International Finance: Study Notes

1) Market seeker design strategy focuses on current market, and current consumer’s needs for quick return on investment. For example US automobile firms manufacturing in Europe for local consumption are an example of market-seeking motivation. 2) Raw Material seekers extract unfinished goods used in the manufacture of a product. For example, a steelmaker uses iron ore and other metals in producing steel. A publishing company uses paper and ink to create books, newspapers, and magazines. Raw materials are carried on a company's balance sheet as inventory in the current assets section. 3) Political safety seekers acquire or establish new operations in countries that are considered unlikely to expropriate or interfere with private enterprise. For example, Hong Kong firms unvested heavily in the United States, United Kingdom, Canada, and Australia in anticipation of the consequences of China’s 1997 takeover of the British colony. ) Production Efficiency seekers produce in countries where one or more of the factors of production are underpriced relative to their productivity. Labour-intensive production of electronic components in Taiwan, Malaysia, and Mexico is an example of this motivation. 5) Knowledge seekers operate in foreign countries to gain access to technology or managerial expertise. An example, German, Dutch, and Japanese firms have purchased US located electronics firms for their technology. Source: Investopedia Question 2: Political risk is a type of risk faced by investors, corporations, and governments. It is a risk that can be understood and managed with reasoned foresight and investment. Broadly, political risk refers to the complications businesses and governments may face as a result of what are commonly referred to as political decisions—or â€Å"any political change that alters the expected outcome and value of a given economic action by changing the probability of achieving business objectives. †. Political risk faced by firms can be defined as â€Å"the risk of a strategic, financial, or personnel loss for a firm because of such nonmarket factors as macroeconomic and social policies (fiscal, monetary, trade, investment, industrial, income, labour, and developmental), or events related to political instability (terrorism, riots, coups, civil war, and insurrection). †Portfolio investors may face similar financial losses. Moreover, governments may face complications in their ability to execute diplomatic, military or other initiatives as a result of political risk. A low level of political risk in a given country does not necessarily correspond to a high degree of political freedom. Indeed, some of the more stable states are also the most authoritarian. Long-term assessments of political risk must account for the danger that a politically oppressive environment is only stable as long as top-down control is maintained and citizens prevented from a free exchange of ideas and goods with the outside world. Understanding risk as part probability and part impact provides insight into political risk. For a business, the implication for political risk is that there is a measure of likelihood that political events may complicate its pursuit of earnings through direct impacts (such as taxes or fees) or indirect impacts (such as opportunity cost forgone). As a result, political risk is similar to an expected value such that the likelihood of a political event occurring may reduce the desirability of that investment by reducing its anticipated returns. There are both macro- and micro-level political risks. Macro-level political risks have similar impacts across all foreign actors in a given location. While these are included in country risk analysis, it would be incorrect to equate macro-level political risk analysis with country risk as country risk only looks at national-level risks and also includes financial and economic risks. Micro-level risks focus on sector, firm, or project specific risk. Political risks are classified as follows: 1) Blocked Fund – Term for â€Å"reserving† funds by one bank for the benefit of another bank. Blocking of funds is an often used banking procedure to ensure that the same funds are not used twice. Often more beneficial to an investor than a bank guarantee. ) Ownership – Is the state or fact of exclusive rights and control over property, which may be an object, land/real estate or intellectual property. Ownership involves multiple rights, collectively referred to as title, which may be separated and held by different parties 3) Religion Heritage – Is the faith in which a person was predominantly raised or the faith a person's parents or previous generations have traditionally held. 4)Terrorism – Is the systematic use of terror especially as a means of coercion. No universally agreed, legally binding, criminal law definition of terrorism currently exists. Common definitions of terrorism refer only to those violent acts which are intended to create fear (terror), are perpetrated for a religious, political or ideological goal, deliberately target or disregard the safety of non-combatants (civilians), and are committed by non-government agencies. Some definitions also include acts of unlawful violence and war. The use of similar tactics by criminal organizations for protection rackets or to enforce a code of silence is usually not labeled terrorism though these same actions may be labeled terrorism when done by a politically motivated group. The word â€Å"terrorism† is politically and emotionally charged, and this greatly compounds the difficulty of providing a precise definition. Studies have found over 100 definitions of â€Å"terrorism†. The concept of terrorism may itself be controversial as it is often used by state authorities to delegitimize political or other opponents, and potentially legitimize the state's own use of armed force against opponents (such use of force may itself be described as â€Å"terror† by opponents of the state). Terrorism has been practiced by a broad array of political organizations for furthering their objectives. It has been practiced by both right-wing and left-wing political parties, nationalistic groups, religious groups, revolutionaries, and ruling governments. An abiding characteristic is the indiscriminate use of violence against noncombatants for the purpose of gaining publicity for a group, cause, or individual. 5)Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to discourage imports and prevent foreign take-over of domestic markets and companies. This policy contrasts with free trade, where government barriers to trade and movement of capital are kept to a minimum. In recent years, it has become closely aligned with anti-globalization. The term is mostly used in the context of economics, where protectionism refers to policies or doctrines which protect businesses and workers within a country by restricting or regulating trade with foreign nations. Source: Wikipedia Question 3: Hedging means reducing or controlling risk. This is done by taking a position in the futures market that is opposite to the one in the physical market with the objective of reducing or limiting risks associated with price changes. Hedging is a two-step process. A gain or loss in the cash position due to changes in price levels will be countered by changes in the value of a futures position. For instance, a wheat farmer can sell wheat futures to protect the value of his crop prior to harvest. If there is a fall in price, the loss in the cash market position will be countered by a gain in futures position. Hedging is a mechanism to reduce the risk of adverse price movements of an asset. It’s an investment undertaken to reduce the risk of adverse movements of the underlying assets. We all agree with the fact that in investment risks and returns are the two sides of a coin. The underlying asset can be a security, currency, debt instruments or a commodity like crude oil. A Perfect Hedge is an offsetting investment which completely eliminates the risk of the price movements. However, this is practically not possible, as all investments do carry a risk. Reason for hedging Participating in hedging has reasons that are connected with price risk. Typically, traders take part in hedging so they can more effectively plan on set pricing (often employing the hedge ratio). Considering of course, gold or silver futures for instance as a hedge against inflation and falling currencies. Farmers, growers and producers alike near the source hedge to get a lock on pricing at some appointed time. Often they buy futures basically in order to protect against price drops. Producers, manufacturers and large consumers are commonly in the practice of hedging but rather to get a better handle on their cash flow or finished product/service costs. Surely in commodities that are known to be volatile in nature, where prices need a stabilization factor. Example : Where precious metals are used as raw materials. Trucking companies, the airlines and transportation companies all hedge to lock in lower prices. Electricity generation, in its used of natural gas also provides ample reason for hedging. Larger food companies needing the ingredients of grains and wheat flour for breads, cereals and baked goods (not to mention coffee and cocoa) and hedge for price protection. When successful it becomes an integral part of delivering their product to consumers. Some companies even hedge so that consumers may not be so hard pressed in the event of price climbs, perhaps seen as unreasonable by consumers. Reason against hedging The management of financial risk is difficult and conceptually demanding. Probably the most difficult issue is the actual recognition of where and how much financial risk is being incurred. Example: An Australian metal producer who borrows in USA as a partial hedge because their product is priced in USD in world markets. The problem with this â€Å"hedge† is that it actually would increase risk. The AUD is a commodity currency and when metal prices fall the AUD will generally be weaker. This means that our metal exporter finds that their USD loan is costing those more in AUD terms at the same time as revenue is collapsing. The reason for the problem is that the company failed to recognize the correlation between metal prices and the AUD exchange rate. Source: wikipedia Question 4: A balance of payments (BOP) sheet is an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers. The BOP summarizes international transactions for a specific period, usually a year, and is prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus tems. Uses of funds, such as for imports or to invest in foreign countries, are recorded as a negative or deficit item. When all components of the BOP sheet are included it must balance – that is, it must sum to zero – there can be no overall surplus or deficit. For example, if a country is importing more than it exports, its trade balance will be in deficit, but the shortfall will have to be counter balanced in other ways – such as by funds earned from its foreign investments, by running down reserves or by receiving loans from other countries. While the overall BOP sheet will always balance when all types of payments are included, imbalances are possible on individual elements of the BOP, such as the current account. This can result in surplus countries accumulating hoards of wealth, while deficit nations become increasingly indebted. Historically there have been different approaches to the question of how to correct imbalances and debate on whether they are something governments should be concerned about. Since 1974, the two principal divisions on the BOP have been the current account and the capital account. The current account shows the net amount a country is earning if it is in surplus, or spending if it is in deficit. It is the sum of the balance of trade (net earnings on exports – payments for imports) , factor income (earnings on foreign investments – payments made to foreign investors) and cash transfers. Its called the current account as it covers transactions in the â€Å"here and now† – those that don't give rise to future claims. The capital account records the net change in ownership of foreign assets. It includes the reserve account (the international operations of a nation's central bank), along with loans and investments between the country and the rest of world (but not the future regular repayments / dividends that the loans and investments yield, those are earnings and will be recorded in the current account). Expressed with the standard meaning for the capital account, the BOP identity is: [pic] The balancing item is simply an amount that accounts for any statistical errors and assures that the current and capital accounts sum to zero. At high level, by the principles of double entry accounting, an entry in the current account gives rise to an entry in the capital account, and in aggregate the two accounts should balance. A balance isn't always reflected in reported figures, which might, for example, report a surplus for both accounts, but when this happens it always means something has been missed—most commonly, the operations of the country's central bank. An actual balance sheet will typically have numerous sub headings under the principal divisions. For example, entries under Current account might include: †¢ Trade – buying and selling of goods and services Exports – a credit entry o Imports – a debit entry ? Trade balance – the sum of Exports and Imports †¢ Factor income – repayments and