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Background and Vocabulary
By NewsHour Extra
Economics, Government
To help students understand the current U.S. and global economic crisis
The United States is in the midst of an unprecedented effort to repair the economy and financial markets severely damaged by risky home loans and falling housing prices. Look at a short article or video with the latest economic news. Ask students to highlight or write down terms or concepts they don't understand. Print out the financial crisis glossary. If the words are not in the glossary, divide the class into groups to use the internet to research the remaining concepts. As a class review any major concepts . Divide the class again, this time into pairs, and have students explain the current melt down to each other using their own words. Once all students have had time to explain to their partner pick two or three students to present to the whole group. Ask the rest of the class to vote on who had the most succinct and correct explanation of the situation. Lastly, ask each pair of students to brainstorm further questions about the current situation using new vocabulary and concepts. You can enter those questions at Paul Solman's Business Desk -- make sure you mention that you are a class using this assignment. Include an email where we can send the answers. Students can write an essay on how the financial crisis is affecting them on a personal, community or state level. Send completed essays to extra@newshour.org FINANCIAL CRISIS GLOSSARY - print out 401(K) plan - An investment and savings plan that enables workers to put away money tax free into an account they can access when they retire (around age 65). 401Ks create a tax incentive to save money for retirement. Bank - a business establishment which keeps money for saving or commercial purposes. Banks also loan money and exchange foreign currencies. Bank run (bank panic) - A series of unexpected cash withdrawals caused by a sudden decline in confidence or fear that the bank will be closed, i.e. many depositors withdraw cash almost simultaneously. Since the cash reserve a bank keeps on hand is only a small fraction of its deposits, a large number of withdrawals in a short period of time can deplete available cash and force the bank to close and possibly go out of business. Capital -The wealth - cash or other assets - used to fuel the creation of more wealth. Within companies, often characterized as working capital or fixed capital. Central bank - The principal monetary authority of a nation, which performs several key functions, including issuing currency and regulating the supply of credit (see credit) in the economy. The Federal Reserve is the central bank of the United States. Central bank intervention - The buying or selling of currency, foreign or domestic, by central banks in order to influence market conditions or exchange rate movements. Commercial bank - Bank that offers a broad range of deposit accounts, including checking, savings deposits and extends loans to individuals and businesses. Commercial banks can be contrasted with investment banking firms, such as brokerage firms, which generally are involved in arranging for the sale of corporate or municipal government bonds and securities. Credit - When you borrow money, you promise to pay in the future. A "line of credit" is permission from a bank to borrow money. Credit crunch - The situation created when banks hugely reduce their lending to each other because they are uncertain about how much money they have and whether the institution they lend to will be able to pay it back. This in turn results in more expensive loans and mortgages for ordinary people. Credit default swap - A complicated type of insurance for investments. Investors who want to protect themselves against a risky investment buy a credit default swap, which will give them a payment if the company they invested in can't pay them what they originally owned. It is similar to buying home insurance that pays you money if the house burns down. The unregulated market for buying and selling these contracts has been a major contributor to the 2008 global financial crisis because failing financial institutions were unable to pay investors on their credit default contracts. Debt - Money owed; also known as liability. Default - Failure to meet the terms of a credit agreement. Equity - Ownership interest in an asset after liabilities are deducted. For example, the value of your house after deducting the total amount of your mortgage. Fannie Mae/Freddie Mac - Government-created financial institutions that buy mortgages from banks and then sell those mortgages as investment products. They were created to help make more money available for banks to make more home loans(see liquidity). Because of the housing crisis, both independent companies were on the verge of collapse and were taken over by the federal government in September 2008. Fannie Mae was created in 1938 and Freddie Mac in 1970. Federal Deposit Insurance Corporation (FDIC) - An independent deposit insurance agency created by Congress in 1933 to maintain stability and public confidence in the nation's banking system. The FDIC identifies, monitors and addresses risks to the deposit insurance funds. The FDIC protects bank accounts up to $250,000 (the amount was $100,000 before Congress passed the rescue plan in October 2008) Federal Reserve Bank - One of the 12 operating arms of the Federal Reserve System, located throughout the nation, that together with their 25 branches carry out various functions, including operating a nationwide payments system, distributing the nation's currency and coin, supervising and regulating member banks and bank holding companies and serving as banker for the U.S. Treasury. Federal Reserve System - The central bank of the United States, created by Congress and made up of a seven-member Board of Governors in Washington, D.C., 12 regional Federal Reserve Banks, and their 25 branches. Finance company - A company that makes loans to individuals. Foreclosure - The legal process used to force the payment of debt secured by collateral (such as a house) whereby the property is sold to satisfy the debt. Usually means a family needs to leave their house because they cannot pay their mortgage. Inflation - An increase in the general price level of goods and services. Interest - When you borrow money from a bank, you pay interest, a fee for the use of money over time. For instance, if you borrow $100,000 for a house, you may end up paying back $300,000 at the end of the 30 year mortgage. Interest also refers to the money earned on a savings account. Investing - Buying part of a company, enterprise or fund in the hopes of making more money. Liquidity - The liquidity of something is how easy it is to convert it into cash. Your current bank account, for example, is more liquid than your house. If you needed to sell your house quickly to pay bills you would have drop the price substantially to get a sale. Liquidity risk - The risk that a bank will not have sufficient cash or liquid assets to meet borrower and depositor demand. Loan - When you borrow money and promise to pay it back-with or without interest. Moral hazard - The risk that someone is cheating, has provided misleading information, or has an incentive to take unusual risks in a desperate attempt to earn a profit. Mortgage - When you borrow money from a bank to buy a house. Mortgage-backed securities - From about 2001 to 2006, Wall Street firms bought the mortgages on lots of houses and put them all together in a pool. They then sold slices of the whole pool of mortgages to investors. The repackaged debt from the pool of mortgages were then traded and re-traded. As the mortgages were moved around, more funds were freed up to lend to more homeowners. Nationalization - When the government takes control of a business. Regulation - A principle rule, or law designed to control or govern how the financial system works. For instance, banks are required to keep a certain amount of cash on hand, but those regulations were scaled back at certain times. Security - Essentially, a contract that can be assigned a value and traded. It could be a stock, bond or mortgage debt, for example. Sub-prime mortgages - Home loans offered to people who have had financial problems or who have low or unpredictable incomes. These loans often had high interest or interest rates that went up after a certain number of payments. Sources: BBC, federalreserveeducation.org

