BRUIN BUSINESS REVIEW

DEAR
READERS
 
 
 3
Welcome
to
a
new
year
of
Bruin

Business
Review.
‐
A
le2er
from
the
editor.

CALENDAR
 
 
 
 4
Jump
start
your
career
by
checking
out
these
events
all
month
long.

NEWS
OF
THE
WEEK
 
 5
Obama
announces
yet
another
housing
bailout

NEWS
BRIEFS
 
 
 6
INVESTMENT
BANKING
 
 8
An
overview
of
the
investment
banking.

CONSULTING

 






 








 10

An
overview
of
consul?ng.

ACCOUNTING
 


 








 12

An
overview
of
accoun?ng.

SCHOOL
PROFILE
 

Featuring
USC
Marshall
School
of
Business.

CAREER
TIPS

 




















14

16
INSIDE
Teaching
the
basics. 

THE
FINANCIAL
CRISIS















19
INTERVIEW
 
 
 







 18 



Read
the
general
overview
on
the
financial
crisis,




it’s
global
impact,
and
how
it
may
affect
you,
the
The
highly
an?cipated
Q&A
with 



student.
Professor
McDevi2.

BRUIN
BUSINESS
REVIEW
2
 LETTER
FROM
THE
EDITOR
DEAR
READERS,
Welcome
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year
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BBR
STAFF
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Wong Eric
Park Stephen
Moock Fred
Kim
Jin
Sun Dmitry
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IN
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EDITOR Robert
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Cover
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courtesy
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OPERATIONS 


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Chris?ne
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USC
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BRUIN
BUSINESS
REVIEW
3
 THE
CALENDAR
OCT‐NOV
2009
October
27 November
3
Jordan
Belfort
–
The
Wolf
of
Wall
Street Warner
Bros.
Speaker
Series:
Resumes/Interviewing
Host:
Alpha
Kappa
Psi
Business
Fraternity Host:
Beta
Alpha
Psi
Accoun?ng
Honors
Society
Time:
7pm Time:
6‐8pm
Loca?on:
Haines
39 Loca?on:
Bunche
2160

Descrip?on:
 Previous
 mul?millionaire
 and
 author
 or

“The
Wolf
of
Wall
Street”
and
“Catching
the
Wolf
of
Wall
 November
9
Street”,
 Jordan
 Belfort,
 will
 give
 a 
mo?va?onal
 speech
 AITC
Workshop:
Secrets
to
Applying
to
Graduate
School
about
business
ethics
and
success. Time:
5pm
Loca?on
203
Covel
October
27 Descrip?on:
Addi?onal
workshop
on
Nov.
23
at
6:30pm
AITC
Workshop:
Careers
in
Business
Consul?ng
Time:
5pm
Loca?on:
203
Covel

November
10
Descrip?on:
 Addi?onal
 workshops
 offered
 Nov.
 12
 at

Bruin
Internship
and
Summer
Job
Fair,
Fall
2009
5pm
and
Nov.
24
at
6pm
Time:
Tuesday
11‐3pm
Loca?on:
Second
Floor
Lounge,
Ackerman
October
27
Descrip?on:
Get
the
chance
to
 meet
up
with
employers

Job
Search
Jumpstart:
MBA
specifically
 targe?ng
 UCLA
 students.
 For
 currently

Time:
Tuesday
4‐8pm
registered
UCLA
students
only.
Bruin
ID
required.
Loca?on:
Strathmore
Bldg.
1st
Floor,
Room
117
November
12
Job
Search
Jumpstart:
For
All
Majors
October
28
Time:
Thursday
1‐4pm
UCLA
Graduate
and
Professional
School
Fair
2009
Loca?on:
Career
Center,
Time:
Wednesday
11‐3pm,
3rd
Floor,
Conference
Room
Loca?on:
Ackerman
Grand
Ballroom
Descrip?on:
 Currently
 registered
 UCLA
 Students
 only.

Bruin
ID
required. November
14
Bruin
Consul?ng
Green
Technology
Case
Compe??on
Time:
8am‐8pm
November
2
Loca?on:
Humani?es
A51
AITC
Workshop
Business
101:
Investment
Banking
Descrip?on:
 
 Bruin
Consul?ng’s
4th
 Annual
Strategy
 and

Time:
5pm
Opera?ons
 Case
 Compe??on.
 Compete
 with
 top

Loca?on:
203
Covel
undergrads
 in
 a
 36
 hour
 compe??on
 to
 develop
 a

Descrip?on:
Addi?onal
workshop
offered
Nov.
19
at
5pm
presenta?on
 and
 recommenda?ons
 regarding
 clean

energy.

November
3
AITC
Workshop:
How
to
Get
Into
a
Great
MBA
Program
December
4
Time:
5pm
Job
Search
Jumpstart:
Last
Chance
for
Fall,
All
Majors
Loca?on:
203
Covel
Time:
Friday
1‐4pm
Descrip?on:
Addi?onal
workshop
offered
Nov.
24
at
5pm
Loca?on:
Career
Center,
3rd
Floor,
Conf.
Rm.

*Sign
 up
 for
 all
 AITC
 (Academics
 in
 the
 Commons)
 Workshops
 on

MyUCLA
and
click
on
“Workshops”.
BRUIN
BUSINESS
REVIEW
4
 NEWS
OF
THE
WEEK
Obama
Announces
Yet
Another
Housing
Bailout
BY
SUNNY
WONG
The
 Obama
 administraUon
 SENIOR
STAFF
WRITER
recently
 announced
 a
 new
 housing

bailout
 program
 to
 bolster
 the
 ailing
 !
housing
 market.
 Although
 there
 have

been
 slight
 improvements,
foreclosure

rates
 are
 s?ll
 increasing
 and
 overall

housing
 prices
 are
 approximately
 30

percent
 lower
 than
in
 2007.
Their
 plan

aims
 to
 assist
 local
 and
 state
 housing

agencies
to
provide
cheaper
mortgages

t o
 fi r s t ‐ ? m e
 o r
 l o w ‐ i n c o m e

homebuyers.
The
administra?on
 hopes

that
 this
 program
 will
 help
 lower

income
families
purchase
homes
in
the

midst
of
this
tough
economic
storm.


To
 provide
 funding
 to
 these
 housing


finance
 agencies,
 the
 government

p l a n s
 t o
 h a v e
 t h e
 T r e a s u r y

Department,
 Fannie
 Mae,
 and
 Freddie

Mac
 purchase
housing
bonds.
This
will

help
 housing
 finance
 agencies
 make

new
 loans
 to
 poten?al
 homebuyers.
 taxpayers
 will
 not
 have
 to
 shoulder
 the
 ini?a?ves
 that
 directly
 targets
 lower‐

The
government
 also
plans
to
ins?tute
 burden
 in
 paying
 for
 this
 program,
 they
 income
homebuyers.
a
 temporary
 credit
 program
 so
 that
 have
not
yet
released
informa?on
on
how

these
 agencies
 can
 refinance
 their
 this
program
will
be
funded.
However,
the
 The
 administra?on’s
last
 housing
bailout,

exis?ng
 bonds,
 which
 will
 improve
 Treasury
 Department
 is
 responsible
 if
 a
 released
 in
 February,
 seemed
 to
 have

liquidity
 access
 for
 the
 outstanding
 housing
agency
happens
 to
default
 on
 its
 worked
 rather
 well
 so
 far.
 According
 to

bonds.
 
 The
 administra?on
 es?mates
 credit
payments.
 the
Federal
 Housing
 Finance
 Agency
 and

this
 program
 will
 allow
 housing
 the
 Department
 of
 Housing
 and
 Urban

Development,
millions
of
Americans
have

agencies
to
lend
money
to
hundreds
of

thousands

 of
 Americans.
 The

“UlUmately,
this
 been
 able
to
take
advantage
of
 the
lower

size
 of
 the
 program
 will
 depend
 on
 housing
bailout
aims
 mortgage
 rates,
resul?ng
 in
 an
 increased

agency
demand.
 to
enable
these
 n u m b e r s
 o f
 h o u s i n g
 p u r c h a s e s .


homeowners
to
keep
 Ul?mately,
 this
 housing
 bailout
 aims
 to


“Experts
believe
that
 their
homes.” enable
 these
 homeowners
 to
 keep
 their


homes.
 The
 new
 program
 is
 expected
 to

this
new
iniUaUve
 Experts
 believe
this
 new
ini?a?ve
 should
 launch
 around
 November,
 which
 is
 also


should
only
slightly
 only
slightly
improve
 the
 housing
market


because
 Housing
 Finance
 Agency‐related

when
 a
 $8,000
 tax
 credit
 for
 first‐?me

homebuyers
expires.

improve
the
housing
 loans
 cons?tute
 a
 very
 small
 por?on
 of

market.” the
 mortgage
 market.
 (<1
 percent)


However,
 the
 program
 is
 s?ll
 rather
 Check
 out
 more
 News
 of
 the
 Week
 on

A l t h o u g h
 o ffi c i a l s
 h av e
 s t a t e d
 significant
considering
it
is
one
of
the
few
 BruinBusinessReview.com

BRUIN
BUSINESS
REVIEW
5
 NEWS
BRIEFS BY
AMORETTE
JENG

Winners
of
the
Nobel
 Berkeley
 addressed
 differences
 in


managing
conflicts
between
companies

they
 obtained
 a
 45
 million
 dollar

bailout
 and
 are
 currently
 paying
 large

Economics
Prize
2009 and
 markets
as
 well
 as
when
 and
 why
 dividends
back
to
the
government.

efficiency
occurs
in
economic
rela?ons.
On
 October
 12,
 2009,
 The
 Sveriges

Riksbank
 Prize
 in
 Economic
 Sciences
 in

Memory
of
Alfred
Nobel
was
presented
 Major
Losses
for

to
 two
 Americans:
 Elinor
 Ostrom
 and
 Bank
of
America
Oliver
 Williamson.
 Both
 winners
 made

contribu?ons
 to
 the
 analysis
 of
 On
 Friday
 October
 16th,
 America’s

largest
 bank,
 Bank
 of
 America,
 has

e c o n o m i c
 g o v e r n a n c e ,
 o r
 t h e
 reported
 a
 steep
 loss
 of
 2.24
 billion

regula?ons
that
authority
figures
use
to
 dollars
 within
 the
 third
 quarter.
 This

spearhead
 companies
 and
 financial
 loss
 coincides
 with
 the
 bank
 CEO,
 Ken

Lewis’,
last
 year
 of
 employment
 before

systems.
 Ostrom,
 a
 poli?cal
 scien?st

from
 Indiana
 University,
 is
 the
 first

re?rement.
As
of
now,
the
company
has
 Social
Networking

yet
 to
 reveal
 who
 the
 succeeding
 CEO

woman
 ever
 to
 win
 the
 Nobel
 will
 be
 to
 undertake
 this
 enormous
 Effects
on
Small

Economics
Prize
and
the
firh
woman
to
 financial
 burden.
 The
 mortgage
 and

credit
 card
 divisions
 of
 the
 bank
 were

Business

win
a
Nobel
this
year.
Her
 work
focused

hit
the
hardest
 as
lenders
are
finding
it
 A
 recent
 study
 from
 Internet2Go
 and

on
 how
 common
 natural
 resources
like
 increasingly
 difficult
 to
 pay
their
 loans

grazing
 land
 and
 forests
 can
 be
 used
 back.
 However,
 bad
 loans
 have
 Merchant
 Circle
 indicates
 that
 almost

successfully
 by
 the
 people
 that
 tend
 decreased
 in
 severity
 compared
 to
 half
 the
 small
 businesses
 surveyed
 use

t h e m
 w i t h o u t
 g o v e r n m e n t
 previous
 losses.
 What
 remains
 in
 social
 networking
 sites
 for
 like
 Twi2er

ques?on
 is
when
the
bank
will
be
 able
 and
 Facebook,
 to
 increase
 their

interven?on.
Williamson,
an
 economist
 t o
 p u l l
 i t s e l f
 o u t
 o f
 fi n a n c i a l

from
 the
 University
 of
 California,
 dependence
 on
 the
 government
 since
 publicity.
This
form
of
adver?sing
is
not

only
 free,
 but
 also
 incredibly
 effec?ve

due
to
 the
 speed
 and
 vastly
increased

range
of
poten?al
consumers.
However,

d e s p i t e
 t h e
 i n fl u x
 i n
 p o s i ? v e

promo?on,
there
are
poten?al
 dangers

in
 u?lizing
social
networking
sites.
Such

dangers
 include
 adver?sing
 to
 such
 an

extent
 that
 consumers
 become

annoyed
 or
 the
 fact
 that
 cri?cisms
 of

the
 firm
 are
 for
 public
 viewing.


