10 Most Searched Terms In 2009

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• 1.Bailout
• 2.Bernard Madoff
• 3.Build America Bonds (BABs)
• 4.Cash For Clunkers
• 5.Chief Executive Officer (CEO)
• 6.Double Dip Recession
• 7.Obamanomics
• 8.Ponzi Scheme
• 9.TARP Bonuses
• 10.Uptick Rule

1.Bailout

What Does Bailout Mean?

A situation in which a business, individual or government offers money to
a failing business in order to prevent the consequences that arise from a
business's downfall. Bailouts can take the form of loans, bonds, stocks or cash.
They may or may not require reimbursement.

Investopedia explains Bailout

Bailouts have traditionally occurred in industries or businesses that may be
perceived as no longer being viable, or are just sustaining huge losses. Typically,
these companies employ a large number of people, leading some people to
believe that the economy would be unable to sustain such a huge jump in
unemployment if the business folded.
For example, Chrysler, a large U.S. automaker was in need of a bailout in the
early 1980s. The U.S. government stepped in and offered roughly $1.2 billion to
the failing company. Chrysler was able to pay the entire bailout back, and is
currently a profitable firm.
One of the biggest bailouts is the one proposed by the U.S. government in 2008
that will see $700 billion put toward bailing out various financial organizations
and those affected by the credit crisis.

2.Bernard Madoff

What Does Bernard Madoff Mean?

The former chairman of the Nasdaq and founder of the market-making firm
Bernard L. Madoff Investment Securities. Madoff, who also ran a hedge fund, was
arrested on December 11, 2008, for running an alleged Ponzi scheme; his hedge
fund lost about $50 billion, but kept it hidden by paying out earlier investors with
money from later investors.

Investopedia explains Bernard Madoff

According to the U.S. Attorney's criminal complaint against him, Madoff was
arrested after telling senior employees at his firm that "it's all just one big lie ...
basically, a giant Ponzi scheme".
With consistent returns of 1-1.5% per month for more than 10 years, it was hard
for investors not to believe the lines used to sell Madoff's hedge fund. The fund's
supposed strategy was to use a proprietary option collar strategy that was meant
to minimize volatility. This was provided as the reason for the fund's consistent
returns.

3.Build America Bonds - BABs

What Does Build America Bonds - BABs Mean?

Taxable municipal bonds that feature tax credits and/or federal subsidies for
bondholders and state and local government bond issuers. Build America Bonds
(BABs) were introduced in 2009 as part of President Obama's American
Recovery and Reinvestment Act to create jobs and stimulate the economy. BABs
attempt to achieve this by lowering the cost of borrowing for state and local
governments in financing new projects.
Investopedia explains Build America Bonds - BABs
In general, there are two distinct types of BABs: tax credit bonds and direct
payment bonds. Tax credit bonds offer a 35% federal subsidy of the interest paid
to bondholders, while direct payment bonds offer a similar subsidy in the form of
a tax credit paid to the bondholder.

4.Cash For Clunkers

What Does Cash For Clunkers Mean?

A program that allows car owners to trade in their old, less fuel-efficient vehicles
in exchange for more fuel-efficient vehicles. Although commonly referred to as
"cash for clunkers", the formal name for the program in the U.S. is the Car
Allowance Rebate System (CARS). The CARS program gives people who qualify
a potential credit of up to $4,500 depending on the vehicle purchased.

Investopedia explains Cash For Clunkers

The Car Allowance Rebate System (CARS) was signed into law by President
Obama in July of 2009 and will be administered by the National Highway Traffic
Safety Administration (NHTSA). If you qualify, once you purchase a car, the
dealer will submit all the required information to the NHTSA.

5.Chief Executive Officer - CEO

What Does Chief Executive Officer - CEO Mean?

The highest ranking executive in a company whose main responsibilities include
developing and implementing high-level strategies, making major corporate
decisions, managing the overall operations and resources of a company, and
acting as the main point of communication between the board of
directors and the corporate operations. The CEO will often have a position on the
board, and in some cases is even the chair.
Investopedia explains Chief Executive Officer - CEO
There are various other titles for the position of CEO including president
and executive or managing director. The role of the CEO will vary from one
company to another depending on its size and organization. In smaller
companies, the CEO will often have a much more hands-on role in the company,
making a lot of the business decisions, even lower-level ones such as the hiring
of staff. However, in larger companies, the CEO will often deal with only the
higher-level strategy of the company and directing its overall growth, with most
other tasks deligated to managers and departments.

6.Double Dip Recession

What Does Double Dip Recession Mean?

