Exploring Issues of Conflict Resolution Essay examples

TITLE The purpose of this paper is to explore issues of conflict resolution [using mediation as a conflict resoltion against police culture. related to culture and power imbalance with minority population and the police culture. LeBaron (1997) argues that people who are privileged or members of one or more dominant groups encounter less problems and lower-intensity conflicts compared to the disadvantaged society see conditions as incendiary. This paper argues that ethnocultural minority groups populations are at a disadvantage with society compared to white culture and policing. The following sub-issues are ...______________ James (1998) states that police culture is the culture of the police force that reinforce the discourse â€Å"we†¦show more content†¦LeBaron (1997) states that mediation is a process by which a neutral third party, in this case the judge, intervenes in decision making of the issue. In this case, before the judge made a decision between of inmate, the judge would have to consider the status and power variables which is assoicated with multiculture (LeBaron, 1997). LeBaron (1997) argues that multicultural is a label that describes the ethnoracial populations who are considered different. This creates a cultural barrier between the dominant culture and the subordinate population which reinforces an imbalance of power relations in society because visible minorities are generalized into one group as the other compared to the privileged population (LeBaron, 1997). In various government and social institutions the ethnocultural popul ation are at a disadavantage and do face cultural barriers. Many enthnocultural groups like Blacks, Aboriginals, and Hispanics are stigmatized for deliquency behaviours and criminial acts which is why police harras them a lot. For instance, related to the news report Curtis Young was a young Black male who was assaulted, harrassed, and detained by the cops for nothing. The judge acknowledged that his report was falsified and evaluated the evidence from the video of the scene that the cops were taking anShow MoreRelatedEssay on Introduction to Negotiation794 Words   |  4 Pagesmethod of choice for all conflict resolutions. Unilateral, bilateral, third-party and alternative dispute resolution (ADR) are all approaches and methods that deals with conflict. Unilateral methods never yield win/win results because the approaches used are avoidance (lose/lose), accommodate (lose/win), and competitive (win/lose). Avoidance is what a person avoids the issue and walk away. It does not matter why this approach is used. The main point of this is that the conflict always remains unattendedRead MoreInternational Law Aids Conflict Resolution Essay1270 Words   |  6 Pagestensions in the East and South China Seas has directed attention to the likelihood of an armed conflict in the region. The purpose of this essay is to identify how international law aids conflict resolution in respect to the disputed territory in South and East Asia Seas. Focussing mainly on the United Nations Convention on the Law of the Sea (LOS Convention) , the essay will then examine the key dispute resolution mechanisms provided in the Conven tion and highlight its effect to resolving the disputesRead MoreI Am Grateful For Having Been Exposed By Dr. Muvingi1518 Words   |  7 Pagesthis book by Dr. Muvingi in my Mediation class. I like Kenneth Cloke, who is the Director of the Centre for Dispute Resolution in Santa Monica, California and is an experienced author and writer. I consider Mediating Dangerously is a call for action for mediators, this book offers a fresh vision to new and experienced mediators within the field of conflict analysis and resolution. Cloke explores the deeper foundations of the transformational process of mediation in order to discover what exactlyRead MoreThe Effects Of Having A Narcissistic Personality1195 Words   |  5 Pageseffects of having a narcissistic personality along with having an inflated sense of entitlement were investigated to determine if these traits will lead an individual to pursue self-interest goals and if these factors will cause greater interpersonal conflict. The r esearch was divided into two studies involving participants comprised of undergraduate college students from diverse ethnic backgrounds. The first study consisted of questionnaires assessing self-image goals versus compassionate goals inRead MoreFactors Affecting Students in Terms of Comprehension and Literature1495 Words   |  6 Pagesdimensions: physical, social, psychological and spiritual. It shows each of these dimensions to be constituted like a force field, within which predictable paradoxes, tensions and dilemmas play out. Human beings can learn to deal with these tensions and conflicts more effectively by facing up to the negatives as well as the positives of their lives, including the tensions of life and death, love and hate, strength and weakness and meaning and absurdity. Best known authors on existential counselling are  IrvinRead MoreWhat Situations Do You Believe Intervention Should Be Mandated? Voluntary?1742 Words   |  7 Pagesshould be mandated? Voluntary? This student believes that intervention should be mandated if the conflict or situation at hand rises to a level which could lead to physical and sometimes irreparable harm of one of the involved parties. A mandated intervention in this situation can be used to redirect negative communication and negative goals in an effort to restore a level of positive conflict resolution. In this student’s opinion an Organizational Intervention should be mandatory if company is boughtRead More Water In the Middle East: Prospects for Conflict and Cooperation 1028 Words   |  5 PagesReasons and origins of the conflict for water are dating back in the late 40s and the Arab-Israeli conflict. More precisely, the countries involved that represent potential conflict are Israel and Syria, as well as Israel and Palestine. For example, what can be mentioned here are Israeli aspirations to keep tight control over the economically important areas. This is directly linked to the water issues and div erting the water from one to another region. Other Arab countries are strongly opposingRead MoreInterview of a Social Service Agency1353 Words   |  6 Pageshowever, the duty both professional have in common is to progress the wellbeing of his or her client. Mediators are a neutral third party and assist disputing parties to negotiate a solution to their conflict. The responsibility of a mediator is to guide the arguing parties to cope with the conflict constructively. The decision-making authority stays among the disagreeing parties. Advocates, on the other hand, can be biased to one party or group. Advocates become the voice for the oppressed populationRead MoreEthics, Conflict Management, And Organizational Commitment1664 Words   |  7 Pagesfollowing three topics of ethics, conflict management, and organizational commitment. By exploring these different areas in a business context, we can overall have a better understanding of why individuals choose to behave a certain way when on the job. For ethical decision-making, I will explore the steps involved in the decision-making process and what internal factors of an individual cause he or she to make an ethical or unethical choice. In terms of conflict management, I will discuss previousRead MoreIntercultural Conflict Management Style ( Chen And Starosta, 1997-8 )1401 Words   |  6 Pagesthree aspects of culture, including cultural context, language differences, and thought patterns, that influence conflict management style (Chen and Starosta, 1997-8). It is important to understand which cultural aspects of communication pattern may be at play when having conflict. One of the key factors that I have found for exploring the communication issues present in intercultural conflicts is the concept of high and low context communication. The idea of high and low context communication was first

Health Economics - 1189 Words

HISTORY OF HEALTH INSURNCE I stopped for a moment to imagine an average Americana’s world without a health insurance, what will become of such individual when the need for healthcare beckons? How will such individual offset the outrageous bill of healthcare? Health insurance is used in America to describe any program that helps pay for medical bills through the following: privately purchased and social insurance or a social welfare program usually powered by the government. Simply put, health insurance is any form of insurance that provides protection by offsetting the actual costs of medical services. Before the onset of federal government’s intervention on health insurance, it can be said that the onus were thrown to lower arms- the†¦show more content†¦Thanks to the J.F. Kennedy administration that put a new song on the lips of people in dire need of health insurance. His administration initiated a government sponsored healthcare where the elderly were really considered. This marked the onset of Medicare and Medicaid- Providing healthcare for retirees, aged and the impoverished. The concept of Medicare and Medicaid involves the federal government paying back physicians for taking care of the retirees, aged and the impoverished; this bill was passed in 1965. Although both Medicare and Medicaid started minutely to cover hospital and physician’s services; sporadically, the expenditure allocated to Medicare and Medicaid began to shoot up with time. Then in September 2, 1974, to address mishaps in the dispensation of certain large pension plans, a bill was passed which entails employee retirement income security act (ERISA); this led to the growth of self-insured employer health plan. Erstwhile, in 1973, Healthcare Maintenance Organization (HMO) Act was enacted, it was created to minimize the cost of healthcare by increasing the level of competition in the healthcare market and increasing access to coverage for individuals. From 1976 through 1996 amendments were made on the HMO actsShow MoreRelatedEconomics and Health Care1520 Words   |  7 Pagesturn leads to market failure. * Third-party payers is another reason because inefficiencies arise as a result of consumers not spending their own money. The majority of the expenses are paid by third parties, primarily health insurance companies and the government since health costs are usually too expensive for the middle to lower class who are usually more likely to become ill. 1B. In the real world, a perfectly competitive market rarely exists. One or more assumptions are violated in mostRead MoreEssay Health Economics2827 Words   |  12 Pagesforms of economic evaluation which are useful in health economics for comparing costs and allocating resources. Health economics is widely relevant to governments and the health sector in implementation of new policy, as it concerns the allocation of resources in the context of a limited budget, or scarcity. Economic evaluation is a potential tool for setting priorities in health, though it is only one of many potential criteria, including overall budget and public attitudes and wants. Economic evaluationRead MoreHealth Economics1683 Words   |  7 PagesHSA 500 Health Services Organization Janeen Whiteside-Harris Professor: Dr. Maryjane Granoff October 24, 2012 United States (U.S.) Health Care System (HCS) Requirements are to write a three to four page paper covering the following: 1. Identify and evaluate at least three forces that have affected the development of the health care system in the U.S. 2. Speculate whether or not these forces will continue to affect the health care system in the U.S. over the next decadeRead MoreStatement Of Scholarship In Health Economics823 Words   |  4 Pagesto express my interest in the PhD scholarship in Health Economics at Monash University which was advertised in seek career website on 14th September 2017. I am a graduate from Curtin University who completed Master of Health Administration. While I was doing my postgraduate studies, I decided to do my dissertation in the field of Economics, focusing on Health Economics. The topic of my postgraduate dissertation was â€Å"Trends in income-related health inequalities in Australia†. The source of the dataRead MoreEssay about Health Economics741 Words   |  3 PagesFebruary 10, 2015 This memorandum will use Grossman’s model of production of health to evaluate how New York City’s new sick leave law will affect emergency room use. Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimalRead MoreEconomics : The Financing Of Health Care1379 Words   |  6 Pages Thomas Gordon Healthcare Economic History ECONOMICS: THE FINANCING OF HEALTH CARE March 2, 2016 Lena Watson Health Care History The United States HealthCare System is pushing and getting ready to have a huge reformation. It is evolving on a major substantial evolution from its organization, management structure, and payment structure. The economic component of healthcare is equally important to better understanding the order to structure stature and is very successful. InRead MoreImplications Of Health Economics Concepts For Healthcare1712 Words   |  7 PagesImplications of Health Economics Concepts for Healthcare Chandra Chisholm Strayer University HAS 510 Dr. David Tataw May 3, 2015 Value of Healthcare Professionals Healthcare is getting gradually complex around the world. The need for technological development, economic support, demographics changes and the study of diseases are shifting at a fast speed. There had been numerous labors in describing collective capabilities and values within the healthcare organizations. It is necessaryRead MoreSocio Economic Class And Health Inequality1174 Words   |  5 PagesSocio-economic class has been linked to health inequality ever since the mid-19 century, when reported the living condition of the poor. Chadwick, E.1842 reported that the average life expectancy in Bethnal Green was 45 for professional but only 16 for labourers. Concern about inequality within the population in the early 20th century was offered as one major justification for the setting up of National Health Service (NHS) based on the recommendation of the Beverage report (1942). The health inequalityRead MoreUnderstanding The Value Of Health Economics811 Words   |  4 PagesUnderstan ding the value of health economics is very important during this rapidly changing environment. Health economics is the study of how transactions or connections between health and the resources needed are made and of the bottom line results (Getzen, 2013). Resources include money but also people, materials and time that could have been used in other ways. Our healthcare needs may be unlimited but the resources we have to satisfy them are not. We must make careful choices about which needsRead MoreHealth Economics And Policy Questions2412 Words   |  10 Pages Health Economics and Policy Coursework Question 2 SN: 13026885 a) w=  £62,500 U= √w 50% chance of medical problem Costs of  £4,900 We can derive this individual’s expected wealth if we multiply the probability of each outcome with the associated costs. E(w) = 0.5 *  £62,500 + 0.5 * ( £62,500 -  £4,900) E(w) = 0.5 *  £62,500 + 0.5 *  £57,600 E(w) =  £60,050 To find out what level of utility will this individual’s expected wealth yield, we simply have to put the value of the E(w) in the utility

Emi Group Plc Case Study free essay sample

The performance reflected the global decline In music Industry revenues, as well as the extraordinary cost of the restructuring program MI was pursuing to realign its investment priorities and Ochs its resources to achieve the best returns in the future. On an annual basis, MI has consistently paid an up-per-share dividend to ordinary shareholders since 2002. MIS recent performance, Stewart questioned whether MI should continue to maintain what would represent a combined GAP 63 million annual dividend payment. Stewart recognized that MI faced considerable threat of takeover.It seemed that boosting MIS share price was Imperative, If Mel wanted to maintain Its Independence. The Dividend Decision The board already declared an Interim dividend of up per share In November 2006. Whether to maintain the past payout level by recommending an additional up final MI dividend be paid. Provided a forecast of the cash flows effects of maintaining the dividend based on market-based forecast of performance. Dividends are payments made by an organization to its shareholders from earnings generated in current or previous periods.Shareholders earn income from two sources, the capital gain due to appreciation of share and dividend yield. Dividend yield Is calculated by delving the current dividend by the price of a share. 2. 0 OVERVIEW OF MUSIC INDUSTRY ON 2007 MI, Warner Music Group, Sony BMW Music Entertainment, and universal Music Group, collectively known as the majors dominated the music Industry In the early 21 SST century and accounted for more than two-thirds of the worlds recorded music and publishing sales. Recorded music and music publishing were the two main revenue drivers for the music Industry.Global music sales have been hit In recent years due to piracy and competition for consumer spending. Despite the growing popularity of digital music. Musics share price has fallen to $4. 75, 72% lower than its PIP price in 2005, and it is Neighed down by debt. MIS new private-equity owner, Terra Firma, paid a high price for the business in August 2007. Now, having got rid of most of MIS senior managers and revealed embarrassing details of their spending habits (IEEE,OHO a Hear went on sundries euphemistically referred to in the music business as fruit and flowers), Terra Firma is due to produce a new strategy later this month. But many Observers reckon the private-equity men are out of their depth. Ere two biggest majors-?universal, which is owned by Veined, a French conglomerate, and Sony BMW, a Joint venture between Sony and Bertelsmann, a German media firm-?derive some protection from their parent companies. Universal IS the strongest and is gaining market share. But people speculate that Bertelsmann may want to sell out to Sony next year. Three vicious circles have now set in for the recorded-music firms.First, because sales of CDC are tumbling, big retailers such as Wall-Mart are cutting the amount of shelf-space they give to music, which in turn accelerates the decline. Richard Greenfield of Pail Research, an independent research firm, reckons that retail floor- space devoted to CDC in America will be cut by 30% or more in 2008. The pattern is likely to repeat itself elsewhere as sales fall. Ere results from 2007 confirm what MIS focus group showed: that the record Industrys main product, the CD, which in 2006 accounted for over 80% of total global sales, is rapidly fading away.In America, the volume of physical albums sold dropped by 19% in 2007 from the year before-?faster than anyone had expected. For the first half of 2007, sales of music on CD and other physical formats fell by 6% in Britain, by in Japan, France and Spain, by 12% in Italy, 14% in Australia and 21% in Canada. Sales were flat in Germany. Paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDC. More worryingly for the industry, the growth of digital downloads appears to be slowing. Second, because the majors are cutting costs severely, particularly at MI and Warner Music, artists are receiving far less marketing and promotional support than before, Inch could prompt them to seek alternatives. Third, record companies face such hostile conditions that their backers, whether private equity or corporations, are lots to spend the sums required to move into the bits of the music industry that are hiring, such as touring and merchandising. The majors are trying to strike 360- degree deals with artists that grant them a share of these earnings.But even if artists agree to such deals, they will not hand over new rights unless they get better terms on recorded music, so the majors may not see much benefit overall. Tim Renee, a former boss of Universal Music in Germany, says the majors should have acted years ago. Ay mid-2007, when the majors realized that digital downloads were not growing as Perhaps the most important experiment of all is a deal Universal struck in Dece mber tit Monika, the biggest mobile-phone maker, to supply its music for new handsets that will go on sale later this year.These Comes with Music phones will allow customers to download all the music they want to their phones and PCs and keep it-? even if they change handsets when their years subscription ends. Instead of charging consumers directly, Universal will take a cut of the price of each phone. The other majors are expected to strike similar deals. Paid-for download services will continue and ad-supported music will become more widespread, but subsidized services where people do not pay directly for music will come by far the most popular, he says.