dividends from loans and investments o Factor earnings – a credit entry o Factor payments – a debit entry ? Factor income balance – the sum of earnings a nd payments. Especially in older balance sheets, a common division was between visible and invisible entries. Visible trade recorded imports and exports of physical goods (entries for trade in physical goods excluding services is now often called the merchandise balance). Invisible trade would record international buying and selling of services, and sometimes would be grouped with transfer and factor income as invisible earnings. In the case of any particular country, a balance reflecting the ratio of monetary receipts from foreign countries to total payments to foreign countries, as computed for a year, quarter, or other period of time. A favorable balance of payments results when receipts exceed payments, whereas an unfavorable balance of payments, or deficit, results when the reverse is true. The balance of payments reflects the diverse economic relations that exist between countries and lead to various international payments; these relations include foreign trade and the export of capital. The balance of payments also reflects international relations in the political, scientific, technological, and cultural spheres; this is seen, for example, in expenditures that arise from the maintenance of representations in foreign countries, from trips by official delegations and tourists, from the acquisition of patents and licenses, and from private transfers. In developed capitalist countries, the chief principals in international economic relations are private companies, including those engaged in commerce, industry, banking, insurance, and transport. The balance of payments forms as the spontaneous result of many isolated transactions an operation, for which no accurate account can be maintained. The balance of payments tables compiled in bourgeois states therefore represent only an approximate evaluation of receipts and payments. The item in the balance of payments tables that is called errors and omissions provides particular evidence of this fact. The balance of payments encompasses only the payments actually made during a given period. By contrast, the balance of international indebtedness, or balance of claims and liabilities, is the ratio of the foreign claims of a given country to the foreign liabilities of that country. The balance of payments in capitalist and developing nations includes scores of diverse items, which usually are grouped in the following categories, as recommended by the International Monetary Fund: foreign trade (exports and imports of commodities), services (including transport, tourism, insurance, government expenditures, banking services, and income from investments), unilateral transfers, the movement of long-term capital, the movement of short-term capital, change in the gold and currency reserves, and errors and omissions. The first three categories constitute the current account balance of payments, the next two are the balance of capital movements, and the last two are the balancing items. Analysis of the balance of payments is very important in describing a country’s place in the system of international economic relations, especially with respect to world trade. When receipts from the export of commodities consistently exceed import payments, this generally points to a country’s strength in world markets; this was the case with Japan and the Federal Republic of Germany in the late 1960’s and early 1970’s. On the other hand, import payments that exceed export earnings are an indication of economic difficulties related to the deficit of the balance of payments; this was the position of the USA in these same years. An important item in the current account balance of payments concerns the receipts and payments for foreign investments. This item reflects profit received from abroad and paid abroad, in the form of dividends, interest, and so forth. The profit represents a source of enormous income for capital-exporting imperialist states with large capital investments abroad, either in the form of direct investments or in the form of loans and credits. In 1971, for example, the income of Great Britain from foreign investments was ? 667 million, more than double the positive trade balance. The profit from foreign capital investments repatriated to the United States amounted to $10. 7 billion in 1971 and was the second most important item of receipts in the nation’s balance of payments, after the income from export commodities. This attests to the role of the United States as the center of financial exploitation in the capitalist world. The overwhelming majority of developing countries are importers of capital, and payments on foreign investments are one of the chief reasons for the overall balances of payments deficits. The payments on foreign investments absorb an ever greater portion of the export earnings of the developing countries. Foreign military expenditures are also included in the current account balance of payments. These expenditures are due to imperialist states’ policy of aggression and the maintenance of numerous military bases abroad. This is one of the most important reasons for the deficit in the balance of payments and the ensuing monetary crises. The enormous rise in state military and political expenditures abroad underlies the chronic deficit in the US balance of payments. Expenditures from the early 1960’s through the early 1970’s totaled more than $100 billion, some 40 percent more than the surplus for all other items in the USA’s balance of payments. Capital movement as reflected in the balance of payments is primarily in the form of the movement of long-term capital. Long-term capital movement includes direct investments, which provide for full ownership of enterprises or control of their operations; portfolio investments, made in the form of investments in overseas securities; and loans, credits, and subsidies. The export of capital—the outflow of capital from a given country—is reflected as an expenditure in the balance of payments; the import of capital, on the other hand, represents an influx of funds and is included as income. The export of capital, for example, to the developing countries, causes a flow of profit from the countries where the foreign capital has been placed; this ultimately has a negative effect on the balance of payments of the countries receiving foreign capital. At the same time, increased export of capital sometimes directly worsens the balance of payments of the imperialist states. The export of capital and military expenditures are precisely the reasons for the balance of payments deficit in the USA. The movement of short-term capital is related to the way money on deposit in foreign banks is constantly transferred between countries. These transfers are to a significant degree related to speculation with respect to change in exchange rates or interest on deposits. The indicator of a surplus or deficit of the balance of payments is important in describing the economic situation of a country. In capitalist nations, several methods are used for determining this balance; in the USA, for example, three methods are employed. The balancing indicator is most often the balance of the current transactions and the balance of the change in the gold and currency reserves. Various methods are used to regulate the balance of payments. One basic method involves the export of gold when there is a deficit balance and the import of gold when there is a surplus balance. The chronic balance of payments deficit in the USA in the 1960’s and early 1970’s led to a significant outflow of gold and a reduction in US gold reserves. The balance of payments deficit may also be covered by increasing short-term or long-term debts to creditor nations, which accumulate the corresponding obligations of their debtors. Because the gold reserves of the capitalist and developing countries are limited, foreign credits and loans are becoming the basic means of covering the balance of payments deficit; this is especially true in the case of developing countries. To improve the balance of payments situation, capitalist states frequently resort to a currency devaluation, which helps increase export receipts from tourism, the import of foreign capital, and so forth. The balance of payments situation of a capitalist country is a basic factor in determining the state of that country’s currency. For example, the crisis of the US dollar basically resulted from a sharp deterioration in the US balance of payments, which had a deficit of almost $10 billion in 1972. The US government was forced to devalue the dollar in 1971 and 1973 because of the drop in gold and currency reserves and the increase in foreign debts, both of which were caused by the chronic balance of payments deficit. In socialist countries, foreign economic relations are based on the state monopoly of foreign trade and the foreign-exchange monopoly. The balance of payments is planned as a component part of a general plan embracing the national economy, foreign trade, and currency. Payments of the member countries of the Council for Mutual Economic Assistance (COMECON) are mutually balanced through long-term planning of trade and payments between the countries; payments in transfer rubles are used. Because of the foreign-exchange monopoly, the balance of payments does not influence the situation of the monetary units of the socialist countries. In relations with the capitalist states, the Soviet Union and other socialist countries avoid balance of payments deficits through the planned use of foreign-exchange and gold resources and anticipated foreign-exchange receipts. Source: Finance Asia Question 5: Annualized  Ã‚  Ã‚   =  Ã‚     Ã‚  Ã‚  Ã‚  Ã‚  Forward Price – Spot Price  Ã‚  x  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  12  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚  Ã‚  Ã‚  x  100% Forward Premium  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚     Ã‚   Spot Price  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  # of months   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   forward Direct Quotation represents the value of a foreign currency in dollars (number of dollars per currency). In this case, the Japanese Yen is taken as the local currency and USD is taken as the foreign currency. Direct = ((120 -140) / 140)*(12 / 6)*100 = – 28. 5714% forward discount Indirect = 1 / Direct = 1/-28. 5714% = 3. 5% forward discount Question 6: A  type of diagram  where the curve falls at the outset and eventually rises to a point higher than the starting point, suggesting the letter J. While a J-curve can apply to data  in a variety of fields, such as medicine and political science, the J-curve effect is most  notable in both economics and private equity funds; after a certain policy or investment is made, an initial loss is followed by a significant gain. An example  of the  J-curve effect  is seen in economics  when a country's trade balance initially  worsens following a devaluation or depreciation of its currency. The higher exchange rate will at first correspond to more costly imports and less valuable exports, leading to a bigger initial deficit or a maller surplus. Due to the competitive, relatively low-priced exports, however, a country's exports will start to increase. Local consumers will also purchase less of the more expensive imports and focus on local goods. The trade balance eventually improves to better levels  compared to before devaluation. In private equity funds, the J-curve effect occurs when  funds experience negative returns for the first several years. This is a common experience, as the early years of the fund include capital drawdown and an investment portfolio that has yet to mature. If the fund is well managed, it will eventually recover from its initial losses and the returns will form a J-curve: losses in the beginning dip down below the initial value, and later returns show profits above the initial level. The theory of the J-curve is an explanation for the J-like pattern of change in a country's trade balance in response to a sudden or substantial depreciation (or devaluation) of the currency. Consider the adjoining diagram depicting two variables measured, hypothetically, over some period of time; the dollar/foreign exchange rate, E$/*, and the US current account balance, CA = EX – IM. The exchange rate is meant to represent the average value of the dollar against all other trading country currencies and would correspond to a dollar value index which is often constructed and reported. Since the units of these two data series would be in very different scales, we imagine the exchange rate is measured along the left axis, while the CA balance is measured in different units on the right-hand axis. With appropriately chosen scales we can line up the two series next to each other to see whether changes in the exchange rate seem to correlate with positive or negative changes in the CA balance. Source: Investopedia Question 7: Tax is to impose a financial charge or other levy upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities. Taxes consist of direct tax or indirect tax, and may be paid in money or as its labor equivalent (often but not always unpaid labour). A tax may be defined as a â€Å"pecuniary burden laid upon individuals or property owners to support the government, a payment exacted y legislative authority. † A tax â€Å"is not a voluntary payment or donation, but an enforced