Hagia Sophia

In chapter twelve the remarkable church known as The Hagia Sophia was discussed briefly and I find it fascinating. I first learned about the Hagia Sophia in my art history class in high school. I have always been interested in the fact that it started as a basilica, was then a mosque and is now a museum that functions as both a mosque and a cathedral. I think that this amazing structure is proof that different religions can coexist and come together to create things that we all can cherish. Hagia Sophia is in Istanbul, turkey which was part of the Byzantine Empire until it was conquered by the Ottoman Empire.It was originally built under the rule of Justinian to function as a church in 532 A. D. Justinian had material brought over from all over his empire. Large stones were brought from far-away quarries: porphyry from Egypt, green marble from Thessaly, black stone from the Bosporus region and yellow stone from Syria (â€Å"The Annotated Mona Lisa†). More than ten thousand peo ple were employed during this construction. This new church was immediately recognized as a major work of architecture, showcasing the creative insights of the architects. Hagia Sophia is one of the greatest surviving examples of Byzantine architecture.The church’s decorated interior of mosaics and marble pillars and coverings is massive and takes ones breath away. The dome seems weightless as if held up by the unbroken row of 40 arched windows under it, which help flood the colorful interior with light. All interior surfaces are covered over with polychrome marbles, green and white with purple porphyry and gold mosaics, encrusted upon the brick. This covering hid the large pillars, giving them a brighter look. In 1453, the ottoman turks took over and the Sultan Mehmed II ordered the building to be converted into a mosque.The bells, altar, iconostasis, and sacrificial vessels were removed, and many of the original beautiful mosaics that Justinian put in were plastered over. T he Islamic features — such as the mihrab, the minbar, and the four minarets outside — were added over the course of the Ottomans rule. It was used as a mosque until 1935, when it was converted into a museum by the Republic of Turkey. For almost 500 years the Hagia Sophia served as a model for many of the Ottoman mosques such as the Sultan Ahmed Mosque, the Sehzade Mosque, the Suleymaniye Mosque, and the Rustem Pasha Mosque. However the Hagia Sophia is still the most awe inspiring.I believe that if the ottomans had never converted the church or if the church hadn’t been built under Justinian we wouldn’t have the beautiful mix of architectural aspects that we have today. The fact that the church contains the beautiful gold inlayed mosaics of Justinian, the depictions of Christ, and the large medallions with the names of Muhammad and Islam's first caliphs and that they all coexist beautifully is a perfect example of the harmony between the religions. People from all over the world from all backgrounds come to worship or just visit the beautiful structure.

Free Trade In Society Essay

How does the society benefit from an economy built on free trade where both the labor and the buyer only seek personal gain?   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   On an economy that is built of free trade, society will run like clockwork because of the various incentives that the various sectors of the economy provide.   It is human nature for individual to act upon incentives.   Children are commonly disciplined by their parents with the use of incentives. It is the same in the case of the laborer and the buyer.   Both of them seek only personal gain.   It is highly uncommon that either buyer or laborer will act for the greater good of the nation or for world peace.   They work because they want to earn a living.   They want a nicer car, a bigger home, a good education for their children, and a trip abroad for the summer perhaps.   All their efforts are targeted to their personal goals, all of which is quantifiable in terms of money.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   The laborer will always look for a place where there is a higher monetary yield for a lesser amount of work.   He will work harder if he knows that there is a promotion ahead. The buyer, on the other hand, will always search for a good bargain for any of his purchases.   All in all, everyone wants more for their money and time.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Society benefits from this system because it creates more competition in the markets of both buyers and laborers, resulting in more options and better options for both sectors.   With this equilibrium, society benefits because the economy benefits, thus increasing the standard of living. If however, there is an oversupply of labor, wages will go down and unemployment will go up, distorting the balance.   This is the same for buyers. A lack in competition will increase prices and decrease their purchasing power.   It is therefore necessary to maintain a good equilibrium in both labor markets and buyer markets which will result in a better economy, and which will eventually result in a higher standard of living for society.

Why was there a revolution in March 1917?

