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Michael Araluce established a successful career as a financial consultant before joining Washington Mutual, Inc. as a Vice President in 1999. Working closely with senior management, Michael Araluce helped to reinvigorate Washington Mutual branches that were not performing up to par. Michael Araluce was integral in managing large stock accounts, exceeding bank sales goals, and providing research and investment recommendations to senior management. The next year, Michael Araluce became a Senior Vice President with Bank of America Corporation, managing a particularly high net worth base of customers. For six consecutive years, Michael Araluce was recognized as the GE Capital Top Producer. Michael Araluce was also honored with the Spirit Award of Excellence by President Timothy Maloney, the highest honor awarded in Global Wealth and Investment Management. In 2006, Michael Araluce left his position at Bank of America to assume the role of Vice President with California National Bank, where he managed the largest retail banking center throughout all of Orange County. Most recently, Michael Araluce joined Union Bank as the Regional Senior Financial Advisor in 2009. In conjunction with his career as a financial investor, Michael Araluce is also active in his community with charity organizations and community service work. Organizations that Michael Araluce has contributed time or funds to include Miracle Ranch, Working Wardrobes, the Los Angeles Mission, and Mariners Church. Additionally, Michael Araluce is a proficient public speaker, having delivered investment advice before groups such as Baraban Securities, Inc., OASIS Senior Center, Executive Women International, and the National Association for the Advancement of Colored People. Michael Araluce currently lives in Santa Ana, California, where he enjoys various outdoors activities such as running and bike riding. When not reading books on business or investing, Michael Araluce enjoys the works of Henry David Thoreau, Michael Lewis, and Eugene O'Neill.

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An Overview of the Economic Principles of Supply and Demand

Santa Ana, California-based financier Michael Araluce maintains a long history of holding executive positions with banking firms like Washington Mutual, California National Bank, and Bank of America. Outside of his professional duties, Michael Araluce enjoys speaking about financial topics like macroeconomics and GDP, economic elasticity, and supply and demand to local nonprofits and professional organizations.

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Supply and demand refers to a fundamental concept of market economies. Supply identifies how much of something the market can provide. Demand, on the other hand, refers to the amount or quantity of a product or services that buyers’ desire. Supply and demand directly relates to the price of a good and serves as a primary force in the allocation of resources for products. A number of theories further evaluate these relationships, such as the law of demand. The law of demand states that consumers will purchase more of a product or service the lower its price and less of it at a higher cost. Subsequently, the law of supply correlates to supplier nature, stating that producers and distributors will set a higher price for a greater quantity of an item.

"When such moments of disequilibrium arrive, notions such as criticality, ..."

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  The supply and demand relationship may affect the economy in several different ways. Equilibrium refers to an economy where supply and demand balance each other out. Only achievable in theory, equilibrium represents the most efficient form of allocation of goods because consumers request exactly the amount of product provided. However, the real economy exists in constant flux between levels of supply and demand and thus disequilibrium occurs. Disequilibrium manifests itself in two different ways: excess supply or excess demand. Excess supply occurs when a manufacturer or distributor sets their prices too high, leading to a lower interest than expected and an overabundance of unwanted goods. Conversely, excess demand happens when a product’s low price attracts too many consumers, resulting in not enough goods to satisfy the overall need.

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Federal Reserve Bank Dictates American Economic Policy

Michael Araluce is a highly respected investment and commercial banker whose experience includes positions of leadership at such well-known institutions as Washington Mutual Inc., Bank of America Corporation, and Fidelity Investments. Mr. Araluce is an astute analyst of economic issues, including the history and impact of the Federal Reserve System. The Panic of 1907, which nearly destroyed the American banking industry and caused business owners to declare bankruptcy in record numbers, sparked a movement in the United States to create a federally regulated bank. Supporters of the proposal argued that such an institution would lift power from the hands of a so-called “banking trust” overseen by a handful of wealthy people. In 1912, President-elect Woodrow Wilson received the Glass-Willis proposal. This measure, written by Rep. Carter Glass, a Democrat from Virginia, and Henry Parker Willis, a special advisor to the Banking and Finance Committee of the United States House of Representatives, recommended the creation of more than 20 regional reserve banks. These institutions, rather than a single national bank, would be controlled privately, leading to more varied oversight. The measure charged these proposed facilities with performing the functions of central banks and issuing currency against gold and commercial assets. Moreover, the proposal required each regional reserve bank to hold a portion of the reserves of its sister reserve banks, a suggestion aimed at increasing interaction and transparency. The Glass-Willis plan would lead to the formation of the Federal Reserve System. When the Federal Reserve System was created by Congress in 1913, proponents envisioned that the oversight and regulations inherent in the new institution would provide economic and monetary stability for the United States. Although its role has expanded over the years in response to the ever-changing needs of commerce and government, the Federal Reserve banks continue to carry out a mission focused on reliable payments, organized and regulated operations of banking extending to the entire system of financial institutions, and control of national policies regarding money and the economy. In essence, as Michael Araluce explains, the Federal Reserve System determines the direction of the national economy.