Jurassic Park Essays (478 words) - Jurassic Park,

Jurassic Park Jurassic Park takes place on an Island off the Coast of Costa Rica which is owned by a multimillionaire, John Hammond. On this island he has set up a genetical engineering facility which permits him and his scientist to create dinosaur from blood extracted from prehistoric mosquitos, that have been preserved in amber. Before he opens this living attraction to the public he needs specialist to approve the park. He brings them to the island and begins to show them what he has accomplished. While they are touring the island one of the computer programmers, Dennis Nedry, is secretly planning to steal dinosaur embryos from the park and sell them to a company that is trying to compete with Hammond. The only way Nedry can obtain these embryos is to immobilize the park by interrupting the parks normal function, so that he could sneak in and steal the embryos. This all takes place while the visitors are out in the park touring, and in the mist of a terrible storm. After Nedry has executed a virus in order to steal the embryos the storm hits, and the park power goes out. As the power goes out the visitors to the island are stuck in the middle of nowhere, with an escaped T-Rex. Everyone flees and is scattered through the park. The animals begin attacking the control building, while they are search for food. Since all the power is out there is no way to stop them, or containing them. In the hysteria a scientist , Wu, discovers that the dinosaurs have been mating, which they thought wasn't possible, because they were only cloning females, but the dinosaurs have adapted and have found a way to reproduce. They think they got the power back on so they try to put all the animals back in their holding areas. Little did they know that the whole time the park was running on auxiliary power, and once this power ran out they could not restore the main power. When all the power finally ran out the animals began attacking at full force now. Their only alternative to get the power restored is to have someone manually turn on another auxiliary power generator so they could get the main power running again. The visitors and the staff of Jurassic Park escape but with two casualties. They escape by having a helicopter pick them up. After the pick up the Costa Rican government bomb the island in order to destroy it. According to the book genetic cloning can be accomplished by obtaining just a small amount of blood. May this type of cloning be possible in real life only time will tell, and the advancements in technology it should be a thing of the future. The fact that this type of thing might be done, is slim only because of dangers of disturbing the natural flow of things. In the book the greatest marvel they discovered turned around and caused them great disaster. If man kind does try to bring back the dinosaurs will the same happen?

Art Direction in Film and Television--history essays

Art Direction in Film and Televisionhistory essays Imagesthey draw us into their sinful lust, invigorate us, suck us in like zombies or candy. I, like most of us, am a media junkie, and gladly process sparkly music videos with no content and horrific movies that I later attest to dislike. Undoubtedly, many a time I have paid more attention to the beauty of the design on my entertainment rather than its verbal content, not to say that the two are separated. The topic of this writing is, therefore, my most addicting brain amphetamine as well as opiate-art direction for films and performances. Here I will explore my visual fetish. Film art and production direction is a direct descendant of stage design and the very first art director was a craftsman. In many ways, I find stage design a more compelling medium due to its direct interaction with the audience and a greater impact and a awe arising out of usage of multimedia and unusual distortion of space and reality. The special effects-educated audience is more likely surprised by the miracles arising in real space than in the so commonly manipulated world of film, unless the film itself brings with it an element of tangibility. While much even of the more contemporary stage design seems fairly traditional, there is much experimentation in the field. After the war, under the crumbling funding, the theatre designs became highly minimal and fostered experimentation in the medium. The new theatre has been called the theatre that survived the theatre. Their liberated settings combine realistic, abstract, multi-media and environmental scenic techniques. Stage design does not restrict itself only to theater and opera. Great sets have been created for musical performances, commercial installations, and art exhibitions.. Art direction for films comes as a natural offspring of stage design. At its birth, film production was a largely uncharted territory, and the first sets, so as to not to confuse either the actor or the...

Cookiecutter Shark Facts and Information

Cookiecutter Shark Facts and Information The cookiecutter shark is a small shark species who got its name from the round, deep wounds it leaves on its prey. They are also known as the cigar shark,  luminous shark, and cookie-cutter or cookie cutter shark. The cookiecutter sharks scientific name is Isistius brasiliensis. The genus name is a reference to Isis, the  Egyptian goddess of light, and their species name is a reference to their distribution, which includes Brazilian waters.   Classification Kingdom:  AnimaliaPhylum:  ChordataSubphylum:  VertebrataSuperclass:  GnathostomataSuperclass:  PiscesClass:  ElasmobranchiiSubclass:  NeoselachiiInfraclass:  SelachiiSuperorder:  SqualomorphiOrder:  SqualiformesFamily:  DalatiidaeGenus:  IsistiusSpecies:  brasiliensis Description Cookiecutter sharks are relatively small. They grow to about 22 inches in lengths, with females growing longer than males. Cookiecutter sharks have a short snout, dark brown or grayish back, and light underside. Around their gills, they have a dark brown band, which, along with their shape, gave them the nickname cigar shark. Other identification features include the presence of two paddle-shaped pectoral fins, which have a lighter coloration on their edges, two small dorsal fins near the back of their body and two pelvic fins. One interesting characteristic of these sharks is that they can produce a greenish glow using photophores, bioluminescent organs which are located on the sharks body, but densest on their underside. The glow can attract prey, and also camouflages the shark by eliminating its shadow. One of the most important features of cookiecutter sharks is their teeth.   Although the sharks are small, their teeth are fearsome-looking.  They have small teeth in their upper jaw and 25 to 31 triangular-shaped in their lower jaw. Unlike most sharks, who lose their teeth one at a time, cookiecutter sharks lose the complete section of lower teeth at once, as the teeth are all connected at their base. The shark ingests the teeth as they are lost a behavior that is thought to be related to increasing calcium intake.   The teeth are used in combination with their lips, which can attach to prey through suction.   Habitat and Distribution Cookiecutter sharks are found in tropical waters in the Atlantic, Pacific, and Indian Oceans. They are often found near oceanic islands.   These sharks undertake a daily vertical migration, spending the daytime in deep waters below 3,281 feet and moving toward the water surface at night.   Feeding Habits Cookiecutter sharks often  prey upon animals much larger than they are.   Their prey includes marine mammals  such as seals, whales and dolphins and large fish such as tuna, sharks, stingrays, marlin and dolphin, and invertebrates such as squid and crustaceans. The greenish light given off by the photophore attract prey. As the prey approaches, the cookiecutter shark quickly latches on and then spins, which removes the preys flesh and leaves a distinctive crater-like, smooth-edged wound. The shark grips the preys flesh using its upper teeth. These sharks are also thought to cause damage to submarines by biting their nose cones. Reproductive Habits Much of cookiecutter shark reproduction is still a mystery. Cookiecutter sharks are ovoviviparous. The pups inside the mother are nourished by the yolk inside their egg case.   Cookiecutter sharks have 6 to 12 young per litter. Shark Attacks and  Conservation Although the idea of an encounter with a cookie cutter shark is frightening, they generally present no danger to humans due to their preference for deep waters and their small size.   The cookiecutter shark is listed as a species of  least concern on the IUCN Red List. While they are caught occasionally by fisheries, there is no targeted harvesting of this species.   Sources Bailly, N. 2014. Isistius brasiliensis (Quoy Gaimard, 1824). In: Froese, R. and D. Pauly. Editors. (2014) FishBase. Accessed through: World Register of Marine Species, December 15, 2014Bester, C. Cookiecutter Shark. Florida Museum of Natural History. Accessed December 15, 2014.Compangno, L., ed. 2005. Sharks of the World. Princeton University Press. 368pp.Martin, R. A. Cookiecutter Shark. ReefQuest Centre for Shark Research. Accessed December 15, 2014.

Lipstick sales in the Recession Thesis Example | Topics and Well Written Essays - 4250 words

Lipstick sales in the Recession - Thesis Example Women although consider lipstick an essential but purchase it as a luxury to give themselves satisfaction. The results of the research have been supported by economic theories of Keynes, the income effect, the lipstick index and the elasticity of income theories. The results defy the substitution effect and basic economic theory of demand and supply. An interesting point is that lipstick sales are being depended upon to assess recession however, the trend of buying lipstick is changing and women are substituting it for lip gloss. Thus the question arises as to how much can the lipstick index be relied upon or whether the theory should be revised to include a certain pool of cosmetics for the theory to be more dependable. Recession has the global market and the economic conditions are deteriorating both in the developed and developing countries. The unemployment rate is increasing and the purchasing power of consumers is shrinking (CBS News 2008). Consumers now have to make choices and switch to cheaper commodities. Most cannot afford to purchase the luxuries they could afford in pre-recession times. Thus the overall prices of all goods are increasing due to inflation and according to the law of economics the demand for all products should decrease (CBS News 2008). However, as per Keynes (2009) there are certain products whose demand and supply rises in recession which is against the economic law. Lipstick is one of these products as its demand rises with the recession and increase in prices. The research focuses on why the demand of lipstick rises even with the increase in prices. So much so, that the sales of lipstick are used to indicate the recession patterns and to know whether recession has set in or not. The greater the sales, the more the recession. In the makeup industry the lipstick index is ardently used to see the recession progress. At the same time, it is also

Forensic Anthropology Essay Example | Topics and Well Written Essays - 2000 words

Forensic Anthropology - Essay Example Having understood the two, it is then necessary to draw a link between the two or evaluate all the possible relationships between the two. It will also be imperative to reckon that a marriage between the two possible brings forth what is commonly termed as forensic anthropology. This paper seeks to show how biological anthropologist assist with a forensic investigation besides identification of individuals. The paper starts first by understanding what forensic is, then moves on to define anthropology and forensic anthropology then shows how anthropology can aid in forensics. The term forensic refers to the application of scientific knowledge in a bid to solve legal problems and enable the smooth running of legal proceedings (Bartol, 2004: p8). As such, any profession that uses scientific knowledge aids bin forensics and this explains the existence of such terms as forensic anthropology, forensic medicine, forensic science, forensic experts etc. Forensic comes from a Latin word "forensic" which means relating to a forum and forum in this case which according to the ancient Rome was a market place where people congregated to conduct all sorts of business as well as public affairs. As time went on, the term forensic was limited to reference of the courts of law thus entering English use in 1659 with that very meaning. Therefore, forensic refers to law problems or issues which are solved by the application of scientific knowledge. The word anthrop... Human beings and their ancestors are studied in terms of the physical characteristics, social and environmental relations and culture. Main concern of anthropology is the origin of the present homosapien's, ancestors, evolutionary development etc. As such, anthropologists study the skeletons, DNA, tools, etc of the modern man's ancestors to locate the origin of the present day behaviours and culture. Thus, the common questions asked by the anthropologists include but are not limited to: 1 What defines human beings 2 Who are the ancestors of modern human beings 3 What are the human physical traits 4 How do human beings behave 5 Why the differences and variations among the human beings 6 How has the evolutionary past human beings influenced both the culture and social organization These are just but examples of questions asked by anthropologists and have been used to offer a rough estimation of the scope of anthropology. The modern anthropology borrows extensively from both the humanities and natural sciences such as biology and chemistry. The modern anthropologists have specialized in technical subfields which have found wider applications both within and without the scope of anthropology. What is Forensic Anthropology Basically, forensic anthropology is the application of anthropology in forensics. It is simply the marriage between anthropology and forensics. Generally, forensic anthropology is the assessment of the skeletal remains of human beings on behalf of the law enforcers in a bid to establish the identity of the bones (Klepinger, 2006: p3). Anthropology is wide and is divided into linguistic anthropology, cultural anthropology, archaeology and physical anthropology. Of great help to forensic is the physical

Politeness and Pragmatics in the Cross-Cultural Communication Essay Example for Free