Children will be taught how to look after their money when personal finance lessons become a compulsory part of the national curriculum next year.

HONG KONG (Reuters) - Asian stocks slipped on Tuesday on caution ahead of the earnings season in the United States, while the U.S. dollar weakened against the yen, dragging Japanese exporters down.

The dollar's dip helped give a boost to oil and commodity prices and helped to underpin shares of resource companies.
Investors were cautious as U.S. financial markets reopen after a holiday and face a slew of key earnings reports due this week from heavyweight stocks, including Bank of America, Citigroup, IBM General Electric and Google.
"Investors need to be careful ahead of earnings reports. It's been the case so far that companies that report results tend to face profit-taking as stocks had gained sharply by already factoring in solid figures," said Yutaka Miura, a senior technical analyst at Mizuho Securities.
The MSCI index of Asia Pacific stocks outside Japan eased 0.4 percent, with technology shares the biggest drag by sector.
The Thomson Reuters index of regional shares pulled back 0.3 percent.
Stronger-than-expected results last week from tech bellwether Intel Corp failed to excite investors, while steep loan losses reported by JPMorgan Chase & Co. rattled investors on worries that U.S. consumers are still struggling under the weight of heavy debts.
Japan's benchmark Nikkei average dipped 0.12 percent after dropping 1.2 percent on Monday, pulling back from a 15-month high hit last week. Honda Motor Co was 1.2 percent lower and Toyota Motor Corp slipped 1.1 percent.
An expected bankruptcy filing by Japan Airlines had little market impact, with its shares already having plunged to just 4 yen.
The dollar fell 0.2 percent to 90.51 and hit a four-week low, while the euro fell to a four-month low against the pound as Greece's fiscal woes continued to take a toll on the common currency.
At a meeting of euro zone finance ministers on Monday, Greece received the group's backing to tackle its debt troubles, even as they pressed the country to do more on its own.
Greece's ballooning budget deficit and debt of more than 120 percent of GDP has triggered downgrades by debt rating agencies and hurt the euro in the past few months.
The pound also got a boost from reports that U.S.-based Kraft Foods and Britain's Cadbury Plc were arranging a $19 billion deal to create the world's largest confectionary group.
But the Australian dollar lost ground after China's central bank boosted the yield in an auction of one-year bills more than expected, raising more worries that authorities are trying to slow the country's robust recovery.
Metal and oil prices rose on a weaker dollar.
Palladium hit a fresh 18-month peak, spurred by the launch of an exchange-traded fund backed by the metal earlier this month, while gold inched up $5 to $1,137.50. Oil extended gains scored on Monday, edging up 25 cents a barrel to $78.25.
In the bond market, Japanese government bonds inched down on caution ahead of an auction of five-year debts worth 2.4 trillion yen ($26.4 billion) later in the day. Ten-year JGB futures edged up 0.04 point to 139.32.
(Additional reporting by Aiko Hayashi; Editing by Kazunori Takada)