Russia was a very backward country compared with the other European countries. There were few factories before 1890 and there had been little industrial development in Russia. By 1990, however, many peasants were leaving the countryside to work in the towns and industry made twice as much in 1990 as in 1890. This meant that towns like Moscow and StPetersburg grew up quickly. In these towns grew slums where the working class, that had previously not existed at all, lived. The increased population of the towns meant there was more pressure on Russia's farmers to produce more food, which could not be done with the medieval farming methods still in use. In other words Russia was in the middle of an industrial revolution when the Tsar was forced to abdicate in 1917. All other European countries had been through the same process, but without such a drastic side effect. Whereas in England and France the government had changed to accommodate the needs of the new social order, in Russia these changes had been used as an excuse to get rid of the Tsar. Therefore, it was largely the Tsar's inadequacy as a ruler and the mistakes he made that led to a revolution in 1917. Tsar Nicholas was not a strong ruler and was out of touch with the needs and realities of his country. He himself was extremely wealthy and surrounded by only the good things in life, and associated only with the aristocracy. He ruled as an autocrat, unaided by any parliament. Nicholas succeeded in keeping power by the secret police, the Okhrana, military power and censorship of the press. Nicholas believed he was chosen by God. Influenced by one of his ministers, Pobedonostev, he forced the Russian Orthodox religion on other ethnic groups, especially the Jews, and on the people in schools, the army and work places. This made him even more unpopular than before, with his use of terror to oppress his people. In 1905, there was nearly another revolution. The causes of that demonstrated the bad feeling against the Tsar, as did the number of anti-government publications when censorship was relaxed in 1903, and the strikes and demands when the Tsar tried to set up government-approved unions. In 1904 Tsar Nicholas tried to unite his country by going to war with Japan over parts of the crumbling Chinese Empire. This led to many humiliating defeats and a display of Russian incompetence in organisation. This further increased the bad feeling towards the Tsar. All these, coupled with failed harvests and low wages, resulted in a peaceful protest on 22 January 1905, which was led by Father Gapon. Father Gapon organised a strike and a petition that requested better working conditions, an elected parliament and an end to war. He marched with the workers to present the petition to the Tsar at the winter palace, not knowing that he had left the day before. When they arrived at the palace, the soldiers turned on the crowd and started firing. That day became known as ‘Bloody Sunday'. In the same year, the Tsar's uncle was shot, there was an increase in peasant riots, there was mutiny on the battleship Potemkin, printers went on strike and there was a general strike where practically everything closed down towards the end of the year. Tsar Nicholas survived the events of 1905 because then and afterwards the army supported him, and made sure that by March 1906 all revolution was crushed and its leaders were either dead, exiled or in hiding. Nicholas was lucky in that the great massof peasants blamed the land owners and not himself, and that censorship of the newspapers was still in place. He also protected himself by agreeing to the October Manifesto. This was a list of promises given by the Tsar that was drawn up by Witte. Included in it were promises for a Duma or parliament elected by the people, civil rights, uncensored press and the right to form political parties. This was successful in taking pressure off the Tsar and secured the middle class's support of the government. It did not, however, satisfy the revolutionaries and later on it appeared that they were right in regarding the Manifesto with suspicion. Although there was freedom of expression, newspapers were fined if they printed anything offending the Tsar, and the Duma was so limited that it was virtually ineffective. In it the proletariat and the peasants were highly under-represented. Even so the Tsar failed to accept it as a governing body and it was only by the time of the fourth Duma that he begun to work with it. After 1905, life did begin to change in Russia and a key figure responsible for these changes was Stolypin, the Prime Minister appointed by the Tsar. He used the army to exert the Tsar's power in the countryside by setting up military courts that could sentence and hang a person on the spot. The hangman's noose became known as Stolypin's necktie. The terror this caused was heightened by the still-active Okhrana that had many informers. People were required to carry internal passports and travellers to register with the police of the area they were staying in. In 1911, Stolypin affected changes in the countryside to make agriculture more productive. Peasants could buy land from their neighbours with money borrowed from a peasant's bank set up by Stolypin. The aim in this was to create a wealthy class of peasants loyal to the government, kulaks. 15% took up this offer and Stolypin's theory appeared to have worked with record harvests in 1913. The poorer peasants became labourers or factory workers. Four million were encouraged to cultivate land along the Trans-Siberian railway but found that it was already taken by rich land speculators. They then returned, angry, to European Russia. In the towns there was an industrial boom that meant production increased by 100% between 1906 and 1914. The workers, however, did not benefit from this increase with the average wage being under what it was in 1903. In 1912, an important strike took place in the Lena goldfields in Siberia that led to 170 dead workers and 375 wounded. This had a similar effect to Bloody Sunday and gave way to many workers' protests. These changes affected some, even if very little, improvements in Russia and would have led to more had had they not been interrupted by the First World War. The war meant that the fourth Duma had to be dismissed, just when the Tsar had begun accepting it. However, at first the war seemed good for Russia; initially there were successes and the people supported the Tsar but even at first the similarities to the Russo-Japanese war were obvious, except that the effects would be far worse as it would be a far longer war, giving the Tsar more time to make mistakes. The early enthusiasm for the war dwindled quickly as losses mounted high. The soldiers went to the front without proper warfare or equipment as basic as boots for the cold and wet. They blamed their officers for their ill organisation. Life was hard in the towns also. There was little food and what there was, was sent to the soldiers but often did not get to them. People were starving in the cities and there were huge bread queues. Prices went up as there was a shortage of nearly everything but the workers' wages did not. Coal was unavailable and as the factories closed. People were hungry, cold and unemployed. Morale also dropped as stories from the front told of misery and defeat. In September 1915 Tsar Nicholas made a great mistake by taking over the running of the war. This was such a massive error because the people now blamed him for the suffering brought about by the war. It also meant that he left Russia in the hands of Rasputin and Alexandra. The Tsarina was not popular as she was thought to be a German spy and Rasputin was infamous fir his behaviour. Together they replaced the able ministers of the Duma with favourites or men that would do as they were told. The Tsar lost support continually until March 1917 as he was held responsible for the war and things it had caused. By March 1917 the proletariat did not only want their physical needs satisfied but they also wanted political change. On the seventh forty thousand workers from the Putilov engineering works went on strike in Petrograd. The next day they were joined in their demonstrations by thousands of women. Over the next few days men and women demanded food, fuel and better conditions together. On the twelfth soldiers joined the strikers and marched with them to the Duma. Instead of shooting at the crowds, they shot at their officers. The Tsar had lost the support of the army. The Tsar could not survive revolution this time. He had lost the support of the army that had been very important to him in keeping control by suppressing any opposition. Underneath him the people had always been divided into different political factions but this time only a portion of the aristocracy supported him. On 15 March, the railway workers did not allow the Tsar's train into Petrograd. Certain army officials entered the Tsar's compartment to ask him to abdicate but the Tsar had already decided to do this in favour of his brother as his son's medical condition meant that there would be added difficulty to his ruling. However, Russia had had enough of the Tsars. Some people think that abdication was the biggest mistake of all as it meant certain ruination for the Romanovs. The 1917 revolution was the result of a combination of factors. In the short term, the First World War was an important cause, but there was a growing dissatisfaction with the Tsarist regime and the economic and social hardships it caused, that nearly boiled over in 1905. Everything that ever happened or did not happen in Russia could be shown as a reason for it but what made it so significant was what happened after the overthrowing of the Tsar with the Provisional Government and Lenin.