Politeness and Pragmatics in the Cross-Cultural Communication Essay Introduction In this paper, we will examine the Natural Order Hypothesis which was first introduced by Stephen Krashen in the late 1970s and 1980s. Krashen proposed the Second Language Acquisition Theory with five hypotheses. The Natural Order Hypothesis is a part of this second language theory. This hypothesis claims that learners of second language acquire the grammatical structures in a predictable way. It includes that some grammatical structures acquired naturally earlier than the others and this synchronization does not affected by the learners’ native language, age or any condition of exposure. Using a case study approach we will observe whether this claim is valid in Bangladeshi context or not. To examine that how the Natural Order Hypothesis works in Bangladeshi context, we have chosen some Bangladeshi people from different ages. Some the students of first semester and second semester of University of Liberal Arts Bangladesh. We have asked them to answer some certain questions which have added in the last section. This paper is divided into several chapters. The first section of the paper introduces with the five hypotheses of Stephen Krashen’s Theory of Second Language Acquisition. The hypotheses are demonstrated one by one because all the hypotheses are interrelated. This part is concluded with some main points of criticism about the Natural Order Hypothesis. The next section of the paper analyses our examinations about the hypothesis. It includes the Findings and Results of the study. The last section of the paper explains recommendations and conclusion where we have given our opinion. Krashen’s Theory of Second Language Acquisition Stephen Krashen’s Theory of Second Language Acquisition is well accepted widely in all areas of second language research and teaching since the 1980s. This theory consists of five hypotheses. These are the Acquisition-Learning Hypothesis, the Monitor Hypothesis, the Natural Order Hypothesis, the Input Hypothesis and the Affective Filter Hypothesis. The explanations of these hypotheses are given below. The Acquisition-Learning Hypothesis The Acquisition-Learning Hypothesis states that there are two ways to  develop second language proficiency for adult learners. One is ‘acquisition system’ and another one is ‘learned system’. According to Krashen, the ‘acquisition system’ is a subconscious process. In this system, it is claimed that the development of the L2 proficiency goes through naturally. More like the way children acquire their first language. The learners acquire language without knowing about that acquisition is taking place. The main point is that learners develop proficiency through using language in meaningful conversations where the focus is on meaning not in the rules of language. On the other hand, ‘learned system’ is referred to ‘knowing about’ language. According to Krashen, the ‘learned system’ is a conscious and explicit process. Through this system learners learn about the language as a conscious study of formal instructions. That means the two systems are totally opposite. Krashen states that acquisition is more important to develop second language proficiency. Learning cannot lead to acquisition. He adds that conscious rule of ‘learned system’ only performs as one function; Monitor or editor. So the error correction occurs in ‘learned system’ which affects in learning language. But error cannot affect in case of acquiring language because in development of L2 proficiency, ‘acquired system’ only gives learner a ‘feel’ of error subconsciously. To demonstrate the Acquisition- Learning hypothesis, Krashen also denies about Noam Chomsky’s Language Acquisition Device (Device). Chomsky claims that humans are born with the instinct or innate facility for acquiring language. There is a ‘black box’ in every person’s brain and it acquires any language before puberty. Krashen disagrees and says that acquisition of second language can also happen after puberty. He further explains that LAD also works for adult but that does not mean that adult will always acquire second language as native speaker. He claims that LAD function also works for adult second language acquisition. The distinction between ‘acquisition system’ and ‘learned system’ can be seen in the table given below. The Monitor Hypothesis Stephen Krashen explains in the Monitor Hypothesis that how acquisition and learning are used in second language performance. This hypothesis holds the theory that utterance in L2 is initiated by the acquired system at first and after that the learned system works if there is any need of changes. Krashen includes that utterance of L2 happens generally through acquired linguistic competence. The role of learned system is work as a Monitor or editor. To use Monitor successfully, Krashen gives three conditions. These are time, focus of form and know the rule. 1. Time: The first condition explains that the acquirer must have enough time to apply the Monitor. The problem regarding this condition is, during normal conversation one cannot look after the time. If someone tries to use the Monitor he/she will fail to utter in right time or if someone tries to maintain the time he/she will fail to use the Monitor. The important part is that this condition can be applied only in case of advanced acquirers who use Monitor occasionally. 2. Focus on Form: The second condition instructs that the acquirers must focus on form of the language. The acquirers must think about the correctness of the form. But the problem is using Monitor with focusing on form is really tough. To maintain this condition one can lose the track whether he/she will Monitor what he/she is saying or he/she will Monitor how is he/she saying it. 3. Know the rule: The third condition is the acquirer must know the rule of language. It is very difficult condition to maintain because everyone does not know about all the rules. Even the best students may not know all the rules of the language which they are exposed to. So, these are the three conditions which drive to use Monitor successfully. But later on Krashen has mentioned only about the focus on form and know the  rule. He did not mention about the first condition ‘time’. Learnt knowledge (Monitoring) Acquired knowledge Output Figure: Model of adult second language performance On the other hand, Krashen has explained about three individual differences regarding use of the Monitor though the difficulties of three conditions remain dissolved. According to him, there are three types of Monitor users. Monitor over-users, Monitor under- users and the Optimal Monitor users. 1. Monitor over-users: This type of people use the Monitor all the time. They always check their output with the conscious knowledge of the language. Krashen claims two causes for this type of Monitor users. Firstly, they acquire language with the restriction of grammar instruction. Secondly, they may have acquired a good amount of second language but can not trust their acquired competence. That is why they always try check and cover their mistakes by using Monitor. So, they speak hesitantly and try to correct their utterances at the middle of a conversation. 2. Monitor under users: These types of people whether acquire language not learning or they do not prefer to use their conscious knowledge. Actually they do not use the conscious knowledge even when the three conditions are met. The self-correction happen only from a ‘feel’ of correctness. 3. The Optimal Monitor users: The optimal users are the people who apply the Monitor when it is necessary and appropriate. They know how to combine their learned competence with their acquired competence. They never use the grammar rules in their regular conversation because it can interfere in their utterances. This type of users most of the time achieve like the  native speaker in writing and planned speech. The Natural Order Hypothesis: According to Krashen the Natural Order Hypothesis deals with the grammar structures. The hypothesis explains that grammatical structures are acquired in predictable order. This order does not follow any rules that the easier grammar rule will be at first and then the complex one. It claims that there are some certain grammatical structures which acquired early by the learners of second language acquisition and then the others and it is for any given language. Krashen explains that the claim does not prove as 100% always, but there are some significant similarities. Krashen actually adopted this hypothesis from the study of Dulay and Burt’s study of what they called the order of acquisition of grammatical morphemes in English by five to eight year old children learning English as a second language (1974). They established a chart of morphemes for their study. So, Krashen adopt the idea of English morphemes and established his Natural Order Hypothesis. Krashen believed that there was no difference regarding the synchronization of the grammar structures. But later on Krashen develops his own idea about the order. He examines the study with both children and adult’s second language and illustrates the natural order of grammar structure according to his point of view. Table: Average order of second language acquisition in English. In further description about the Natural Order Hypothesis Krashen explains three facts. * Krashen claims that natural order cannot be changed. Teacher cannot change the order through drills or exercises. If a teacher tries to drill a certain rule for several weeks the result will be zero. Because the acquirer will only acquire language when it is ready to acquire the certain rule. This fact is very much related to the Affective Filter Hypothesis. * The natural order of grammar structures do not depend on any obvious feature. It can go through complex to easier or easier to complex. Some rules acquired later which are quite simple. On the other hand some rues acquired earlier which seem to be difficult in structures. It shows that curriculum designers might face problem that which one they should put earlier and which one in later. * The third fact is that the natural order is not the teaching order. So, if someone predicts that through learning the grammar structures he or she will acquire language proficiency, he/she might wrong. Because Krashen applied the Natural Order Hypothesis to extend the idea of ‘the Input Hypothesis’. The Natural Order Hypothesis actually helps to know how the comprehensible input can be acquired one by one. So the learners will acquire the language in a natural order as a result of getting this comprehensible input. Criticism of Natural Order Hypothesis: Krashen’s Natural Order Hypothesis faces many criticisms about the predictable natural order in second language learners’ acquisition of grammatical structure. His using of English morphemes as a model also causes criticisms. There are some important criticisms which really force linguists to rethink about Krashen’s Natural Order Hypothesis. These are, * Krashen claims that all L2 learners adopt the same nature of acquiring language to attain proficiency. However there is some individuality between learners. Every learner does not go through the same order of morphemes to  learn grammar rules. Some adopts the -ing form at first and later on go through the other rules step by step. On the other hand some adopts the pronoun case (he/she, his/her etc.) at first. So, Krashen’s hypothesis does not concern about individuality. * Another criticism explains that all languages do not have the same morphemes. Some languages do not have the function of Copula or definite/indefinite article. So as a result the learners from this type of languages face problem acquiring the morphemes though these are the simplest one. The learners pick up the morpheme according to their first language acquisition. Here, Krashen actually totally overlooked the possibility of the influence of L1 on L2. On the other hand he also ignored the role of negative and positive transferences. * Krashen claims that his model of natural order works for both adult and children. Critics raised questions about this generalization. That how did Krashen judge it as the both applied natural order for adult and children. Did the judgment was from instrument and task specific? A critic named Larsen-Freeman applied Krashen’s natural order model for both the adult second language learners and children second language learners and she found that the model really works but when she put it in some different tasks using different instruments, she could not found any similarity between adult learners score and children learners score. So, Krashen’s claim proved itself as unreliable because it does not work for every situation. So these are the criticisms regarding Krashen’s Natural Order Hypothesis. To evaluate our case study we have taken the help of these criticisms and we also found some problems in Bangladeshi context. The evaluation has given in the Analysis part. The Input Hypothesis: The Input Hypothesis gives the answer of the question that how we acquire language. Regarding this hypothesis Krashen states that, the learners acquire language by understanding input which is slightly beyond their  competence. He also adds that when the learners understand the messages of a language, they acquire language. The main theory of this hypothesis is ‘i+1’. Here ‘i’ is learners’ present competence and ‘i+1’ is the input of the language which can be understood by the learners. Krashen calls this ‘i+1’ as the comprehensible input. He not only states that but also strongly claims that ‘comprehending message’ can help to acquire language and there is no other fundamental process of language acquisition. Another point he claims that listening and reading comprehension are the primary important function of second language acquisition. There is one important point which should be noted that the Input Hypothesis and the Natural Order Hypothesis are interrelated. These two are combined to answer the question of how we move from one stage to another of acquisition. That means, Natural Order Hypothesis works for analyzing the Input Hypothesis that how learners move from ‘i’ to ‘i+1’. The Natural Order Hypothesis helps to decide that which one should be the comprehensible input or ‘i+1’ in the classroom. There are two corollaries in the Input Hypothesis. These are, 1. The first corollary is that speaking is not the cause of language fluency but the result of language accuracy. It cannot be taught directly. It is acquired through comprehensible input. 2. The second corollary is, if there is enough amount of comprehensible input the learner will automatically acquire competence from the teacher. There is no need to use grammar structure. That means there is no need to be finely tuned input which means the exact next grammar structure as ‘i+1’. It can also be roughly tuned input, like the nearer structures from the ‘i’. So, from this hypothesis we can understand that there is no need to use energy in acquiring language. The main important part is just to understand the messages. When we understand the messages of second language, the LAD starts to work. This is how we acquire language. The Affective Filter Hypothesis: The Affective Filter Hypothesis describes us that how people face obstacles to acquire second language. It tells us about a filter named ‘affective filter’ which works as an obstacle in the way of acquiring language. The affective filter does not work directly as a barrier but creates a ‘mental block’ in brain which prevents to acquire language. Krashen explains that if the affective filter is down then the comprehensible input reaches to the LAD and acquires competence but if the affective filter is up then the input does not reach to the LAD and acquisition does not happen. Krashen includes that there are some ‘affective variables’ which control this affective filter. The affective variables include motivation, self-confidence and anxiety. This variables help to acquire second language very easily. But if someone has low motivation, low self-esteem and debilitating anxiety the student will face difficulties to acquire language. Because these low motivation, low self- esteem and anxiety will ‘raise’ his affective filter and form a ‘mental block’ which will become an obstacle to understand the input and acquire language. So, the Affective Filter Hypothesis helps to determine that why a specific learner faces problem in dealing the comprehensible input though he/she has reached a native- like competence. The main point is one should have motivation, self-confidence and low anxiety if he/she wants to acquire second language. Many critics raised question against Krashen’s Theory of Second Language Acquisition. Some of them are reliable and the rest of them are from anti- Krashenites. From our opinion, though Krashen has applied many statements to prove his theory but the Natural Order Hypothesis really lacks in reliable informations. The hypothesis could not set with our Bangladeshi context. The discussion has given in the next section.

Learning a New Language Essay -- Language Communication Cultural Essay

Learning a New Language Language is a matter that touches many American cultures. Cultures thrive on their languages and customs to define the people they are. However, second languages can divide not only people of a specific group but also members of a particular family. Several writers address the unvarying difficulty of learning a second language in America. Many rhetorical devices are used to sustain their assertions and to shape the reader. An Asian-American author speaks about multilingualism in American today. Tan (2002) uses rhetorical devices to support her claims about her frustrations with a mother who does not speak English very well. Throughout this paper, I will analyze Tan’s cause-and-effect structure, personal experiences, and pathos appeal. This essay will show how Tan supports her claim through these rhetorical elements. Tan (2002) shows cause-and-effect structure throughout the text. During her copy, Tan uses this rhetorical element to show her readers how hard it was for her to grow up knowing two languages in America. The following selection from Tan (2002) shows how cause-and-effect is used in her example: â€Å"I know this for a fact, because when I was growing up, my mother’s 1) â€Å"limited† English limited 2) my perception of her. I was 3) ashamed of her English. I believed that her English reflected the quality of what she had to say. That is, because she expressed them 4) imperfectly her thoughts were imperfect.† (37) â€Å"I think my mother’s English almost had an effect on 5) limiting my possibilities in life as well. Sociologists and linguists probably will tell you that a person’s developing language skills are more influenced by peers. But I do think that the language spoken in the fa... ...that she is happy in the end and therefore appeals to the reader’s emotions. Tan (2002) structures her claims about her bilingual life around cause-and-effects, personal experiences, and pathos appeals. She uses cause-and-effect to show how events in her past have led up to the person she is today. She uses personal experiences to explain where she is coming form when she shows her frustration about her family. Tan uses a pathos appeal to identify with her reader so they understand through their emotions how she really feels about her mother. Through her explanations and identifications, Tan shows how growing up in a multilingual family can change someone in to a more accommodating person. References Tan, Amy. â€Å"Mother Tongue.† Constructing Others, Constructing Ourselves; a reader. Sibylle Gruber. Dubuque, IA: Kendall/Hunt, 2002. 35-39

George Orwells Animal Farm

In George Orwell's Animal Farm, power and control of the farm shifts from Mr. Jones to Snowball and from Snowball to Napoleon. Each, no matter how well their leadership, was corrupted by power in some way as compared to Russian leaders of the time. The most corrupt, Napoleon, uses several methods of gaining mocontrol the Handmaids in almost any way they desire. It is clear that the theme of power and control through the depiction of it’s citizens creates a severely oppressive society. This theme is portrayed by the role of government and the patriarchal society. The government strikes fear on its citizens with the Wall and the Salvaging in the Handmaid’s Tale, the military force in V for Vendetta and the outcasting of animals that do not follow orders in Animal farm. Fear and intimidation are used in the texts and furthermore, power is shown through the patriarchal society, which includes the Commanders, the Commander's Wives, and the Handmaids assigned to them. Overall, the Republic of Gilead institutes power and control in society, therefore forcing its residents into submission and causing them to loose control over their own lives. . re power and luxury.Power and Control â€Å"Once you had the freedom to object, to think and speak as you saw fit, you now have censors and systems of surveillance coercing your conformity and soliciting your submission† (V, â€Å"V for Vendetta†). Throughout history there has been struggle of power and control between a governing body and it's people. In the movie â€Å"V for Vendetta,† the government has ultimate control over it's people in a dystopian future, created by a series of strategic events that could be in the near future for the United States. Good morning/afternoon teachers and fellow students. Today I will be talking to you about Power and Control related to my three texts, Animal Farm by George Orwell, V for Vendetta directed by James McTeigue and The Handmaid’s Tale by Margaret Atwood. Yes it is necessary for the government to impose a certain amount of power and control on its citizens in order for a society to function properly. However, too much power and control in a society eliminates the freedom of the residents, forbidding them to live an ordinary life. In the dystopic futuristic novel, The Handmaid's Tale demonstrates the theme of power and control through an oppressive society called the Republic of Gilead. The government establishes power and control through the use of the Wall, military control, the Salvaging, and the Particicution. The Patriarchal society allows the Commanders to hold immense power over the citizens, while the Commander's Wives hold the power in the household. Generally, the Handmaids do not hold very much power because they are of a lower class in the Patriarchal society. The Republic of Gilead institutes power and control in society, therefore forcing its residents into submission and leaving them completely helpless in a totalitarian regime. Just like in George Orwell's Animal Farm, power and control of the farm shifts from Mr. Jones to Snowball and from Snowball to Napoleon. Each, no matter how well their leadership, was corrupted by power in some way as compared to Russian leaders of the time. The most corrupt, Napoleon, uses several methods of gaining more power and luxury. The citizens in The Handmaid’s Tale know that they are constantly under surveillance, so they try their best to conform to avoid getting caught. The patriarchal society is another factor that develops power and control. The Republic of Gilead is male dominated; the Commanders exercise authority over all the citizens. The Commander has a high status in society, as explained by Ofglen when she says, â€Å"He's way up there†¦ He's at the top, and I mean the very top. At such time it's hard to imagine it† (Atwood 262). The Commander's Wives hold power, for â€Å"they can do almost anything to [the Handmaids]† (Atwood 344). Clearly, the Commander's Wives are permitted to control the Handmaids in almost any way they desire. It is clear that the theme of power and control through the depiction of it’s citizens creates a severely oppressive society. This theme is portrayed by the role of government and the patriarchal society. The government strikes fear on its citizens with the Wall and the Salvaging in the Handmaid’s Tale, the military force in V for Vendetta and the outcasting of animals that do not follow orders in Animal farm. Fear and intimidation are used in the texts and furthermore, power is shown through the patriarchal society, which includes the Commanders, the Commander's Wives, and the Handmaids assigned to them. Overall, the Republic of Gilead institutes power and control in society, therefore forcing its residents into submission and causing them to loose control over their own lives. .