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Calvary Chapel Montebello (CCM)

As an established investment and banking expert, Michael Araluce is involved in church volunteerism activities with ministries such as the Mariners Church and the Calvary Chapel Montebello (CCM). In particular, he has donated time and effort to the food service programs and international relief funds of these ministries. CCM is led by Pastor Pancho Juarez, a Vietnam veteran who spent many years of his life after military service trapped in a cycle of drug and alcohol abuse. Returning to his hometown in 1990, Juarez grew inspired to start a home-fellowship. Juarez designed the ministry as one that would reflect his own personal struggles and life journey. In particular, he was determined to reach out to the down-and-out, giving their lives renewed calling and purpose. CCM maintains a strong dedication to mission work through international projects such as the Casa del Descanso Women's Shelter in Rosarito, Mexico. The shelter plays a vital role in Baja California, where an estimated one in four women suffers from repeated physical or psychological abuse. The shelter provides fully outfitted living facilities for up to 20 families at a time with devotionals, bible studies, and church services encouraged. Transitional in nature, the Casa del Descanso receives families on referral from the police department and social service networks. Beyond the refuge it provides, the Casa strives to transition mothers and their families to a stable life on the outside within a matter of months. Mothers are required to work upon entering the home, with staff assisting them in setting up a savings account and managing a budget.     Mark Araluce is also inspired by the recent mission trips that CCM members have undertaken to parts of the globe as diverse as Ghana and the Philippines. In 2009 CCM organized a mission endeavor to Cambodia, supporting a safe haven center that offers refuge for young children at risk of human trafficking. In addition to providing a peaceful environment, the center offers children education, jobs training, and bible study. To get involved with the Calvary Chapel Montebello, visit ccmtb.com.

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The Financial Industry Regulatory Authority

by Michael Araluce

Formerly known as the National Association of Securities Dealers (NASD), the Financial Industry Regulatory Authority (FINRA) ensures that brokerage firms and exchange markets adhere to predetermined industry standards. The NASD formed after the Maloney Act of 1938 amended the Securities Exchange Act, granting it power to supervise aspects of the American financial industry.

Several decades later, the organization revolutionized trading with the introduction of the National Association of Securities Dealers Automated Quotations (NASDAQ) stock market, which later became an independent entity. FINRA came into existence only a few years ago when the NASD assume responsibility for arbitration functions, rule enforcement, and member regulation for the New York Stock Exchange (NYSE). Formerly, NYSE Regulation performed these tasks. Today, FINRA governs member firms according to set rules and regulations and by consulting with the United States Securities and Exchange Commission (SEC).

Although many consider FINRA an arm of the United States government, the organization provides third-party protection for the public and finance professionals. FINRA oversees securities futures, corporate bonds, and equities trading. Authoring its own governing rules, FINRA ensures that licensed individuals and admitted firms thoroughly understand all regulations. In order to promote best practices, the organization oversees a number of education and qualification examination programs for finance professionals. FINRA conducts regular examinations of these parties, verifying that they maintain compliance. Should an individual or firm fail to obey set rules, the SEC sanctions FINRA to take disciplinary action.

Historically, many individuals criticized FINRA for its failure to detect or punish a number of damaging schemes, especially with the country’s largest financial institutions. Recently, however, the organization has tightened its hold on the finance industry, as evidence by sizeable fines imposed on Morgan Stanley earlier this year:

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