contribution, exacted pursuant to legislative authority† and is â€Å"any contribution imposed by government whether under the name of toll, tribute, tallage, gabel, impost, duty, custom, excise, subsidy, aid, supply, or other name. † The legal definition and the economic definition of taxes differ in that economists do not cons ider many transfers to governments to be taxes. For example, some transfers to the public sector are comparable to prices. Examples include tuition at public universities and fees for utilities provided by local governments. Governments also obtain resources by creating money (e. g. , printing bills and minting coins), through voluntary gifts (e. g. , contributions to public universities and museums), by imposing penalties (e. g. , traffic fines), by borrowing, and by confiscating wealth. From the view of economists, a tax is a non-penal, yet compulsory transfer of resources from the private to the public sector levied on a basis of predetermined criteria and without reference to specific benefit received. In modern taxation systems, taxes are levied in money; but, in-kind and corvee taxation is characteristic of traditional or pre-capitalist states and their functional equivalents. The method of taxation and the government expenditure of taxes raised is often highly debated in politics and economics. Tax collection is performed by a government agency such as Canada Revenue Agency, the Internal Revenue Service (IRS) in the United States, or Her Majesty's Revenue and Customs (HMRC) in the UK. When taxes are not fully paid, civil penalties (such as fines or forfeiture) or criminal penalties (such as incarceration) may be imposed on the non-paying entity or individual. Taxes are sometimes referred to as â€Å"direct taxes† or â€Å"indirect taxes†. The meaning of these terms can vary in different contexts, which can sometimes lead to confusion. An economic definition, by Atkinson, states that â€Å"†¦ direct taxes may be adjusted to the individual characteristics of the taxpayer, whereas indirect taxes are levied on transactions irrespective of the circumstances of buyer or seller. According to this definition, for example, income tax is â€Å"direct†, and sales tax is â€Å"indirect†. In law, the terms may have different meanings. In U. S. constitutional law, for instance, direct taxes refer to poll taxes and property taxes, which are based on simple existence or ownership. Indirect taxes are imposed on events, rights, privileges, and acti vities. Thus, a tax on the sale of property would be considered an indirect tax, whereas the tax on simply owning the property itself would be a direct tax. The distinction between direct and indirect taxation can be subtle but can be important under the law. The Advantages of Direct and Indirect Taxes Governments collect taxes by direct and indirect means. An example of a direct tax is payroll tax, where tax is deducted by an employer from an employee's income, and paid directly to a collection agency, such as the Internal Revenue Service in the United States. An indirect tax is a tax which is not paid directly to the collection agency by the person paying the tax, but goes an intermediary, who then passes the tax to the collection agency. Sales taxes are examples of indirect taxes. Progressive Advantage of Direct Taxes One advantage of direct taxation is that it is easy to apply in a progressive manner. Progressive taxes are a fair way of generating revenue, because multiple rates of taxation can be applied, based on the ability of the tax payer to pay the tax, especially if tax rates increase marginally. For example, a government may apply income tax to earnings at a rate of 10 percent, for all income earned up to $20,000. Then it applies a rate of 15 percent to income over $20,000. A person earning more than $20,000 will pay tax at a rate of 10 percent on the first $20,000 earned, and only pays 15 percent on earnings over that amount. Progressive, marginal, direct taxation is therefore fair because higher earners bear a greater part of the tax burden, based on their ability to pay higher rates of tax. Transparency of Direct Taxation Direct taxes, which go directly by the person bearing the burden of the tax, are transparent taxes. For example, when an employer deducts taxes from the wages of an employee, the employee can see the amount of tax deducted, as it is included on his or her wage statement, or pay-slip. Self-employed tax payers can also see the amount of tax they need to pay to the government, hen they complete their tax returns. In a democracy, tax transparency means that governments have to justify taxes they impose to their voters, and tax-paying voters always aware of the tax burdens imposed on them by politicians. Environmental Benefits of Indirect Taxation Governments use Indirect taxes, such as taxes added to the price of goods and services, to modify the behaviour of individuals in order to help a chieve environmental goals. For example, the true price of gasoline, at point of delivery to the public is low. The price does not encourage people to reduce their use of gasoline by using public transport, or buying more fuel-efficient vehicles. If a government wishes to reduce the use of gasoline as part of an environmental protection goal, it can artificially inflate the price of gasoline to the consumer, by imposing a sales tax to increase the price. When a government imposes a high enough tax on gasoline, it results in a reduction of demand for gasoline, and thus aids the government in implementing its environmental policy. Source: Wikinvest Question 8: The Bretton Woods system was established in 1944 as the major capitalist powers initiated a program of national regulation aimed at containing the contradictions of the world economy and preventing the development of socialist revolution. Its demise in 1971 inaugurated a new stage, characterised by the development of globalised production and the domination of an international financial market. When the US pulled the rug from under the previous system it did so in order to maintain its position of global hegemony in the new economic order which was beginning to emerge. It managed to do so but at great cost. The free market program it has so strenuously promoted over the past 30 years has intensified all the contradictions of the capitalist mode of production. At the same time, starting with the unilateral decision of August 15, 1971, the basis for collaboration between the major capitalist powers has been narrowing. The combined impact of these two processes has created the conditions for major economic, social and political upheavals in the world capitalist economy in the period immediately ahead. Source: Wordiq Question 9: There are many factors that influence the exchange rate of US dollar. Generally speaking, there are mainly four reasons: first, the health condition and the rate of return for investment of the US economy, secondly, the balance of international payment in the US, thirdly, the level of interest rates in the US compared with those in other countries, and fourthly, the rate of inflation. The following might be the reason why it’s expected to continue tight throught to the basement floor: †¢ Massive budget and trade deficits. †¢ Ultra-low interest rates. (Zero on the short end. ) †¢ $59 trillion in unfunded liabilities for Social Security, Medicare and Medicaid. Bernanke conjuring extra trillions out of thin air to buy Treasuries and mortgage-back securities and patch various holes in the U. S. economy. There is no reason to believe any of these problems will vanish in the months ahead. Yet the dollar will soar in 2010. Here’s why†¦ Two Reasons for a Dollar Rebound There are two main forces that could drive the dollar high er: †¢ All the problems mentioned above are already well recognized and priced into the greenback. †¢ Dollar psychology is overwhelmingly bearish. Just as 10 years ago, investors couldn’t imagine Internet stocks doing anything but soaring higher. Five years ago, they couldn’t imagine real estate doing anything but barrelling down the same one-way street. Record lows for the dollar are coinciding with enormous confidence that the dollar has nowhere to go but down. When extreme valuations are accompanied by unbridled optimism or abject pessimism, it virtually always marks a turning point – and an opportunity. This is no exception. Commentators seem to forget that all currency values are contingent. You can’t just look at fundamentals in the United States. You have to look at them abroad, too. And there isn’t uch out there right now that’s terribly positive†¦ America’s Fellow Heavyweights Have Problems, Too Take Europe, for example†¦ †¢ Eurozone: In the third quarter, the 16-nation Eurozone grew at a 1. 5% annual rate. The U. S economy, by comparison, grew at 3. 5%. European consumers and most business sectors are still feeling the pain from the deepest recession since the 1930s. The continent is likely to be the weakest region for global expansion next year, according to Julian Callow, Chief European Economist at Barclays Capital in London. †¢ United Kingdom: This is no bastion of strength, either. Europe’s biggest economy outside the Eurozone is still in recession, due to overly indebted British households and tight credit. British GDP contracted at an annualized 1. 6% in the third quarter. †¢ Japan: The world’s second-largest economy has its own problems, too. At 172% of GDP, Japan’s government debt is by far the largest among rich nations. What’s more, it’s expected to reach 200% next year – and hit 300% within a decade. Rising social security costs and the weak economy are the primary culprits. The new government there is trying to prevent a double-dip recession by spending even more. But with government debt soaring to records, talk of new stimulus measures is already pushing up long-term rates and threatening to curtail the impact of fresh spending. Source: Economics help Question 10: Standard deviation is a widely used measurement of variability or diversity used in statistics and probability theory. It shows how much variation or â€Å"dispersion† there is from the â€Å"average† (mean, or expected/budgeted value). A low standard deviation indicates that the data points tend to be very close to the mean, whereas high standard deviation indicates that the data are spread out over a large range of values. Technically, the standard deviation of a statistical population, data set, or probability distribution is the square root of its variance. It is algebraically simpler though practically less robust than the average absolute deviation. A useful property of standard deviation is that, unlike variance, it is expressed in the same units as the data. Note, however, that for measurements with percentage as unit, the standard deviation will have percentage points as unit. In addition to expressing the variability of a population, standard deviation is commonly used to measure confidence in statistical conclusions. For example, the margin of error in polling data is determined by calculating the expected standard deviation in the results if the same poll were to be conducted multiple times. The reported margin of error is typically about twice the standard deviation – the radius of a 95 percent confidence interval. In science, researchers commonly report the standard deviation of experimental data, and only effects that fall far outside the range of standard deviation are considered statistically significant – normal random error or variation in the measurements is in this way distinguished from causal variation. Standard deviation is also important in finance, where the standard deviation on the rate of return on an investment is a measure of the volatility of the investment. When only a sample of data from a population is available, the population standard deviation can be estimated by a modified quantity called the sample standard deviation [pic] Risks can be reduced in four main ways: Avoidance, Diversification, Hedging and Insurance by transferring risk. Systemic risk, also called market risk or un-diversifiable risk, is a risk of security that cannot be reduced through diversification. Participants in the market, like hedge funds, can be the source of an increase in systemic risk and transfer of risk to them may, paradoxically, increase the exposure to systemic risk. Unsystematic risk also called the diversifiable risk or residual risk. The risk that is unique to a company such as a strike, the outcome of unfavorable litigation, or a natural catastrophe that can be eliminated through diversification. A ratio developed by Nobel laureate  William F. Sharpe to measure risk-adjusted performance. The  Sharpe ratio  is calculated by subtracting the risk-free rate – such as  that of the  10-year U. S. Treasury bond –  from the rate of return for a portfolio and dividing the result by the standard deviation of the portfolio returns. The Sharpe ratio formula is: [pic] The Sharpe ratio tells us whether a portfolio's returns  are due to smart investment decisions or a result of excess risk. This measurement is very useful because  although one portfolio or fund can reap higher returns than its peers, it is only a good investment if those higher returns do not come with too much additional risk. The greater a portfolio's Sharpe ratio, the better its risk-adjusted performance has been. A negative Sharpe ratio indicates that a risk-less asset would perform better than the security being analyzed. A variation of the Sharpe ratio is the Sortino ratio, which removes the effects of upward price movements on standard deviation to measure only return against downward price volatility. The Treynor ratio (sometimes called the reward-to-volatility ratio or Treynor measure), named after Jack L. Treynor, is a measurement of the returns earned in excess of that which could have been earned on an investment that has no diversifiable risk (e. g. Treasury Bills or a completely diversified portfolio), per each unit of market risk assumed. The Treynor measure is similar to the Sharpe measure, but the Treynor measure uses the portfolio’s beta instead of the portfolio’s standard deviation. The Treynor measure is calculated as follows: (rp – rf) / ? p In this equation, rp = the average return on the portfolio, rf = the average risk-free rate, and ? p = the weighted average beta of the portfolio. The Treynor measure is found by dividing the portfolio risk premium by the portfolio risk as measured by the beta. An asset’s Treynor measure in isolation also means little. It also must be measured against the market’s Treynor measure, which is calculated by dividing the market risk premium, or the return on the market minus the risk-free rate by the beta of the market, which is 1. 