Information and Geography of United Arab Emirates

Information and Geography of United Arab Emirates Population: 4,975,593 (July 2010 estimate)Capital: Abu DhabiBordering Countries: Oman and Saudi ArabiaArea: 32,278 square miles (83,600 sq km)Coastline: 819 miles (1,318 km)Highest Point: Jabal Yibir at 5,010 feet (1,527 m)United Arab Emirates is a country located on the eastern side of the Arabian Peninsula. It has coastlines along the Gulf of Oman and the Persian Gulf and it shares borders with Saudi Arabia and Oman. It is also located near the country of Qatar. United Arab Emirates (UAE) is a federation that was originally formed in 1971. The country is known as being one of the wealthiest and most developed in western Asia. Formation of United Arab Emirates According to the United States Department of State, UAE was originally formed by a group of organized sheikhdoms that lived on the Arabian Peninsula along the coasts of the Persian Gulf and the Gulf of Oman. These sheikdoms were known to have constantly been in dispute with one another and as a result, constant raids on ships the area was called the Pirate Coast by traders in the 17th and early 19th centuries.In 1820, a peace treaty was signed by the areas sheikhs in order to protect shipping interests along the coast. Raiding of ships continued until 1835 however, and in 1853 a treaty was signed between the sheikhs (Trucial Sheikhdoms) and the United Kingdom which established a perpetual maritime truce (US Department of State). In 1892 the U.K. and the Trucial Sheikhdoms signed another treaty that forged a closer relationship between Europe and the present-day UAE region. In the treaty, the Trucial Sheikhdoms agreed not to give away any of their land unless it went to the U.K. and i t established that the sheikhs would not begin new relationships with other foreign nations without first discussing it with the U.K. The U.K. then promised to provide military support to the sheikhdoms if needed.Throughout the mid 20th-century, there were several border disputes between the UAE and neighboring countries. In addition in 1968, the U.K. decided to end the treaty with the Trucial Sheikhdoms. As a result, the Trucial Sheikhdoms, along with Bahrain and Qatar (which were also being protected by the U.K.), tried to form a union. However they were unable to agree with each other so in the summer of 1971, Bahrain and Qatar became independent nations. On December 1 of the same year, the Trucial Sheikhdoms became independent when the treaty with the U.K. expired. On December 2, 1971, six of the former Trucial Sheikhdoms formed the United Arab Emirates. In 1972, Ras al-Khaimah became the seventh to join. Government of United Arab Emirates Today the UAE is considered a federation of seven emirates. The country has a federal president and prime minister which makes up its executive branch but each emirate also has a separate ruler (called an emir) who controls the local government. The UAEs legislative branch is made up of a unicameral Federal National Council and its judicial branch is made up of the Union Supreme Court. The seven emirates of the UAE are Abu Dhabi, Ajman, Al Fujayrah, Ash Shariqah, Dubai, Ras al-Khaimah and Umm al Qaywayn. Economics and Land Use in United Arab Emirates The UAE is considered one of the wealthiest nations in the world and it has a high per capita income. Its economy is based on oil but recently the government has begun programs to diversify its economy. Today the main industries of UAE are petroleum and petrochemicals, fishing, aluminum, cement, fertilizers, commercial ship repair, construction materials, boat building, handicrafts, and textiles. Agriculture is also important to the country and the main products produced are dates, various vegetables, watermelon, poultry, eggs, dairy products,  and fish. Tourism and the related services are also a large part of UAEs economy. Geography and Climate of United Arab Emirates United Arab Emirates is considered a part of the Middle East and it is located on the Arabian Peninsula. It has a varied topography and in its eastern portions but much of the rest of the country consists of flat lands, sand dunes,  and large desert areas. In the east there are mountains and UAEs highest point, Jabal Yibir at 5,010 feet (1,527 m), is located here.The climate of UAE is desert, although it is cooler in the eastern areas at higher elevations. As a desert, UAE is hot and dry year round. The countrys capital, Abu Dhabi, has an average January low temperature of 54ËšF (12.2ËšC) and an average August high temperature of 102Ëš (39ËšC). Dubai is slightly hotter in the summer with an average August high temperature of 106ËšF (41ËšC). More Facts About United Arab Emirates UAEs official language is Arabic but English, Hindi, Urdu,  and Bengali are also spoken 96% of the population of UAE are Muslim while a small percentage is Hindu or Christian UAEs literacy rate is 90% Sources: Central Intelligence Agency. CIA - The World Factbook - United Arab Emirates. Retrieved from: https://www.cia.gov/library/publications/the-world-factbook/geos/ae.htmlInfoplease.com. (n.d.). United Arab Emirates: History, Geography, Government, and Culture- Infoplease.com. Retrieved from: infoplease.com/ipa/A0108074.htmlUnited States Department of State. United Arab Emirates. Retrieved from: state.gov/r/pa/ei/bgn/5444.htmWikipedia.com. United Arab Emirates - Wikipedia, the Free Encyclopedia. Retrieved from: http://en.wikipedia.org/wiki/United_Arab_Emirates