When gross domestic product (GDP) growth slides back to negative after a
quarter or two of positive growth. A double-dip recession refers to a recession
followed by a short-lived recovery, followed by another recession.

Investopedia explains Double Dip Recession

The causes for a double-dip recession vary but often include a slowdown in the
demand for goods and services because of layoffs and spending cutbacks from
the previous downturn.
A double-dip (or even triple-dip) is a worst-case scenario. Fear that the economy
will move back into a deeper and longer recession makes recovery even more
difficult.

7.Obamanomics

What Does Obamanomics Mean?

A buzzword that describes the economic philosophy of U.S President Barack
Obama. Obamanomics calls for lower tax rates for companies that meet certain
criteria, such as providing decent healthcare and maintaining a U.S. workforce
and headquarters. Obama's economic platform also calls for higher taxes for
high-income families and investment in education, healthcare and the sciences.

Investopedia explains Obamanomics

Obamanomics generally stands in opposition to supply-side, or "trickle-down",
economics, which holds that people (including the rich) should keep more of
what they earn because they will spend that money, promoting economic
growth. Obamanomics shares some similarities with Keynesian economics,
which states that active government intervention and monetary policy can
smooth out bumps in economic cycles and promote stability.

8.Ponzi Scheme

What Does Ponzi Scheme Mean?

A fraudulent investing scam promising high rates of return with little risk to
investors. The Ponzi scheme generates returns for older investors by acquiring
new investors. This scam actually yields the promised returns to earlier
investors, as long as there are more new investors. These schemes usually
collapse on themselves when the new investments stop.

Investopedia explains Ponzi Scheme

The Ponzi scam is named after Charles Ponzi, a clerk in Boston who first
orchestrated such a scheme in 1919.
A Ponzi scheme is similar to a pyramid scheme in that both are based on using
new investors' funds to pay the earlier backers. One difference between the two
schemes is that the Ponzi mastermind gathers all relevant funds from new
investors and then distributes them. Pyramid schemes, on the other hand, allow
each investor to directly benefit depending on how many new investors are
recruited. In this case, the person on the top of the pyramid does not at any point
have access to all the money in the system.
For both schemes, however, eventually there isn't enough money to go around
and the schemes unravel.
9.TARP Bonuses

What Does TARP Bonuses Mean?

A buzzword coined by the financial media during the financial crisis of 2008/09 to
describe bonuses paid to employees and executives of banks and other financial
firms that received Troubled Asset Relief Program (TARP) funds. TARP
bonuses were controversial because employees were receiving additional
pay even as their companies required bailout funds.

Investopedia explains TARP Bonuses

Companies argue that they have to pay bonuses to retain talent. But critics
contend that because the companies led by the executives in question
were being rescued with taxpayer money, the bonuses were not well-deserved
and the recipients should not be considered "talent".
On March 19, 2009, the House approved a bill to create legislation that would put
a 90% tax on bonuses earned during the 2008 year. This tax would apply to
banks receiving TARP bailout funds of more than $5 billion. This legislation
was created in response to the public anger surrounding $165 million in bonuses
that was paid to traders in the AIG Financial Products (A.I.G.F.P.) division, the
division responsible for the majority of losses surrounding the fall of A.I.G.

10.Uptick Rule

What Does Uptick Rule Mean?

A former rule established by the SEC that requires that every short sale
transaction be entered at a price that is higher than the price of the previous
trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule
10a-1 and was implemented in 1938. The uptick rule prevents short sellers from
adding to the downward momentum when the price of an asset is already
experiencing sharp declines.
The uptick rule is also known as the "plus tick rule".
Investopedia explains Uptick Rule
The SEC eliminated the rule on July 6, 2007, but in March of 2009, following
a conversation with SEC Chair Mary Schapiro, Rep. Barney Frank of the House
Financial Services Committee said that the rule could be restored. Frank's
conversations were spurred by a call for the return of the rule by several
members of Congress and legislation reintroduced on January 9, 2009, for its
reinstatement. On April 9, 2009, the SEC approved the release of five proposals
for reinstating the uptick rule, which will each be put out for a 60-day public
comment period.
By entering a short sale order with a price above the current bid, a short seller
ensures that his or her order is filled on an uptick. The uptick rule is disregarded
when trading some types of financial instruments such as futures, single stock
futures, currencies or market ETFs such as the QQQQ or SPDRs. These
instruments can be shorted on a downtick because they are highly liquid and
have enough buyers willing to enter into a long position, ensuring that the price
will rarely be driven to unjustifiably low levels.