0. If the asset’s Treynor measure is greater than the market’s Treynor measure, the asset has outperformed on a risk-adjusted basis. Source: Investopedia SECTION B: ESSAY QUESTIONS Question 1: One of the primary uses of PPP is in lessening the misleading effects of shifts in a national currency. This is particularly an issue when calculating a nation's Gross Domestic Product (GDP). For example, if the riel falls in value to 80% of its value on the dollar, the GDP as expressed in US dollars will also drop to 80%. This does not accurately reflect the standard of living in that country (a common use of GDP), however, because the devaluation of the riel is most likely due to international trade issues that will not yet have had any effect on the average Cambodian. By using purchasing power parity, however, one is not misled by the temporary devaluation of the riel in relation to the dollar — a Big Mac ® still costs 9,000 riel in Cambodia and $3 USD in the US, and so the Big Mac ® index exchange rate remains the same. Purchasing power parity is, of course, an imperfect device for determining things such as GDP, as the exchange rate will vary based on the basket item used for the index. This effect is lessened by looking at a large sample of commodities, rather than one or two, but this simply minimizes the problem rather than eliminating it entirely. It is also worth noting that PPP lumps items together into broad classes, not taking into account things such as quality — a hat is a hat is a hat, and its value in the index remains static, even though a shoddy hat's value on the international market would be much lower than a well-made hat's value. According to interest rate parity the difference between the (risk free) interest rates paid on two currencies should be equal to the differences between the spot and forward rates. If interest rate parity is violated, then an arbitrage opportunity exists. The simplest example of this is what would happen if the forward rate was the same as the spot rate but the interest rates were different, then investors would: 1. borrow in the currency with the lower rate 2. convert the cash at spot rates 3. enter into a forward contract to convert the cash plus the expected interest at the same rate 4. nvest the money at the higher rate 5. convert back through the forward contract 6. repay the principal and the interest, knowing the latter will be less than the interest received. Therefore, we can expect interest rate parity to apply. However, there is evidence of forward rate bias. Covered interest rate parity Assuming the arbitrage opportunity described above does not exist, then the relations hip for US dollars and pounds sterling is: (1 + r? )/(1+r$) = (? /$f)/(? /$s) where r? is the sterling interest rate (till the date of the forward), r$ is the dollar interest rate, /$f is the forward sterling to dollar rate, ?/$s is the spot sterling to dollar rate Unless interest rates are very high or the period considered is long, this is a very good approximation: r? = r$ + f where f is the forward premium: (? /$f)/(? /$s) -1 The above relationship is derived from assuming that covered interest arbitrage opportunities should not last, and is therefore called covered interest rate parity. Uncovered interest rate parity Assuming uncovered interest arbitrage leads us to a slightly different relationship: r = r2 + E[? S] where E[? S] is the expected change is exchange rates. This is called uncovered interest rate parity. As the forward rate will be the market expectation of the change in rates, this is equivalent to covered interest rate parity – unless one is speculating on market expectations being wrong. The evidence on uncovered interest rate parity is mixed. The effect proposes that if the real interest rate is equal to the nominal interest rate minus the expected inflation rate, and if the rea interest rate were to be held constant, that the nominal rate and the inflation rate have to be adjusted on a one-for-one basis. Real interest rate = nominal interest rate – inflation rate. In simple terms: an increase in inflation will result in an increase in the nominal interest rate. For example, if the real interest rate is held at a constant 5. 5% and inflation increased from 2% to 3%, the Fisher Effect indicates that the nominal interest rate would have to increase from 7. 5% (5. 5% real rate + 2% inflation rate) to 8. 5% (5. 5% real rate + 3% inflation rate). International Fisher Effect theory that the currency of a nation with a comparatively higher interest rate will depreciate in value in comparison to the currency of a nation with a comparatively lower interest rate. It further implies that the extent of depreciation will be equal to the difference in interest rates in those two nations. It is based on the observation that the level of real interest rate in an economy is closely linked to the level of local inflation rate and is independent of a government's monetary policies. Thus, in general, the higher the inflation rate, the lower the value of currency. Source: Investopedia Question 2: Firstly, Comparative advantage was first described by Robert Torrens in 1815 in an essay on the Corn Laws. He concluded it was to England's advantage to trade with Portugal in return for grain, even though it might be possible to produce that grain more cheaply in England than Portugal. However, the concept is usually attributed to David Ricardo who explained it in his 1817 book On the Principles of Political Economy and Taxation in an example involving England and Portugal. In Portugal it is possible to produce both wine and cloth with less labor than it would take to produce the same quantities in England. However the relative costs of producing those two goods are different in the two countries. In England it is very hard to produce wine, and only moderately difficult to produce cloth. In Portugal both are easy to produce. Therefore while it is cheaper to produce cloth in Portugal than England, it is cheaper still for Portugal to produce excess wine, and trade that for English cloth. Conversely England benefits from this trade because its cost for producing cloth has not changed but it can now get wine at a lower price, closer to the cost of cloth. The conclusion drawn is that each country can gain by specializing in the good where it has comparative advantage, and trading that good for the other. Example: Two men live alone on an isolated island. To survive they must undertake a few basic economic activities like water carrying, fishing, cooking and shelter construction and maintenance. The first man is young, strong, and educated. He is also faster, better, and more productive at everything. He has an absolute advantage in all activities. The second man is old, weak, and uneducated. He has an absolute disadvantage in all economic activities. In some activities the difference between the two is great; in others it is small. Despite the fact that the younger man has absolute advantage in all activities, it is not in the interest of either of them to work in isolation since they both can benefit from specialization and exchange. If the two men divide the work according to comparative advantage then the young man will specialize in tasks at which he is most productive, while the older man will concentrate on tasks where his productivity is only a little less than that of the young man. Such an arrangement will increase total production for a given amount of labor supplied by both men and it will benefit both of them. Imperfect market refers to a type of  market that does not operate under the rigid rules of perfect competition. Perfect competition implies an industry or market in which no one supplier can influence prices, barriers to entry and exit are small, all suppliers offer the same goods, there are a large number of   suppliers and buyers, and information on pricing and process is readily available. Forms of imperfect competition include monopoly, oligopoly, monopolistic competition, monopsony and oligopsony. Thirdly, a product life cycle refers to the time period between the launch of a product into the market till it is finally withdrawn. In a nut shell, product life cycle or PLC is an odyssey from new and innovative to old and outdated! This cycle is split into four different stages which encompass the product's journey from its entry to exit from the market. The product life cycle theory is used to comprehend and analyze various maturity stages of products and industries. Product innovation and diffusion influence long-term patterns of international trade. This term product life cycle was used for the first time in 1965, by Theodore Levitt in an Harvard Business Review article: â€Å"Exploit the Product Life Cycle†. Anything that satisfies a consumer's need is called a ‘product'. It may be a tangible product (clothes, crockery, cars, house, and gadgets) or an intangible service (banking, health care, hotel service, airline service). Irrespective of the kind of product, all products introduced into the market undergo a common life cycle. To understand what this product life cycle theory is all about, let us have a quick look at its definition. This cycle is based on the all familiar biological life cycle, wherein a seed is planted (introduction stage), germinates (growth stage), sends out roots in the ground and shoots with branches and leaves against gravity, thereby maturing into an adult (maturity stage). As the plant lives its life and nears old age, it shrivels up, shrinks and dies out (decline stage). Similarly, a product also has a life cycle of its own. A product's entry or launching phase into the market corresponds to the introduction stage. As the product gains popularity and wins the trust of consumers it begins to grow. Further, with increasing sales, the product captures enough market share and gets stable in the market. This is called the maturity stage. However, after some time, the product gets overpowered by latest technological developments and entry of superior competitors in the market. Soon the product becomes obsolete and needs to be withdrawn from the market. This is the decline phase. This was the crux of a product life cycle theory and the graph of a product's life cycle looks like a bell-shaped curve. Let us delve more into this management theory. Source: Buzzle Question 3: | | |Belize |Costa Rica | |Earnings before taxes | |1,000,000. 00 |1,500,000. 0 | |corporate income tax Rate | |0. 4 |0. 3 | |Tax | |400,000. 00 |450,000. 00 | |Earnings after taxes | |600,000. 00 |1,050,000. 00 | | | |300,000. 0 |525,000. 00 | |Dividend wtax rate   | |0. 1 |0 | |Dividend wtax amount | |30,000. 00 |0 | |Remitted amount after wtax | |270,000. 00 |525,000. 0 | | | | | | |Current US Corporate income tax rate | | |5% | |Dividend received by US parent after US Corporate tax | | |26,2500. 00 | |Net Dividend Received | |270,000. 0 |498,750. 00 | | | | | | |Total Earning before tax |250,000. 00 | | | | | | | | |Total Dividend received by Gramboa |768,750. 0 | | | |Total Tax pa id |906,250. 00 | | | | | | | | |Overall effective tax  rate |36. 35% | | | Question 4: Option 1 – No Hedging Assume that the expected spot rate in 90 Days is indeed $1. 7850/?. Now: a) 90 days putX = 1. 75P = 0. 015 b) 90 daysX = 1. 71P = 0. 01 3 months laterExercise Option (a) Received = (1. 75 – 0. 015) * 3mil = $5,205,000. 00 Answer: Do Not exercise Option 2 – Forward Hedge Buy a forward hedge at 90 Days forward rate at $1. 7550/? Now enter F @ 1,755 Money receivable in $ = 1. 755 x 3m = $5. 265m Option 3 – Money Market Hedge 1) Day 1 – Borrow ? , Amount borrowed = ? (3m / (1 + (14/4) /100)) = ? 2,898,550. 00 2) Day 1 – Convert all ? to $ = $1. 762 x 2,898,550. 00 = $5,107,246. 00 Option 1: Put $5,107,246. 0 to US bank @ 6% Option 2: Use $5,107,246. 00 as capital investment 3 months later:Option 1 Received ? 3 mil to pay ? 3 mil to British Bank Dollars in pocket = $5,107,246. 00 * (1+6%* 3/12) = $5,183,854. 69 Option 2 Received ? 3 mil to pay ? 3 mil to bank $5,107,246. 00 (1+12%*3/12) = $5,260,463. 00 Conclusion Money market is the best option as the m oney received is more than Put option hedge. Forward hedge resulted in receiving more than money market hedge wheras no hedging is assuming that the expected spot rate is reached but that is leaving it to chance. — END OF ASSIGNMENT–