Context
A good functioning of utilities is crucial to build an efficient economy. They have important effect on households’ life, firms’ performance and the efficiency of other components of the economy. Many components of the broad utilities sector such as transport, telecommunications or energy have been studied in the literature and their positive impact on growth and development supported. At least three channels are in play. First, these activities are important providers of jobs. Therefore, their growth and development may create non-negligible opportunities of employment. Second, their good performance could have positive spillovers on other sectors of the economy through the reduction in costs of doing business. Third, with the increasing globalization and the international fragmentation of the production process, well performing utilities can help exporters to better take advantage of their participation in international markets and attract more FDI and portfolio investment. In the ERF region as in other regions of the world, utilities have been for a long time state-owned and managed. Efficiency issues pushed a number of countries to initiate programs for rationalizing the functioning of the sector either through allowing for more competition or through a set of regulation agencies. However, contrary to steps taken elsewhere in developing countries, and despite recent initiatives, the ERF region still lags behind in regulatory reform and liberalization of utilities markets. Theme and Sub-Themes
The proposals should investigate the interconnections between the functioning of utilities in the ERF region and the regulatory and competition frameworks as well as their impact on firms’ competitiveness and economic growth. Drawing on the industrial organization literature and applied welfare economics, submissions are encouraged under the following themes or related questions, covering either one sector, one country or comparatively:

1. Regulatory regimes of utilities, firm behavior and welfare outcomes
2. Competition policy, enforcing agencies and anti-competitive behavior
3. Firm dynamics, whether large or small, covering such issues as entry and exit as well as innovation and survival.

Guidelines for Proposals 
Authors should submit a proposal of a maximum length of twenty pages. It should be structured to contain seven sections in the following format. ERF reserves the right to exclude proposals that are not consistent with these guidelines.
1. Statement of the research problem: A clear and concise description of the nature and importance of the proposed research; its scope and boundaries; its general context; and objectives with explicit reference to feasibility and policy relevance.
2. Value Added: A selective and analytical review of the relevant literature, with a view to both demonstrating knowledge of past theoretical and empirical work, as well as identifying the knowledge gap that the proposed research is intended to address.
3. Conceptual Framework and Research Methodology: A clear statement of the conceptual framework should be provided elaborating on the set of specific, identifiable and concrete questions for which the proposed research is intended to provide answers. This is to be followed by an elaboration of the research methods to be employed and why they are best suited to answer the research questions. The section should also indicate the nature of the information required and the data collection techniques, whether primary or secondary or a combination of the two. Finally, it should explain how the information will be analyzed and interpreted using quantitative and/or qualitative methods.
4. Publications and Dissemination Strategy: This section should describe the research products that will be delivered at various stages of the research process. It should also outline a strategy on how these products will be disseminated to different stakeholders (working papers, edited volumes, workshops, etc.)
5. Time Frame: A clear plan of the timing of all stages of the research project as well as any dissemination activities (including workshops), taking into account that all projects have to be completed before October 31st 2010.The timetable must specify due dates of draft and final papers as well as any planned events. The proposed events should have a description of the nature, purpose, size and proposed time period.
6. Budget: should be submitted in US dollars, itemized and inclusive of all research expenses. Research costs should be sufficiently detailed to show research compensation for various researchers, including the principal investigator. Other budget items may include travel, if necessary, research assistance, data collection, office supplies and photocopying. The purchase of equipment is not allowed under ERF grant rules. If events are planned, separate costing is required.
7. References.
Eligibility
The following eligibility criteria will be applied:

• Researchers should have expertise in the topic being researched.
• At least one of the main researchers should be from the ERF region, whether residing inside or outside the region.
• Researchers from disciplines other than economics may apply.