From Boom to Bust Financial Crisis of 2008

From Boom to Bust Financial Crisis of 2008 Although academic interest in the global financial crisis that began in the United States in mid-2008 has declined as time goes on, it is a brief period in world economic history that is worth remembering and understanding. Although academic interest in the global financial crisis that began in the United States in mid-2008 has declined as time goes on, it is a brief period in world economic history that is worth remembering and understanding. In many respects, the consequences of the crisis have become a way of life; while the world economy is slowly improving, the financial crisis fundamentally changed many economic relationships between governments, financial institutions, markets, and consumers. From Boom to Bust in Six Easy Steps The chain of events that explains the financial crisis is relatively simple.  Naturally, each of these steps involved a large number of contributing factors. As the US economy improved after the â€Å"dot-com bubble† that created a short-term decline in 1999-2000, much of the recovery was directed into residential construction. In order to generate demand for the huge supply of housing, banks, and lending companies began issuing large numbers of â€Å"adjustable-rate mortgages†, mortgages with a low initial rate and with generally less stringent qualifications for buyers; this allowed a large number of people who had previously not been able to afford their own home a chance to buy one, and in many cases, spend more than was prudent for their level of income. WHAT IS FIAT MONEY The expansion of consumer credit in home loans also led to an increase in credit-funded consumer spending in other parts of the economy as well, fueled in large part through loans against home equity; as long as demand for housing remained strong – which was encouraged by looser credit standards – home prices and property values remained high, and consumers could use that value as collateral for additional spending. Eventually, the housing supply reached a saturation point, which under â€Å"normal† circumstances would have resulted in housing prices declining gradually until a supply-demand equilibrium was reached; this would have been partly achieved by lenders tightening lending standards and incrementally increasing interest rates to compensate for lower revenues. Three things made the situation beginning in late 2005 less than â€Å"normal,† however: The lending business had expanded along with the housing market Because the demand for mortgages was roughly equal to the demand for houses, a large number of lending businesses – most operating under regulatory guidelines that were much less strict than for banks – were started after 2000. The problem this caused was a lack of funding; mortgages take a little time, from the perspective of the lender, to start providing a stable revenue stream that can be used for new loans, unless the lender has a large initial financial reserve, which many did not. That led to the growth of creative funding concepts, such as Mortgage-backed securities, which became a hot market commodity In order to fund the lending boom, large and small lenders alike bundled their outstanding mortgages into financial derivatives called mortgage-backed securities, which took a variety of forms. An MBS is essentially a claim on a percentage of the cash inflow from a mortgage or group of mortgages and is generally paid on a monthly or quarterly basis, similar to a bond coupon. Once an MBS is created, however, its value as a tradable security is not necessarily limited to the expected revenue on paper from the mortgages in the pool; prior to 2008, the market value of these derivatives grew to several trillion dollars, many times the value of the properties they represented. The volatility of these MBS derivatives was a significant trigger for the financial disaster, because MBS were traded worldwide, meaning that US conditions were underliers for the entire global financial system. The drop in home prices, which was an inevitable consequence of a saturated market, led to lower revenues for lenders, which began to reduce the value of MBS’s. This created one self-feeding cycle because it led to less financing for new mortgages; it led to another because the only way the lenders could compensate was to raise the interest – sometimes precipitously – on their adjustable-rate mortgages, which in turn led to an accelerating number of mortgage defaults by borrowers. A mortgage that is not being paid has zero value as part of an MBS; in what seemed to be overnight but in reality was a period from late-2006 to mid-2008, an enormous amount of asset value held by financial institutions in the form of mortgage-backed securities simply vanished. The impact on financial institutions meant that, at a minimum, lending became severely restricted, and a large number of institutions failed outright – 25 in the US in 2008 alone. The evaporation of the credit market impacted business and consumer spending and created the deepest recession in the US since the Great Depression of the 1930’s. Financial institutions overseas were not spared, either; large organizations such as the UK’s Northern Rock, Switzerland’s UBS, and the Royal Bank of Scotland were deeply exposed to the crisis through the MBS trade  and had to resort to various levels of government intervention to prevent utter chaos. The MBS problem affected a large number of investment organizations as well, companies and government bodies who held a large number of derivatives as part of the financial portfolios for pensions and retirement savings for workers. MONEY MAKES THE WORLD GO AROUND The history of the financial crisis is mainly a lesson about the complex – and evidently potentially-risky – connections in global economics. The entire world economy suffered because of an unsustainable condition in the housing market in the US, and the financial products and processes that evolved as a result of that condition. Moves by governments toward better regulation of financial industries, such as the new requirements for financial reserves that will be required under the Third Basel Accord, have largely been aimed at providing firewalls to prevent future financial crises from spreading as far and as fast. In another respect, however, the history of the financial crisis serves as a warning of what can go wrong. In this context, we may find ourselves with some reasons to worry; in some parts of the world such as China and developing Asian countries, rapid expansion of real-estate markets threatens to reach the same â€Å"bubble† levels as what occurred i n the US, and financial markets are beginning to see the reintroduction of exotic derivative securities. Knowing how quickly things can spiral out of control might help to prevent or at least lessen the effects of future financial crises.