Research methods assignment Example | Topics and Well Written Essays - 1000 words - 1

Research methods - Assignment Example sistent health anxiety not only causes great suffering for the patient and those around them but is also costly in terms of higher medical care utilization (Barsky, Ettner, Horsky & Bates, 2001). Hence, it remains a priority to understand the aetiology and maintenance of hypochondriasis and to develop effective treatments. Although DSM-IV-TR (2000) currently classifies hypochondriasis as a somatoform disorder it has been argued that the underlying cognitive processes are more consistent with those in anxiety disorders (Mayou, Kirmayer, Simon, Kroenke, & Sharpe, 2005; Noyes, 1999; Olatunji, 2009; Deacon &Abramowitz, 2009,) and thus it has been conceptualized as such for the purposes of treatment (Paul, Warwick, Deale, 2003; David Clark et al., 1998; Wells, 1997). Schizophrenia is a chronic, severe, and disabling mental illness that has a particularly negative impact on patients with the disorder. For example, compared to normal people, schizophrenics will often face significant problems with developing social relationships, self-care, and are often unable to hold down a job. As a result, everybody knows that they are usually unemployed, socially isolated, and dependent on the financial support of family or public welfare. It is, therefore, imperative that mental health professionals develop effective treatments to tackle the problem. A number of different treatments have been developed to target the problem of Schizophrenia. These include antipsychotic medications, electroconvulsive therapy, cognitive-behavioral therapy, family education and therapy, and social skills training (Rosenberg & Kosslyn, 2014). Many Schizophrenics don’t like taking medication, usually because of the many distressing and long term negative side-effects. Cons equently, I would recommend treating Schizophrenia with psychological interventions, rather than medication. An experiment was carried out to examine the impact of drinking alcohol on driving ability. One hundred participants took