Selection Criteria
All proposals will be evaluated by a refereeing committee on the basis of the following criteria:

• The value added from the project in terms of contributing to existing knowledge,
• The methodological soundness, be it econometric or in-depth case studies,
• The policy relevance of the findings,
• The effectiveness of the dissemination strategy, and
• The extent to which the project involves a capacity building component.

PLEASE FORWARD YOUR SUBMISSION, TOGETHER WITH:

• AUTHOR(S)’ CV(S)
• TWO PUBLISHED PAPERS, AND
• THE PROPOSAL IDENTIFICATION SHEET (ANNEX 1) ( Click here to download the sheet )

TO: dhalaby@erf.org.eg with a cc to yfahim@erf.org.eg .
For further inquiries, please contact
Dina El Halaby,
Senior Economist,
ERF, at 7 Boulos Hanna Street, Dokki,
Cairo, Egypt.
E-mail: dhalaby@erf.org.eg

Акико Икеда и Катара Tsunetomi

13 января (Bloomberg) - Япония, AOS индекса Topix отправился в свой первый в этом году снижения после Китая поднял банки, АО Отношение резервов для охлаждения экономического роста, цен на сырьевые товары упали, и ослабление доллара США до трехнедельного минимума против йены.

Mizuho Financial Group Inc, Япония, AOS третий по величине кредитор отказался. "Mitsubishi Corp, Япония, AOS крупнейшим торговцем товаров, упал. Корпорации Canon Inc, Мир, AOS крупнейший производитель камер и которая получает около 80 процентов своих доходов за пределами Японии, отступили. Корпорация Bridgestone, упал после Бэнк оф Америка Corp., AOS Merrill Lynch & Co. сократить свой рейтинг по миру, AOS крупнейшего производителя шин.

, ÄúThe иен, AOS набирает силу, а также падение сырьевых товаров, будет стимулировать инвесторов продать акции, включая ключевые экспортеров зафиксировать прибыли, Au сказал Hiroichi Ниси, менеджер Акции Nikko Cordial вкл. ценных бумаг в Токио.

Nikkei 225 Stock Average упал на 0,8 процента до 10,796.31 состоянию на 9:03 утра в Токио. Более широкий Topix потерял 0,4 процента до 949,92 с почти вдвое больше запасов сокращается по мере продвижения.

Topix имели низкий возвращение в прошлом году среди Benchmark индексов в мире, AOS 40 крупнейших фондовых рынков, восхождение на 5,6 процента, на обеспокоенность правительства будет не в состоянии оживить экономический рост и сильной иены повредит прибыли. Акции в индекс торговли в среднем в 38 раз доходы оценкам, по сравнению с 15 раза по Стандартным & Poor, AOS 50 показателя в США и в 13 раз за Dow Jones Stoxx 600 Index в Европе.



Китай, AOS обязательных резервов



В Нью-Йорке, стандартная & Poor, AOS 500 Index снизился вчера первый раз в этом году, потеряв 0,9 процента, после Alcoa вкл., AOS четвертом квартале доходы прицепные средней оценки аналитиков и Китая переехали в прохладном экономического роста. Финансовые запасы замедлен после официальной Белого дома заявил, что правительство будет привлечь $ 120 млрд в банковских сборов компенсировать потери от финансового поручительством.

Китай будет и увеличить долю депозитов, что банки должны выделить в качестве резервов на 50 базисных пунктов, начиная 18 января центрального банка заявил о своем веб-сайте прошлой ночью.

Сырая нефть с поставкой в феврале упала 2,1 процента до $ 80,79 за баррель в Нью-Йорке вчера, большое снижение за пять недель. Лондонская биржа металлов Индекс шести металлов, включая медь и цинк упали на 1,9 процента вчера.

Курса йены на 90.97 по отношению к доллару сегодня, самым высоким уровнем с 21 декабря с 92.23 на вчера, AOS тесной биржевой торговли в Токио. По отношению к евро, она укрепила от 131,79 до 133,68. Сильной иены уменьшает доходы за рубежом в японских компаниях, когда пересчитаны в местной валюте.

Валюта поднялась на 14-летнего максимума в ноябре и составила в среднем 93,59 в 2009 году самый высокий годовой показатель с начала торговать валютами свободное в 1971 году.




- Редактора: Николас Джонсон.