Quain Lawn and Garden, Inc. Case Analysis Essay

After a false retirement Bill and Jeanne Quain realized their destined action in the plant and shrub business. The need for a high-quality commercial fertilizer prompted the innovation of a blended fertilizer called â€Å"Quain-Grow†. Working with chemists at Rutgers University, a mixture was constructed from four compounds, C-30, C-92, D-21 and E-11. Specifications (i.e constraints) for the mixture demanded that Chemical E-11 must constitute for at least 15% of the blend, C-92 and C-30 must together constitute at least 45% of the blend, and D-21 and C-92 can together constitute no more than 30% of the blend. Lastly, Quain-Grow is packaged and sold in 50-pound bags. The objective of this analysis is to determine what blend of the four chemicals will allow Quain to minimize the cost of a 50-lb bag of the fertilizer. To do this we have used Linear Programming (LP) – a technique specifically designed to help managers make decisions relative to the allocation of resources. In this case, C-30 = , C-92 = , D-21 = , and E-11 = . The constraints for this case were translated into linear equations (i.e. inequalities) to mathematically express their meaning. The first constraint  that C-11 must constitute for at least 15% of the blend can be expressed as: . The second constraint that C-92 and C-30 must together constitute at least 45% of the blend can be expressed as: . The third constraint that D-21 and C-92 can together constitute no more than 30% of the blend can be expressed as: . Lastly, the fourth constraint is that Quain-Grow is packaged and sold in 50-lb bags can be expressed as: . These equations were obtained and entered into a POM LP a s a minimizing function. The objective function of this case was calculated and expressed as . These results show that we can recommend the following ratios of C-30, C-92, D-21 and E-11 respectively so that the cost of a 50-lb bag of fertilizer is minimized: 7.5 lbs, 15 lbs, 0 lbs and 27.5 lbs. In checking to see if these align with the given restraints we found the following to be true; ; ; and . The actually cost result of this minimization analysis was calculated to be $3.35 per 50 lb bag of fertilizer. The equation for this result is as follows: . Additionally, we performed a sensitivity analysis to project how much our recommendation may change if there are changes in the variables or input data. This type of analysis is also called postoptimality analysis. There are two approaches to determining just how sensitive an optimal solution is to changes: (1) a trial-and-error approach and (2) the analytic postoptimality method. In this case analysis we used the analytic postoptimality method. After we had solved the LP problem, we used the POM software to determine a range of changes in problem parameters that would not affect the optimal solution or change the variables in the solution. While using the information in the sensitivity report, it is pertinent to assume the consideration of a change to only a single input data value at a time. This is because the sensitivity information does not generally apply to simultaneous changes in several input data values. Our main objective when performing this analysis was to obtain a shadow price (or dual value) –  the value of one additional unit of a scarce resource in LP. In any scenario, the shadow price is valid as long as the right-hand side of the constraint stays in a range within which all current corner points continue to exist. The information to compute the upper and lower limits of this range is given by the entries labeled Allowable Increase and Allowable Decrease in the sensitivity report. Our results from the sensitivity analysis were produced in two parts. The first shows the impact of changing the objective function coefficients on the optimal solution and gives the range of values (lower and upper bound) for which the optimal solution remains unchanged. The second part of the report shows the impact of changing the R.H.S of the constraints of the objective function value, with the help of Dual Value (Shadow Price), with the lower and upper bounds for which the shadow price is valid. Lastly, these results explain that the price of C-30 can vary within the range of .09 to Infinity without affecting the optimal solution. Likewise the range for C-92 is between –Infinity and .12, the range for D-21 is between 15 and 42.5, and the range for E-11 is between 30 and Infinity. The second part of this sensitivity analysis show the ranges for which the shadow prices are valid. Constraint 1 has a dual value of 0 and is valid between –Infinity and 27.5. Constraint 2 has a dual value of -.08 and is valid between 15 and 42.5. Constraint 3 has a dual value of .03 and is valid between 0 and 22.5. Finally, Constraint 4 has a dual value of -.04 and is valid between 30 and Infinity.

Problems with real estate career during the recession Research Paper

Problems with real estate career during the recession - Research Paper Example ..11 Works Cited†¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦.12 Executive Summery Real estate market is among the most dynamic market in history. Despite the fact that the market is not that large, many processes need to run successfully. Many economic issues as well as legal matters that make operation in it not that easy bind this market. Investing in real estate is only profitable when the economic gaps are high, but quite challenging in low economic seasons. Working n real estate does not offers difficulties to the investors only, but also to their selling agents. Brokers normally earn handsomely in peak seasons despite some few challenges they encounter during their marketing. However, in recession times a lot of risk with little satisfaction is what they encounter in the job. There are several challenges that they meet in their operation, including the fac t that this sector is much dominated among few buyers at the recession times. This creates a very stiff competitive environment that discourages their prosperity. Marketing real estate products pose difficulty due to the high expectation from the sellers from the brokers. Despite the economic falls, sellers still expect to fetch great prices for their products that become unachievable by the agents. Emerging trends in the real estate such as such as Mortgage Assistance Relief, MID and QRM creates changes in the brokers work environment. This forces the brokers to adjust to the running occupational changes that normally are not easy. During economic scarcity loaning system are much reduced that only a few clients are available in the market. The agents hence find no market for their services in the market. In such cases generally earns very little to support them. Because of these challenges, working in this career is normally very hard, and mitigation measures are necessary to prote ct this employment sector. Several recommendations encompassing legal aspect, market protection, financial security, diversification, technological adaptation and teamwork have been proposed for implementation to see these groups succeed and enjoy their career. This proposal was made after a rigorous research and study in the field. Introduction For many years, the lives of real estate agents have been unbearable, especially during recessions. Due to this, the brokers sent their pleas to the ministry of labour in the late 2007, following the start of 2007 and 2009 recession. This was taken as an appropriate moments since studies could reveal situations of the real estate brokers from the start to the end of economic hard times. The Ministry in turn sent a group of experts to study the problem and recommend as appropriate. This report was presented to me, a broker and the secretary of the real estate brokers in the Washington. Besides, the report was tabled before the representatives of real estate agents, real estate investors and representatives from government policy makers and planners. This was carried out in a two days seminar in Washington. The report was aimed at