However,
 with
 such
 user‐friendly

technology,
businesses
are
now
able
to

bridge
 the
 gap
 between
 themselves

and
their
consumers.


Six
Face
Charges
on

Insider
Trading
Billionaire
 Raj
 Rajaratnam,
 founder
 of

the
 Galleon
 Group,
 and
 five
 others,

including
 execu?ves
 from
 Intel
 and

McKinsey
 &
 Co.,
 were
 arrested
 for


BRUIN
BUSINESS
REVIEW
6
connec?ons
 to
 what
 U.S.

A2orney
Preet
Bharara
stated
is

the
 largest
 hedge
 fund
 insider

trading
ever.
They
were
charged

for
 pocke?ng
 over
 20
 million

dollars
 in
 illegal
 profits
 by

obtaining
 informa?on
 about

businesses
 like
 Google
 Inc.
 and

Hilton
 Hotels.
 The
 illegal

ac?vi?es
 were
 supposedly

conducted
 during
 July
 of
 2007

and
 were
 discovered
 through

first
 ?me
 ever
 court‐authorized

wiretaps.


Asian
Countries

Dominate

Broadband

Services
A
 recent
 study
 of
 broadband

services
by
University
of
Oxford,

England
and
University
of
Oviedo,

Spain
and
supported
by
Cisco
evaluated
 Dow
Hits
10000 risen
 50
 percent.
 Despite
 this
 posi?ve

turn
of
events,
the
ques?on
remains
as

66
countries
and
 240
ci?es
to
 find
 that
 to
 how
 long
 this
 rise
 will
 last.
 Based

South
 Korea
 has
 come
 out
 on
 top,
 Last
 week,
 Dow
 Jones
 Industrial
 strictly
 on
 stocks,
 it
 appears
 that
 the

bea?ng
out
 Japan,
the
 previous
 leader,
 Advantage
 reached
 above
 10,000
 for
 economy
 may
 be
 slowly
 recovering.

as
the
 main
 broadband
 service
 na?on.
 the
first
 ?me
 this
 year.
This
 came
 as
a
 However,
others
argue
that
this
rise
will

South
 Korea,
with
a
total
of
 97%
wired
 shock
 to
 investors
 in
 the
 midst
 of
 a
 be
 brief
 with
 some
 profits
 based
 on

households,
 has
 had
 a
 massive
 deep
 recession.
 Since
 March,
Dow
 has
 cuung
costs,
not
increasing
earnings.
It

improvement
 in
 the
quality
 and
 speed
 c a n
 a l s o
 b e
 n o t e d
 t h a t
 t h e

of
 internet
 services.
Following
Japan
 in
 unemployment
 rate
 is
 s?ll
 at
 record

third
 place
 is
 Hong
 Kong
 and
 then
 highs,
 which
 goes
 against
 indicators
 of

S w e d e n ,
 S w i t ze r l a n d ,
 a n d
 t h e
 economic
improvement.

Netherlands.
The
 United
States
 has
not

made
it
 into
 the
top
10
and
is
included

in
 the
second‐highest
category
which
is
 To
read
past
News
Briefs,
check
out

defined
 as
 having
 a
 “comfortable”
 BruinBusinessReview.com
average
 internet
 connec?on.
 This
 was

an
 improvement
 compared
 to
 the

previous
 year
 in
 which
 the
 survey

stated
 that
 the
 United
 States
 had

services
that
were
barely
sufficient.

BRUIN
BUSINESS
REVIEW
7
 A
GENERAL
OVERVIEW
OF
INVESTMENT
BANKING BY
ERIKA
K.
SOLANKI
Investment
 banking
 is
 one
 of
 the
 most
 a2rac?ve

and
 yet
 elusive
 career
 op?ons
 for
 students

interested
 in
 business‐related
 professions.

Investment
 bankers
 are
 known
 to
 be
 highly
 Research
compensated
and
 to
 work
 long
hours,
but
 how
do

bankers
rake
 in
 so
 much
 capital
 and
 what
 do
 they
 Sales
&
Trading
do
during
those
long
hours?
Many
of
us
have
heard
 Equity,
Fixed

about
 dabagirls.com,
Da?ng
a
Banker
 Anonymous,

a
 Web
 site
 dedicated
 to
 consoling
 the
 significant
 Corporate
Financing
others
 of
 investment
 bankers
 who
 have
 been
 M&A,
Capital
Raising,

affected
 by
 the
 economic
 recession.
 Many
 of
 us
 Underwri?ng
have
 also
 seen
 the
 Carlos
 Solis
 character
 on
 the

television
show
Desperate
Housewives
woo
his
wife
 !
with
 expensive
 getaways
 on
 private
 jets
and
 $300
 Generally,
 an
 investment
 bank’s
 research
 department

perfumes,
 which
 he
 funds
 with
 his
 job
 in
 banking.
However,
 thoroughly
researches
specific
 companies,
industries,
and
 the

while
 investment
 banking
 may
 seem
 to
 be
 one
 of
 the
 most
 economy
and
then
makes
recommenda?ons
about
 the
buying

lucra?ve
business‐related
 career
 op?ons,
many
students
 who
 and
selling
of
various
financial
products.
The
sales
and
trading

are
considering
pursuing
internships
and
careers
in
investment
 department,
as
 the
 name
 implies,
 includes
 sales
 people
 and

banking
 internships
 do
 not
 have
 comprehensive
 industry
 traders
who
deal
with
the
selling
and
buying
of
equity
(stocks)

knowledge,
 and
 without
 that
 knowledge
 they
 can’t
 be
 like
 and
 fixed
 income
 (bonds).
 Sales
 and
 trading
 services
 are

Carlos
 Solis.
 Candidates
 must
 have
 a
 thorough
 and
 generally
 for
 ins?tu?onal
 or
 investors
 with
 a
 high
 net
 worth.

comprehensive
 understanding
 of
 the
 investment
 banking
 The
 corporate
 finance
 department
 is
 also
 known
 as
 the

industry
to
impress
employers
during
interviews. investment
 banking
 division,
 which
 is
 further
 divided
 into

product
 groups
 and
 industry
 groups.
 The
 product
 group

“Investment
bankers
are
known
 includes
 mergers
 and
 acquisi?ons,
 financial
 sponsors,
 and

to
be
highly
compensated
and
to
 leveraged
 finance.
 The
 coverage
 group
 serves
 clients
 from


work
long
hours...” varying
 industries,
 including
financial
 ins?tu?ons,
 healthcare,


and
technology,
to
name
a
few.

In
 simplest
 terms,
 investment
 banks
 are
 financial

intermediaries.
Investment
bankers
serve
 as
a
bridge
between
 The
 sales
 and
 trading
 department,
 as
 the
 name
 implies,

two
 par?es
 to
 help
 companies,
 and
 possibly
 governments,
 includes
sales
people
and
traders
who
deal
with
the
selling
and

raise
 capital
 through
 mul?ple
means.
Investment
 bankers
can
 buying
of
equity
(stocks)
and
 fixed
 income
 (bonds).
There
are

issue
 (or
 underwrite)
 and
 sell
 securi?es,
 which
 include
 typically
three
types
of
 salespersons.
There
is
the
classic
retail

primarily
 equity
 (stocks)
 and
 debt
 (bonds).
 In
 addi?on,
 broker,
who
 sells
 stocks
 and
 stock
advice
 to
 the
 average
Joe,

investment
 banks
 provide
 guidance
 to
 companies
 regarding
 the
 ins?tu?onal
 salesperson,
 who
 works
 with
 large

mergers
 and
 acquisi?ons
 and
 with
 trading
 different
 financial
 ins?tu?onal
 investors,
 and
 the
 private
 client
 service

instruments,
such
as
commodity‐to‐equity
securi?es. representa?ve,
 who
 works
 with
 ultra‐high
 net
 worth

individuals.
However,
sales
 and
trading
services
in
 investment

The
structures
of
investment
 banks
vary
slightly
depending
on
 banks
are
generally
for
ins?tu?onal
or
investors
with
a
high
net

the
individual
firm;
however,
general
investment
banks
include
 worth.
three
 basic
 departments:
 research,
 sales
 and
 trading,
 and

corporate
finance.

 Traders,
on
 the
 other
 hand,
 help
 facilitate
 the
 purchase
 and

selling
of
securi?es
by
execu?ng
trades
on
behalf
of
a
client
or

holding
 an
 inventory
 of
 securi?es
 to
 sell.
 There
 are
 two

primary
 roles
 traders
 play
 in
 a
 bank.
 First,
 they
 help
 clients

BRUIN
BUSINESS
REVIEW
8
 provide
liquidity
to
clients
by
execu?ng
purchases
and
sales
of
securi?es.
Traders
make
money
for
the
client
by
selling
securi?es
at
a

higher
price
from
when
they
purchased
them.
Besides
serving
a
client,
traders
also
execute
trades
on
behalf
of
the
investment
bank,

which
is
known
as
proprietary
trading.
Traders
aim
to
make
a
profit
using
the
firm’s
own
capital.
The
corporate
finance
department
is
also
known
as
the
investment
banking
division,
which
is
what
most
undergraduates
aim
to
get

into.
The
 division
 mainly
serves
 the
 following
 two
 func?ons:
1)
 mergers
 and
 acquisi?ons
 and
 2)
 underwri?ng.
 The
 mergers
 and


Classification of Investment Banks

Bulge Bracket Middle Market Boutique
• The largest and most • Firms dealing with clients • Specialized firms with
profitable firms with revenues of less than relatively smaller clients
• Examples: Goldman Sachs $1 billion • Example: Mercanti Group
and JPMorgan • Example: Jefferies & Co

acquisi?ons
unit
 advises
companies
on
 mergers
between
 companies.
For
 example,
if
company
A
wanted
to
 purchase
Company
B,


the
 investment
 bank
 will
 help
 figure
 out
 the
 final
 price
 of
 the
 deal
 and
 make
 sure
 the
 transac?on
 is
 executed
 smoothly.
 The

underwri?ng
unit
 of
the
investment
 bank
mainly
serves
to
 raise
 capital
 for
 a
 client
 company
either
 through
 equity
(stocks),
debt

(bonds),
 or
 loans.
An
 investment
 bank
 is
 further
 divided
 into
 product
 groups
 and
 industry
groups.
The
 product
 group
 includes

mergers
 and
 acquisi?ons,
 financial
 sponsors,
and
 leveraged
 finance.
The
 coverage
 group
 serves
 clients
 from
 varying
 industries,

including
financial
ins?tu?ons,
healthcare,
and
technology,
to
name
a
few.