Dorothy and the Tree Essay

Dorothy and the Tree: A Lesson in Epistemology Stanley Fish discusses how we in society base our lives off of assumptions. Using the example of Dorothy and the tree, Fish is able to show how with our assumptions, we as people categorize others and things into what we believe to be correct. Whether or not we have actually taken the time to figure out if we are right is irrelevant. He notes that we should just â€Å"keep trying to expand our sense of ‘us’ as far as we can†, so we can avoid judgments and isolating ourselves from the rest of society. Even though Dorothy realizes her mistake, she doesn’t realize that it is not a failure, but her consciousness assuming the classification of things in the world. Fish later on defines thought as the â€Å"structure that at once enables perception†, meaning that within categories things emerge, limiting perception and nothing can allow one to see everything because that is God’s job. Fish uses many Bible allusions to create justification for his assertions. He uses Genesis 1:26, and Paul’s road to Damascus to show that people can be persuaded to change their placement of things in society. Despite all of his valid points, Fish states that it is nearly impossible for one to change just on realizations. He believes it takes practice to accept the fact that there are things that we cannot comprehend because there is no limit on the conceptual trappings of society.

Harvard Acceptance Letter Real and Official

Harvard Acceptance Letter Real and Official SAT / ACT Prep Online Guides and Tips Each year, Harvard receives nearly 40,000 applicationsfrom high school hopefuls. Only5% of them get a Harvard acceptance letter.For example, in 2015, Harvard College accepted 1,990 applicants from a record 37,307 applications for the Class of 2019. That’s a 5.3% admission rate.Unfortunately, the overwhelming majority of applicants get a rejection letter. â€Å"I am very sorry to inform you†¦Ã¢â‚¬ When I was in high school, I was one of the lucky few to apply Early Action and receive an acceptance letter in the mail. This validated years of hard work and made me giddy like I'd never been before for what came after high school.Here’s my complete, official Harvard acceptance letter. Want to learn what it takes to get a Harvard admit letter yourself? Read my How to Get Into Harvard and the Ivy League guide. I'll take you through the philosophy behind how to become the world-class student that schools like Harvard, Princeton, and Stanford are looking for. You'll learn what it means to develop an application Spike, why being well-rounded is the path to rejection, and how to craft a compelling application yourself. Read this guide now, before it's too late. Here's a scan of the original admissions letter sent to me by the Office of Admissions at Harvard College. (Thanks to my dad for keeping it around). This is for Early Action, though I'd bet the Regular Decision letter looks similar. Even though I was admitted to my other top choice schools (Princeton, MIT, Stanford especially), I ultimately decided to attend Harvard. Unlike Princeton and MIT, it hadleading graduate schools in every discipline (medicine, law, business), which made me believe it had the broadest set of opportunities and the most diverse community. Because of my interest in medicine and science at the time, it also had the broadest, richest research community. At the end of the day, I also felt like I would regret not attending Harvard more than any other school. After this letter, I'll give you tips on what it takes for you to get an acceptance letter like this for yourself. Harvard College Office of Admissions and Financial AidByerly Hall8 Garden StreetCambridge, Massachusetts 02139 Dear Mr. Cheng, I am delighted to inform you that the Committee on Admissions has admitted you to the Class of 2009 under the Early Action program. Please accept my personal congratulations for your outstanding achievements. In recent years, nearly twenty thousand students have applied for the sixteen hundred and fifty places in the freshman class. Faced with many more talented and highly qualified candidates than it has room to admit, the Admissions Committee has taken great care to choose individuals who present extraordinary academic, extracurricular and personal strengths. In making each admission decision, the Committee keeps in mind that the excellence of Harvard College depends most of all on the talent and promise of the people assembled here, particularly our students. In voting to offer you admission, the Committee has demonstrated its firm belief that you can make important contributions during your college years and beyond. By early March, you will receive an invitation to visit Harvard from Friday, April 29, to Sunday, May 1. Our faculty and students have arranged a special welcome for you and we think the experience will be interesting and useful in making your final college choice. Of course, we would also be happy to have you visit at some other time and we hope you will make a special effort to do so if you will be unable to join us in April. Especially if you cannot come to Cambridge during the next several months, please do not hesitate to contact us if we can be of help in any way. You will find our application booklet and our website (admissions.college.harvard.edu/) good sources of information about college life and we will be sending you a course catalog in the spring to help familiarize you with our academic opportunities. We are enclosing a statement about choosing a college that might be helpful. You have until May 1 to respond to our offer. However, we are enclosing with this letter a reply card for your use in case you are able to inform us of your decision before the May 1 reply date. A complete admission packet will be mailed to you in early April. We very much hope that you will decide to attend Harvard, and we look forward to having you join us in September. Yours sincerely, William R. Fitzsimmons Dean of Admissions and Financial Aid (Hope you will join us!) Want to get into Harvard or your personal top choice college? We can help. PrepScholar Admissions is the world's best admissions consulting service. We combine world-class admissions counselors with our data-driven, proprietary admissions strategies. We've overseen thousands of students get into their top choice schools, from state colleges to the Ivy League. Learn more about PrepScholar Admissions to maximize your chance of getting in. OK....Now What? You probably have a reason forlooking at this acceptance letter. Let me try to help you out. If you just received a rejection letter from Harvard, I'm sorry. When admissions officers say it's a really hard decision when it comes down to the wire, they're speaking the truth. The good news is that your future is almost entirely up to you. There are Harvard graduates who end upfloundering in life, and there are graduates from hundreds of other colleges (and people who don't even go to college) who end up accomplishing amazing things. You're in control of your own fate. So if you're disappointed about a Harvard rejection, I hope you pick yourself up and excel from this point forward. Here's a guide on good study habits to excel in academics. If you're in high school (or even earlier) and want to apply to Harvard, I hope this acceptance letter inspires you to want one of your own. Make no mistake, it took a lot of hard work to get to the point where I had a great chance at getting admitted to Harvard and passing their admission requirements. I had to strategize carefully and be ruthless about where I spent my time so I could balance a high GPA, challenging coursework, test scores, and demanding extracurricular activities. To help you out,I've written everything I know about succeeding in high school and college admissions. If you want your own Harvard acceptance letter, these are must-read guides: 1) How to Get Into Harvard and the Ivy League This is my foundational guide to help you understand what top colleges like the Ivy Leagues are looking for. Here you'll learn: what kinds of students are most attractive to Harvard and why why being well-rounded is the kiss of death in top college admissions what a Spike is and why an effective Spike will get you into every college you apply to how you can develop a Spike of your own I'm not saying it's easy, because it's not. But far too many students have the wrong idea about what kinds of students colleges are looking for. In the process, they waste far too much time on things that aren't important and do nothing to increase their chances of admission. Even worse, they end up miserable and constantly stressed. That's why I wrote this guide. Read it and you might totally change your application strategy before it's too late. 2) My Complete Successful Application to Harvard, Including Common App and Supplement To complement my "How to Get Into Harvard" guide, I share my entire college application, page by page, word for word. You'll see the exact application that the admissions committee at Harvard saw, including the Common Application, my transcript, personal essays, letters of recommendation, and Harvard supplement. I also provide commentary on every piece of my application. You'll see what was reallyimportant to get me into Harvard, and other things that weren't. You'll even see mistakes I made in my application. I've never seen anyone else provide this level of detail,so this is a special treat. 3) How to Get a 4.0 GPA and Better Grades Your coursework is one of the most important aspects of your college application. Not only do you need great grades, you need great grades in what Harvard says is "themost demanding college-preparatory program available." Thus it's no surprise that a lot of high school students are stressed out by coursework and the demands of college applications. Do you feel like you're taking too many AP courses and struggling to stay afloat? Consistently, I see that the biggest problems are with mindset, habits, and strategy.I've written a comprehensive guide with my complete set of strategies in how to excel in high school coursework. I take you through three levels of detail, from top-down: Mindset and Psychology: Do you have the confidence to know you can improve with hard work? Overall Planning and Habits: Do you get the most out of every hour? Do you understand what teachers care about, and how to give them what they want? Do you know how to combat procrastination? Individual Class Strategies: How should you be treating English and science classes differently? I learned a lot of these lessons the hard way, throughout high school and college. This is the guide I wish I had before starting high school. Take the time to read it and you might save hundreds of hours of time and get even better grades. 4) How to Get a Perfect SAT Score/ How to Get a Perfect ACT Score In addition to coursework, the other major numbers piece to your application isyour SAT/ACT score. Simply put, this number is so important because it compares you on even ground to every other high school student taking the test. Top schools like Harvard expect you to be in the top 1 percentile of the country. If you're not, you'll cast serious doubt on your academic ability. In my perfect SAT and perfect ACT guides, I share the major strategies that you'll need to get above a 2100 on the SAT and 32 on the ACT. Also, check out my series on getting perfect scores in each of the sections on the SAT/ACT: SAT 800 Series: Reading | Math | Writing- Learn important strategies to excel in each section of the SAT. ACT 36 Series: English | Math | Reading | Science - Learn how to get a perfect 36 on each section of the ACT. Want to improve your SAT score by 160 points or your ACT score by 4 points?We've written a guide for each test about the top 5 strategies you must be using to have a shot at improving your score. Download it for free now:

A Brief History of the Tampon and Who Invented It

A Brief History of the Tampon and Who Invented It The first tampons were made using a wide variety of materials found in nature. The prevailing thought seemed to be that if it was absorbent, chances are that it would work as a tampon.   Tampons First Appeared in Ancient Egypt For instance, the earliest historical evidence of tampon use can be found in ancient Egyptian medical records that described tampons comprised of material derived from the papyrus plant. In the fifth century B.C., Greek women fashioned their protection by wrapping lint around a small piece of wood, according to writings of Hippocrates, a physician considered to be the father of western medicine. The Romans, meanwhile, used wool. Other materials have included paper, vegetable fibers, sponges, grass and cotton.   But it wasn’t until 1929 that a physician named Dr. Earle Haas patented and invented the modern-day tampon (with applicator). He came up with the idea during a trip to California, where a friend told him how she was able to improvise a more comfortable and effective alternative to the commonly used and bulky external pads by simply inserting a piece of sponge on the inside, rather than outside. At the time, doctors were using plugs of cotton to staunch  secretions and so he suspected a compressed form of cotton would absorb just as well.   After a bit of experimenting, he settled on a design that featured a tightly bound strip of absorbent cotton attached to a string to  allow for easy removal. To keep the tampon clean, the cotton came with an applicator tube that extended to push the cotton into place without the user having to touch it. Tampax and o.b.: Two Brands With Longevity Haas filed for his first tampon patent on November 19, 1931, and originally described it as  a catamenial device, a term derived from the Greek word for monthly. The product name â€Å"Tampax,† which originated from â€Å"tampon† and â€Å"vaginal packs,† was also trademarked and later sold to  businesswoman Gertrude Tendrich  for $32,000. She  would go on to form the Tampax company and begin mass production. Within a few years, the Tampax arrived on store shelves and by 1949 appeared in more than 50 magazines.   Another similar and popular type of disposable tampon is the o.b. Tampon. Invented by German gynecologist Dr. Judith Esser-Mittag in the 1940s, the o.b. Tampon was marketed as a â€Å"smarter† alternative to applicator tampons by emphasizing greater comfort and doing away with the need for an applicator. The tampon comes in the shape of a compressed, insertable pad designed to expand in all directions for better coverage and also features a concave tip so that a finger can be used to push it snugly into place.   In the late 1940s, Esser-Mittag partnered with another physician named  Dr. Carl Hahn to start a company and market the o.b. Tampon, which stands for one binde or without napkins in German. The company was later sold to American conglomerate Johnson Johnson.   One major selling point the company touts on its website is the fact that a non-applicator tampon can be more environmentally friendly. How so? Johnson Johnson states that 90% of the raw materials that go into o.b. tampons come from renewable resources.

Develop arguments pro and con with respect to customized pricing. What Essay

Develop arguments pro and con with respect to customized pricing. What are the differences in implementing the policy across dif - Essay Example This causes lots of competition between other stores. Many other stores will drop the product's price in order to gain revenue from it. Sometimes other stores will drop their product price so low they lose revenue. A good example would be B-to-B magazine. If the retail store calculated the revenue from other stores in the area, the retail store could come up with a lower price to attract customers. The cons of opening up two stores in two different towns may cause the retail store to lose money. Customized pricing is determined by the location in the town. Considering the two retail stores will be in two different towns they will have to go by the customized pricing terms. Many of the prices seen at one retail store may not be seen at the other retail store. Depending on what product the customer is looking for, he or she may have to drive from town to town to get the cheaper price for the product. Sooner or later it will be like the two thrift stores from different towns will be com peting. Another good example would be B-to-B magazine. If the retail store sold the magazine for a really cheap price, the store may not get a big enough revenue. The pros and cons of using customized pricing are equal. It just depends on what type of retail store that person wants to open up, or whether or not he wants to open up more than one store.