Book Report - Night by Elie Wiesel Essay Example | Topics and Well Written Essays - 1000 words

Book Report - Night by Elie Wiesel - Essay Example Through Eliezer, he relates his story although there were minor differences. Example, Wiesel was wounded on his knee and Eliezer was wounded on his foot. He created these slight variations to establish a distinction between him and his character. But Wiesel and Eliezer are the same persons. They share the same experiences, they share the same perspective, they share the same feelings. And because they have too many things in common, Wiesel could be lost in developing his narrative. This does not make Night a fiction story. Wiesel only made things a little bit different because it was too much memory to bear. There was a personal need to change certain things so he can continue with his narrative as truthful as it can be. As you would notice, the differences do not impact the experiences of the character. Whatever he felt during his experience, it was the same feeling that Wiesel felt at that moment he experienced it. Wiesel’s experience had left a mark on him. Although it did not completely destroy him, it changed him significantly. Who wouldn’t, when he had experienced the cruelty that man inflicted towards his fellow men. That was the essence of the last statement of the narrative. By the end of the story, Eliezer was a changed man. As Wiesel created a division between him and his main character by giving Eliezer slightly different experiences, Eliezer created a barrier between him and himself. He felt he was a different person as he looks at himself in the mirror. Although he sees himself, he feels that his reflection is staring at himself, that his eyes have their own life, gravely emphasizing the emptiness that he was feeling at that moment. Eliezer is a dynamic character. He changes with time within the story. This is significant as the narrative focuses on relating Wiesel’s experiences. The narrative is concentrated in telling Eliezer’s experiences through his own eyes. Whatever opinions there are, whatever tho ughts there are in the story, it was his and only his. You would not hear or see things beyond his thoughts. You would not read about Chlomo’s thoughts about his son. You would not find anything about Moshe’s experiences when he was caught by the Nazis. You would only observe and look into Eliezer’s thoughts and emotions. Eliezer’s relationship with his father was a significant point in the story. It became his stronghold, the reason for living through the dreadful torture and persecution of the Nazi era. During his childhood, he found the Jewish religion because of his curiosity. Moshe the Beadle was the one who guided him and taught him what Jewish religion is. When Hitler seized control of Romania, Eliezer found himself in the middle of a discriminating world. That’s when he started to get confused. He was not deeply affected when he heard Moshe’s stories about the cruelty done to the Jews. But when he saw it with his own eyes, his faith started to shake. He did not expect that world to exist and â€Å"never shall (he) forget those moments which murdered (his) God and (his) soul and turned (his) dreams into dust.† At â€Å"the first night in the camp†¦the little faces of children, whose bodies†¦turned into wreaths of smoke†¦(the) flames consumed (his) faith forever.† He did not expect that this could happen and everything that he learned in his Jewish faith was turned upside down. When he heard the question, â€Å"Where is God? Where is He,† his answer that â€Å"He is hanging here on this gallows† indicated that his faith is slowly dying, like the man who was slowly dying in front of him. Before this experience, he felt that the question â€Å"where is God† is a strange question to ask, that it is similar to asking, â€Å"why did (he) live(s) and why did (he) breathe.†

Global Business Environment Portfolio Essay Example | Topics and Well Written Essays - 2000 words

Global Business Environment Portfolio - Essay Example It is a market that is very important for any economy and is capable of creating more jobs per million currency investments than any other market or industry. This report will investigate the various changes in the travel and tourism market in the last five years (2007-2011) and analyse how economic and technological factors have contributed to these changes. Tourism industry continued its strong growth in 2007 like the previous 3 years. 2008 started on a positive note with a 5% increase in the first half but started to decline as the graph of the number of international arrivals started moving in the negative curve. The year ended with an overall growth of only 2% in complete contrast to the 7% growth in 2007 (UNWTO, 2009). The trend continued as there as a 4.2% decline in 2009. Tourism and travel industry hit an all time low in 2009 (UNWTO, 2010). 2010 saw exceptional recovery with a 7% increase in the number of international tourist arrivals (935 million). Even though there was a speedy recovery, it was not consistent and was at varied speeds. It was the emerging economies that mainly contributed to the recover. The recovery was lower in the advanced economies and this reflected the global economic situation at the time (UNWTO, 2011). But an exception to this is the US. 2010 saw a record-setting 60 million international tourist (Office of Travel and Tourism Industries, 2010). International tourism consolidated for the losses and saw tremendous recovery. 2011 was a great year as there was healthy growth registered. There was 5% increase in international tourism in first half of 2011 this in spite of many challenges. The fact that has been very promising is that the advanced economies have grown faster than expected. The number of international arrivals was a record 440 million. European countries have done exceedingly well with strong growth even though the economic situation has been very gloomy. During the same time, as international tourism has been swingi ng both ways, domestic tourism saw a steady growth in majority of the markets. Source: UNWTO, IMaCS analysis There were also other important changes in the travel and tourism industry in the last five years. Internet was heavily used by users to assist in the travel plans. Following are some of the important statistics with respect to travel and technology: Search engines were used for gathering travelling information by 62% of personal travellers (Trent, 2011) Mobile devices were extensively used by business travellers (51%) (Trent, 2011) Flash sales have become very popular in the travel and tourism industry. Unexpected emails have resulted in a 25% booking of travel services (Trent, 2011) Online booking of travel destinations and services has increases tremendously (Trent, 2011). Economic factors have been a major contributor to the changes in the travel and tourism industry in the last five years. The global economic crisis has been the contributor to the decline in the growth o f the travel and tourism industry in the 2008 and 2009. The various economic factors that lead to the downfall of the travel and tourism industry were the global financial crisis, fluctuations in exchange rate (massive fluctuations), credit crunch, increase in the prices of the commodities and oil prices. The consumers as well as the business had lost their confidence in the economic conditions. This affected the spending behaviours of

INTERVIEW PROJECT Assignment Example | Topics and Well Written Essays - 750 words

INTERVIEW PROJECT - Assignment Example He came back recently and now runs the store that was previously operated by his father. Peter received his draft when he was 30 years old and still struggling to become a teacher in local schools. Since, this was not producing fruitful results so he decided to go on to serving his nation in that way. He strongly believes that this was Fate and that he was really nervous when he reported at the mentioned area in the draft letter (Peter refuses to give exact names, places and dates) as many able bodied people were assembled there. The first day was a general introduction to everything, most importantly understanding the ideology of going to Iraq. The second day however left everyone in cramps and aching limbs. â€Å"The only thing that let me through was the belief that this is for the greater good.† Says Peter as he had to do an extra mile since he wasn’t that tough. He does not remember his instructors clearly; all he remembers are the tenor of their voices. It was at night in the training centre when the delegated places of the soldiers were announced, Peter was assigned to go to Mosul and there he joined the 71st Cavalry regiment. â€Å"It was November when we landed there, the hot gust of wind and stench welcomed us and I realized that the training was justified for being that tough.† says Peter. ... He was good at spying, so he assisted in planting coups too. And there he experienced being a prisoner. Peter says, â€Å"I was held captive for some hours because a riot broke out between the people of different Iraqi sects and there I showed them my Mississippi spirit.† Peter was sent to combats as his fellow soldiers fell, the fight in the beginning was the toughest because they were being opposed by many as US army was also trying to strike peace-pacts with the over-thrown government. However, when matters grew worse, air raids were called for, which was the most effective one in conquering the enemy. â€Å"Life got a new meaning when I became a soldier; every act was an act of purpose and service.† says Peter. Though they seldom enjoyed because most of the time they were on duty. Apart from that, the food they usually got was below average as all of them were more used to hygienic and healthy food but resources were scarce because of the ongoing battle. The soldier s were provided with food and other essential supplies from the Headquarters but with the enemy at their heels, they had to be extra cautious. Entertainment was scarce but once in a while a fellow soldier used to sing songs of love and nobody mentioned songs of war. Once or twice, Peter tried to keep a diary but it got lost when they were moving from Mosul to Baghdad. â€Å"Never was a very religious person, but the tomb of Jonah was a historical place in Mosul and before I was transferred to Baghdad, I visited there. My stomach tingled with awe at the tomb which was elaborately decorated with enamel colors and what not. Before I could cross all the steps leading to the tomb, a lolling head, dismembered from it body

Marketing Essay Example | Topics and Well Written Essays - 500 words - 42

Marketing - Essay Example A personal touch with the customer, understanding his need, proper courtesy and a genuine smile is all that he longs for. It has something more to do with Max Weber bureaucracy or organizational pyramid (2) where everyone points a finger to the other one. In last two decade, the entire marketing scenario has gone through a paradigm shift and excellent customer service appears to be the deciding factor in this changing order. First of all, it is the sense of belonging, the proud ownership of the employees that literally change the face of the organization. The training of the employees that makes them serve the customer in a better manner plays the pivotal role. He should learn to communicate effectively, put a genuine smile in his face and be willing to serve his customer in every conceivable way. The stuffs should also know how to outmaneuver the customer without compromising the It is observed that a typical grocery shop stores 30,000 products and the owner answers same no of quarries. In supermarket the product listing may cross well past six digit marks but the product information which needs to be volunteered is surprisingly absent. The profit surges upwards if some subtle changes can be taken care of. For instance, Wal-Mart has a concerted return policy and a podium in every store where anyone can put a question regarding any service (3).The resultant outcome is a satisfied customer who returns again and again – to contribute to the profit of the organization. There can be multi pronged way to provide better customer care in a supermarket. Firstly, the proper motivations of the employees that work wonder. â€Å"At IBM, every one sells† as Buck Rodgers had put it in his best seller ‘The IBM Way’ (4) which should be the anthem of every supermarkets which aspires to make it big. From the doorman to the casher, every one needs to work in unison, compromising over everything except company ethics and profitability. The