Almost
all
investment
banks
share
the
same
hierarchical
structure.


!
Analyst Associate Vice President Managing Director

Lifestyle
as
an
investment
banker
is
especially
difficult
 due
to
the
fast‐paced
 work
environment
and
long
hours.
Investment
 bankers


working
 in
 corporate
 finance
 and
 research
 usually
 work
 more
 than
 100
 hours
 a
 week.
 Bankers
 in
 sales
 and
 trading
 have
 more

reasonable
work
hours,
but
they
are
constantly
are
under
a
high
amount
of
pressure.
While
some
believe
the
constant
pressure
and

fast‐paced
working
environment
give
investment
 bankers
an
edge,
others
believe
the
pressure
is
too
much
to
sustain
a
permanent

lifestyle,
regardless
of
the
hery
quarterly
bonus.
Consequently,
many
bankers
move
on
to
other
 fields
such
as
private
equity,
hedge

funds,
and
business
development
arer
their
two‐year
s?nt.

MERGERS
&
ACQUISITIONS
PRODUCT FINANCIAL
SPONSORS
LEVERAGED
FINANCE
GROUP
SERVES CLIENTS THAT ARE IN
DIFFERENT INDUSTRIES INCLUDING COVERAGE
FINANCIAL INSTITUTIONS,
HEALTHCARE, AND TECHNOLOGY, GROUP
AMONG MANY OTHERS.

BRUIN
BUSINESS
REVIEW
9
INDUSTRY
OVERVIEW: By:
Eric
Park


 CONSULTING Staff
Writer

Strategic
consul?ng
focuses 
on
a 
company’s 
external


WHAT
IS
CONSULTING? factors
and
environment
within
the
client’s
industry.


Consul?ng
 is 
 a 
 high
 profile
 industry
 with
 The
 factors 
 and
 environment
 related
 to
 strategic

professionals
from
diverse
educa?onal
backgrounds.
 consul?ng
 include 
compe?ng
companies,
 suppliers,

In
 this
 field,
 professionals
 known
 as 
 consultants
 customers,
 as
 well 
 as
 government
 regula?ons.


provide
their
 exper?se 
and
recommenda?ons 
in
 a
 Strategy
 consultants
 will 
 use 
 their
 exper?se 
 to

variety
 of
 fields
 such
 as 
 resource
 management,
 recommend
and
implement
a 
plan
of
ac?on
to
help

li?ga?on,
and
technology. a 
 company
 reach
 its 
 goals 
 when
 one
 of
 more
 of

these
factors
changes.
An
 example
 of
 a
 rela?onship
 analogous 
 to

consul?ng
 firms
 and
 companies
 that
 use
 their
 O t h e r
 co n s u l ? n g
 s p e c i a l i za ? o n s
 i n c l u d e :

services
would
be 
that
 of
 a
doctor
 and
pa?ent.
 
 A
 management,
 financial
 services,
 li?ga?on,
 human

p a ?ent
 w i l l 
 u s ua ll y
 visit
 the
 doctor
 for
 resources,
and
healthcare.
predominantly
two
reasons,
a
diagnosis 
on
an
illness

or
 for
a
checkup.
 
Similarly
consul?ng
firms
will 
use

their
 exper?se
 to
 recommend
 ideas 
 to
 help
 FEATURES
OF
THE
CONSULTING

companies 
that
 may
 be
 at
 risk
 for
 large
 losses 
or
 PROFESSION
even
 failure 
 or
 to
 promote 
 greater
 efficiency
 in
 a

stable 
 or
 even
 thriving
 company.
 Government
 Consul?ng
 provides 
 a
 wealth
 of
 experience
 in

bodies 
and
companies 
will 
seek
 consul?ng
 services
 different
 business
 fields 
 because
 of
 the
 various

to
 receive 
 advice
 and
 recommenda?ons
 for
 business 
aspects 
and
range 
of
clients
and
industries

problems
that
they
cannot
resolve
themselves. that
 consultants
work
with.
 
Employees 
are
known

to
 work
 long
 hours
when
working
 in
the
industry.

Consultants 
 primarily
 offer
 their
 services 
 in
 three
 This 
 frequently
 occurs 
 during
 busy
 seasons
 when

areas
 of
 business:
 Informa?on
 Technologies,
 there
are
numerous
clients 
and
projects 
to
manage

opera?ons,
and
strategy.
 due 
 to
 increased
 demand
 for
 consul?ng
 services

across
client
industries.
Informa?on
 Technologies 
 consul?ng
 is
 concerned

with
 helping
 clients 
 adopt
 new
 technologies 
 to
 This 
profession
requires 
moderate
to
large 
amounts

improve
business 
efficiency.

Consultants 
in
this 
field
 of
travel 
as 
teams
of
consultants 
are
some?mes 
sent

usually
 have 
 degrees 
 with
 a 
 technology
 related
 out
 to
 manage
 and
 collaborate
 with
 a
 client
 for

concentra?on
 such
 as
 computer
 science.
 
 IT
 varying
 lengths 
of
 ?me.
 
 It
 is 
also
 a 
necessity
 for

consultants
have 
experience 
with
 sorware 
used
 in
 professionals
in
this 
field
to
possess 
strong
analy?cal

business
such
as
those
produced
by
Oracle
and
SAP. and
problem
solving
skills.
Opera?ons
 consul?ng
 help
 clients 
 improve 
 their

internal 
workings 
in
areas 
such
as 
human
resources.


Such
 consultants
 in
 this 
 field
 improve
 a
 client’s

organiza?on,
processing,
and
produc?on.
 
 They
 will

not
 only
 make
 recommenda?ons 
 to
 improve

opera?ons 
but
also
make 
sure 
that
those
ideas 
are

correctly
executed.
BRUIN
BUSINESS
REVIEW
10
 ENTERING
CONSULTING
Consul?ng
 has
 tradi?onally
 been
 a 
compe??ve
 industry
 to
 enter
 because 
of
 its
 popularity
 and
 quality
 of

candidates.
 
 Firms
look
 for
 candidates 
that
possess 
a
strong
 level
of
 academic
 success 
such
as;
 a
high
GPA,

experience
that
displays
teamwork,
interpersonal
skills,
and
problem
solving.

Like
 many
 other
 professions 
 consul?ng
 firms 
 use
 tradi?onal 
 behavioral
 interview
 ques?ons 
 to
 gauge
 a

candidates’
personality.

A
common
interview
type
is 
a 
case
study.

An
interviewer
will 
give
the
interviewee
a

business 
problem
to
solve
heavily
using
a
candidate’s
skills 
in
analysis.

These
types 
of
problems
include
but
are

not
 limited
 to
 analysis 
of
 declining
 company
 performance
 in
 aspects 
including
 profits
 and
 produc?on
 and

crea?ng
solu?ons
to
keep
a
business
successful
with
increased
market
compe??on.

For
 poten?al
 candidates
 to
 have
 success
 in
 case
 interviews,
 individuals
 should
 analyze 
and
 prac?ce
 case

interviews.
Many
companies 
have
sample
case 
studies
available
on
their
website
as 
well 
as
prac?ce 
workshops

for
those
interested.

There
are
also
case
study
guides 
and
online
resources 
from
companies 
such
as 
Vault
and

WetFeet.

Vault
ConsulUng
Guide

Rankings
OVERALL 














BEST
TO
WORK
FOR

1.
McKinsey
&
Company 1.
Bain
&
Company

2.
The
Boston
Consul?ng
Group,
Inc. 2.
Trinity
Partners
LLC

3.
Bain
&
Company 3.
Gallup
Consul?ng

4.
Booz
&
Company 4.
Triage
Consul?ng
Group

5.
Deloi2e
Consul?ng
LLP 5.
Health
Advances
LLC

6.
Monitor
Group 6.
Cornerstone
Research

7.
PricewaterhouseCoopers
LLP
 7.
OC&C
Strategy
Consultants
(Consul?ng
Prac?ce)
8.
Strategic
Decisions
Group
8.
Mercer
LLC
9.
The
Boston
Consul?ng
Group,

9.
Ernst
&
Young
LLP
(Consul?ng
 Inc.
Prac?ce)
10.
Milliman
Inc.
10.
Oliver
Wyman

BRUIN
BUSINESS
REVIEW
11
 AN INTRODUCTION TO

ACCOUNTING
By
David
Vayzner
IS
ACCOUNTING
RIGHT

“In
the
wake
of

West
 LA
 community.
 It
 also
 provides

interac?on
 with
 major
 accoun?ng

FOR
ME? firms.
 Volunteering
 in
 their
 program

recent
financial
 Accoun?ng
 is
 a
 challenging
 profession

will
 provide
 you
 with
 a
 prac?cal

knowledge
 of
 accoun?ng
 procedures

scandals,
 which
 requires
 unique
 skills
 and

a2ributes.
 A
 person
 who
 is
 interested

and
 help
 you
 determine
 whether

accoun?ng
 is
 the
 right
 profession
 for


opportuniUes
in
 in
 pursuing
an
 accoun?ng
career
 must


have
 an
 ap?tude
 for
 math.
 He
 or
 she

you.
The
Student
 Accoun?ng
 Society
is

a
 UCLA
 accoun?ng
 club.
 They
 host

must
 also
 have
 good
 cri?cal
 reading

accounUng
will
 events
with
major
 accoun?ng
firms
and

a n d
 a n a l y ? ca l
 s k i l l s .
 A r e r
 a l l ,
 hold
 weekly
 mee?ngs.
 The
 Student

accoun?ng
requires
one
not
 only
to
 be
 Accoun?ng
 Society
 is
 an
 excellent

go
up…” able
to
perform
math
on
economic
data

but
also
to
 analyze
data
and
be
able
to

resource
 that
 provides
 UCLA
 students

with
 a
 pathway
 to
 the
 professional

discern
 pa2erns
that
may
be
useful
 for
 world
of
accoun?ng.


management
 or
 individuals.
 Precision

An
 accoun?ng
 career
 is
 very
 exci?ng
 to
 detail
 and
 punctuality
 are
 also

a n d
 c a n
 o ff e r
 t r e m e n d o u s
 required.
The
most
 important
 a2ribute

HOW
DO
I
GET
THERE?

opportuni?es.
 Accoun?ng
 is
 the
 is
 having
 a
 commitment
 to
 ethical

process
 of
 structuring
 and
 analyzing
 The
 requirements
 for
 an
 accoun?ng

integrity.
 When
 repor?ng
 on
 sensi?ve

economic
 figures
 and
 data
 for
 the
 career
 are
 rigorous.
 A
 degree
 in

financial
 informa?on,
 it
 is
 vital
 to
 be

internal
 use
 of
 firms
 and
 the
 external
 accoun?ng
 or
 a
 related
 field
 is
 oren

honest
and
to
not
obscure
informa?on.
use
 of
 the
public.
Organized
 economic
 required.
 UCLA
 offers
 an
 accoun?ng

data
 provides
 insights
 for
 managers
 on
 minor
 in
 the
 Anderson
 School
 of

how
 to
 move
 forward
 with
 the
 “The
most
important
 Business
 which
 provides
 students
 with

a
 ve r y
 d eta i l e d
 b a c k g ro u n d
 i n

company
 and
 makes
 it
 easy
 for
 the

public
 to
 see
how
 well
 the
 company
is

agribute
is
having
a
 accoun?ng
procedures.
Once
you
enter

doing.
 Most
 importantly
 accoun?ng
 is
 commitment
to
 into
 the
 field
 of
 accoun?ng,
 The
 CPA

( C e r ? fi e d
 P u b l i c
 A c c o u n t a n t )

t h e
 p r o c e s s
 o f
 e s t a b l i s h i n g

accountability
 within
 a
 business
 or
 ethical
integrity.” cer?fica?on
 will
 be
 vital
 as
 it
 allows

g o v e r n m e n t
 o r
 a n y
 p a r ? c u l a r
 accountants
 to
 file
 reports
 with
 the

ins?tu?on
 for
 that
 ma2er
 that
 deals
 Securi?es
 and
 Exchange
 Commission.

with
 money.
 In
 the
 wake
 of
 recent
 With
 a
 CPA
 you
 will
 be
 able
 to
 rise
 in

UCLA
 has
 many
 different
 accoun?ng

financial
 meltdowns
 and
 scandals,
 the
 field
 of
 accoun?ng
 and
 more

resources
 that
 will
 help
 guide
 you

opportuni?es
 in
 accoun?ng
 will
 go
 up
 opportuni?es
will
be
 open
for
 you.
It
 is

toward
 a
 suitable
 career
 path.
 