Hurricanes Essay Example | Topics and Well Written Essays - 250 words

Hurricanes - Essay Example The latent heat release brings about temperature increase for the cooler atmosphere above through condensation and since this occurs in cycle, humidity of the warm ocean air augments and blends with the accumulating storm that eventually becomes the hurricane. Scientific studies also attribute the creation of a hurricane from elevated wind speed due to atmosphere at higher altitudes where high pressure exists as well. Global warming via greenhouse gases naturally impacts oceans, such as the North Atlantic and the northern Indian ocean, with rise in temperature, thereby contributing to the change which favors strengthening of storms with wind speeds that could reach the maximum. Under these circumstances, hurricanes may be produced significantly whenever the wind shear profile, not necessarily the water temperature, gains an advantage through the global warming which normally enhances to the huge quantity of energy exchanged between the ocean and the air on its top. Consequently, â€Å"As water warms, the ability of water to evaporate goes up, and a greater evaporation rate will produce a more intense hurricane† according to MIT meteorologist Kerry

Finland Essay Example | Topics and Well Written Essays - 1250 words

Finland - Essay Example he largest lake in this country, holds the record of being the fourth largest in the all of Europe (see Statistics Finland http://www.stat.fi/index_en.html). As to its landscape, more of the areas of Finland are flatlands with few hills. Today, this country is one of the most progressive nations in Europe. Most of the areas of Finland are covered with forest trees (see Statistics Finland http://www.stat.fi/index_en.html). The culture of Finland is a mixture of indigenous heritage defined by its Nordic and European culture (see CIA World Fact Book). According to CIA World Fact Book, the culture of Finland has been strongly influenced by the adjacent countries of Sweden and Russia. The traditional Karelian melodies and lyrics are said to be the primary source of inspiration for the music of Finland (see CIA World Fact Book). Accordingly, the Karelian culture is said to be the purest expression Finnic culture (see CIA World Fact Book). In the field of visual arts, handicrafts and architecture, Finland has gained a reputation for its handicrafts and industrial designs (see CIA World Fact Book). Like many countries in Europe, Finland as its share of ethnic groups. According to the CIA Work Fact Book, 93.4% of people living in Finland are Finns or the natives of Finland, 5.6% are Swede 0.5% are Russian, .03% are Estonian, 0.1% are Roma or Gypsy and 0.1% are Sami. Based on the 2009 edition of the CIA Work Fact Book, the emigration rate of Finland is at .06 migrants /1,000 population. Since majority of the people in this country are Finns, the official language in Finland is Finnish while the second official language is Swedish (see Statistics Finland http://www.stat.fi/index_en.html). Other languages spoken in Finland are Russian, Estonian, Finnish Romani, Finnish Sign Language and Sami language (see Statistics Finland). According to Statistics Finland, there are three Sami languages spoken in Finland. These are the Inari Sami, Northern Sami and the Skolt Sami (see

Book Emperor Of The Air English Literature Essay

Book Emperor Of The Air English Literature Essay Throughout many of his stories in his book Emperor of the Air author Ethan Canin explores the theme of happiness in relation to his characters. Depending on which source one uses, happiness ranges from the quality or state of being happy to a state of well-being characterized by emotions ranging from contentment to intense joy and according to the Oxford English Dictionary Good fortune or luck in life or in a particular affair; success, prosperity. Based on this, happiness is subjective to the individual. Every story in the book deals with the theme in its various forms but the three pieces I will examine each deal with this subject and its various definitions in their own ways, and I feel are the best representations of happiness. In his second story The Year of Getting to Know Us Canin introduces the idea of happiness directly and very matter-of-factly. Canin first questions the happiness of Lenny while he is at the counselors when he is asked You sound as if you dont want to let people near youà ¢Ã¢â€š ¬Ã‚ ¦Right? and Lenny responds with Im a reasonably happy man (Canin 26). After reading this, we get a sense that maybe Lenny is lying, that he is holding something back. How can someone be happy, going through what he has, and will continue to go through? The events that are explained further in the story: his fathers death and his wifes affair, impose on this question further. On the very next page Lenny goes on to talk about his life saying I am struck by the good fortune of my life (Canin, 1988). Perhaps Lenny truly is happy, as he early states an exact definition of the word in his thought of good fortune. Despite all that has happened in his life, he remains optimistic, and believes himself to be happy, and maybe he is. The opposition to Lennys apparent happiness is the nearly constant nagging he receives questioning his emotions and ability to feel anything at all. Canin mentions such an instance immediately after mentioning Lennys good fortune in life when he states Anne says that I dont feel things (Canin 27). Lenny never questions whether or not if he is able to feel, but also never goes out of his way to show any emotion other than stating that he is indeed happy. Even after witnessing his wifes affair firsthand, the only way Lenny can express himself is by writing down on a napkin you are a 40 year old man with no children and your wife is having an affair (Canin, 1988). Lennys apparent lack of any emotion that would come naturally to anyone in the same circumstance is quite intriguing and leaves the reader questioning his feelings, if he has any. Another moment where Lennys feelings are under fire comes when he is a child and his mother asks him if he is angry and he responds with I dont know (Canin, 1988). This shows the reader that even though he was young, Lenny was indecisive about his feelings, and whether or not he felt anything. Canin leaves the decision of whether or not this character is happy or if he can feel, up to the reader. I believe that Lenny is and was happy, and just because a person may not show outward expressions of emotion, or whether they know exactly what they are feeling at a given time or not, does not mean they are not happy or unable to feel. Lenny has more than likely felt very conflicted about things as is stated by Canin near the end of the story after Lennys father has passed away But I didnt feel what I thought I would. Just the wind on my throat, the chill of the morning. (Canin 40). Given such circumstances it is easy to see why some may view him as being unhappy or without feeling completely, but with that being said, it is all subjective. Lies is the third story in Canins collection and unlike The Year of Getting to Know Us it does not introduce the concept of happiness quite as clearly. From the very first paragraph we see a certain sense of naivety about the character Jack, which is no more evident than when he says to himself Some guys my age are kids, but Im eighteen and getting married and thats a big difference (Canin, 1988). This thought alone says a lot about Jack, and what he must be telling himself happiness is, and what happiness can be. We do not yet know that Katy, his girlfriend, is pregnant, or that he is soon to be a father. Canin does not tell the reader this outright, but hints at it, and leaves the reader to question Jacks motives, and his state of mind. Jack is trying to convince himself that things are good, and that everything will be O.K. but the truth of the matter is, that things will probably not be good, and he does not want to acknowledge this. He chooses to live in the moment, and lies to himself to be happy. Jack has no problems lying and Canin gives us an example of this when Katy says that she loves him, and Jack says to himself I dont mind lying, but not about that as if to say that it is O.K. to lie about some things, but not about others (Canin 50). When Jack does tell Katy that he loves her, it comes at the end of the story and almost seems forced, as if even he doesnt believe it and the lies he has been telling himself are starting to fade through. For a while jack is happy, but it is only a false sense of happiness because he had to lie to himself, had to trick himself into believing it. He acted in ways he normally never would have, and had to compensate with the lies. A question one should take into consideration when thinking about Jacks situation is should he be happy? Does jack have the right to be happy by whatever means necessary, even if it means lying to himself with no mind of the repercussions? The answer to this is yes. Jack realizes his situation, as Canin states I think about how this bit with Katy started and how fast its gone, and it kind of stuns me that this is what happened, that of all the ways a life can turn out this is the way mine is going to go (Canin 52). Despite his circumstances Jack chooses to remain optimistic about his future, and goes about this by lying to himself, hence the title of the story; Lies. Pitch Memory is similar to The Year of Getting to Know Us in a couple of ways. Both of the main characters insist that they are happy, both have dilemmas they need to overcome, and both have people in their lives who believe they are not happy. Lenny had both his mother and wife, and the main character of PM, who is suspiciously nameless, has her klepto-mother. Canin gives us insight into why she may not be happy through a first person narrative perspective. Through this perspective it is not really necessary to know her name, and was a wise decision on Canins part because we are able to keep an objectionable distance from the character. Although we do not know her name, we do know about her family and her profession, as Canin states on page one-hundred Tessa is a heart surgeon and I am a waitress (Canin 100). From here we can see as to why she may be not as happy as what she says or thinks, but then again, does ones occupation really determine ones overall happiness? The answer to this is no, people can love their job but still be miserable and vice-a-versa. It does not matter that she is a waitress, but this is a fact that her mother cannot seem to comprehend. I have dealt with similar issues in my own life. I once told my mother that I would be perfectly happy with a career at Pizza-Hut, so long as I was able to live how I wanted. Granted this was a lie, but I was trying to make a point, and she understood this. Sometimes it takes people a little longer to come around, but if they truly care; they will. The first example Canin gives of her mothers thoughts occurs when she receives a phone call from one her fathers old acquaintances who said Your mother is concerned about what youre doing with your life. This shows not only that her mother cares about her life, but also that she is still somewhat confused as to how someone could be happy serving pancakes. She actually goes on to tell her mother directly that she is happy as Canin illustrates Im happy, Mother. I dont want another job, I dont need a husband. Im happy (Canin 107). With this Canin directly tells us that she is happy, as she lists reasons to her happiness, and gives her a uniqu e sense of logic about it. People make their own happiness, there is no standard as to what constitutes being happy. Thanksgiving dinner is when she proclaims her happiness yet again during dialogue with her mother: My Mother asks the waiter whether he minds working on Thanksgiving Day and he tells her that everybodys got to earn a living. Thats right, my mother says when the waiter leaves. Mom, I am earning a living. Are you going to serve pancakes the rest of your life? I think I will, I say, and this makes my mother start to cry (Canin, 1988). This is the most obvious declaration of happiness in the entire book, as she is able to firmly stand her ground and tell her mother that she is happy, and will continue to do what makes her happy, be it serving pancakes or cleaning the bathrooms at the restaurant. Canins theme of happiness in each of these stories takes on its own forms, and leaves the readers asking themselves questions about their own happiness. He addresses if one can be happy despite the gravest of circumstances, whether happiness can be attained by lying to oneself, and if someone can be happy despite not having the best standing in life and by doing what they love to do. He addresses each story with a realistic yet optimistic viewpoint on the subject, and is able to maintain it to the very last sentence in each.

Explore Shelley’s presentation of the impact of the Creature in the lig

Explore Shelley’s presentation of the impact of the Creature in the light of this comment. The Creature is described as ‘ a fiend of unparalleled barbarity’, yet many modern readers may sympathise with him. Explore Shelley’s presentation of the impact of the Creature in the light of this comment. It is my view, that the Creature may be seen from two main perspectives, on the one hand he may be seen as a â€Å"Monster†, â€Å"a fiend of unparalleled barbarity† and on the other he may be seen as a victim with whom the reader may sympathise. Out of the three narratives in the book, the one which occupies that major part of the book I that of Victor Frankenstein. It is from his perspective that we are imparted most of the evidence which may lead us to consider the Creature as a ‘Fiend of unparalleled barbarity.’ Throughout Frankenstein’s framed narrative, he refer to the Creature as â€Å"daemon†, â€Å"devil† or â€Å"wretch and perhaps (one may consider) with good reason considering the creature’s actions after his creation. Firstly, the Creature murdered Victor’s youngest brother William, an innocent child. However, the Creature’s true intentions when committing the murder remain unclear, as the Creature says, â€Å"I grasped throat to silence him, and in a moment he lay dead at my feet.† This statement, by the Creature, is of course ambiguous, as the Creature could have literally been trying to silence William, whilst on the other hand there is the more sinister aspect, that the Creature could have grasped William’s throat with a mind to silence him permanently. If we take Shelley’s view of her 1831 audience as â€Å"monsters thirsting for each others blood† then we would of course condemn the Creature, as someone who committe... ...cism against Islam, and particularly the Turks as something which was socially acceptable, this prohibiting from any form of empathy with the Creature. In conclusion, despite the Creature’s clearly appalling actions throughout the novel, I assert that these perhaps may be a result of the environment into which the Creature is created, just like a child born into an unstable and abusive household may often grow into an unstable and abusive person the Creature â€Å"born† into an abhorrent, un-accepting, unforgiving and violent world becomes abhorrent and violent himself, acting only the way others have acted towards him, with the utmost hate and unjustifiable violence, and it is because (I believe) the Creature is only a result of the environment into which he is created, a product of nurture as opposed to nature, that many modern readers sympathise with him.