The growth of Starbucks Case Study Example | Topics and Well Written Essays - 2500 words

The growth of Starbucks - Case Study Example (Marios Theodosiou). The rise of multinationals such as Starbucks came with the advent of globalization, where trade restrictions were eliminated. Doing businesses in most countries abroad became much easier than before. Government regulations are more relaxed and tariffs were reduced or totally eliminated. These developments have given chance to big companies in the developed countries to capture bigger markets including the Third World. This has given rise to the issue of how to standardize product internationally and at the same time adapt to the individual idiosyncrasies of each country. Multinational firms such as Starbucks face this type of dilemma. Product standardization is the introduction of domestic products internationally with a little or no modification (International Product Decision). Product standardization is done in commodities such as shoes. Multinational shoe firms such as Nike, Adidas and Reebok release shoes that are sold across different countries. The other way of marketing product is through adaptation. If the firm spouses this marketing strategy, it adapts domestic product to suit the foreign market. Product modifications are done. They can be specifically designed for foreign markets. It is believed that 'global marketing of standardized products can, however, lower operating costs, and with effective coordination exploit a company's best product and marketing ideas" (Powers). One of the benefits of standardization is it allows current technology to adapt products and services to the local needs and wants. "It is also possible to tailor standardized strategies for different worldwide segments that exist cross-nationally" (Powers). On the other hand, there are doubts on the standardizing domestic products. Some concerns raised against standardization are national prejudices (Powers). Buzzel posited that "it is a mistake to assume that product standardization is possible without careful consideration of the idiosyncrasies of each market, such as physical environment, the stage of economic development, cultural characteristics, the stage of product lifecycle, competition, distribution systems, advertising media, legal restrictions, and finding the right balance between local autonomy and central coordination" (Powers). There is a need for both. Both have advantages and disadvantages. At this point, we will specifically be analyzing how Starbucks was able to make a decision on choosing between product standardization strategy and product adaptation. The Starbucks' Case Starbucks is known for coffee. But people around the world know that it does not only offer coffee or food, it offers experience, tranquility, and class. This is something that the company has standardized. Covering three continents, the green and white emblem has dominated various countries. Starbucks management has decided to standardize the product all over the world. Its cozy interior, plus

Individual Strategic Business Planning portfolio Essay

Individual Strategic Business Planning portfolio - Essay Example By virtue of the sophisticated technology JetFan Ltd expects to capitalize on the demand for sophistication by the consumers. The amount of money required for the business initiative has been stated as $2.5 million worth equity capital. Moreover by way of ‘intellectual property’ rights the company will be able to avoid any duplication of the impeller technology in the market besides giving it a good brand name. So the Executive Summary portion of the business plan clearly highlights all the aspects relating to fund requirement, project worthiness etc. Overall it can be said that the portion covers all the relevant questions making it an ‘excellent’ one. Business Description The business plan has been stated as ‘commercialization’ of impeller technology in worldwide market by entering into alliances with the leaders in the fan manufacturing market. The product offered by the business has been stated clearly in section â€Å"Creating the JetFan R evolution† where it has been stated that the business plans to offer small-sized, quieter and convenient fans to the consumers. This is an expansionary business opportunity. The reasons for the success of the plan has been outlined in the section â€Å"Why use JetFan and why now†. Here the benefits of adapting to the new technology have been stated as stall-free, miniaturization, less power consumption, reduced noise etc. The pressure differential advantages of JetFan over the conventional axial flow have been presented by way of a chart. The growth forecast for the JetFan market has been anticipated to be 15 percent every year. The section â€Å"Creating the JetFan Revolution† highlights the unique features of the JetFan’s unique impeller design. It has been mentioned how the JetFan scores over traditional plans in terms of higher airflow, improved efficiency, long battery life etc. Besides it has been stated how the JetFan reduces the inventory and tooli ng costs for the manufacturers. So overall in the business plan the details relating to nature of the business, products offered, its unique benefits, future growth prospects, salient product features and the unique business characteristics have been clearly outlined. So overall a good description of the business has been given. Marketing The market size has been conservatively estimated at 350 million small fans. This has been expected to grow by 15% annually. The market trend has also been anticipated to be strong owing to the fast replacement of the desktop computers with portable computers. The business plans to sell its impellers to the manufacturers in various industries. This implies that the business will not supply to the customers directly rather it will function as an intermediary as the plan clearly states that the sale of the impellers will be mainly to the manufacturers. The plan states that the business faces direct competitions from the manufacturers of specialist fa ns like Papst, NMB and Sunon. In the event JetFan decides to manufacture complete units of fans then it is expected to face significant direct competition. These fan manufacturers occupy a sizable portion of the market. However, it has also been stated that if the company sticks to the production of fan impellers instead

The Psychological challanges of Oppressed women in The Yellow Essay

The Psychological challanges of Oppressed women in The Yellow Wallpaper - Essay Example of Gilman’s writings that reflect her society’s views of mental illness and diagnostic conventions and attitude towards women’s postpartum psychosis. The setting of Charlotte’s story â€Å"The Yellow Wallpaper† enormously reflects the time period in which the story takes place. Indeed the setting of the story reflects the American society in the late 19th when the people were less endowed with scientific knowledge and the position of women in the society was restricted within the four walls of their parents and husbands’ house. Women were also thought of to be devoid of any intellectual capability. Therefore they were restricted from any psychophysical works except the indoor activities of raising children and serve their husbands. Evidences of Gender Discrimination in Gilman’s Story The distorted figure in the yellow wallpaper symbolizes the forced inactivity of women and also the society’s view of women’s physical fragi lity. In the 19th century American and European societies it is thought that women are the passive pacifier of men’s sexual desire and therefore they should not do any type of work more than what the circumstance requires them. The male dominated society thinks that men are born to work outside and women are for house and hearth. But according to the vindication of Gilman’s story, what men think of the betterment of women is their mere observation from a remote point of view. Men never can assimilate themselves with the selves of women and therefore they cannot feel what is felt by women (Bak 41-2). But as the protagonist herself is confined and restricted, she can feel the agony of the imaginary crippled woman who is bandit in the yellow wallpaper. She is confined within the sanitarium that symbolizes the whole male dominated... The author of the essay: "The Psychological challanges of Oppressed women in "The Yellow Wallpaper" analyzes the society’s attitude towards women’s psychological illness in the 19th century and its influence on Gilman’s writing. Gilman’s story speaks more of the patriarchy’s attitudes towards women’s mental illness, in the 19th century, which was considered to be the result of extensive brainwork. The author of the essay mentions that in the story, the author attempts to vindicate that nuptial institution as well as the related restrictions imposed upon a woman in marriage is detrimental to the harmonious psychological growth of women. That is, women’s struggle for their own selves must challenge the so-called male-imposed norms, rules and regulations in the name of women’s betterment. In the end the author of this paper sums up that according to Gilman, women’s situation from a male point of view is ironical in the sense that the male counterpart of the society thinks that what they prescribe for women is for their welfare, while the male dominated society’s restriction in the name of women’s wellbeing is detrimental to the women’s psychology. Throughout the whole story John examines the protagonist’s condition from a detached observer’s point of view. Consequently he cannot look into the protagonist’s agony. But John can be viewed as the production of his male society. In John’s society, women viewed only from a male point of view and this male viewpoint is excessively obsessed with the sexuality of the female body.

Ge Imagination Breakthrough Essay Example for Free

Ge Imagination Breakthrough Essay Can he hope to change a company whose growth was driven by acquisitions and productivity improvement into an organic growth company dependent on innovation, entrepreneurship and risk taking particularly in such a large complex performance driven corporation? Answer: 2a: Yes, Immelt is relying on ‘technological leadership, commercial excellence and global expansion’ to provide â€Å"unstoppable† opportunities and expand GE’s business base. He wanted to use GE’s size and diversity as sources of strength and to drive growth by investing in places and in ways that others could not easily follow. As a counter effect of 1st Jan 2005 deadline for emission regulations it was predicted that there would be a spike in demand for old products, leaving little market for EVO in 2005. These old models were in ready inventory and with much better discounts. 3c: Continual redefinition of the global EVO product and the failure to make hybrid commercially viable * Initially GE decided to develop EVO country specific during IB meeting but it was not viable because of low requirements. * Recognizing the international constraints the EVO was also developed as a product concept ‘Global Modular Locomotive’. Design developed around set of standard components that could be building to different requirements. * GML also helped GE in reducing the response time in international tender processing, reducing the amount spent in non recurring engineering, and reducing the time between order amp; the sale. * GE was also adaptable to specific international requirements such as Kazakhstan’s condition to transfer the assembly operations to their country. This was a part of GE’s international strategy â€Å"In country, for country†.