 UCLA

due
 to
 stricter
 internal
 regulatory
 a
 known
 fact
 that
 accountants
 with

VITA
(Volunteer
 Income
 Tax
 Assistance)

s t a n d a r d s
 a n d
 m o r e
 r i g o r o u s
 CPA’s
 have
 an
 advantage
 over
 those

is
 a
 nonprofit
 organiza?on
 that

accoun?ng
procedures. who
don’t
in
the
job
market.

There
are

provides
tax
 assistance
to
people
in
 the
 two
major
pathways
to
get
your
CPA.

BRUIN
BUSINESS
REVIEW
12
Pathway
1 Pathway
2

 For
those
who
want
to
pracUce
in
California
• 36
quarter
units
of
accoun?ng
related

subjects
• 36
quarter
units
of
Business
related
subjects
• 2
years
of
work
experience
• passing
all
four
parts
of
the
CPA
exam
• Passing
an
ethics
course.

For
those
who
want
to
pracUce
in
other
states
as

well.
• 36
quarter
units
of
accoun?ng
related
subjects
• 36
quarter
units
of
business
related
subjects
• 1
year
of
work
experience
• 225
quarter
units
in
general
• passing
all
four
parts
of
the
CPA
exam
• passing
an
ethics
course

AccounUng
firms
look
for
the
following
skills
and
agributes:


•
AnalyUcal
ability 

•
Ability
to
work
independently


•
Leadership
skills 

•
Team
skills


•
Wrigen
and
oral
communicaUon
 

•
MulUtasking
ability
skills 

•
High
ethical
standards


•
AgenUon
to
detail 

•
Computer
literacy






AccounJng
Careers














Accoun?ng
can
be 
sub‐categorized
into
three
different
parts.
Not
all 
accountants 
do
the
same
job
and

it
is
advantageous 
to
know
the 
three 
different
types 
of
accoun?ng
careers 
before
you
decide 
to
pursue
a 
career

path
in
accoun?ng.
Below
is
a
quick
summary
of
the
different
accoun?ng
careers.


 











Audit/Internal





 
Tax 





Advisory

If
 you
 are 
 in
 the
 audi?ng
 Here
 you
 help
 businesses 
 and
 Advisory
 Accountants 
 assist

profession,
 you
 analyze
 the
 individuals
with
their
 tax
 forms
 companies 
in
assets
evalua?ons

fi n a n c i a l 
 s t a t e m e n t s 
 o f
 a n d
 p r o v i d e 
 t h e m
 t a x
 and
 help
 facilitate 
 mergers

companies 
and
determine
their
 consulta?on
 advice.
 You
 can
 between
companies 
as 
mergers

fairness 
 and
 reliability
 and
 also
 advise
 companies
 of
 the
 can
 become 
 very
 technical

whether
 they
 are
 an
 accurate
 tax
 implica?ons 
 of
 certain
 o r d e a l s .
 T h e y
 a l s o
 h e l p

representa?on
 of
 a 
 firm’s
 ac?ons
 and
 specialize
 in
 tax
 companies 
with
budge?ng,
and

financial
health.
A
major
part
of
 policy
 of
 state
 and
 local
 keeping
 track
 of
their
 finances.

audi?ng
 is 
 making
 sure 
 that
 governments.
 People 
in
the
tax
 Other
 services 
may
 include 
risk

companies 
 establish
 strong
 business 
 can
 also
 specialize
 in
 a s s e s s m e n t s
 a n d
 f r a u d

internal
 control
 systems 
 to
 interna?onal
tax. inves?ga?ons.

protect
 themselves 
 against

fraudulent
records.

BRUIN
BUSINESS
REVIEW
13















R
!
By
Chris?ne
Liu






Staff
Writer




 
 


 
 
 
 anked
 the
 top
 20



 


 



school
by
BusinessWeek
 !
“Students explore business
and
U.S.
 
News
&
World
Report,
 the
 Execu?ve
MBA
problems through a
USC
 Marshall
School 
of
Business 
in
 multidisciplinary approach 
 
 
 
 
 Like
 the
 MBA
 P.M.
 program,
 the

Los
 Angeles 
 is
 a
 private 
 research
 that teaches interpersonal Execu?ve
 MBA
 is
 designed
 for
 those

and
 academic
 ins?tu?on
 ranked
 skills/teamwork, leadership who
 wish
 to
 remain
 fully
 employed

highly
 for
 its
 accoun?ng,finance,
 and entrepreneurial talents, while
 pursuing
 an
 MBA
 degree.

entrepreneurship
 and
 interna?onal
 global awareness and However,
 this
 program
 is
 for
 senior

business 
 studies 
 programs.
 The
 technological knowledge.”  managers
 and
 seasoned
 professionals.

Marshall
 curriculum
 emphasizes
 Students
 can
 a2end
 classes
 in
 either

interac?ve 
learning,
 being
 the
 first
 MBA
for
Professionals
and
Managers Los
 Angeles
 or
 San
 Diego
 on
 Fridays

school 
with
interna?onal
travel
and
 and
 Saturdays
 from
 8:45
 am
 to
 4:30

study
 projects
as 
requirements
 for
 
 
 
 
 
 The
 Marshall
 MBA
 Program
 for
 pm.
 The
 curriculum
 is
 focused
 on

every
 MBA
 degree.
 Various 
 MBAs
 Professionals
 and
 Managers
 is
 offered
 actual
 business
 world
 situa?ons
 that

and
 specialized
 degrees
 offered
 in
 the
evening
for
 students
who
would
 senior
managers
oren
encounter.

include: like
 to
 be
 fully
 employed
 while

pursuing
 an
 MBA
 degree.
 It
 is
 a
 33
 IBEAR
MBA
Program
month
 program,
in
 which
 the
 1st
 year

The
 IBEAR
 MBA
 program
 is
 an

Marshall
MBA consists
 of
 core
 classes.
 Arer

a c c e l e r a t e d
 g l o b a l
 M B A
 f o r

comple?on
of
 the
 1st 
year,
the
student

experienced
professionals.
This
unique


 
 
 
 

A
two
 year,
full
?me
program,
the
 can
 set
 the
 pace
 for
 the
 rest
 of
 the

program
 is
 one
 year
 intensive
 at
 USC,

Marshall
MBA
program
operates
with
a
 program
 (as
 long
 as
 it
 is
 within
 five

with
 a
 class
 size
 of
 only
 55
 students.

low
 student
 to
 faculty
ra?o
 and
 small
 years
 total).
 The
 evening
 class
 meet

From
 August
 to
 December,
 students

class
 sizes.
 Students
 explore
 business
 twice
a
week
from
6
pm
to
9:40
pm.
If

complete
 the
 MBA
 fundamentals,
 and

problems
 through
 a
 mul?disciplinary
 the
 commute
 to
 L.A.
 is
 inconvenient,

from
 January
 to
 July,
 teams
 of
 4‐5

approach
 that
 teaches
 interpersonal
 the
first
year
of
core
classes
can
also
be

students
 par?cipate
 in
 a
 five‐month

skills/teamwork,
 leadership
 and
 completed
 at
 the
 new
 Orange
 County

long
 interna?onal
 consul?ng
 project

entrepreneurial
 ta l ents ,
 global
 Center
in
Irvine.
for
 a
 U.S.
 or
 foreign
 corporate
 client.

a w a r e n e s s
 a n d
 t e c h n o l o g i c a l

This
 program
 stresses
 business

knowledge.
 Since
 Marshall
 is
 located

rela?onships
 between
 North
 America,

close
 to
 major
 business
 and
 financial

centers
 in
 L.A.,
 the
 school
 offers
 a
 Asia
and
La?n
America.

strong
 alumni
 network
 that
 opens

a d d i ? o n a l
 o p p o r t u n i ? e s
 a n d

experience. BRUIN
BUSINESS
REVIEW
14
!

Master
of
Accoun?ng
MBA
Admissions
Profile

 
 
 
 
 A
 full‐?me,
 one‐year
 program,
 the

Leventhal
 Master
 of
Accoun?ng
is
ranked
 as
 2009 2010 2011
on
 of
 the
 top
 graduate
 accoun?ng
 programs
 Applicant
Pool
in
the
na?on.
To
prepare
for;
careers
in
public
 Applications
Received 1651 2076 2224
accoun?ng,
financial
services
and
 investment

%
Accepted 29% 23% 22%
banking,
 government
 and
 non‐profit,
 and

corporate
 finance,
 the
 program
 uses
 case
 Class
Size 219 222
study
methods
and
teamwork
in
all
courses.
Academic
Profile
Master
of
Business
Taxa?on
Average
GPA 3.3 3.3 3.3





The
Master
of
Business
Taxa?on,
offered
 Median
GMAT 690 700 690
both
full‐?me
and
part‐?me,
is
aimed
to

GMAT
80%
Range 640‐730 640‐740 640‐740
develop
skills/exper?se
professionals
need

while
working
with
individuals
and
firms
with

tax
legisla?on
and
regula?on
at
all
 General
government
levels.
Taxa?on
includes
law,
 Average
Age 28 28 28
economics,
accoun?ng
and
poli?cs,
and
thus

requires
the
tax
advisor
to
understand
all
 Average
Years
Week
 5 5 5
Expectancy
aspects
of
tax
law
and
its
administra?on.

Married
Students 16% 14% 13%
Master
of
Medical
Management






This
degree
provides
physicians
with
the
 Undergrad
Majors
formal
business
educa?on
needed
to
help
 Humanities
and
 27% 25% 27%
them
realize
their
professional
goals.
It
is
 Sociology
modeled
arer
the
Execu?ve
MBA
program

Science
and
allows
physicians
to
earn
a
degree
in
only

one
year,
without
interrup?ng
their
careers.

 Science
&
Engineering 26% 27% 21%
Business 23% 26% 30%
informa?on
about
the
USC
Marshall
School
of

Economics 19% 14% 15%
Business
programs,
visit:
Computer
Science 5% 8% 7%

www.marshall.usc.edu




Admissions





Each
program
has
its
own
admission

requirements.
To
find
applica?on
material

and
for
more
informa?on
about
the
USC

Marshall
School
of
Business
programs,
visit:


www.marshall.usc.edu




BRUIN
BUSINESS
REVIEW
15
 CAREER
TIPS
enough
 to
 get
 a
 job.
 The
 job
 market
 is
 becoming
 more
 and
 more
 compe??ve.