Traders- Risk, Decisions and Management

70+ DVD’s FOR SALE & EXCHANGE www. traders-software. com www. forex-warez. com www. trading-software-collection. com www. tradestation-download-free. com Contacts [email  protected] com [email  protected] ru Skype: andreybbrv TRADERS This page intentionally left blank TRADERS Risks, Decisions, and Management in Financial Markets Mark Fenton-O’Creevy Nigel Nicholson Emma Soane Paul Willman 1 Great Clarendon Street, Oxford ox2 6dp Oxford University Press is a department of the University of Oxford.It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide in Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Madrid Melbourne Mexico City Nairobi New Delhi Shanghai Taipei Toronto With offices in Argentina Austria Brazil Chile Czech Republic France Greece Guatemala Hungary Italy Japan South Korea Poland Portugal Singapore Switzerland Thailand Turkey Ukraine Vietnam Oxford is a r egistered trade mark of Oxford University Press in the UK and in certain other countries Published in the United States by Oxford University Press Inc. New York  © Oxford University Press 2005 The moral rights of the author have been asserted Database right Oxford University Press (maker) First published 2005 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, or under terms agreed with the appropriate reprographics rights organization.Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above. You must not circulate this book in any other binding or cover and you must impose this same condition on any acquirer. British Library Cataloguing in Publication Data Data available Library of Congress Catalo ging in Publication Data Data available ISBN 0–19–926948–3 3 5 7 9 10 8 6 4 2 Typeset by Newgen Imaging Systems (P) Ltd. , Chennai, India Printed in Great Britain on acid-free paper by Biddles Ltd. King’s Lynn, Norfolk Acknowledgements We gratefully acknowledge the help of the investment banks which cooperated in this research and provided ? nancial support, and the Economic and Social Research Council which provided funding as part of the Risk and Human Behaviour Programme (grant number L211252056). We are especially grateful to the traders and managers who gave us their time and shared their understanding. This page intentionally left blank Contents List of Figures List of Tables viii ix 1INTRODUCTION Traders, Markets, and Social Science 1 10 2 THE GROWTH OF FINANCIAL MARKETS AND THE ROLE OF TRADERS 3 ECONOMIC, PSYCHOLOGICAL, AND SOCIAL EXPLANATIONS OF MARKET BEHAVIOUR 4 TRADERS AND THEIR THEORIES 5 A FRAMEWORK FOR UNDERSTANDING TRADER PSYCHOLOGY 6 RISK TAKERS Pro? ling Traders 28 51 74 110 145 178 197 212 221 237 7 8 9 10 BECOMING A TRADER MANAGING TRADERS CONCLUSIONS APPENDIX The Study References Index List of Figures 2. 1 2. 2 2. 3 3. 1 3. 2 4. 1 4. 2 5. 1 5. 2 6. 1 6. 2 6. 3 6. 4Post-war UK equity market growth Post-war US equity market growth Global growth in OTC derivatives Expected utility theory Prospect theory The relationship between risk and return Idealized trader risk pro? les RAT Screenshot Distribution of traders’ illusion of control scores A model of individual risk behaviour Comparisons of personality scores by occupational group Risk propensity, risks taken—now and past Comparisons of risk propensity scores by occupational group 7. 1 Career mobility to date 7. 2 Likelihood of a career change in the next 5 years 8. Introducing incentive and monitoring effects to prospect theory description of risk behaviour 14 15 16 40 41 55 63 104 106 117 132 136 138 174 175 194 List of Tables 6. 1 Risk taking index 6. 2 Personality facets—signi? cant differences between occupational groups 6. 3 Relationships between RTI and Big Five personality factors 6. 4 Relationships between RTI and Big Five personality subscales 6. 5 Regression on total remuneration 8. 1 Controls and incentives associated with framing effects—empirical ? ndings 10. A1 Investment bank sample pro? le 10.A2 Personality and risk propensity sample pro? le 10. A3 Frequencies of self-ratings of performance 131 133 138 140 143 193 214 215 218 This page intentionally left blank Chapter 1 INTRODUCTION Traders, Markets, and Social Science I grew up in a small town in Florida and none of this stuff really exists like stocks and bonds and things like that. No one I ever knew growing up did this sort of thing and to me it all seems like a fantasy world sometimes and it’s very abstract. You know, I explain to my mother what I do and I can’t, you can’t put it into words, it just doesn’t make any sense. You can read also Portfolio Management QuizzesI am so removed from the daily life of the average person that I think at some point this has got to come to an end. Whether I really believe that or not I don’t know but in my head I kind of think this is all fantasy land and one day I’m going to wake up and I’m going to say I had the most amazing dream, I’ve been working on some place called Wall Street, that paid me lots of money and I just sat around and looked at computers all day and put these pieces together and everything worked out and it was all a lot of fun. So in my mind that’s kind of what I think.Derivatives Trader, ? rm B We live in a world that is shaped by ? nancial markets and we are all profoundly affected by their operation. Our employment prospects, Introduction our ? nancial security, our pensions, the stability of political systems and nature of the society we live in are all greatly in? uenced by the operation of these markets. Th e role and importance of international ?nancial markets and the traders who inhabit them has grown dramatically in the past few decades. The level of ? nancial ? ows in these markets can rise to quite staggering levels.For example, in the day before the setting of entry exchange rates to the Euro, trades in currencies entering the Euro totalled about ten times World gross domestic product (GDP). At any one time, outstanding derivatives contracts have a total value of around four times World GDP. Professional traders ? gure prominently in media accounts of the workings of ? nancial markets and the economy. Television news bulletins on the economy or stock market frequently include interviews with senior traders, or footage of a trading ? oor. Stories about ‘rogue’ traders are big news.The decisions of individual traders are often seen as having the potential to move markets and affect national economies. Yet, the role of the professional trader is largely absent from mai nstream ? nancial economic accounts of markets. Professional traders, we argue, inhabit a borderland in markets where some of the orthodox assumptions of ef? cient, instantaneously adjusting prices break-down. They are often well placed to exploit market imperfections, by virtue of lower transaction costs, access to privileged information, critical mass, or proprietary knowledge and models.However, at the same time, they work in a fast-moving landscape of noise, rumour, unreliable information, and uncertainty. Thus, it is often dif? cult to tell whether an opportunity is real or illusory. This is a book about professional traders in this noisy borderland: what they do, the kind of people they are, how they perceive the world they inhabit, how they make decisions and take risks. This is also a book about how traders are managed and the institutions they inhabit: ? rms, markets, cultures, and theories of how the world works. Our approach to writing this book is explicitly interdiscipl inary.We draw on psychology, sociology, and economics in order to illuminate the work of traders and their world. Our focus is traders and the ? rms they work in. It is not the purpose of this book to mount an extensive critique of the dominant rational–economic account of ? nancial markets, nor 2 Introduction is ‘markets’ our central focus. We are concerned principally with understanding the world of the professional trader. However, we do believe our work is relevant to an understanding of ? nancial markets. First, in order to understand the role and work of the trader, it is important to understand that the neoclassical paradigm of ef? ient markets and rational pricing breaks down at the margins and that professional traders both bene? t from and contribute to this departure from orthodox ? nancial economic theory. Second, the ef? cient markets paradigm rests on the assumption that in the absence of uniformly rational investors, there is a suf? cient group of rational investors who are able to drive out pricing anomalies through arbitrage. 1 Professional traders in investment banks seem good candidates to play this role. Hence, the evidence that we present on the ways in which traders can deviate signi? antly from rational– economic norms of behaviour may be fruitful in helping to explain market phenomena. 1. 1 Our Work and How It Informs the Book This book is based on a study of traders in ? nancial instruments in four large investment banks operating in the City of London. Over the course of 1997 and 1998, we carried out interviews with 118 traders and trader managers in four large City of London investment banks and collected qualitative and quantitative data on their roles, behaviour, performance, and psychological pro? les. We carried out followup interviews in 2002. We use detailed quotations from the interviews throughout the book. Where we use these quotes they are presented verbatim. We had three main concerns. First, we came to the study with a strong interest in decisionmaking and risk. While all business is concerned to some extent with risk, investment banks and ? nancial traders are almost unique in the extent to which their work is founded on the management of risk and the extent to which they must make decisions about risk. Second, in the vast literature on ? nancial markets relatively little attention has been paid to the role of ? ance professionals in these markets and we wanted to redress this. 3 Introduction Third, we observed that the large literature on markets and the (somewhat slimmer) literature on traders are marked by very different approaches and paradigms in three branches of the social sciences: economics, sociology, and cognitive and social psychology. We wanted to bring together the insights of these different disciplines. Throughout the book we draw both on the data we gathered in this study and on the insights of prior research and literature in ? nancial economics, psychol ogy, and the sociology of markets.We turn now to those literatures. 1. 2 Traders in the Social Science Literature Neoclassical Financial Economics Financial economics is a relatively young discipline. The origins of modern (neoclassical) ? nancial economics are often located in the early 1950s in the work by Markowitz (1952) on portfolio theory. During this period, ? nance moved from a concern with describing the activities of actors in ? nancial markets to the construction of parsimonious models of markets founded on assumptions of rational investor behaviour. The central organizing idea of neoclassical ? nancial economics is the ef? ient markets hypothesis, which holds that price changes are essentially a random walk. All new information relevant to prices is incorporated into prices instantaneously (Fama, 1970). This central proposition and much of the theory which springs from it is founded on the idea that any asset which is not ‘rationally priced’ provides opportu nities for pro? t, which will be instantly taken up and cause prices to converge to the ‘rational’ level (i. e. arbitrage). This assumption is both illustrated and lampooned in the ? nance joke about two ef? cient market theorists who pass a $50 bill lying in the street.They leave it untouched and congratulate each other on realizing that if it presented an opportunity for pro? t someone else would have picked it up already. Even the strongest proponents of the ef? cient markets hypothesis do not claim that it represents a good description of the behaviour of individuals in markets. Rather it is claimed to be a good enough description, which should be judged on its predictions rather than its assumptions. 4 Introduction Fama (1970), who set out an early comprehensive account of the ef? cient markets paradigm, has more recently suggested that: Like all models, market ef? iency (the hypothesis that prices fully re? ect available information) is a faulty description of pri ce formation. Following the standard scienti? c rule, however, market ef? ciency can only be replaced by a better speci? c model of price formation, itself potentially rejectable by empirical tests. (Fama, 1998: 284) The ? nance professional is largely absent from orthodox ? nancial economic accounts of markets. The assumption of ef? cient markets, with no privileged information held by any investor, leaves little room for an account of how professional investors might make better than market returns.However, more recently, there has been an increasing interest within ? nancial economics in explaining empirically observed departures from the predictions of the ef? cient markets hypothesis and rational–economic pricing theories. Many of these fall in the emerging ? eld of behavioural ? nance. What has allowed consideration of the role different types of investor might play in markets is the growing recognition that perfectly ef? cient markets are not an automatic consequence o f the existence of arbitragers: an idea that has been captured eloquently by Lee (2001: 284).I submit that moving from the mechanics of arbitrage to the [ef? cient markets hypothesis] involves an enormous leap of faith. It is akin to believing that the ocean is ? at, simply because we have observed the forces of gravity at work on a glass of water. No one questions the effect of gravity, or the fact that water is always seeking its own level. But it is a stretch to infer from this observation that oceans should look like millponds on a still summer night. If oceans were ? at, how do we explain predictable patterns, such as tides and currents? How can we account for the existence of waves, and of surfers?More to the point, if we are in the business of training surfers, does it make sense to begin by assuming that waves, in theory, do not exist? A more measured, and more descriptive, statement is that the ocean is constantly trying to become ? at. In reality, market prices are buffete d by a continuous ? ow of information, or rumours and innuendos disguised as information. Individuals reacting to these signals, or pseudo-signals, cannot fully calibrate the extent to which their own signal is already 5 Introduction re? ected in price. Prices move as they trade on the basis of their imperfect informational endowments.Eventually, through trial and error, the aggregation process is completed and prices adjust to fully reveal the impact of a particular signal. But by that time, many new signals have arrived, causing new turbulence. As a result, the ocean is in a constant state of restlessness. The market is in a continuous state of adjustment. Lee argues that the relationship between inef? cient pricing and arbitragers may be like predator–prey dynamics. In equilibrium there must be both predator and prey. Similarly, in equilibrium there will be both arbitragers and arbitrage opportunities in the market place.There is another important way in which ? nancial ma rkets are widely accepted as departing from the ef? cient markets paradigm. Investors trade much more often than the theory suggests they should. More recent ? nancial economics accounts often distinguish two types of investors: ‘noise traders’ and ‘smart traders’ (a recent example is Daniel, Hirshleifer, and Teoh, 2002). Noise trading is trading on the basis of information that is either irrelevant to price or has already been discounted by the market. ‘Smart’ traders are those who act rationally, trading only on the basis of genuinely new and relevant information.This distinction is sometimes taken to map on to the difference between naive investors and trained professional investors (e. g. Ross, 1999; Shapira and Venezia, 2001). Behavioural Finance There has been increasing interest within the ? eld of ? nancial economics in using what is known about persistent biases in human cognition to explain departures of market behaviour from the pred ictions of ef? cient markets theory. Collectively known as behavioural ? nance, these models and empirical studies generally seek to explain market behaviour that departs from the predictions of orthodox ? ancial economics by reference to systematic cognitive bias among investors or important subgroups of investors. 3 Behavioural ? nance draws heavily on work from behavioural decision-making, a branch of psychology concerned with modelling human decision-making processes. While, in the main, this literature does not distinguish between professional traders and other investors, there have been 6 Introduction some attempts to compare the susceptibility to biases of ? nance professionals to that of the wider population.For example, Shapira and Venezia (2001) found professional brokers less susceptible than independent investors to one common bias, the disposition effect (a bias towards selling stocks more readily to realize gains than to realize losses), although they were not immune t o the bias. In an experimental study Anderson and Sunder (1995) compared the behaviour of laboratory markets populated by experienced commodity and stock traders with the behaviour of markets populated by MBA student traders. They found the amount of trading experience to be an important determinant of how well market outcomes approximated (ef? ient market) equilibrium predictions. Student traders’ markets exhibited departures from rational prices founded in common cognitive biases while bias levels in markets with experienced traders were substantially lower. However, as we explore in Chapter 5, our own research offers evidence that professional traders are just as susceptible as other groups to some forms of bias, with important consequences for their behaviour and performance. Sociology of Markets Sociologists interested in markets have paid rather more attention to the role of professionals than have ? ancial economists. Unlike ? nancial economists who take markets to be naturally occurring, sociologists tend to stress the ‘social embeddedness’ of markets and the ways in which they are sustained as social institutions through active intervention and regulation. One important strand of work is concerned with the social networks that operate within markets and in particular the ways in which professionals within markets act through these social networks and exercise informal sanctions over participants departing from accepted norms of behaviour (e. g.Baker, 1984a; Abola? a, 1996). Research by ? nancial economists also demonstrates the signi? cant effect the detailed structure and organisation of markets4 can have on the ? ow of information, liquidity, and prices (e. g. Amihud, Mendelson, and Lauterback, 1997; Lipson, 2003). Others have been concerned with the nature and consequences of ? nancial economic theory. Traders, from this perspective, do not simply inhabit markets; they enact them. That is, the beliefs they hold 7 Introduction ab out the nature of markets affect those markets in non-trivial ways.MacKenzie (2002), for example, describes how the adoption of the Black–Scholes equation for option pricing by traders did not simply enable more effective pricing of options, but helped to bring about conditions that better ? tted the assumptions on which it was based. The close empirical ? t between the predictions of the equation and options prices was bought about, at least in part, by the use of the equation to identify arbitrage opportunities. The empirical ? t has deteriorated subsequently as beliefs have changed to incorporate, inter alia, changed beliefs about the likelihood of market crashes.We pick up this theme of the re? exive relationship between beliefs and markets in Chapter 4. 1. 3 Overview of Book Chapters 2 and 3 set the context for our study and exploration of the role of traders. Chapter 2, ‘The Growth of Financial Markets and The Role of Traders’, considers the growth of inter national ? nancial markets in a historical context and outlines the role investment banks and professional traders have come to play. In Chapter 3, ‘Economic, Psychological, and Social Explanations of Market Behaviour’, we take a more detailed look at differing economic, psychological, and social explanations of market behaviour.Chapter 4, ‘Traders and Their Theories’, considers the nature of traders’ knowledge and the interplay between their subscriptions to theories of the ‘way the world works’ founded in neoclassical ? nancial economics and their more particularist and idiosyncratic theories of ‘how to work the world’. Chapter 5, ‘A Framework for Understanding Trader Psychology’, starts by outlining a psychological model of the trader founded in a selfregulation framework. It draws on the qualitative and quantitative evidence that we have about trader decision-making and bias. It challenges the ? ancial econo mics dichotomy between rational and non-rational and explains the different rationalities that arise as a consequence of internal goal states. We also present evidence on the vulnerability of traders to control illusions and the consequences for their performance. 