Continuous Development Of Modern Media Technology Media Essay

Continuous Development Of Modern Media Technology Media Essay With the continuous development of modern media technology, constantly updated means of communication and increasingly rich forms of communication, mass media almost always affects people in all aspects of life. In current society, a variety of communications activities has become indispensable in our lives. As an example, the radio program Mars on Earth reported in 1938, which led to huge panic in the United States adequately illustrated this point. TV, newspapers, online news, and radio stations and other news media access to information are now the most important source of information for people to understand the social. Media as an integral part of life, its coverage means often affects the publics mood, and the report of peoples point of view often leads the trend of public opinion. While the continuous spread of important information for the audience, the media is also instilling the relevant concept to audience in a subtle way, in order to affects our attitude, and thus to some extent, to change our view of the world. Just as C. Wright Mills stated that Media not only give us information, they guide our very experiences. This paper will make a detailed analysis of the social function of the media, first introduced the media function in the information dissemination, and discusses the media as information channel for people to provide services. Then this paper will analyze in which way the media influence peoples attitudes, behaviors and experiences. 2.0 The social function of the media The news media is part of the whole social system, which is responsible for reporting the development of the whole society and change, recording the process of the functioning of society bit by bit, with has social information dissemination, public opinion, social supervision and cultural heritage features. In all above, information dissemination is the most basic function of the media, and it has been undertaking to pass true and accurate social information, as well as the task of passing the first-hand information to the audience. Through continually providing a large number of reports of the social events, media transfers flow of information about the surrounding environment, transportation, culture, news, financial market to the public, and also a variety of impending disaster has occurred or, threats and other information to meet their needs. (Bryant Oliver, 2009) In addition to the basic functions of information dissemination, media also has social supervision, education and guidance functions. This paper focuses on the social function of how media guides peoples behavior. 3.0 Means by which media guide peoples experience 3.1 Media decides the content and intensity of information dissemination by news selection There are many large and small event happen every day in the world, reporters choose what to report and what not to have set the window limits for the mass audience, and the scope of the subject of discussion. (Deephouse, 2000) The media measures whether the incident should be reported and how they are reported by a certain news value, in which the fresh of news and timeliness are the key criteria. The fierce ratings competition between media makes the journalists must be ready to face tight time pressure; they all hope to make exclusive reports and starting the news. (Lengel Trevino, 1987) When a hot topic in the head, the media will rush to chase stories, all television, newspaper layout with large, a lot of time around the same topic, it is important to create the atmosphere. But soon, when the subject lost its news value, it will completely disappear in the media. The chase of timely news brings urgent pressure of time, so that media workers have difficulties to do in-depth coverage of events. The media led the public to focus a particular issue, it will also lead us quickly forget the subject. 3.2 To guide the public emotions through different ways of media coverage Press report is easy to influence the publics perception of news events, and lead us to a particular point of view to understand the event. The news media report implied social customs, ethics, philosophy, personality temperament and other news elements of influence and control human emotions more and more apparent. (Scannell, 1992) For example, media report to specific geographical coverage and the spread of video content, due to re-process or phenomenon and not only focus on its nature, to live lives of such people would deepen the misunderstanding of people and things, the tendency of these people and events to be rendering, and thus have a negative impact on the public: not only will affect the groups feelings, but also affects the positioning. Medias role is to help us to transcend personal experience of life constraints, let us know what is happening in other corners. News reporting should be objective and fair. But each persons perception of the world derived from the individuals life experience, according to different backgrounds, social status, gender, ethnic group, different people present for the same facts, is bound to see a different face, resulting in different interpretations, no one can remove the view or values . Of course, media are no exception. The integration of these differences in the news becomes emotional and cognitive impact of a factor to people. 3.3 The development of new technologies creates more possibilities for the media influence on people Television reports which allow people to the text provided in the newspaper and sound provided by broadcast, itll also see a real vivid picture. TV news focuses on visual effects, even if not shooting pictures, television stations often use computer graphics showing the incident, manufacturing, and shot in the visual. These impressive images are easy to be trusted by people, so television has more social control force than other media. In addition, the way to receive information from television is mostly passive, television is relatively weak selective information, which more seriously confined the scope of access to information sources of the audience. In todays information society, media pluralism has been formed. In the press, radio, television and other media followed by a fourth media Internet. (Edwards, 1998) The rapid development of new media provides more extensive information on the public. (Couldry Curran, 2003) 3.4 advertising leadS tendency of the media coverage Advertising is the greatest sense aggressors of modern society and the strongest message implants. As an advertising vehicle of the release of advertising, the tremendous impact on the news media brought by the advertising is inevitable. As we all know, at present, the news media advertising is still the most important publishing platform. News and advertising co-exist on one platform, to contradictions and problems inevitably arise. (Schewe, 2004)As social and economic development, the role of advertising is growing. It passes the information to promote economic development in goods but also to both the media and advertisers to create huge economic interests. In the interests of the stimulation, the media coverage will inevitably have a certain bias. Media on corporate image, product performance, marketing activities and other information for publicity, this practice is called soft ads by some media, and is called hidden advertising by advertisers. For ordinary consumers, these practices are very deceptive in nature. This appears to news is actually a style advertising openly in the news section, so unknown to the audience and may mislead them to believe. 4. How peoples experience be guided by media 4.1 Reconstruction of social values through public opinion Opinion is the most controversial social life events have a certain tendency to published comments, opinions and views. As a common psychological tendency of public opinion, it is hidden in the depths of peoples thinking, through the social assessment with value judgments, such as a specific values or behavior of the praise and admiration or criticism and condemnation, resulting in a social atmosphere, to have an impact on the values and behavior of the community Members. With members of the broad impact on society, public opinion has become an important means of cultural control, and the control system in modern society has an important position. Through the role of public opinion, on the one hand, the mass media will be the legislative branch and public administration institutions to develop, promulgate laws, decrees made public, called on people to adhere to the existing social norms, while the mass media to spread the people values, beliefs and life behavior in order to guide public choice to establish a correct outlook on life and behavior; on the other hand, public opinion and mass media will call through the network, television, radio, newspapers and other channels back to the social ruling, prompting the legislature and public regulatory bodies to consider the public demand, the existing legal and institutional system to adjust and improve, and continuously improve its administrative capacity to maintain social stability and social order. Thus, there is the formation of mainstream social values, although it is not mandatory like the law, it generally widespread impact on peoples thinking and behavior as an invisible constraint. 4.2 To change the publics lifestyle and spending habits Mass media treats guide as a starting point, using its powerful propaganda to make people happy in leisure reading among accepted the new consumption patterns and lifestyles, (Morris Ogan, 1996) which gave birth to consumer culture. The shopping information published in the Newspaper also makes people change their attitudes in consumer. Which stores have recently engaged in activities, what brand, price number, price information, etc. Which pharmacies, we reported on the exchange received from these messages, and compare, go consumption. Difference with the elderly is that, young people read newspapers are concerned about the strong style of entertainment news and employment information. Some people also go through the information reported on the drivers, waiters, security and other jobs. From that point on, the mass media, consumer culture and consumption in the formation of lifestyle play a conspiracy role. 4.3 News reports of crime and violence have a tremendous impact on people With the development of society, media attention on political related events has gone from a single broadened to a variety of criminal phenomena, showing a trend of diversification. With the strengthening of public opinion functions, the number of news reports of crime and weight has been significantly improved, which strongly shocked criminals, and demonstrate the power of the rule of law. (Thoman, 2010) Media is keen to report crime and the main reason is that crime news concerns the audience easily and access to them more attractive. Crime news reports often have twists and turns of the plot, as well as the color of violence, it has more stimulating and entertaining elements than the other news stories. The authenticity of news reports also makes it depicts the victims of crime, especially violent crime, to bring serious consequences, more than the literary fiction film and television has more power to shock. Driven by the economic interests, news reports of crime is inevitably some distortion of the real social phenomenon: excessive rendering of malignant cases, highlighting the cruel circumstances, the disclosure of personal privacy and other related personnel cases. Violation of implied theory believes that exposure to aggressive stimuli may increase a persons motivation level of physical and emotional. In other words, the content of news violence can increase aggressive behavior stimulation occur. In some cases, aggressive characters in the news will give them a role model. Which can be seen, the mass media violence and the proliferation of pornography are often imperceptible to the audiences behavior and way of life tend to have a negative impact on these effects if left unchecked, it is possible to induce the production of deviant behavior. Elizabeth (2010) said that, Many blame media for the rise in violence, but of course thats not the whole storyà ¢Ã¢â€š ¬Ã‚ ¦ Some of the details of this connection might be questioned But the fact that a connection exists is hard to dispute. Which leads us to an inescapable conclusion: Something must be done. The media should adopt accurate news reports of crime, so the audience can keep abreast of the latest social facts of the crime, ease because it caused an unknown number of tension, suspicion, rumors and other negative emotions have to create a good environment for punishing evil and promote good. 5. Summary Since the 20th century, mass media has had a profound impact on peoples lives. The newspapers, books, radio, television, communications satellites and the Internet all represented the modern media space, which makes the whole world a small village. In the aspect of time, the whole community culture and communication network system stay in the same structure, which enables human to enjoy the same important information at the same time, so that all ethnic and cultural exchanges and interaction between real world. The news media with modern sense has become the dominant mode of existence of a culture in modern society the news media culture. Media culture on the psychological characteristics, behavioral structure, attitudes toward other aspects have had a significant effect on the contemporary human life form, content and even ways of thinking have changed dramatically along. With the in-depth of news media era, mass media plays in contemporary society, not only to transmit information, provide entertainment and other social functions, but also changing peoples values and way of life, shaping the social and public life. It continually to provide a series of community-oriented public values and colors to create a highly popular media discourse system, the media text is also increasingly becoming an important form of the modern spirit of the consumer. As a result, the news media become a pervasive cultural existence for its coverage of the large community and huge influence on people in modern society. The news media refers to mass media culture as a carrier; to the media of expression is the basic characteristic of modern society, a cultural phenomenon unique. Either as channels for the dissemination of information, or acts to guide the public, news media should be fully aware of their responsibility, (Curran Seaton, 2003) and try to make it fair and make contribute to sound development for the community. (2109 words)