THE
BASICS
Even
 without
 this
 financial
 crisis,
 being
 in
 college
 and
 receiving
 your
 degree
 is
 not


BY
LONA
ZHAO
Regardless,
a
job
 will
 never
 fall
into
your
 lap‐‐
whether
it
is
a
part‐?me
job
or
 a
career,

you
 need
 to
 be
 aggressive
 and
 
 prepared
 in
 your
 job
 search.
 But
 STAFF
WRITER
don’t
fear;
we

!
FINDING
A
JOB:
Even
if
you
are
not
currently
looking
for
a
job,
it
is
essen?al
 to

keep
 connec?ons
 with
 all
 professionals
 you
 have
 met
 so
 far.


For
instance,
if
you
have
done
volunteer
work
in
the
past,
think

about
 networking
 with
 the
 volunteer
 coordinator.
You
 never

know
who
will
be
looking
for
an
employee
in
the
future.

If
 you
 are
 ac?vely
 looking
 for
 a
 job,
a
 very
 helpful
 resource

these
 days
are
online
job
 search
engines
such
as
Monster
 and

Career
 Builder.
 An
 invaluable
 resource
 for
 UCLA
 students
 is

BruinView.
 Where
 employers
 post
 job
 lis?ng
 specifically
 for

Bruins.
When
looking
for
 a
job
online
you
will
want
to
prepare

a
 longer,
more
 detailed
 resume
 so
 that
 you
 can
 more
 easily

differen?ate
yourself
from
other
poten?al
candidates.

You
 do
not
 want
 to
rely
only
on
internet
 job
search
 engines.
It


is
 important
 to
 be
 aggressive
 with
 your
 job
 search
 so
 look

around
in
 the
classifieds,
ask
friends
and
professors,
and
 even

call
 companies
asking
if
there
are
 any
available
posi?ons.
You

do
not
need
to
be
harassing
people
for
a
job,
but
you
definitely

want
to
exhaust
your
every
resource.

“...you
definitely
want
to

exhaust
your
every

resource.” their
 resumes
 for
 every
 job
 they
 apply.
 This
 is
 a
 good
 idea

because
 you
 may
 apply
for
 several
 different
 jobs
at
 the
 same

?me.
 If
 you
 use
 just
 one
 resume,
 you
 have
 to
 keep
 your

WRITING
YOUR
FIRST
RESUME: resume
general
so
as
to
not
 limit
 yourself,
but
this
can
also
be

A
resume
is
a
concise
document
showing
employers
what
you
 boring
for
 the
 employer
 to
 read
 and
 your
 resume
 may
fade

are
capable
of
and
how
you
will
be
valuable
to
their
company.
 into
 the
 background.
 Customizing
 your
 resume
 for
 each
 job

It
is
the
first
 step
 to
geung
your
 foot
 in
the
door.
Try
to
 think
 will
 show
 your
 employer
 how
 you
 might
 be
 perfect
 for
 their

of
 a
 resume
as
you
 would
 an
interview
and
 make
a
conscious
 company.
effort
 to
 use
 your
 resume
 to
 dis?nguish
 yourself
 from
 other

applicants.
This
will
get
you
closer
to
geung
your
new
job. Star?ng
 with
 a
 blank
 slate
 might
 be
 in?mida?ng,
 but

remember,
 you
 do
 not
 have
 to
 be
 previously
 employed
 to

When
 wri?ng
 your
 first
 resume,
 the
 best
 resource
 is
 people
 write
a
resume.
Instead
you
can
list
your
volunteer
experiences

who
 have
 already
 wri2en
 one.
 A
 great
 place
 to
 start
 is
 to
 and
 ac?vi?es
you
 have
par?cipated
 in.
You
 may
also
 want
 to

search
for
free
resume
templates
online.
This
will
help
you
find
 list
 special
 skills
and
 talents
you
have
acquired
 that
may
make

the
 perfect
 format
 for
 your
 resume.
 There
 are
 sites
 that
 you
valuable
in
the
posi?on
 you’re
trying
to
fill.
The
important

provide
career‐specific
resumes
to
cater
to
an
industry
you
are
 thing
here
is
not
to
 lie
 on
your
 resume,
if
you
 are
 caught
you

applying
into.
Similarly,
many
people
also
 choose
to
customize
 will
only
end
up
losing
credibility
with
future
employers.

BRUIN
BUSINESS
REVIEW
16
Now
that
you
have
finished
wri?ng
your
first
resume
you
must
 robo?c
and
 rehearsed.
Instead,
make
a
list
of
 points
that
 you

proofread.
Check
your
header
and
make
sure
that
all
your
 want
to

contact
informa?on
is
correct
and
you
have
not
misspelled
 cover
 when
 answering
different
 ques?ons.
Keep
in
 mind
 that

anything.
Have
someone
else
read
your
resume
and
ask
if
your
 when
 you
 answer
 these
 ques?ons
you
 want
 the
 employer
 to

objec?ves
are
clear.
Finally,
print
your
resume
on
clean
white
 know
why
they
should
hire
you
over
other
applicants.

paper
with
plain
black
ink.
Have
 a
 list
 of
 references
 and
 an
 extra
 copy
 of
 your
 resume


“…if
you
are
caught
lying
 printed
 out
 for
 the
 interview
 in
 case
 the
 interviewer
 will
 not

have
 it
 in
 front
 of
 them.
 (Remember,
 you
 do
 not
 need
 a

on
your
resume
you
will
 previous
job
 for
 references,
pick
a
few
 important
 people
 from


only
end
up
losing
 your
past
ac?vi?es
or
even
a
neighbor—anyone
that
can
vouch

for
you).
credibility
with
future

employers.” Dress
 appropriately
 for
 your
 interview.
 Wear
 clean
 ironed

clothes
 and
 clean
 close‐toed
 shoes.
 You
 should
 be
 well

groomed,
and
try
not
to
 overwhelm
the
interviewer
 with
your

cologne
or
perfume.
When
in
doubt
about
what
to
wear,
think

ACING
YOUR
FIRST
INTERVIEW: more
conserva?vely.
This
 means
 try
to
 conceal
 any
ta2oos
or

First
and
foremost,
it
is
beneficial
to
research
the
company
you
 body
 piercings.
 Looking
 well
 rested
 and
 relaxed
 for
 your

are
 applying
to
 work
for.
Many
employers
have
 a
lot
 of
 pride
 interview
is
essen?al.
for
 their
 company
 and
 may
 look
 for
 employees
 who
 are
 as

enthusias?c
as
they
are.
Doing
your
homework
also
makes
you
 Try
to
 be
 early
 for
 your
 interview—we
are
 not
 saying
one
or

more
 prepared
 for
 the
 interview.
 You
 can
 then
 cater
 your
 two
 hours
 early,
but
 at
 least
 15
 minutes
 so
 that
 you
 can
find

answers
 toward
 why
 their
 company
needs
you
 on
 their
 staff.
 where
you’re
supposed
to
 be.
This
 is
also
 a
good
 ?me
to
 use

You
 will
 also
 find
 that
 employers
 will
 ask
 if
 you
 have
 any
 the
restroom
beforehand
so
that
you
do
not
stress
yourself
out

during
the
interview.

! When
 your
 interviewer
 introduces
 himself/herself,
 wait
 for
 a


handshake
 and
 do
 not
 sit
 un?l
 the
 interviewer
 sits
 down
 or

invites
you
to
sit
down.
Maintain
eye
contact
for
the
interview,

but
do
not
stare
your
interviewer
 down,
you
 want
 to
let
 them

know
you
are
engaged
in
the
conversa?on
but
not
threatening

them.
You
 should
also
 keep
 good
 posture
 but
 try
 not
 to
 look

too
s?ff.
Do
not
fidget
during
your
interview
or
cross
your
arms

or
put
your
 hands
in
your
pocket—these
are
clear
signs
of
how

uncomfortable
 you
 are
 and
 can
 make
 the
 interviewer

uncomfortable.

A
 lot
 of
 employers
 will
 ask
 when
 you
 are
 available
 to
 work

arer
 the
interview.
Do
 not
hesitate
to
men?on
 if
you
 have
an

obliga?on
 that
 might
hold
 you
 back.
Once
 again,
you
 want
 to

be
honest.
If
and
when
 you
get
 hired
for
 the
posi?on,
you
don

not
want
to
spring
your
schedule
on
them.
ques?ons
 for
 them,
 having
ques?ons
 prepared
 will
 help
 you

convey
your
interest
in
their
company. At
the
end
of
the
interview
remember
to
thank
the
interviewer

and
anyone
else
who
 has
helped
you
(i.e.
the
recep?onist,
any

Prepare
 your
 answers
 beforehand
 by
 searching
 common
 job
 associates,
secretary,
etc.).
You
 may
also
 want
 to
ask
what
 the

interview
ques?ons
and
prac?cing
them
either
with
a
friend
or
 selec?on
 process
 is
 like
 and
 how
 long
 it
 might
 be
 for
 you
 to

in
front
of
a
mirror.
You
will
want
your
answers
to
be
clear
and
 find
out
 if
you
 got
 the
job.

Really
try
to
leave
the
interviewer

you
want
ensure
you
 are
answering
the
ques?on
that
 is
being
 with
 a
 las?ng
impression,
even
 if
 you
do
 not
 get
 the
 job
this

asked
 and
 not
 fall
 off
 topic.
 This
 does
 not
 mean
 that
 you
 ?me,
they
might
remember
you
for
another
posi?on
later.
should
 memorize
 your
 answers;
 you
 do
 not
 want
 to
 sound


BRUIN BUSINESS REVIEW 17

 Q&A
with...
 By
Julie
Chen
Edward
McDeviR Senior
Staff
Writer

Q
3:
Why
did
you
choose
to
 Q
6:
What
do
you
do
with
your

become
a
professor? Ume
away
from
UCLA?

EM:
I
must
admit
I
did
not
originally
 EM:
When
I
have
the
?me‐
and
that
is

plan
to
go
into
teaching.
I
went not
very
oren‐
I
like
to
travel.
I
am
also

into
the
field
of
economics
because
I
 a
huge
sports
fan,
especially
college

found
it
fascina?ng.
My
ini?al
plan
 football.
as
an
undergraduate
was
to
go
into
the


Q
7:
Have
you
been
keeping
up

business
field,
but
arer
a
few
econ
classes,

I
was
hooked.


So
when
I
get

to
teach
something
that
I
find
 with
UCLA
football
games
as
well?
enormously

enjoyable,
that
makes
teaching
very
 EM:
Oh,
of
course,
I
watch
every
single

easy
and
very
sa?sfying.
 game,
even
if
we
are
at
a
sour
point.

Edward
 McDeviP,
 a
 lecturer
 for
 UCLA’s


Department
 of
Economics
has
been
teaching

Q
4:
If
you
could
have
chosen
 Q
8:
Now
on
to
some
more

ever
 since
 geWng
his
Ph.D.
 at
 the
 University
 any
other
profession,
what
would
 difficult
quesUons.