8 Introduction Chapter 6, ‘Risk Takers: Pro? ling Traders’ presents a new model of risk taking that shows how trader behaviour emerges from a web of circumstantial and individual causes. The remainder of the chapter explores these individual differences in greater depth, especially how personality impacts different kinds of risk taking and decision-making.The chapter explores what kinds of people traders are, focusing particularly on personality and risk propensity, but also drawing on what we know about their demographics and background. Chapter 7, ‘Becoming a Trader’, uses a career transitions framework and a model of social learning to frame trader development and entry into a community of trad ing practice. We examine the ways in which they both learn and construct knowledge about the process of trading. In Chapter 8, ‘Managing Traders’, we explore the ways in which traders are monitored and managed within investment banks.We highlight the fact that traders are often not ‘managed’ at all, so much as monitored. Our concluding chapter (Chapter 9) draws together the implications of our ? ndings for traders, their management and regulation, and for further research. Notes 1. Arbitrage: purchasing currencies, securities, or commodities in one market for resale in others in order to pro? t from price differences. The effect of arbitrage is to act as a mechanism to bring about convergence of prices in different locations and markets or between equivalent securities. . A more detailed account of the sample and methods is given in the appendix. 3. We give a more detailed treatment of behavioural ? nance arguments in Chapter 3. 4. Often referred to as the institutional microstructure. 9 Chapter 2 THE GROWTH OF FINANCIAL MARKETS AND THE ROLE OF TRADERS Hardly a day passes without newspapers and television carrying a story about ? nancial markets and their impact on our lives. Even a casual perusal of these news stories makes it apparent that the activities of ? ancial institutions and markets have come to play a central role in our economic well-being and security: whether through their direct impact on individual investments and pensions or through their pervasive impact on the level of economic activity within nations and across the globe. The last decade of the twentieth century was marked by a series of international ? nancial crises. These underlined both the interdependence of national economies and ? nancial markets and the global scope of those markets. Financial crises in Latin America, the Asian Tiger economies, and Russia highlighted the speed at which capital can ? e Growth of Financial Markets countries in which investors have lost con? dence and the impotence of national governments to control such out? ows. The impact around the world of these crises on economies and ? nancial institutions demonstrated the highly interconnected nature of ? nancial markets. In the same period a number of ? nancial institutions suffered very signi? cant ? nancial losses as a consequence of the actions of single traders. One of the best publicized of these was Nick Leeson’s role in bringing about the collapse of Barings Brothers, in 1995.The collapse of Barings caused Alan Greenspan of the US Federal Reserve to comment that It is probably fair to say that the very ef? ciency of global ? nancial markets, engendered by the rapid proliferation of ? nancial products, also has the capability of transmitting mistakes at a far faster pace throughout the ? nancial system in ways that were unknown a generation ago . . . Certainly, the recent Barings Brothers episode shows that large losses can be created quite ef? cien tly. Today’s technology enables single individuals to initiate massive transactions with very rapid execution.Clearly, not only has the productivity of global ? nance increased markedly, but so, obviously, has the ability to generate losses at a previously inconceivable rate. Moreover, increasing global ? nancial ef? ciency, by creating the mechanisms for mistakes to ricochet throughout the global ? nancial system, has patently increased the potential for systemic risk. (Greenspan, 1995) While the behaviour of individual traders has at times seriously damaged the ? rms they work for, individual ? nancial institutions have also shown the capacity to endanger the stability and operation of ? nancial markets around the world.In 1998, the collapse of Long Term Capital Management, a hedge fund holding positions in ? nancial derivatives with a notional value of $1,250 billion seriously endangered the stability of the world’s ? nancial systems. How could a single trader bring down a bank? How could a single hedge fund threaten the stability of the world’s ? nancial systems? The answer lies in the way in which ‘derivatives’ allow for the multiplication of market risks (and returns). The very features that make derivatives1 so useful as a tool for managing risk provide for the possibility of massively increasing risks.In this chapter, we argue that the role of ? nancial markets, in both world and national economies, has increased dramatically. 11 Growth of Financial Markets The potential, and sometimes actual, impact of individual traders on ? rms, markets, and economies is enormous. In the following chapters we show that ? nancial markets are neither as rational nor as natural as ? nancial economists paint them and that we need to bring a wider range of social science theory to bear on understanding traders, their ? rms, and the markets they operate in.As we show below, the current globalization of ? nancial markets is not new but sim ply the latest of several cycles of international ? nancial integration over two millennia. In particular, the recent growth in international ? nancial markets could be seen as a return to levels of international ? nancial integration seen at the end of the nineteenth century and interrupted by a period, which included two world wars and the Great Depression. However, the depth and scale of these markets does seem to be different this time and the emergence of new forms of ? ancial instruments, derivatives, capable of massively multiplying possible risks and returns has led to a qualitative difference in the potential impact of individual actions on institutions, markets, and economies. 2. 1 A Brief History of Financial Markets International ? nancial markets are not a purely modern phenomenon. Basic forms of ? nancial exchange can be found throughout recorded history and international ? nancial systems are known to have existed two millennia ago. Historical evidence suggests that t here have been a series of cycles of international ? nancial integration (Lothian, 2002).In the three centuries following the collapse of the Roman Empire, currencies were very unstable and constantly debased. However, in the fourth-century AD, the Emperor Constantine introduced a stable gold coinage, the bezant (also known as the nomisa or solidus). This became widely used throughout the Mediterranean region. It was produced in Byzantium till the thirteenth century and kept more or less the same gold content through till the eleventh century. Until the introduction of the dinar in the Muslim world in the seventh century, it had no competitors as an international medium of exchange.While records are patchy, it is clear that the existence of a stable medium of international 12 Growth of Financial Markets exchange during the period between the fourth and eleventh centuries allowed quite sophisticated ? nancial transactions to take place (Lopez, 1986; Lothian, 2002). The thirteenth cen tury was another period of growth in international trade, both within Europe and between Europe and other parts of the world. Much of this was organized around regular international trade fairs (most notably at Champagne and Brie).This period was marked by the growth of an extensive and sophisticated banking system and by the development of ? nancial instruments such as bills of exchange (which acted jointly as a credit and foreign exchange transaction). It is clear from the records of the dominant northern Italian banks of the time that not only were there quite sophisticated foreign exchange markets, but also that arbitrage was a common activity (Lothian, 2002). During the fourteenth century the importance of these trade fairs and the Italian banks declined. By the ? fteenth century, Amsterdam was the more important centre of ? ancial activity. The sixteenth century saw the development, in Amsterdam, of negotiable ? nancial instruments such as discounting commercial paper and, by the seventeenth century, the development of perpetual bonds, futures contracts, selling short, and other such ? nancial instruments and techniques that would be easily recognized in modern ? nancial markets (Homer and Sylla, 1996; Lothian, 2002). By the start of the eighteenth century, the Amsterdam Exchange, the centre of Dutch trading, had become a world market in which a wide range of commodities and securities were traded.During this period, London took on increasing importance as a centre for international ? nancial trade. With the establishment of the Bank of England and the London Stock Exchange and the intervention of the Napoleonic wars, London came to eclipse Amsterdam as a ? nancial centre by the start of the nineteenth century. The nineteenth century saw a marked expansion of international trade and further development of ? nancial markets. The growth of the US economy drove much of this expansion. The New York Stock Exchange was established in 1817 and by the end of 188 6 it hit its ? st day on which more than a million shares were traded. By the late 1920s New York had overtaken London as a world ? nancial centre. However, the early twentieth century, a period that included two world wars and the Great Depression, saw the collapse of international 13 Growth of Financial Markets trade and the rise of national regulation and controls on international ? ows of capital, which effectively unwound the integration of international ? nancial markets. Rajan and Zingales (2003) show that on a range of indicators of ? nancial development including stock market capitalization as a proportion of GDP, world ? ancial markets did not regain their pre-war (1913) levels until the late 1980s. The second half of the twentieth century once again saw a very substantial increase in international ? nancial integration. As we have seen, there is historical evidence that the current period of globalization of ? nancial markets is not a new phenomenon. Rather there have bee n cycles of high international integration of markets interspersed with periods of low integration throughout the last two millennia. However, it is also clear that with each new cycle the nature and depth of those markets has been changing. Changes in the sophistication of ? ancial instruments and technologies, and changes in communications and information technologies have all been important factors in? uencing the scale and complexity of ? nancial markets. The period since the 1970s has seen a very substantial increase in the size of ? nancial markets. Figure 2. 12 shows the increase in annual 2500 Value of annual turnover (? billion) 2000 30 1500 25 20 1000 15 10 5 0 1965 0 1970 1975 1980 1985 Year 1990 1995 2000 40 Number of bargains (million) 35 Value Reported trades 500 Fig. 2. 1 Post-war UK equity market growth—UK equity turnover 1965–2002 Source: London Stock Exchange. 4 Growth of Financial Markets Value of annual turnover ($ billion) 12000 10000 8000 6000 400 0 2000 0 1967 Value Reported trades 600 500 400 300 200 100 0 2002 Number of bargains (million) 1972 1977 1982 1987 Year 1992 1997 Fig. 2. 2 Post-war US equity market growth—New York Stock Exchange equity turnover 1967–2002 Source: New York Stock Exchange. value of shares traded on the London Stock Exchange between 1965 and 2002. Figure 2. 2 shows the change in annual number of shares traded on the New York Stock Exchange between 1960 and 2002 and the annual value of shares traded from 1985.Both markets show exponential growth over the period, but the real story over the last decade is the growth in derivatives trading. By 2002, outstanding over-the-counter derivatives3 (OTC) contracts had a notional value of $128 trillion, around four times greater than total world GDP. Figure 2. 3 shows the growth in number of active contracts between 1992 and 2002. Much of the recent concern about systemic risks in markets has centred on the role of derivatives. All ? nancial invest ments carry risk. However, there is a difference of degree with derivative trading.They involve contracts which are contingent on the price of underlying assets and because of the way in which trades are regulated, derivatives4 enable investors to speculate on the price of an asset while only depositing a small proportion of the underlying asset price (margin requirements) (Zhang, 1995). In other words, the ? nancial risk borne in an options trade may be many times the money actually deposited to make the trade. Financial ? rms which do not have sophisticated control mechanisms to manage their exposure to derivatives risk may 15 Growth of Financial Markets 000 Gross market value ($ billion) Gross market value 6000 5000 4000 3000 2000 1000 0 92 93 94 95 96 97 98 99 00 01 19 19 19 19 19 19 19 19 20 20 20 02 160 000 Notional amounts 120 000 100 000 80 000 60 000 40 000 20 000 0 Notional amounts ($ billion) 140 000 Fig. 2. 3 Global growth in OTC derivatives—global value of outsta nding contracts Source: 2000–2, Bank for International Settlements; 1994–9, Swaps Monitor publications Inc. unwittingly ? nd themselves exposed to potential losses greater than the total ? rm assets. Such risks can emerge very rapidly in the course of trading and require analysis of the whole ? m’s current portfolio of trading assets in real time to identify potential overexposure to market risk. Of course, the leveraging effect of derivatives does not only affect market risk but also ampli? es risk in the other categories. For example, since derivatives typically have greater volatility than the underlying asset, even a short period in which a ? rm is unable to trade (say due to computer failure) could result in signi? cant risk exposure. The complexity of some derivatives may mean that managers are ill-equipped to understand the trades dealers are engaging in, increasing behavioural risk (Chorafas, 1995: 16).In evidence given to the US House of Representatives , George Soros, a highly successful ? nancial speculator, said of derivative instruments: There are many of them, and some of them are so esoteric, that the risks involved may not be properly understood by even the most sophisticated of investors. Some of these instruments appear to be 16 Growth of Financial Markets speci? cally designed to enable institutional investors to take gambles which they would otherwise not be permitted to take. For example, some bond funds have invested in synthetic bond issues that carry a 10 or 20-fold multiple of the risk within de? ed limits. And some other instruments offer exceptional returns because they carry the seeds of a total wipe out. (Soros, 1995: 312) 2. 2 The Role of Investment Banks in Financial Markets To understand the role of modern investment banks it is necessary to understand how world ? nancial markets have come to be dominated by an American model of ? nance. Much as Byzantium, Lombardy, Amsterdam, and London have been the dominan t centres of ? nancial innovation and power in previous eras, US ? nancial markets and institutions are today.The central feature of the US model that emerged in the post-war years was the decline of relationship banking and the increasing commoditization of ? nancial products and services. The roots of this system lie in the unintended consequences of anti-trust and banking legislation passed in the United States during the 1930s. The segregation of commercial and investment banking in the United States laid the foundation for the development of a strong investmentbanking sector. The fragmentation of the banking industry, imposed by legislation, created conditions in which ? ancial transactions were more readily managed through markets than within large banks. The elimination of ? xed commissions for broking ? nancial instruments in 1975 provided a further impetus for competition. More and more, ? rms seeking to raise ? nance looked to impersonal markets rather than relationships w ith banking institutions. Progressively more transparent and liquid markets in both corporate debt and equity and the corresponding increased competition in these markets served as a signi? cant stimulus to ? nancial innovation.As these markets developed it became apparent to market participants and to the government that effective market operation could only be maintained through active intervention and regulation. A series of waves of external and self-regulation, often in response to market crises, led to the development of regulations and supervisory arrangements designed to contain insider manipulation of markets and ensure free 17 Growth of Financial Markets ? ow of information. On the demand side, the expansion of institutional investment (insurance, pensions, and mutual funds) stimulated and was stimulated by the growth of these ? ancial markets. The slower growth of ? nancial markets and institutions in other parts of the world meant that, as other countries began to follow the United States in opening up competition, US ? nancial institutions were well placed to play a major role. In the wake of the major changes in market regulation in 1986, the long-established London merchant banks were swept away by the US-based investment banks and non-US owned European investment banks have increasingly adopted US approaches. The principal competitive advantage of American ? rms lay in their expertise in managing risk (Steinherr, 2000: 49).Investment banks manage risk in four main ways: they absorb risk for clients, they act as intermediaries for the diversi? cation of risk, they advise on the management of risk and they engage in proprietary trading—taking risk on their own account in the pursuit of returns (Casserley, 1991). Absorbing Risk Investment banks absorb risk for clients in a number of different ways. For example, when they act on behalf of a client they absorb credit risk (the risk the client will default on payment for the transaction and th ey are unable to unwind the transaction at a favourable price).They underwrite issues of securities (e. g. commercial paper5 to cover shortterm ? nancing needs), guaranteeing to buy from the client at a ? xed price should the security fail to achieve its expected price in the open market. They also play an important risk absorption role in trading markets. In some of these the bank will act as a market-maker,6 providing liquidity in a particular ? nancial instrument. The bank ? xes prices at which it will buy or sell a ? nancial instrument and stands ready to buy or sell at those prices even if there is no party to pass the transaction on to immediately.In return for the spread between these prices the bank absorbs the risk of the market moving against them. Risk Intermediation In other cases the bank will act as an intermediary for the diversi? cation of clients’ risk. This may be by acting as an intermediary in trading 18 Growth of Financial Markets markets or by putting to gether complex OTC deals that rely on aggregating (or disaggregating) ? nancial instruments provided by third parties. The banks bene? t from this intermediation work in two principal ways. First, they charge commission and second, they have access via their customers to information about order ? ws in the markets in which they operate. Such ? ow information provides opportunities to exploit temporary market imperfections and pro? t through trading on their own account. Risk Advice The risk advice role overlays risk absorption and risk intermediation. For example, the bank may play an important advisory role related to underwriting activities or in putting together a complex OTC deal. The role of the bank in providing risk advice to clients rests not just on technical skills and experience in managing risk, but also in a (sometimes) greater overview of the markets in which they operate.An important issue here is the tension between the bank’s desire to make pro? ts on its own account and to earn a return through providing effective advice and services to customers. This tension is re? ected to some extent in tensions which emerge in most banks between trading and sales desks. As we will see later in the book, banks vary in the priority they give to serving customer needs versus seeking opportunities for returns through trading on their own account. 