Terms To Know
ARM Loans: An adjustable rate mortgage loan is a loan that allows borrowers to pay their loans back starting at a low value which then increases to a much higher value every so often.
Bailout: Providing a loan or a grant (the giving of money for reason) to help a company or individual to keep them solvent, or able to make their monthly financial payments.
Bankruptcy: A proceeding in the federal court in which a debtor that is unable to make debt obligations has all their assests liquidated and they are relieved further liability over a company.
Corporations: A group of people legally joined together to work as one business.
Credit Default Swap: A specific form of a counterparty agreement (counterparty: the other participant in a deal, contract, etc.) which allows the transfer of credit risk from one party (party: person or group of people involved in a transaction, negotiation, etc.) to another party. One party in this transaction faces any credit risk from the other party and is known as the lender. The counterparty agrees to insure this risk with monthly payments to the lender. If the party paying the lender defaults, the lender providing the insurance will have to purchase from the insured party the defaulted item (anything of economic value). In turn, the insurer pays the insured the remaining interest on the debt as well the original investment.
Crude Oil: Petroleum before it has been processed or refined into products.
Cyclical Unemployment: Unemployment caused by the ups and down of the stock market.
Debt: A certain amount of money owed to a person or an organization for funds borrowed.
Default: To fail in making regular debt payments or to fufill obligations in an agreement.
Derivatives: A financial item whose value and characteristics depend on the characteristics and value of the underlier, usually a currency, bond, or other financial item that would alter the financial item's value.
Dissolution: The end of a company's legal existence.
Equity: The difference between what a property is worth and the remaining mortgage or loan payments against it.
Exchange Rates: The current market price for which one currency can be traded for another. For example, if the US dollar exchange rate for the euro is $1.20, this means one U.S dollar can be exchanged for 1.2 euros.market price for which one currency can be traded for another.
Foreclosure: A legal process when an owner's right to their property is ended.
Gross Domestic Product (GDP): Gross Domestic Product is the amount of money any country makes or earns. Gross Domestic Product is ocnsidered when ranking of the countries by economy takes place, but at the same time you can't rank countries by their economy just based on their GDP.
Hard Core Unemployment: When some one is physically or mentally dissable and can not work.
Inflation: The rise of the general levels of prices on goods and services over a period of time. High inflation rates hinder the economy while low inflation rates may reduce economic failure.
Interest Rates: The amount of money that it costs to borrow money. Interest rates are usually in the form of credit card balances, loans, or mortages.
Investments: To buy or give money in hope of making more money in the future.
Labor Force: The people in the world that employed with a job.
Liquidation: To convert everything in a company to cash. This includes stocks, paying off debt, assests, etc. to then go out of business.
Loans: A deal where a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money.
Mortage: A loan to finance the purchase of real estate.
Oil Producing and Exporting Countries (OPEC): A group of countries founded in 1960 that choose to join together to control the exportation of their crude oil to the other countries.
Per Capita: Per capita is found by dividing the amount by the number of people living in that area. The only con about finding Per Capita, is that you are saying that everyone has the same amount, or are equal but in real life that rarely happens. For example: to find the Per Capita Gross Domestic Product of a country you would find the GDP of that country and divide it by the number of people in that country.
Prime Loans: A prime loan is to borrow money from the bank with a "clean" credit history. You will pay back a portion of the loan every month with an additional interest rate from the monthly pay back.
Recession: A time of general economic decline.
Sub-prime loans: A sub-prime loan is very similar to a prime loan ( definition below ). You can borrow money that you later must pay off with additional interest. Sub-prime loans are different from prime loans because people wanting prime loans must have a 'clean credit history' such as no records of bankruptcy, large amounts of debt, or other 'unclean' credit problems. Sub-prime loans don't need people to have totally clean credit histories. Sometimes sub-prime loans are used for people needing 'credit repair' for those being denied a prime loan but are in need of the money. The trade off for not being denied a sub-prime loan is that the interest rates and additional fees are often higher or there are more of them.
Supply and Demand: The abundance of goods purchasable at a given price, and the amount of command for those goods.
Structural Unemployment: Due to the fact that the human race has changes in the wants, resources,and the continual change in the technology throughout the stock markets.