never really anything to do online either. I would sign on, check my email, which was always empty since this was before the time of “spam”, check to see if any of my friends were online so we could instant message each other, and then sign off.

Tony D. The internet, telecommunications, electronics

8.     How do you handle saving and how has this changed

Asma V. I only work part time since I am a full time student, so my pay check is pretty measly. But I have two accounts with my bank, a checking account where I put spending money, and a savings account, where I deposit a portion of my check into weekly. I used to keep money at home, but I ended up spending most of it because it was within arm’s reach.

Tony D. I have a savings account, always have.

Joanie A. Don’t save…have most of the things we saved for when we were young
9.     What was the price of gas when you got your first car?

Asma V. I think gas prices were around $3.25 or so at that time.

Tony D. Forty-five cents

Joanie A. If I can remember, about 19.9 cents per gallon (unbelievable, right?)
10.What was your wage at your first job?

Asma V. Minimum wage, $8.25

Tony D. Minimum wage, around $3.50, or $4.00

Joanie A. $1.00 per hour


Monday, April 9, 2012

RS Your Choice: Countrywide

This blog post is in response to the podcast “A Friday Podcast: A Former Mortgage Exec Speaks Out” published by Planet Money on March 16, 2011.

Oh, Countrywide Insurance. Its companies like you that make me afraid of corporate life. Where do I even begin? Not only is it completely wrong to make sure that a person whom you recruit to work for you sign onto a questionable mortgage by your company, locking her into a home for seven years, but to have her complete a survey report about your company and then completely change it before it reaches the hands of the upper most crust of Countrywide is just unethical. Why change it? Was it because you didn’t want anyone to know about how unhappy your employees really were? Or was it really that you didn’t want word to get out that there was blatant fraud practiced in many areas of your company? And why set up a “anonymous hotline” for employees to have a safe place to voice their concerns and then fire them after they report any misconduct? Just to say you have one? Or is it so that you could “weed out” the bad apples who are actually concerned.

First things first, if I was running a mortgage company I would give my employees the best possible mortgage agreement with lowest interest rates. They’re going to be working for me, and they are unhappy at home why would they be happy at the job they moved to that home to work for.  Second, if I hire someone to completel a survey, I want to know what the results really are. I want to know why people feel the way they do and how we can fix it. I want to know if there is questionable activity happening in my company because my name, my brand is at stake. And lastly, I would never set up a so called “anonymous hotline” and take advantage of it. If I was trying to sell my company to a bigger bank, I would go about it truthfully making sure they knew exactly what they were getting themselves into, because I would want exactly the same done to me.
Not important enough, i guess.

RS: Regulators Mount Up, Part II

This blog post is in response to “The Warning”, published by PBS.

Let’s set the stage. Someone congress doesn’t know very well, Brooksly Born, top of her class at Stanford, the first woman president of the Stanford Law Review, top notch lawyer, and chairperson of the Commodities Futures Trading Commission, comes and tells them that the over the counter derivatives they’re letting go unlegislated will cause a horrible financial crisis in the United States that will affect everyone unless something is done about it. And what happens? She is dismissed.

Firstly, let me explain what derivatives are. An over the counter derivative is a bet or swap between companies and banks as insurance to protect them unforeseen economic calamities. It’s a safety net for companies invested in the market. But what people did not know was about the fraud that was going on behind the scenes. Since derivatives aren’t regulated by the government, all known records of these swaps are strictly private, allowing banks like the Bankers Trust be basically presented with money from a contract with Proctor and Gamble. It wasn’t until it was too late that people were learning that banks were giving derivatives on derivatives on derivatives.

 I’m not surprised at all that when Brooksly Born came to congress and told them about her research about over the counter derivatives and its association with fraud would cause an economic upheaval, she was denied..  She went up against Alan Greenspan, Chairman of the Federal Reserve at that time, who was completely against regulation of derivatives because it would cause more harm than good. He thought it was okay for fraud to happen, either at basic levels or higher levels. When a no body like Born goes up against a prominent member of Washington, paired with 90% of congress not understanding what Born was talking about when it came to the derivatives, of course they would side with “their guy”.

But no more than six weeks after Born was dismissed in front of congress does it come out that one of the major companies, LTCM, a long term capital management company hedge fund based in the affluent Greenwich, CT, was going down because of the same thing that Born was lobbying for.  But LTCM gets saved by 14 banks who pledge enough money to keep it afloat in order to save the market. And finally, the people of congress start to ask questions about Born’s idea, and start to wonder about whether she really had something going or she just got lucky. Still, nothing productive was done. And to this day, something that has proven to be instrumental in the most recent fall of the stock market is still not taken care of. But President Barack Obama is weighing its pros and con’s. So hopefully, he’ll prove worthy of my vote.

Monday, March 19, 2012

RS: Regulators Mount Up

This blog post is my response to “Commanding Heights, The Battle for the World Economy”, released by PBS.

This documentary was really interesting, especially when it came up how after World War II, the government tried to control the prices of all goods, causing huge amounts of inflation in Germany. When the government ruled price control was taken away, the economy flourished. According to the video, “overnight the black market disappeared. People stopped hoarding, and goods not seen for 10 years went on sale”. How great is that? What a huge turnaround from where goods were being traded for cigarettes and booze to the economy actually making its way back up.

Still, even after seeing Germany’s success, most countries wanted to have the government set up their economy. And while some flourished, others didn’t. The situation with Germany after the war is not the only occurrence where the lack of government involvement helped a diminishing economy. During the 1920’s in the United States, there was a recession, but the government wasn’t involved and the problem rectified itself within the year.

Yet, the government still wants to involve itself in the economy even after seeing how it is unecessary. In the past few years, there has been the issue with the government "bailing out" banks which needed assistance. Who knows what would have happened if the banks just went thru the normal life cycle. If they had gone down, who knows where the economy would have been if there wasn't an intervention. Where would we be now? We'll never know.

Thursday, March 15, 2012

RS: Not Everything Sucks

This blog post is my response to “Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The Joy of Stats” released by BBC and “Peter Diamandis: Abundance is our future” released by TED in February 2012

Turn on the news and 98% of what you see will be negative; tornados, tsunami's, earthquakes, war, murder, you name it, it will be mentioned. Why has our society become so negative and cynical? Yes, things are not doing too great right now, but compare it to what it could be? Compare today to this day 50 years ago and appreciate how far not only the United States, but every other country, has progressed.  

According to Hans Rosling’s video, “200 countries, 200 years, 4 minutes”, two hundred years ago we were all in the same range of poor and low life expectancy. Slowly but surely, all countries came up and now we all are within the middle to high range. Instead of focusing on the negatives, why can’t we think of how far we’ve come?

 As stated by Peter Diamandis, “Over the last hundred years, the average human lifespan has more than doubled; average per capita income adjusted for inflation around the world has tripled. Childhood mortality has come down a factor of 10. Add to that the cost of food, electricity, transportation, communication have dropped 10 to 1,000-fold. Steve Pinker has showed us that, in fact, we're living during the most peaceful time ever in human history. And Charles Kenny that global literacy has gone from 25 percent to over 80 percent in the last 130 years. We truly are living in an extraordinary time. And many people forget this

He’s totally right. We have made so many progressions, and if you look at statistics, we've got a lot more growing that is happening right as we speak.

 So why is it that we are just so focused on what’s NOT going right? Is it just wide spread worldwide cynicism? How did we become so ungrateful for what we have? Lets not forget that we are raising children in these “horrible times”. Why don’t we teach the future leaders of our countries to be thankful, and to see a bigger picture than our narrow, privileged minds can.

Peter Diamandis: Abundace is our future