Чтобы связаться с журналистами на эту статью: Акико Икеда в Токио на +81-3-3201-2011 или iakiko@bloomberg.net; Катара Tsunetomi на +81-3-3201-2089 или ktsunetomi@bloomberg.net.



Чтобы связаться с редактором, ответственных за эту статью: Darren Boey на +852-2977-6646 или dboey@bloomberg.net

Dlr at bottom, yen still to drop - China fund official

* But dlr cuts gains as the official says views are personal
By Satomi Noguchi
TOKYO, Jan 12 (Reuters) - The dollar jumped against the yen and the euro on Tuesday after an official from China's sovereign wealth fund said the U.S. currency has hit bottom.
But the greenback quickly reversed those gains after the official said the comments were only his personal view, prompting some investors to drop the currency. [ID:nBJB003635]
"The market was completely taken aback by the comments from the Chinese official," said a trader for a U.S. bank, adding that this indicated how sensitive market players have become to Chinese policy movements.
The dollar made up earlier losses against the yen and gained 0.1 percent to 92.21 yen JPY=.
But it was off its earlier high of 92.43 yen hit as Peng Junming, an official in the asset allocation department of China International Corp, the country's $300 billion sovereign wealth fund, also said the yen would continue to drop. [ID:nTOE60B02Z]
The yen had been broadly firmer in early trade as investors cut yen selling positions that had pushed it to an over 15-month low against the Australian dollar, with traders citing Japanese investors repatriating funds invested in euro-denominated bonds.
The euro fell as low as $1.4453 on EBS before rebounding to trade at $1.4488 EUR, down 0.2 percent on the day. It was below a three-week high of $1.4557 hit the previous day.
The euro nearly erased an earlier 0.5 percent loss below 133 yen to trade flat on the day at 133.60 yen EURJPY=.
The Australian dollar also cut earlier losses as much as 0.8 percent slide to stand at 85.47 yen AUDJPY=, down 0.2 percent and retreating from its more than 15-month high of 86.20 yen struck the previous day.
MORE U.S. EARNINGS EYED
The dollar recovered some of the losses that took it to three-week lows hit after weaker-than-expected jobs data revived expectations that U.S. interest rates will stay low for a longer period.
The dollar's rebound was partly helped by a declining U.S. stock futures SPc1 in Asian trade, after the earnings season got off to a mixed start with Alcoa (AA.N) missing Wall Street's forecast. [ID:nN11155201].
The decline in U.S. stock futures cut some support to higher-yielding currencies.
Still, expectations for strong earnings later this week, coupled with robust Chinese trade data on Monday, provided support to optimism about a global recovery, slowing the U.S. dollar's gains. (Additional reporting by Kaori Kaneko; Editing by David Dolan)

(Repeats to fix technical glitch) (For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, Jan 12 (Reuters) - Japanese Finance Minister Naoto Kan agreed with U.S. Treasury Secretary Timothy Geithner that currency market stability was desirable in his first phone talks with his U.S. counterpart since assuming the post last week, a government source said on Tuesday.
In a phone call on Monday evening, Kan told Geithner he would attend the Group of Seven finance chiefs' gathering to be held in Canada on Feb. 5-6, the Japanese official with direct knowledge of the matter told Reuters.
It is unclear whether Kan and Geithner will meet for bilateral talks on the sidelines of the G7 gathering, although usually under such circumstances the two ministers would meet, the official said.
The phone conversation was initiated by Japan, said the official, who declined to be named due to the sensitivity of the matter.
Kan, 63, also deputy prime minister, was named finance minister last Wednesday, replacing 77-year-old Hirohisa Fujii, who stepped down for health reasons. [ID:nTOE60601A]
In his first press briefing as finance minister last Thursday, Kan jolted financial markets by saying he hoped the yen would weaken further and that many Japanese firms were in favour of dollar/yen around 95 yen. [ID:nTOE60607E]
He toned down that call for a weaker yen the following day after a rebuke from the prime minister, saying currency levels should be determined by markets. [ID:nTOE60701F] (Reporting by Tetsushi Kajimoto, Leika Kihara)

By Kim Kyoungwha

--With assistance from Liza Lin in Singapore. Editors: James Poole, Jake Lloyd-Smith

To contact the reporter on this story: Kyoungwha Kim in Singapore at +65-6212-1895 or Kkim19@bloomberg.net

To contact the editor responsible for this story: James Poole at +65-6212-1551 or jpoole4@bloomberg.net