INTERNATIONAL FINANCIAL ARENA

Financial Market on the International Financial Arena

Financial Market on the International Financial Arena

Financial Markets

The Financial Market is the place, device or system which are bought and sold any financial assets.

Financial system of the United States

Washington - In 1792, a group of 24 New York brokers met under a buttonwood tree to sign an agreement establishing the first stock exchange in the country. This tree has long since disappeared, but the street is not located in lower Manhattan, Wall Street has become synonymous with the financial sector of the United States. (Berglöf, 2006, 50)

In 2006, the value of stock transactions by institutions along Wall Street has reached 43.9 trillion, according to the Securities and Exchange Commission (SEC), the main regulator of financial markets in the United States.

In addition, according to a professional association, these institutions have mobilized 3.9 trillion dollars for companies in 2006. (Lane, Milesi-Ferrari, 2006, 126)

The Market Revolution

Once considered the citadel of the great financiers, Wall Street is now a nation of shareholders. In 1952, only 4% of Americans owned shares. In 2005, this percentage has risen sharply: Half of American households own stocks or bonds directly or indirectly through mutual funds. In the case of oil and gas companies of the United States, for example, individuals own 23% of the shares they have issued, mutual funds nearly 30%, pension funds 27%, the individual accounts of retirement (IRA) 14%, 6% being held by corporations or other institutions. The Stock Exchange "American" is no longer exclusively American. More than 1,230 foreign companies are listed on the records of the SEC. (Reinhart, Rogoff, 2009)

Moreover, as the president of this organization, Mr. Christopher Cox, foreigners hold a record number of U.S. companies representing $ 33 trillion, which is more than twice the amount of gross domestic product of the Union European.

Wall Street has also become a social phenomenon. In his book in English "Timeless Principles for the New Economy" (The eternal principles for the new economy), the famous investor Warren Buffet said that the television commentators, columnists and financial analysts, among others, all seeking to attract the attention of people wanting to put their money. (Lane, Milesi-Ferrari, 2006, 126)

Economic Shocks:

American Population owns less than 1% of the whole nation wealth

Mortgages rescheduled to reset nationwide

Official unemployment rate has reached to 25%

National debt of the US has passed 13 trillion

Regulation have shut down 5 more banks

Homes that went into foreclosure reached to 367065

Interest rate gone up.

Gas Prices/War Profits

Food prices has gone up

Oil prices are going up

Gold Shocks, liquidity and the United States Economy during national baking era.

Political Economy, Sectoral Shocks, and Border

Enforcement

2001- 2006 September 11 + Iraq war + Globalization + Offshoring + Real estate bubble + Highest budget and trade deficits in U.S. history

The Shock Doctrine

The Enron Saga

Stocks and Bonds

The SEC regulates the vast markets of the United States by demonstrating both encouragement and realism. On the one hand, she knows that the existence of stock exchanges efficient, accessible and honest is essential to encourage the ...