How
would
you

of
 California,
 Los
 Angeles
 in
 1994.
 He
 is
 it
be? describe
the
current
state
of
the

currently t e a c h i n g
 a
 c l a s s
 o n
 global
economy?
Macroeconomics
Theory. EM:
I
don’t
know
if
this
counts
because


Q
1:
To
start
off,
what
do
you
 it
is
s?ll
in
academia,
but
I
think
I
would

also
have
enjoyed
history
as
a

EM:
At
least
for
the
U.S.
economy,
as

the
Fed
has
recently
said,
there
are

enjoy
most
about
teaching? profession.
I
have
always
been
very
 definitely
signs
that
it
is
stabilizing.
Of

fond
of
history
and,
in
fact,
one
of
my
 course,
most
specialists
in
this
field

EM:
I
very
much
enjoy
the
interac?on
 favorite
fields
as
a
graduate
student
 predict
a
very
slow
recovery,
so
we
will

with
students,
especially
during
office
 was
economic
history.
But
I
enjoy
other
 probably
have
the
high
unemployment

hours.
It
is
a
challenge
to
teach
 branches
of
history
just
as
much.
 rates
for
a
few
years.
economics
and
I
enjoy
that
challenge.

Q
5:
A
lot
of
students
consider
 Q
9:
Last
quesUon:
Many

Q
2:
What
would
be
your
 you
to
be
one
of
the
hardest
 believe
that
the
financial
crisis
has

biggest
frustraUon
about
teaching? Economics
professors.
Do
you
have
 made
economics
more
relevant

any
advice
for
students
that
find
 and
immediate
to
college
students.

EM:
That
would
have
to
be
the
large
 your
classes
difficult? Looking
at
your
classes,
how

class
sizes.

The
large
class
sizes
make
it
 accurate
do
you
think
this

very
difficult
to
interact
with
only
but
a
 EM:
Work.
Work.
Work.

Ask
ques?ons.
 statement
is?
handful
of
students.
Otherwise,
I
don’t
 Economics
is
[a]
difficult
subject,
so
a

have
many
complaints.
The
students
at
 student
needs
a
lot
of
perseverance
to
 EM:
We
would
like
to
think
that

UCLA
are
by
and
large
very
hard‐ succeed
in
this
field.
There
is
 economics
is
always
very
relevant.
Has

working
and
intelligent.
That
is
one
of
 unfortunately
no
special
“trick”
to
 it
become
more
relevant
to
college

the
things
that
make
teaching
here
so
 doing
well
in
economics
or
almost
any
 students?
I
would
say
that
it
has:

enjoyable. other
rigorous
field
of
study.
It
helps
if
 Especially
those
about
to
graduate
and

you
enjoy
the
subject
ma2er. enter
the
job
market.
Recent
events

have
piqued
many
students’
interest
in

business
fluctua?ons
and
the
sources

of
such
fluctua?ons.

BRUIN BUSINESS REVIEW 18
THE
FINANCIAL
CRISIS

The
Global
Impact
of
the
Financial
Crisis
 20

How
the
Financial
Crisis
Can
Affect
You
 22

(The
Student)


The
Financial
Crisis:
An
Overview
 
 23

BRUIN BUSINESS REVIEW 19

 FINANCIAL
CRISIS
THE
IMPACT
ON
THE
GLOBAL
ECONOMY
BY
STEPHEN
MOOCK
Staff
Writer


I
t
 has
 been
 a
 ligle
 over
 a
 year
 now
 since
 the
 collapse
 of
 the
 Wall
 Street
 giant
 Lehman
 Brothers
 and
 the

naUonwide
realizaUon
that
the
financial
sector
would
be
in
for
a
stomach‐churning
ride.

Aper
the
investment

bank
 filed
 Chapter
 11
 bankruptcy
 protecUon
 on
 September
 15,
 2008,
 markets
 experienced
 unprecedented

drops
that
caused
people
around
the
naUon
to
cringe
as
their
401k’s
disappeared
before
their
eyes.

Beginning

October
6,
in
what
became
known
as
“Black
Week,”
the
Dow
Jones
industrial
average
fell
1,874
points
or
18%.


This
 became
 the
index’s
 worst
 weekly
 decline
 on
 both
 a
 point
 and
 percentage
basis
 ever.
 
 With
 Americans
 being

worried
about;
paying
 their
mortgage,
finding
 another
 job
aper
 being
laid
 off,
or
 the
possibility
of
 reUrement,
 
 it
 is

easy
 to
 understand
 why
 people
 have
 been
 more
 concerned
 with
 their
 own
 well
 being
 instead
 of
 the
 global

ramificaUons
of
 the
financial
meltdown.

The
original
panic
is
over
now
 and
it
is
important
that
we
look
with
a
broad

view
 at
 how
 naUons
 other
 than
 the
United
 States
 have
 been
 affected
 by
 this
 turmoil.
 
 In
 this
 arUcle
 it
 would
 be

impossible
to
cover
all
areas
 of
the
world
and
how
they
have
been
affected.
Instead
the
focus
will
be
on
two
relevant

topics:
 
China’s
 role
in
 the
recovering
 global
economy
and
the
restructuring
 of
 global
finance
that
will
help
 heal
the


CHINA’S
ROLE
IN
THE
 not
 back
 to
 its
 pre‐crisis
 state.



Retailers
 in
 na?ons
 worldwide

GLOBAL
ECONOMY are
 being
 more
 cau?ous
 about

Over
 the
 past
 year
 there
 has
 been
 a
 their
purchases.
They
also
do
not

considerable
 amount
 of
 buzz
 revolving
 have
 the
 excess
 liquid
 capital

around
 the
 Chinese
 economy
 with
 that
 was
 once
 had
 to
 purchase

respect
 to
 the
 global
 financial
 crisis.

 excess
 goods
 and
 find
 ways
 to

People
 have
 been
 throwing
 around
 get
people
to
buy
them.
such
 statements
 as
 “China
 owns
 all
 of

America’s
 debt,”
 and
 “China
 has
 not
 The
 size
 of
 China’s
 economy
 is

been
 affected
 by
 the
 wounded
 growing
but
s?ll
less
than
a
third

interna?onal
 economic
 state.”
 
 These
 of
 that
of
 the
United
 States
with

claims
 have
 validity,
 but
 they
 can
 also
 a
 GDP
 of
 13.8
 trillion.
 
 Being
 a

be
 misinterpreted
 without
 a
 deeper
 country
where
it
has
proven
hard
 !
look
 into
 the
 current
 state
 of
 China.

 to
 borrow,
 both
 corpora?ons
 and
 house
prices.

It
is
too
early
to
call
this
a

The
 first
 key
piece
 of
 informa?on
 that
 households
 in
 China
 have
 resorted
 to
 bubble,
 but
 the
 government
 needs
 to

must
 be
 understood
 is
 that
 China,
like
 higher
 savings
 rates
 in
 the
 past
 years.

 be
 ready
 to
 introduce
 legisla?on
 in

most
 of
 the
 other
 developed
 world
 These
 savings
 put
 China
 in
 a
 premier
 order
 to
 ?ghten
 liquidity
 if
 this
 trend

na?ons
 did
 receive
 a
 government
 state
to
lend
when
the
rest
of
the
world
 con?nues.

The
Shanghai
A‐share
index

s?mulus
 package
 in
 order
 to
 prevent
 really
 needed
 it.
 
 However
 that
 is
 up
 a
 solid
 60%
 from
 last
 November,

it’s
largely
export
 based
economy
from
 excessive
saving
does
not
 s?mulate
the
 and
 the
 average
 Chinese
 home
 price
is

collapsing.
 
 The
 end
 of
 2008
 was
 a
 economy
or
new
business
growth. nine
 ?mes
 that
 of
 the
 household

t e r r i b l e
 ? m e
 f o r
 r e t a i l .
 S u c h
 income.

These
figures
when
 combined

establishments
 stopped
 placing
 orders

for
more
merchandise.

This
was
a
killer
 “...the
average
Chinese
 with
 the
 large
 increase
 in
 trading
 and


for
 China’s
 manufacturing
 industry
 home
price
is
nine
Umes
 home
 sales
 would
 lead
 anyone
 to

that
of
the
household
 believe
 that
 this
 is
 the
 beginning
 of
 a

which
 thrives
 on
 constant
 worldwide
 income.” bubble
 that
 will
 undoubtedly
lead
to
a

exports.
 
 China
 managed
 to
 pull
 catastrophic
burst.
through
 the
 brief
 lull
 in
 trade.
 Before
 China’s
recent
growth
is
something
that

another
 Wall
 Street
 giant
 could
 fall,
 should
be
paid
close
a2en?on
to.

Arer

China’s
 produc?on
 was
 back
 up
 and
 the
 deployment
 of
 the
 s?mulus,
there

running.
 
 However,
 produc?on
 is
 s?ll
 has
 been
 a
 rapid
 jump
 in
 share
 and


BRUIN BUSINESS REVIEW 20

 and
 America
 s?ll
 lean
 towards
 the

route
of
 fewer
 restric?ons,
 holding

s t r o n g
 t o
 t h e
 f r e e
 m a r k e t

philosophy
 and
believing
 that
firms

should
 make
the
decisions
 on
 how

much
 to
pay
 their
 employees.
 
The

G20
 issued
 a
 statement
 indica?ng

that
 regula?ons
 would
 be
 made

requiring
 a
 significant
 por?on
 of

variable
 compensa?on
 to
 be

deferred
 (?ed
 to
 performance
 and

to
 be
 issued
 in
 the
form
 of
 stock).


They
 also
 asked
 all
 firms
 to

i m p l e m e n t
 i n d e p e n d e n t

compensa?on
 commi2ees
 who

review
 the
 firm’s
 structure
 and

systema?c
 risk,
adjus?ng
 employee

compensa?on
appropriately.

Another
 important
 aspect
 of


finance
 that
 the
 G20
 inves?gated

was
 raising
 required
 percentage

! equity
 controlled
 by
 large
 banks.


RESTRUCTURING
OF
 the
UK,
have
been
 significantly
affected

by
 this
 global
 hardship
 leaving
 When
 many
 loans
 backed
 by
 li2le

GLOBAL
FINANCE
 everyone
 in
 a
 posi?on
 ready
 to
 equity
 (the
 value
 of
 the
 property

Many
 economists
 are
 fairly
 confident
 held
 against
 the
 loan)
 are
 present,

nego?ate.
that
 we
 have
 seen
 the
 worst
 of
 the
 unstable
 economic
 condi?ons
 will

recession
 and
the
economy
is
ready
to
 likely
be
the
result.

It
may
seem
like

A
group
of
twenty
finance
ministers

begin
making
a
recovery.

Now,
policies
 this
 problem
 would
 be
 easily
 fixed

and
 central
 bankers
 making
 up
 the

need
 to
 be
 implemented
 so
 that
 a
 by
 implemen?ng
 a
global
 standard

G20
met
in
Pi2sburgh
for
their
most

steady
recovery
is
 possible.

 The
 world
 minimum
equity
required
to
borrow

recent
 summit
 to
 discuss
 future

powers
 and
 central
 bankers
 must
 join
 on.
 
 However,
 the
problem
 lays
 in

r e g u l a ? o n s
 t h a t
 m u s t
 b e

together
 to
 make
 sure
 that
 the
 when
 accoun?ng
 rules
 that
 are
 not

implemented
 into
 the
 financial

the
 economy
 recovers,
 it
 is
 by
 uniform
 in
 every
 country.
 Meaning

industry.
 
 Established
 in
 1999,
 the

sustainable
 means.
 
 Along
 with
 the
 that
 the
 way
 assets
 are
 evaluated

G20
 gathers
 to
 converse
 and

United
 States,
 other
 interna?onal
 can
vary
enormously
from
 place
 to

b r a i n s t o r m
 a b o u t
 h o w
 t h e

powers,
 Japan,
 France,
 Germany,
 and
 place.
 
