The Current Economic Situation - Global Recession - The Cause of the Current World Financial Crisis

The primary cause of the current recession and economic crisis was the drastic increase in subprime adjustable-rate mortgages and the CDO's (collateralized debt obligations) that they comprised. The number of subprime mortgages issued in 2005 and 2006 increased dramatically while prime mortgages decreased.

Mortgages are securitized by the federal government; they are pooled together and sold in sections, which spreads the risk and uncertainty to those who take part (nearly everyone). It created a huge web of risk in that the securities are dependent on the underlying mortgage values. The value of the CDO's and their securities decreased and were miscalculated to begin with. Rating agencies could not accurately determine the value them. This is why so many people lost nearly all of their retirement which was largely based on these securities.

Worst of all, the federal government actually encouraged the purchasing of these securities without knowing the underlying risk involved. The web of risk was spread worldwide, not just in the United States. Major institutions like AIG, Citi, Chase, Bear Sterns, etc. held many of these CDO's, and many aspects of society all around the world were dependent upon these huge corporations, thus basically when they failed, society failed.

The Current Economic Situation - Global Recession - The Cause of the Current World Financial Crisis

On the surface level, borrowing and lending also was at an all time high in the past few years. Many people cite the Federal Reserve, Inflation, and the money supply as causes (as if that means something), or random phrases they here on the news, thinking they know what they're talking about, but these things are not really related to the whole situation at all.

The Current Economic Situation - Global Recession - The Cause of the Current World Financial Crisis
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What Does A Financial Advisor Do?

The job of the personal advisor begins with client consultation. At this point an advisor with take note of specific information regarding a client's current finances as well as their future financial goals. Using these to pieces of information, an advisor with then create a thorough plan that identifies problems as well as offer remedies and solutions. A personal advisor will typically meet with the client twice a year to provide updates on the client's financial situation as well as get updates on any changes to the client's lifestyle, to include marriage, divorce or retirement. On the client's behalf, the advisor can purchase or sale a multitude of financial products such as insurance and mutual funds or provide various services including will preparation or the completion of annual taxes.

Some common businesses financial analysts work for are banks, insurance companies, mutual and pension management companies, and securities firms. An analyst's job in these businesses involves the assurance that the companies make sound financial and investment decisions. Analysts read the company's financial statements, analyze prices, costs, sales, expenses and tax rates. All of these elements tie into the projection of future earnings as well as the determination of the value of the company. Financial Analysts are also required in the merger and acquisitions departments of each corporate entity to assess and prepare detailed analyses of the costs and benefits of any potential merger or company takeover.

Basically, Financial Analysts are essential to every monetary aspect of business and the global world marketplace.

What Does A Financial Advisor Do?

To become a Financial Advisor, a person must have a bachelor's degree in business, finance, accounting, business administration or statistics. A high knowledge level of financial analysis methods as well as accounting procedures and specifics of corporate budget are essential for a financial advisor to have in their day-to-day work needs. While a bachelor's degree is acceptable, a master's degree is preferred for analysts who work at the highest corporate levels. Like corporate analysts and advisors, personal finance advisors are strongly recommended to posses a degree in accounting, finance, economics, business mathematics, or law to best help their clients.

It's best to understand Finance Advisors as much as possible so you can make an informed decision and take the best steps possible to reach your objective. Our time is our so precious and despite cell phones and other conveniences we seem to never have enough of it. See below for more information on Financial Advisor.

What Does A Financial Advisor Do?
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