Extra Credit #1

Have you ever heard of LIBOR? That's ok if you haven't it's not a broadly talked about topic. The media has constantly suppressed many scandals over the years but one that has shocked me most recently is the suppression of the LIBOR scared. The scandal happened around the 2008 financial market crash. There was so much going on during this timeframe that it is easy to become confused with what really happened. So what is LIBOR?

LIBOR stands for the London Interbank Offered Rate. Basically, this is a benchmark interest rate used for short-term loans, adjustable-rate mortgages, and student loans, and loans in general, use LIBOR as an interest rate. What this means is that a few panel banks decide what is their interest rate they offer loans to other banks for uncollateralized amounts of debt. The scandal in 2008 was that Barclay's a bank in London plead guilty to submitting false rates for their own advantage. Sometimes this means submitting false low numbers to appear better than they were or falsely high rates to make short-term profits on their derivatives contracts. Barclay's is not the only bank under investigation countless other banks, Goldman Sachs, JP Morgan, and many other highly known institutions. 

LIBOR affects trillions of dollars of financial transactions and the effect on the economy of manipulating these loans has been huge. This also indirectly affects the stock market because LIBOR is an index of interest rates overall, it has an inverse relationship with the stocks. 

So what does this mean for the economy? LIBOR was found to be an ineffective system by the IBA. Now it is being phased out and replaced by SOFR, Secured Overnight Financing Rate.  This rate is supposed to be more accurate for a variety of reasons. First, it is based on actual transactions rather than assumptions of future costs by a panel of bankers. Because it is based on actual transactions it will need to be adjusted more often than LIBOR. For example, for one-year rates, might need to be adjusted twice a year instead of once a year. The secured overnight financing rate is based on transaction data that underlines US debt backed by US treasuries. The expectation is that this will be a more secure rate less vulnerable to manipulation. 

Currently, the issue with LIBOR being phased out of use is that many financial instruments used by corporations around the world are filing lawsuits because LIBOR negatively affected them. 

Final Blog Post

The use of technology integration into society is represented by an exponential graph. The graph below shows the relationship between time and technological inventions. As mentioned in the last article diffusions of innovations help us see the process in which new technology becomes widespread in society.

Now that technology has exponentially grown into society how have these new inventions changed the environment in which we live? There are many positive attributes, medical tools, GPS, phones, and washing machines. Some technologies have fewer drawbacks than others. Inventions are made because of the need to solve a problem, with the speed rate at which a new invention is made there is not much time given to thinking about the negative effects this technology could potentially have. 

As shown in the movie Age of AI we can see that the problem in some cases might just be trying to reduce costs. This might be positive for some stakeholders but not for all. Let's examine this on a macro level, the society as a whole will benefit because the price will be cheaper because this will cut costs and individuals will have to pay less for the product. Shareholders will also benefit, which are a part of stakeholders because they are wealthier and they have more money to reinvest in other sectors. The negatives are that many workers are cut out of a job. The mental health issues that arise are extreme and most have yet to find a solution. Not only does the displacement directly affect those unemployed but then the family of those unemployed and future generations also. As mentioned in the movie Age of AI the children of those that have lost their jobs feel strained and unable to match up to their parents. Those problems are just a glimpse of the negative drawbacks of technology on a macro level. 

As we move on to the micro-level we see most issues are related to personal uses of phones or computers. Personally believe smaller inventions like washing machines, air conditioning, and cars only enrich our lives and make them easier, when I begin to have concerns is when "smart computers" are in the center of one's life. Now there are additional problems, for example,  eating disorders, mental health disorders, anxieties, and stresses that come along with technology. Everyone at some point in their modern lives is guilty of falling victim to one of the problems listed above. 

In addition, if you try to research the issues you might face another problem with technology and the online platforms, which are overloading of information and misinformation. The saturation of the online market with different ideas is immense and it can seem overwhelming to detect the optimal route to begin. 

I believe we have a chance at combating the issues above if we take a personal viewpoint. I will use my relationship with technology as an example. I by no means have a perfect relationship with technology but I am aware of its negatives which I believe is the start. With individuals being educated about the downfalls of technology we can begin to correct a lot of the problems that we currently have. Some of the solutions are simple, that doesn't mean easy. For example, exercise has been proven to help and correct many mental health issues. Taking the time to exercise and to avoid technology for an hour or two is not a complex concept but it can be a difficult one. Now due to the attention span shortening, specifically in younger generations by social media, it can be very difficult to motivate the younger generations to do those types of simple tasks. 

Getting back to the basics I believe is one of the healthiest ways in which to combat the negative side effects of technology and begin to train ourselves to look at the pros and cons of a technology before it is introduced to determine whether the good outweighs the bad.