 American
 standards
 usually

industrialized
 and
 developing

na?ons
 of
 the
 world
 can
 work
 involve
 pricing
 assets
 to
 market,

together
 for
 the
benefit
 of
 the
 where
European
policies
are
aiming

global
economy.

One
of
the
hot
 to
 revert
 to
 “smoothed”
 balance‐
topics
 discussed
 was
 the
 sheets
that
are
be2er
for
regulators

c o n t r o v e r s i a l
 i s s u e
 o f
 than
investors.
 
 The
G20
agreed
 to

e x t r a v a g a n t
 b o n u s e s
 f o r
 work
 on
 geung
 these
 prac?ces

financial
 sector
 employees.

 standardized
 interna?onally
 so
 that

Germany
 and
 France
 tend
 to
 less
will
be
lost
in
transla?on.
lean
 towards
 a
 stricter
 stance

on
the
size
and
type
of
bonuses,

wan?ng
 to
 limit
 them
 to
 a

smaller
 percentage
 of
 an

individual’s 
non‐variable
income

as
 well
 as
 paying
 par?ally
 in

shares 
rather
 than
cash.
 Britain

!
BRUIN BUSINESS REVIEW 21
 How
the
Economy
is

AffecUng
You BY CHRIS YOUNG
Staff
Writer

Unless
you
have
been
 living
 under
 a
rock,
you
 know
 that
currently,
America


and
most
of
 the
world
 has
been
 locked
down
 in
 an
economic
recession.
The

news
has
been
inundated
with
doom
and
gloom.
However,
there
is
a
story
out

there
that
hasn’t
been
told.
We
have
all
heard
the
sta?s?cs
and
figures.
The

job
 loss
 figures,
 the
 consumer
 price
index,
 and
 of
 course,
 all
 the
 speeches

made
by
all
the
talking
heads
we
see
regularly
on
television.
But
how
are
we,

as
college
 students,
 affected?
 Yes,
 even
in
our
world
 of
 books
and
 beer,
the

interna?onal
economy
has
affected
us
profoundly.

First,
something
that
 directly
affects
 us.
 n u m e r o u s
 i n t e r n s h i p s
 f o r


In
 the
 past
 year,
 the
 UC
 system
 has
 undergraduates
 have
 been
 cuung

raised
 tui?on
 by
9.3%.
For
 the
 average
 down
on
 their
offerings.
An
 investment

student
 with
 no
 financial
 aid
 or
 group
 in
 San
 Francisco
 which
 in
 2007
 of
 jobs,
students
are
branching
out
 and

scholarships,
that
 is
 nine
 hundred
 firy
 took
on
 three
 undergraduate
interns
 in
 developing
 more
 skills.
 Students
 are

just
 for
 tui?on.
 This
 is
 not
 even
 their
 mortgage
 department
 including
 spending
 more
 ?me
 a2ending
 student

including
housing,
meal
plans,
or
 any
of
 one
 from
 UCLA
 could
 not
 take
 on
 any
 run
workshops
such
 as
resume
builders

the
 other
 ameni?es
 we
 pay
 for.
 For
 interns
 in
 the
 summer
 of
 2009
 simply
 and
 mock
interviews.
Students
 are
also

those
 of
 you
 who
 were
 a
li2le
 slow
 in
 because
 there
 was
not
enough
work
to
 beginning
 to
 map
 out
 their
 op?ons.

math
 class,
a
 thousand
 dollars
is
 not
 a
 give
to
an
unpaid
intern.
Stop
 and
 think
 Graduate
 school
 is
 becoming
 a
 much

laughing
 ma2er.
 That’s
 two
 UCLA
 about
 this
 for
 a
 second.
 There
 was
 no
 more
a2rac?ve
 op?on
as
jobs
become

French
 textbooks,
two
Civil
Engineering
 demand
 for
 an
 unpaid
 intern.
Although
 a
rare
 commodity.
The
average
student

textbooks,
 four
 microeconomics
 this
 is
 the
 excep?on
 rather
 than
 the
 is
 now
 much
 more
 aware
 of
 what
 he

textbooks,
 and
 a
 subscrip?on
 to
 the
 rule,
 compe??on
 and
 supply
 of
 things
 can
do
 to
make
himself
more
a2rac?ve

magazine
 of
 your
 choice
 with
 change
 such
 as
jobs
 and
 internships
for
 college
 for
 the
eventuality
of
entering
the
work

ler
over
for
lunch
at
Ackerman.
 students
have
been
 coming
further
 and
 force.
In
a
way,
this
recession
is
helping

further
between.
 by
 driving
 students
 to
 learn
 essen?al

Besides
 the
 thinning
 of
 our
 wallets,

business
 skills
 that
 will
 help
 them
 in

compe??on
for
 internships
is
becoming
 The
 en?re
 picture
 is
 not
 all
 grey
 skies

both
 recessions
 and
 normal
 economic

fierce.
 Firms
 which
 used
 to
 offer
 and
 raindrops.
With
 fee
 hikes
and
 lack

?mes.
 In
 a
 recovering
 economy,
 these

skills
will
 be
even
more
useful.
The
Dow

Jones
 Industrial
 Average,
 one
 of
 the

biggest
 indicators
 for
 the
 state
 of
 the

American
economy,
broke
10,000
points

in
 mid‐October
 for
 the
 first
 ?me
 in
 a

year.
Combined
 with
 the
 posi?ve
 news

coming
 from
 Ben
 Bernanke
 and
 the

treasury
 department,
 it
 looks
 like
 our

extended
 economic
 forecast
 includes

some
 sunshine
 for
 current
 college

students.

BRUIN BUSINESS REVIEW 22

 THE
GREAT

CREDIT
CRISIS:

A
LONG
BUMPY
ROAD
BY ROBERT CHANG

T
STAFF WRITER


















he
Great
Credit

Crisis

has
scarred
the
lives
of
many With
 all
 the
 extra
 money,
 banks
 were
 willing
 to
 finance



















Americans.
They
are

hurUng
since
they
have
joined mortgages
with
 much
lower
 interest
 rates,
making
it
 easier
 for



















the

increasing

number

of

unemployed

people

or Americans
buy
homes.
 
Hence,
the
 American
 dream
 had
just



















have


witnessed


value


of


their


stock

porsolios become
a
whole
lot
cheaper
to
a2ain.

slashed
 in
 half
 It
 has
been
 more
 than
 a
 year
since
the
 crisis

brought
 the
 financial
 Utan
 Lehman
 Brothers
 to
 its
 knees,
 People
who
normally
could
only
afford
to
rent
took
advantage

prompUng
the
government
 to
issue
an
unprecedented
mulU‐ of
 low
 interest
 rates
 to
 buy
 homes.
 The
 growth
 in
 demand

trillion–dollar
bailout.
Yet
 even
in
hindsight,
many
people
do
 caused
house
prices
to
skyrocket,
and
some
homeowners
took

not
understand
the
economic
crisis’
root.
 advantage
of
the
market
by
refinancing
their
homes
at
a
higher

Does
 the
 fault
 lie
 with
 former
 president
 Bush?
 Former
 price.
 Many
 Americans
 could
 now
 make
 a
 living
 buying
 and

Federal
 Reserve
 chairman
 Alan
 Greenspan?
 Or
 Wall
 Street
 selling
houses
for
profit,
also
known
as
“flipping.”
CEOs?
 Should
 the
 blame
 fall
 on
 investors,
 mortgage

companies,
 or
 even
 the
 average
 American?
 To
 get
 to
 the
 Alone,
banks
did
not
have
capital
to
finance
all
of
their
 clients’

bogom
of
this
crisis,
we
trace
its
roots
to
the
beginning
of
the
 homes.
 They
 sold
 some
 of
 the
 mortgages
 to
 government‐
housing
boom. sponsored
 enterprises
 like
 Fannie
 Mae
and
 Freddie
Mac,
who

consequently
bought
50
percent
of
residen?al
mortgages
from


THE
AMERICAN
DREAM the
banks.
Normally,
Fannie
Mae
 and
 Freddie
Mac
 would
 only


buy
 mortgages
 that
 held
 up
 to
 certain
 standards,
 but
 the


(NOW
40%
OFF!) standards
were
 lowered
 due
to
 government
 pressure
 to
 keep

supply
on
par
 with
rising
demand.
This
was
the
first
of
a
series

of
risky
moves
that
would
eventually
lead
to
the
housing
bust.

! To
 take
 a
 cue
 from
 our
 Later,
 as
 Wall
 Street
 investors
 began
 stepping
 up
 their

former
 president,
we
 can
 purchase
 of
 risky
 debt,
 Fannie
 Mae
 and
 Freddie
 Mac
 felt

blame
 the
 housing
 boom
 increased
pressure
to
compete.
and
 its
 subsequent
 bust

on
 Osama
 Bin
 Laden
 and
 The
 housing
 boom
 caused
 fervor
 in
 the
 banking
 industry.

the
 infamous
 September
 Bankers
 were
 quick
 to
 take
 advantage
 of
 the
 opportunity,

11,
 2001,
 a2acks.
 In
 lending
money
to
people
who
did
 not
have
adequate
credit
 to

a d d i ? o n
 t o
 l o s s
 o f
 buy
a
home
 based
 on
previous

American’s
 lives,
 the
 standards.
 These
 subprime

American
 economy
took
a
 mortgages
 were
 most
 popular

!
heavy
 blow
 that
 day.
 Under
 then‐chairman
 Greenspan,
 the
 in
 none
 other
 than
 our
 own

Federal
 Reserve
 loaned
 out
 billions
 of
 dollars
 to
 finance
 State
 of
 California.
 Soon,

companies
 and
 cut
 the
 interest
 rate
 from
 3.5
 percent
 to
 1
 en?re
 companies
 sprung
 up

percent
over
the
remainder
of
2001.
This
influx
of
money
 overnight
 devoted
 to
 lending

into
 the
 financial
 system
 did
 its 
 job
 in
 saving
 the
 these
 subprime
 mortgages.
By

economy
 from
 a
 recession
 induced
 by
 the
 events
 of
 lending
 money
 to
 aspiring

September
 11.
The
low
interest
rates
and
excess
capital
 homeowners
 with
 bad
 credit,

made
borrowing
a
li2le
too
easy.
 banks
 risked
 a
 chance
 that


loans
 would
 default.
 This

would
 render
 their
 mortgages


BRUIN BUSINESS REVIEW 23

 worthless.
One
of
the
most
notorious
prac?ces
was
the
stated
 subprime
 mortgages
 had
 been
 issued
 adjustable‐rate
 loans

income
loan.
Where
interest
 rate
and
 credit
were
 determined
 which
 meant
 banks
 could
 change
 the
 mortgage
 interest
 rate

by
 the
 income
 claimed
 by
 the
 borrower.
 Some
 people
 based
on
 economic
condi?ons.
This
 had
 worked
out
very
well

exploited
 this
 prac?ce
by
exaggera?ng
their
 incomes
to
 get
a

be2er
interest
rate.

