The Sun Dollar

It seems as if WaMu and Wachovia arent the only ones in the gutter...now according to Market Watch the European financial firm Fortis has needed the aid of 3 European governments( Belgium, the Netherlands and Luxembourg ) to bail out the company. The grand total of this is $16 billion.

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Just some news updates for anyone who has a bank account with Wachovia!

The Federal Deposit Insurance Corp. has just been involved in the new buyout of Wachovia by Citigroup. In response of the on going financial crisis, Citigroup bailed out Wachovia and bought it for $2.16 billion!

As stated in the recent article by the Washington Post, Citigroup is now one in three of the major banks that control "almost a third of the nation's deposit!" The other two are Bank of America, and JP Morgan Chase.

The cause of Wachovia's downfall was the money lost in mortgage loans.

This is the second bank buyout since Washington Mutual was sold for 1.9 billion to JP Morgan Chase.

To watch a video on this bank buyout crisis from Bloomberg click here!

(Jacky)

Personally, I've never been what many would consider "financially independent". I blame this mostly on my parents, my high school...and partially on myself. Throughout my adolensence I was told to focus on academics and everything would be taken care of--everything as far as necesseties. But once my necesseties turned out to come with a hefty price tag, I realized that I was becoming too dependent on my parents. And it didn't help that my high school didn't offer some sort of financial class. Sure there was the recquired "Life Skills" course, but the curriculum was too broad and fleeting for a freshmen high schooler to comprehend.

So, here I am, 21 years old and, like so many of my peers, I'm near dead broke. I am a full time student and have a part time job, and bills and expenses continue to pile up. And there is no sympathy out there for me, too expensive. Unlike my two blogging counterparts I am the least economy savvy--I don't know where I fit into it all. Or even if I fit into it at all, and if I do how to I work around all the obstacles? I never took the time to interest myself, and so I am looking for a path to financial independence blind. And on my path this article caught my eye.

To me, the economy is a vast spider web with many very intricate details...I just need a good way to navigate it.


-Kerstin

I want to update our readers on some of the bigger themes our blog will be following this semester. We, that is Jacky, Kerstin and Katherine agreed to follow four specific topics related to the economy. We are still discussing the fourth topic, but here are the three we will shortly have available on this blog.

First, we will focus on student budgeting. We will have some important tips on how to balance your budget and leave college without being in serious debt. We will have more information on this topic in mid-October.

The second subtopic will be the economy's influence on immigration patterns. There is an interesting article related to this issue in a recent issue of the Washington Post.

Third, we will investigate what influence the economic downturn has on students who are just leaving college with an MBA or other business degree. We want to hear what these people's hopes and fears are now that many respective employers are failing or taken over by the government.

Katherine

This website allows you to read different journals and published studies and papers on what is happening economically around the world or as a nation. People can join, by reading and rating certain entry's as well as publishing your own journal. There are also discussion papers that you can comment on.

Economics E-Journal

Jacky

This has been a stormy week on Wall Street. First, Monday's bankruptcy and closure of financial giant Lehman Brothers. Then, Bank of America acquired Merrill Lynch. And by the end of the week the government bailed out financial giant American International Group. This bailout comes after Uncle Sam already bailed out Fannie Mae and Freddie Mac a few weeks ago. While I am currently trying to figure out how to pay for my groceries for the upcoming week, the government is throwing around 85 Billion dollars at AIG. This makes me wonder where all this money is coming from...

I did some research to answer this question. This massive wave of failures is certainly not unprecedented. The market has been in crises before and the economy has had its fair share of ups and downs over the past decades. But it certainly has never had such a global impact as this time. Because markets are more interrelated now than ever before, other countries are affected by what's happening on Wall Street. The US government is not alone in lending money to bail out some of these hurting international players. Some of the bailout money is coming from foreign countries. On Thursday last week, several foreign central banks including the European Central Bank and the Bank of Japan announced a plan to invest a combined 180 billion dollars into the global markets. The central banks are hoping to prevent an economic crisis with a global impact.

But where is all this cash coming from? Did someone open a treasure chest or do we have a secret savings account for situations like this? The answer is no. But the US Federal Reserve can sell some of its securities including treasury bills on the world markets. This will mean more international investment in the US market which can eventually lead to more instability. Other parts of the bailout money will of course come from us, the tax payers. So, remember to cut back on things you don't really need and save up some money. Because tax day is coming.

Katherine