Cause and effect Essay Example | Topics and Well Written Essays - 500 words - 11

Cause and effect - Essay Example Some economists believe the crisis to be a result of economic cycles which are impossible to resist. There is, however, another theory, which considers the crisis to be a result of a new policy of credit accommodation. That is also the theory the paper focuses on. Most banks and mortgage lenders offered 100 percent financing of a price for a house (or even more). As a comparison, most world banks currently finance approximately 85 percent of a price. This was a really advantageous credit for borrowers – they received an opportunity not only to buy a house, but also to renovate it. However, such a loan was quite risky for lenders. A house could have been sold only for lower price in case a borrower failed to pay the loan back. Thus, the investment becomes lossmaking. However, the number of such deals was constantly increasing. As a result, both banks and estate agencies were financed by investment banks. Another factor was that mortgage rate was not stable. It was dependent on LIBOR, the average interest rate that the average leading bank would be charged if borrowing from other banks (Bischoff & McGagh, 2012). Benefits are obvious – borrowers expected their loan interest rate to decrease in case general situation is being improving. On the other hand, lenders expected it to grow together with the percentage. Thus, mortgage-lending system of the US in 2006-2008 was dependent on LIBOR index. It was acceptable when the index was a little bit increasing or slightly decreasing, though both parties were interested in its stability. However, LIBOR index turned to be quite changeable and instable in practice. It was about 6 percent by the end of 2007. What is more, it was continuously growing. As a result, borrowers were unable to pay back their loans. Investment banks bore thumping damages. That is how the US mortgage crisis appeared. Its effects may be felt even now. That is what set off chain reaction of

Sedimentary or metamorphic rocks and engineering issues Essay

Sedimentary or metamorphic rocks and engineering issues - Essay Example der, 2001).   Given the ability of engineers to measure all these, an emphasis on the latter is quite important in order to provide insight that would at least help in reducing earthquake intensities in the society. Particularly, the understanding of sedimentary rocks and their contribution to earthquakes intensities is necessary. To start with, earthquake shaking starts from the rupturing fault and then continues at other distances away from the fault. Earthquake shaking intensity is supposed to decrease as the distance from the rupturing fault decreases. However, it has been observed that shaking in one site is sometimes stronger than shaking in another site. Sometimes, this shaking can be ten times higher or stronger than shaking in another site (Ammon, 1997). Geologists have come up with information relating sedimentary rocks with earthquake shaking intensities. Geologists argue that shaking is always high in areas of softer rocks. In addition, shaking is amplified in areas of thicker sediments compared to areas of thin sediments. As it has been observed, the major reason why sedimentary rocks are associated with shaking intensities is because they are soft (Denecke & Series, 2003). An explanation of the relationship between sedimentary rocks and earthquakes shows that seismic waves’ speed is much higher in hard rocks when compared to sedimentary rocks. This is because the latter are soft as it has been explained earlier. In areas with different rock types, waves tend to pass through harder rocks to the softer rocks, they slow down. However, in order to carry the same energy carried in the hard rocks, they tend to get bigger than before. Therefore, shaking at sites that have soft rock layers is stronger since the seismic waves tend to move slowly as shown in Figure 1 and 2 (SCEC, 2014). The loss of life and properties associated with earthquake intensities can actually be controlled by avoiding buildings in area of soft sedimentary rocks. If this is not