THE
CORRUPTION
SPREADS
In
 another
 world
 this
 would
 have
 been
 the
 extent
 of
 the

problem
and
only
the
housing
market
would
suffer
in
the
long

run.
Reducing
severity
of
 the
recession.
 Unfortunately,
 this
 is

not
 how
 business
 is
 done
 in
 today’s
 global
 economy.
 Wall

Street
investment
banks
bought
mortgages
from
bank
lenders,

the
investment
 banks
 then
 sliced
 them
 up,
repackaged
 them,

and
 sold
them
as
securi?es,
the
most
common
of
 which
 were

collateralized
debt
obliga?ons
(CDOs).
This
prac?ce
turned
out

to
 be
 a
 huge
 mistake

since
 investors
 were

unaware
 that
 these

purportedly
 “safe”
 for
 borrowers
when
 market
 condi?ons
were
favorable,
but
 as

securi?es
 they
 were
 the
market
 slowed
 their
 mortgage
 rates
 increased
 to
 beyond

b u y i n g
 c o n ta i n e d
 what
 they
could
 afford.
Americans
piled
with
 debt
found
they

parts
 of
 the
 high‐risk
 had
no
other
choice
but
to
default
on
their
mortgage
loans.
subprime
 mortgages.
 The
 en?re
 situa?on
 was
 a
 mess
 of
 hidden
 landmines
 within

Investors
were
 willing
 the
 financial
 sector.
 Banks
 loaned
 their
 mortgages
 to

to
 buy
 these
 CDOs
 investment
 banks
 and
 Fannie
 Mae
 and
 Freddie
 Mac.
 These

b e c a u s e
 t h e
 companies
cut
them
up
and
sold
them
as
securi?es,
hiding
the

companies
 in
 charge
 dangerous
 subprime
 mortgages
 in
 each
 security
 like
 a

of
 monitoring
 the
 risk
 landmine.
 Investors
 and
 hedge
 funds
 then
 bought
 up
 the

of
 securi?es
 had
 given
 them
 AAA
 ra?ngs(One
 of
 the
 safest
 securi?es,
believing
that
 they
were
rela?vely
safe
thanks
 to
a

ra?ngs
 possible).
 The
 ra?ng
 companies
 later
 admi2ed
 their
 miscalcula?on
 by
the
ra?ng
agencies.
Then
AIG
insured
 these

mistake,
but
the
damage
had
been
done. securi?es,
 based
 on
 the
 same
 assump?on
 that
 they
 were

“safe.”
As
the
housing
market
started
to
fail,
it
began
to
trigger

To
 cover
 their
 bases,
 investors
 bought
 credit
 default
 swaps
 the
financial
land
mines.
from
 insurance
 companies.
 These
 insurance
 plans
 covered

mortgage
 securi?es
 in
 case
 they
 defaulted
 and
 they
 At
first,
the
effects
 were
subtle:
Two
 Bear
 Sterns
hedge
 funds

reimbursed
 investors
 for
 their
 losses.
 AIG
 was
 one
 of
 the
 collapsed
in
June
2007,
and
in
 
 August,
2007
 the
lending
firm

companies
that
issued
many
of
these
credit
default
swaps.
Like
 Countrywide
 had
 to
 be
 rescued
 by
Bank
of
 America
 from
 the

everyone
else,
AIG
believed
the
housing
boom
would
 con?nue
 crushing
 weight
 of
 its
 mortgages
 in
 default.
 Congress

indefinitely
and
considered
insuring
CDOs
to
be
a
safe
bet.
 addressed
 the
issue
 briefly.
Overall,
there
did
 not
 seem
to
 be

much
 cause
 for
 alarm–yet.
 In
 2008,
 investors
 began
 selling

In
 early
 2006,
 the
 housing
 bubble
 showed
 some
 signs
 of
 stock
 in
 Bear
 Stearns.
 Following
 rumors
 that
 the
 firm
 was

defla?on,
 against
 expert
 drowning
in
 toxic
 securi?es;
 its
 stock
 price
dropped
 to
 $30
a

predic?ons
 that
 home
 share
from
$171
a
year
earlier.
At
the
insistence
of
the
Federal

!
prices
 would
 con?nue
 to
 Reserve,
JP
Morgan
Chase
bought
Bear
 Stearns
for
 $2
a
share.

rise.
 With
 less
 demand
 in
 The
 government
 was
 forced
 to
 buy
 out
 Freddie
 Mac
 and

the
market,
banks
began
to
 Fannie
Mae
in
order
to
keep
them
afloat.

reduce
 supply
 of
 loans

therefore
 ending
 some

loose
 lending
 prac?ces.

M a n y
 r e c i p i e n t s
 o f
 In
 
 September
 2007,
 Lehman
 Brothers,
 another
 Wall
 Street


BRUIN BUSINESS REVIEW 24

! point
drop
in
U.S.
DOW
Jones
history.
As
an
increasing
number

of
 banks
 buckled,
a
new
program
was
presented
to
 Congress.

The
Troubled
Asset
Relief
Program
 (TARP),
which
 required
 the

same
 $700
 billion
 of
 funding
 but
 integrated
 the
 oversight

requirements
 Congress
 sought.
 Congress
 approved
 the

program,
and
it
seemed
to
assuage
the
financial
landmines.

DON’T
LET
THE
FINANCIAL

SECTOR
HAVE
THE
ALL
FUN
Just
 when
 the
 economy
 seemed
 to
 have
 bo2omed
 out,
 the

American
 auto
 industry
 collapsed.
 Already
 weakened
 by

foreign
 compe??on,
American
 car
 companies
were
sha2ered

THEN
THE
CDOs
HIT
THE
FAN by
 the
 massive
 drop
 in
 consumer
 spending
prompted
 by
 the

recession.
 Chrysler
 and
 General
 Motors
 (GM)
 CEOs
 stood

before
 Congress
 and
 urgently
 requested
 help.
 President

In
 
 September
 2007,
 Lehman
 Brothers,
 another
 Wall
 Street

Obama
 forced
 GM
 and
 Chrysler
 to
 declare
 chapter
 11

giant,
 declared
 itself
 bankrupt.
 The
 Federal
 Reserve
 had

bankruptcy
 if
 the
 they
 were
 to
 reconstruct
 themselves.

considered
 a
 bailout
 but
 declined
 because
 it
 feared
 poli?cal

Consequently,
both
 companies
made
massive
 cuts
 at
 the
 cost

repercussions.
 The
 fall
 of
 Lehman
 Brothers
 shocked
 Wall

of
millions
of
American
jobs.
Street.
In
 only
 two
 days
 later,
the
 global
 insurance
 giant
 AIG

was
 on
 the
 verge
 of
 bankruptcy.
 In
 light
 of
 these
 massive

failures,
 and
 the
 fragile
 state
 of
 AIG,
 the
 Federal
 Reserve
 ARE
WE
THERE
YET?
believed
 it
 could
 no
 longer
 afford
 inac?on.
Consequently,
AIG

received
 $85
 billion
 in
 federal
 bailout
 money,
 which
 the
 Throughout
 2009,
the
 U.S.
government
 spent
 more
 than
 $10

Obama
Administra?on
asserted
would
avoid
a
global
economic
 trillion
 dollars
 on
 economic
 recovery.
Earlier
 this
 year,
history

collapse.
Soon
 arer
the
AIG
debacle,
banks
began
 crashing
by
 was
made
twice
as
Barack
Obama
took
office
and
 the
Federal

the
dozen. Reserve
 cut
 interest
 rates
 to
 less
 than
 one
 percentage
 point


 above
zero.
The
Obama
Administra?on
a2empted
 many
?mes

to
 rescue
 the
 economy,
 one
 of
 its
 most
 pronounced
 efforts

! being
 the
 American
 Recovery
 and
 Investment
 Act
 of
 2009,

which
authorized
increased
spending
on
rescuing

mostly
large

financial
 firms.
 But
 the
 increasing
 number
 o}anks
 deemed

“troubled”
or
near
 bankruptcy
by
the
U.S.
treasury
seemed
 to

increase
 every
day:
 252
 the
 fourth
 quarter
 of
 2008
 and
 305

and
416
 in
the
first
and
second
quarters
of
2009,
respec?vely.


Americans
were
 further
 skep?cal
 their
 tax
 dollars
 were
 being

used
 effec?vely
 and
 efficiently
 when
 reports
 were
 released

revealing
 that
 AIG
 had
 paid
 $165
 million
 in
 bonuses
 to

execu?ves
 
 (including
 those
 that
 had
 contributed
 to
 the

company’s
downfall).
Bank
“stress
tests”
conducted
by
the
U.S.

Treasury
 revealed
 that
 the
 majority
 of
 banks
 s?ll
 needed

government
aid
to
survive
the
recession.


During
 summer
 2009,
 things
began
 to
 improve.
 The
 abysmal


housing
 market
 bo2omed
 out
 and
 began
 to
 show
 signs
 of

recovery.
The
Dow
 Jones
Industrial
 Average
hit
 10,000
 points

Former
 Treasury
secretary
Henry
Paulson
and
Federal
Reserve
 on
 October
 14,
 2009,
 and
 it
 con?nues
 to
 move
 upward.

chairman
 Ben
 Bernanke
 proposed
 a
 $700
 billion
 bailout
 Furthermore,
Wall
 Street
 companies
 that
 were
 bailed
 out
 by

program
 before
 Congress.
 When
 Congress
 rejected
 the
 the
government
believe
that
they
will
soon
be
able
to
pay
their

proposal
 due
 to
 the
 lack
 of
 oversight
 s?pula?ons,
 the
 Dow
 debt.

Jones
 Industrial
 Average
 plummeted
 778
 points,
 the
 largest


BRUIN BUSINESS REVIEW 25

 TERMS
YOU
SHOULD
KNOW:
BE
AN
EXPERT
ON
THE
RECESSION
Subprime
mortgage:
loans
made
to
prospec?ve
homeowners
with
inadequate
credit;
high
risk
of

default

Adjustable‐rate
mortgage:
home
loan
whose
interest
rate
can
change
at
the
bank’s
discre?on

Mortgage‐backed
securiUes:
securi?es
whose
value
came
from
mortgage
payments;
the
most

common
type
were
collateralized
debt
obliga?ons

Collateralized
debt
obligaUons
(CDOs):
securi?es
that
were
made
up
of
different
pieces
of

mortgages,
some
of
which
were
subprime

Triple
A
RaUng:
ra?ng
given
to
securi?es
that
are
considered
to
be
safe;
this
ra?ng
was
mistakenly
given

to
mortgage‐backed
securi?es

AIG:
an
American
insurance
giant
with
global
?es;
the
Obama
Administra?on
feared
a
worldwide
economic

meltdown
had
it
been
allowed
to
fail

Fannie
Mae
and
Freddie
Mac:
government‐sponsored
enterprises
that
buy
mortgages
from
banks;

became
increasingly
risk‐inclined
during
the
Bush
administra?on

Bear
Stearns:
Wall
Street
investment
bank
that
played
heavily
in
the
mortgage‐backed
security
exchange;

its
stock
value
plummeted
arer
two
of
its
hedge
funds
collapsed;
eventually
bought
by
JP
Morgan
Chase
Bank

Washington
Mutual:
highly
successful
commercial
bank
that
par?cipated
in
the
subprime
mortgage

fiasco;
became
the
biggest
bank
failure
in
U.S.
history
due
to
defaulted
mortgage
loans;
was
bought
by
JP

Morgan
Chase
Bank

Alan
Greenspan:
chairman
of
the
Federal
Reserve
from
August
1987
to
January
2006
who
lowered

interest
rates
arer
September
11,
2001,
and
warned
about
holes
in
the
housing
bubble

Ben
Bernanke:
Greenspan’s
replacement
and
current
chairman
of
the
Federal
Reserve;
took
hands‐on

approach
to
managing
the
crisis
and
made
many
bailouts
with
the
Federal
Reserve
that
were
not
included
in

the
Congressional
fund

BRUIN BUSINESS REVIEW 26