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HOT or NOT: Začni na svojich cieľoch pracovať každý deň Pamätaj, že aj cesta dlhá tisíce kil…

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😈Začni na svojich cieľoch pracovať každý deň🌎🕰️ Pamätaj, že aj cesta dlhá tisíce kilometrov začína s jedným malinkým krokom👣. Preto nech už snívaš💫 o čomkoľvek, začni robiť malé, logické, každodenné kroky, aby si svoje sny uskutočnil💥. Pretože sny sa ti nesplnia bez toho, aby si im k tomu dopomohol.💣 Tak sa vzchop🤙 a ZAČNI už TERAZ👅. Pusti sa do práce.…

MY MAN

The Credit Market is a broad trading arena encompassing both investment-grade and junk bonds; companies seek to develop capital through selling debt options. In relation to aggregate dollar value, the credit market is substantially larger then equity markets. Keep in mind, credit markets and the trading of like bonds are only agreements to develop a value transaction between two people; the assumption exists between both parties that financial assets are available to cover the agreement. Equity Markets have less risk in liquid assets then the credit market. This suggests that the trading of credit has a real potential to carry large risk securities from sub-prime loans, or junk bonds.

Lending operations, the lending institution examines an applicant’s previous loan repayment history to determine whether the loan risk is prime, or sub-prime. The determinate variable, or risk, is comprised after basic consideration of the applicants’ history:

·         Bad credit, or poor repayment periods; a customer fails to pay timely per agreed installment dates or defaults on a loan.

·         An applicant has little to no credit history to effect a determination.

·         Applicant has low income or expresses a life style [incurring debt] exceeding income

·         Loan values exceeding collateral's, or securing property such as a house or automobile

·         Applicant has poor history with credit cards, or revolving credit

If a loan applicant, after history examination, expresses instability to poor ratings the risk is high that the loan will default; the applicant is considered sub-prime. Conversely, an applicant who expresses a credit history where loans were repaid in full and within agreed upon installment dates the applicant is considered prime, or the risk is low that the loan will default.

Investment-grade securities are a categorization of securities identifying the strength, or low risk of default, of a bond. Investment Grade Ratings are listed:

·         High Quality

o   AAA

o   AA

·         Medium Quality

o   A

o   BBB

Credit ratings below investment grade securities are considered low quality investments with high levels of risk, or default, and are typically referred to as junk bonds. Although, securities and trading are high regulated by the Securities Exchange Committee (SEC), the quality of credit remains unregulated and traders operate largely with the assumption that the bonds are investment grade. Moreover, securities portfolios typically express an average credit quality rating.

A bond, or bond issuance, is simply a legally binding agreement with stipulations of agreement satisfaction between two parties. The bond itself may vary with its financial assets but the agreement of investment is what is essentially backing bonds. Junk bonds are financial assets with a low credit quality rating, or with a high-risk of default; the marketing value for junk bonds is the higher pay out then bonds of low defaulting risk. Securitization of investment portfolios occurs when bonds are bundled; bond pooling represents various risks of credit and debt. Often these portfolios consist of construct slices, or tranches, which are portions of other bond constructs; each tranche offers different maturities and risks associated with it; the higher the risk, the more the CDO pays.  Essentially, the assumption that a CDO was based on investment grade credit ratings, the principal loans began with sub-prime holders. The FED, and Federal Administration, oft times develop capital by selling these debt obligations overseas to say China or Europe; Once a CDO is sold internationally, the high grade risk is now not only affecting the American Economy but the Global Economy as well. The resulting effect resembles injecting heroin into the body; the ‘high’ is immediate, however, the ‘crash’ is more pronounced and catastrophic long term, especially with excessive or extended use.

Economists are still researching how the credit market crash occurred, but others and I feel the system crash began within the housing market with loan granting to sub-prime applicants. Banks and lenders most likely considered acquiring the debt to selling the security to an open market avoiding the risk; with Greenspan’s Put, the market shifted the bonds throughout the national and global economy.

Present market value is essentially based on the assumption between trading parties that the value exchange will continue to occur; however, the loans were based on sub-prime candidates and marketed as investment-grade securities; moreover, those bonds were sold and re-sold, then split up and sold again and the process has repeated several times over. Although the principal behind securities trading was legitimate the credit, or debit was based on sub-prime aspects; where the problem began is that these securities were marketed as investment-grade with low-risk, they were marketed and sold as something they were not. In addition, investors purchased them and the government shoveled them overseas spreading junk bonds all over the world with traders under the assumption the default risk was low. Doubtless, anyone can claim ignorance without seeming incompetent; this collapse is not isolated to a single concept but by the greed and carelessness of many people.