7 Proprietary Trading In providing services to customers, investment banks build up information on order ? ws, they develop expertise in valuing particular securities or in economic fundamentals in particular sectors or countries, they build proprietary models of price behaviour and they build up data on historic behaviour of prices and relationships between them. This can place them in a better position to judge risks and returns than other market participants and opens up the possibility of earning good returns on their own account. This activity typically takes two forms: short-term (often intra-day) trade s designed to exploit knowledge of temporary price ? ctuations linked to ? ows of orders in the market and longerterm trades, often based on arbitrage (exploiting pricing inconsistencies between different securities, markets, or time periods). 19 Growth of Financial Markets 2. 3 The Role Played by Traders The work of traders can be divided into three broad categories: trading on behalf of customers, market-making, and proprietary trading. 8 Traders acting on behalf of customers take the least risk on behalf of the bank, while proprietary trading potentially involves the greatest risk.However, in practice, the three spheres of activity often overlap. For example, a trading desk acting on behalf of clients may also have authority to take intra-day positions to bene? t from short-term price movements in the markets they operate in. Alternatively, in some circumstances, while not strictly acting as a market-maker, they may stand ready to create liquidity for important clients by buying or selling to those clients when they cannot ? nd a counterparty for their trades. As one senior trader told us: We are paid to be on the wrong side of the market for our customers.If we have an institution that pays us thirty million dollars a year in commissions, we will, on occasion at their request, be a buyer for them when there are only sellers on the market or be a seller for them when there are only buyers. When they’re in a more normal market environment where there is plenty of liquidity and good two-way ? ow, they don’t necessarily need our capital. In fact they prefer not to use our capital because all that does then is create another buyer or another seller in the market with them.But when the market is heavily tilted in one direction than the other, even the market’s selling off, there are much more sellers than buyers or a very strong market where there are much more buyers than sellers. That’s when they need us to step in and serve as that intermediary to facilitate the execution of their order. 9 Alternatively, a trading desk operating as a market-maker may combine this with some proprietary trading. One trader described the activity of his desk: We have a P&L [pro? t and loss], budget of about $20m a year through plain vanilla market making with customers.However, we make about half the money in proprietary trading using the ? ow and information from customers—putting it on our book instead of putting it back into the market. For the ? rst half of this year we were number one for turnover in our niche with between 10% and 15% of the market. The 20 Growth of Financial Markets more that number increases, the better information we would have for proprietary trading, but we would probably start losing money from the market making function because prices would have to be so keen, so there is a balance.Equally, traders mostly engaged in proprietary trading will seek opportunities to generate customer business: I d o proprietary business and I’m supposed to be doing proprietary but I interface with the ? ow desk so I would be looking at customer business trying to generate customer business. My slant is proprietary but I’m always trying to emphasise customer business using my positions. 2. 4 How do Traders Make Pro? ts? If, in ef? cient markets, price changes are essentially a random walk and all new information relevant to prices is incorporated into prices instantaneously (Fama, 1970), then how do traders make money? The ? st answer is that they charge commission for their intermediation and advisory role. By aggregating customer orders they can reduce transaction costs. However, as we will explore in Chapter 3, in practice, markets are not completely ef? cient and information asymmetries exist. Traders essentially earn economic rents10 by exploiting information advantages. These may come from a number of sources, including information on asset ? ows within markets (e. g. from having a large customer base); privileged information on the economic basis for an asset price; proprietary databases allowing more accurate calculation of probabilities (e. . historical asset volatility for pricing options); models of the relationship between prices and economic fundamentals; models for extracting the information inherent in historical price changes of an asset and other related assets; and effective understanding of the ‘sentiment’ and likely behaviour of other market actors. All of these information advantages are potentially short-lived. The very act of trading may reveal information to other parties. Others may emulate models. Others may access the same sources of information.New information may wipe out the utility of earlier information. At the same time markets are in practice very ‘noisy’. That is to say, there is a lot of trading going on that is not based on information 21 Growth of Financial Markets genuinely relevant to the und erlying value of an asset. Black (1986) noted in his presidential address to the American Finance Association that Traders can never be sure that they are trading on information rather than noise. What if the information they have is already re? ected in prices? Trading on that kind of information will be just like trading on noise.Traders can only earn above market returns, on average, over time, if they are genuinely trading on new and relevant information. However, on any individual trade it will be dif? cult to tell whether a positive outcome is the result of trading on information or of essentially unpredictable market movements (as a result of noise trading in the market, changes in sentiment, or new unexpected events). Similarly, for any individual trade it is dif? cult to determine whether a negative outcome is the result of trading on noise rather than information or the result of unforeseeable market movements.So it will often be the case that trading outcomes are not cont ingent on the trader’s strategy or information. Further, it will often be dif? cult to determine once an outcome is achieved whether the outcome was indeed contingent on a trader’s information and skill. While trading is a skilful activity, many trading outcomes are not contingent on skill. At the same time traders are highly motivated to establish causal relationships between information they hold and prices, since a signi? cant source of rent for any trader is the capacity to establish contingent relationships before others observe them.This problem of determining the links between behaviour and outcome for traders is one we will return to repeatedly in the book. While the detail of different trading strategies is not our principal focus, we describe some common trading approaches to set the stage for our later discussions. In order for traders to achieve better than average market returns, it is not suf? cient that markets are imperfect; it is also necessary they ha ve some competitive advantage relative to others who seek to exploit those imperfections.Within this fast-moving and uncertain world, traders adopt a variety of strategies to exploit the information and expertise to which they have access. These can be divided into four main categories: insider strategies, technical strategies, fundamental strategies, and ? ow strategies. 22 Growth of Financial Markets Insider Strategies Insider strategies involve achieving advantage by exploiting privileged access to information (Casserley, 1991). Of course, some such strategies are illegal. It is, for example, illegal to exploit privileged access to advanced knowledge of company earnings news or potential takeovers.However, most of these strategies are concerned with perfectly legitimate attempts to build an information advantage over rivals. The extent to which it is possible to achieve such information advantages varies signi? cantly from market to market. For example, in relatively undeveloped markets such as the ‘emerging markets’ there may be frequent and persistent information asymmetries. In these circumstances, traders who are able to establish good personal networks may build an advantage, which enables them to anticipate price movements. However, in mainstream equities markets, the speed and ef? iency of information dissemination may make such advantages dif? cult to achieve. Insider strategies can improve a trader’s ability to anticipate market movements. However, as we noted earlier, it is often dif? cult or impossible for a trader to determine whether they have a genuine information advantage or whether their information is simply noise, already discounted by the market. Technical Strategies If markets are perfectly ef? cient, then historic prices contain no information that can be used to infer future price movements. However, many traders claim to do just that.They seek to exploit market imperfections through the analysis of past price info rmation. One form of technical trade concerns using patterns in price data to identify likely turning points in price trends (charting). Traders seek to identify trends early, buy into those trends and exit before the trend breaks. Many traders consider these patterns and trends in market prices to be driven by underlying investor sentiment. While there is some evidence that supports the existence of exploitable patterns in market prices (e. g. Kwon and Kish, 2002), many ? ancial economists are sceptical of their existence. Fama (1970) dismissed technical analysis as a futile undertaking on the grounds that historical prices have no predictive validity. However, more recent arguments against technical 23 Growth of Financial Markets trading strategies take a weaker position: that while there is some predictability in market movements, exploiting these does not, on average, make returns in excess of transaction costs (e. g. Allen and Karjalainen, 1999). A second important technical st rategy requires the analysis of historical price relationships between different ? ancial instruments. Traders scan markets looking for discrepancies in pricing relative to these relationships on the assumption that they will move back to the historical pattern. Often the gains on technical trades will be small and over short time periods, thus these trades often depend on an ability to identify opportunities rapidly and frequently. This allows the trader to make large numbers of such trades each making a small pro? t. To bene? t from such trading strategies requires the ability to trade at low transaction costs, frequently, with considerable IT support.Many traders use technical strategies to supplement other approaches. For example, a trader having established a trade on the basis of customer ? ow information may use technical information on trend behaviour to determine the precise point at which to take pro? ts or cut losses. Others, while fundamentally sceptical about strategies relying on historical trend data, assume prices will be driven to some extent by investors using such models. For example, one trader told us: A lot of traders are chartists and a lot of people here don’t like you looking at charts, they don’t believe in them.However, I look at a chart if I am putting on a large position, or looking for something to trade because if there are people out there who use charts as a model to trade, this will affect how things trade in the markets whether I believe in it or not. Fundamental Strategies Technical strategies are purely concerned with anticipating trends and pay no attention to the underlying economic basis for evaluation of the security being traded. By contrast, fundamental strategies are concerned with the fundamental relationship between economic value of the underlying asset and market price.Traders following these strategies essentially seek to use expertise and information in the accurate valuation of securities, on the assumption that market values will 24 Growth of Financial Markets converge to theoretical values. To the extent that traders can establish an advantage in valuation of securities, they may be able to earn pro? ts from identifying securities that are undervalued or overvalued by the market. One highly successful trader told us: I tend to take positions that depend a lot on central bank decisions e. g. nterest rates, so depend on macro economic position of the country, the judgement about how the Bank of England is going to behave and how the market is going to proceed. I try to put myself in Eddie George’s11 feet and try to understand. We have been building a model of Bank of England reactions to economic events. I have lunches with people who decide our interest rates and try to understand how they think . . . It all comes down to focus and completely immersing myself in an area. However, as with insider strategies it can be genuinely dif? cult for a trader to understand whe ther they have a genuine advantage in valuation.Further, as we will see in Chapter 3, trading on valuation advantage depends on the market converging to a value in a time scale over which you can ? nance a trade. Flow Strategies This strategy predicts prices as a function of demand and supply for securities in the market. Particularly for securities in which there is not much liquidity,12 large trades can shift prices signi? cantly. Where a bank has a large customer base in a particular niche, this can give them access to valuable market information, in particular, information on trading ? ows.These kinds of advantage are more readily achieved in OTC markets, which lack the transparency of trades organized through exchanges. However, in any given market niche, there will be a very limited number of ? rms that can capture suf? cient order ? ow information to give them a genuine advantage. Feldman and Stephenson (1988) studied the use of ? ow information in the US treasury bonds marke t. They suggest that through the use of informal information trading with customers, a ? rm with a 3–4 per cent share in trading may have a good sense of what is going on in 30 per cent or more of the market.However, they also show that medium sized players in these markets are often unable to exploit their customer relationships effectively. They argue that large players systematically 25 Growth of Financial Markets shut medium sized players out of information networks while providing good market information to smaller players who they mostly relate to as customers rather than competitors. As we have seen, ? nancial markets have a long history and have been through multiple cycles of global ? nancial integration over the last two millennia, but their development into domains of such immense complexity and global in? ence has occurred only within the last 50 years. The volume of trading and of traders has no historical precedent, nor has the complexity and variety of the inst ruments traded. Within this context, the activities of traders within investment banks are important not just to their customers, but also at the level of national and international economies. Naturally, these phenomena have attracted the attention of academics and commentators, from a variety of disciplines, who have, as we shall show in the next chapter, different and sometimes competing explanations of what in? uences and explains behaviour within global ? ancial markets. Notes 1. Derivatives are ? nancial products, which depend on or derive from other assets. 2. Values in all ? gures are nominal (non-in? ation-adjusted). 3. OTC derivatives are not traded in an exchange but are contracted directly between the two contracting parties. 4. Exchange requirements generally only require traders selling options to deposit a proportion of the potential claim. Further, speculation using derivatives is often highly leveraged (funded through borrowed funds). 5. Market traded short-term corp orate debt. 6. Market-makers stand ready to buy or sell an asset or class of assets.Typically a market-maker quotes a buy (bid) and sell (offer) price to a client before the client declares whether they wish to buy or sell. The spread between bid and offer both provides a return and some protection against market movements in the time taken for the marketmaker to readjust their holdings after a trade. 7. There are also important differences between the United States and the United Kingdom in how this tension is regulated. UK banks face fewer constraints on the relationship between customer business and proprietary trading. 26 Growth of Financial Markets 8. The types of ? ancial instruments dealt in by traders cut across these categories. Some traders specialize by a particular type of instrument (e. g. equities or bonds in a particular sector), others deal in a range of instruments related to a particular geographical region or sector. 9. See also Abola? a (1996) for a description o f such market stabilizing behaviour by market-makers. 10. Returns in excess of the market risk premium. 11. Eddie George was Governor of the Bank of England at the time of interview. 12. Liquidity: the availability of parties willing to buy or sell a security at any given time. 27 Chapter 3ECONOMIC, PSYCHOLOGICAL, AND SOCIAL EXPLANATIONS OF MARKET BEHAVIOUR For at least forty years psychologists have amassed evidence that economic man is very unlike a real man and that reason—for now, de? ned by the principles that underlie expected utility theory, Bayesian learning and rational expectations—is not an adequate basis for a descriptive theory of decision making. De Bondt, 1998 I am in fundamental disagreement with the prevailing wisdom. The generally accepted theory is that ? nancial markets tend towards equilibrium and, on the whole, discount the future correctly. I operate using a different theory, according to which ? ancial markets Market Behaviour cannot possibly di scount the future correctly because they do not merely discount the future; they help to shape it. Soros, 1995: 111 If we are to understand traders, we have to ? rst understand the markets they inhabit. Neoclassical economics has been extraordinarily successful in explaining most market behaviour in the aggregate. However, it has two principal weaknesses for our purposes. The ? rst concerns what it does not address and the second concerns some important failures at the margins. Neoclassical ? nancial economics treats markets as a given, or naturally arising.Investor preferences and risk appetites are treated as external to the model but predictably ordered and distributed. Markets are modelled as adjusting instantaneously with little attention to the detail of how such adjustments come about. While neoclassical ? nancial economic models effectively explain a great deal of market behaviour, there are some important failures at the margins. There is a wide range of anomalies which are dif? cult to explain within this paradigm. If markets instantaneously adjust and are perfectly ef? cient, then the only role for professional traders is as intermediaries who cannot earn above market returns, but ssentially earn commission as intermediaries. There is nothing to be earned by arbitrage activities or speculation. Indeed, it is not even clear within neoclassical accounts of markets that there is a role for intermediation. However, if we assume markets to be only nearly perfect and ‘sticky’, the trader’s role as someone with privileged expertise, tacit knowledge, and access to private information (within limits) makes more sense. Here, traders are the oil in the market machine; they are on