Global Supply Chain Management Assignment Example | Topics and Well Written Essays - 3250 words

Global Supply Chain Management - Assignment Example The firms that practice supply chain management experience considerable reductions in cost and cycle time (Li and Du, 2005, p. 279). For instance, Wal-Mart stores reported an increase in inventory turns, decline in out-of-stock occurrences along with a renewal cycle that has decreased from weeks to only hours as a consequence of an effective supply chain management. Even though supply chain management is simple to understand in theory, it develops more complexity with bigger companies and it variety of products, more global locations of the suppliers, customers as well as facilities responsible for distribution. Supply chain management is also complicated since companies may be components of more than one pipeline at a specific time (Fredendall and Hill, 2001, p. 4). As an example, the manufacturer of synthetic rubber may simultaneously be a part of the supply chain for tires, industrial products, mechanical parts, shoes and aircraft components among others. Key drivers of supply cha in performance in a complex environmentLambert (2008, p. 20) found out that the performance of a supply chain is dependent of a number of drivers: logistical and functional including facilities, inventory, transport and information. FacilitiesFacilities define the physical locations where commodities are produced or stored, where storage and production sites make up the main forms of facilities (Zanjirani Farahani, Rezapour and Kardar, 2012, p. 193). In the facilities, there is either processing or transformation.

A Humble Proposal for Handling Muslim Immigrants in Germany Essay

A Humble Proposal for Handling Muslim Immigrants in Germany - Essay Example The given paper will prove that Muslims suffer from outrageous discrimination and oppression in German society, which is the blatant violation of human rights established by some United Nations conventions, and propose a solution to the problem basing on German laws. We cannot overlook the fact that compared to other European countries, Germany provides a relatively wide range of opportunities for immigrants’ employment, but Muslim immigrants face barriers in employment related to their religion and ethnicity, which endangers their welfare and ability to earn their living in the host country (Muehe 21). German employers show profound bias in their policy because they would rather prefer to hire a German than an immigrant worker. This unfair policy seems controversial, for â€Å"since the 1990s, analysts have pointed to Germany's ongoing need for immigrants to bolster economic development and maintain a dynamic workforce, given the rapid aging of the country's population† (Oezcan). In other words, do not Muslim workers deserve equal employment prospects after all they have done for Germany? Moreover, Muslims experience vast cultural and religious discrimination in the German environment, which gradually forces them to integrate and assimilate via various sadistic language courses and governmental integration programs. German government first admits Muslim immigrants into the country and then considers five or six million of them a problem that needs to be handled. Muslims experience blatant rejection of their religion and are virtually forced to hide their Islamic centers in unmarked buildings on the outskirts of the cities (Brenner), and the number of mosques in Germany is unbelievably small: Berlin, the great capital if this tolerant state hosts only four big mosques! Muslims are violently persecuted by anti-fundamentalist activists of German descent: for instance, peaceful Salafists, who were earlier seen on their noble mission of patrolling German cities’ neighborhoods, are constantly attacked by Germans.

Final Case Study Analysis Research Paper Example | Topics and Well Written Essays - 1000 words

Final Case Study Analysis - Research Paper Example Incidents of sexual harassment can be hard to account for. When activities are conducted through the use of verbal ability and physical sexual harassment is conducted, it can be accounted for. In certain cases, sexual harassment activities become very hard to account for, for example: using signs and symbols to harass another individual. In workplace environment, sexual harassment cases involve both the harasser and the person being harassed. These activities might be conducted by the people in the supervisory and management level and these activities may even be conducted by peers or people working at the same level of the organization or by even those who are not working within the organization, such as customers and suppliers. Sexual harassment effects the organization and work environment in a negative manner and there are ways through which such activities can be countered. Negative Impacts While analyzing the effects of sexual harassment on an organization and the people workin g with the organization, EEOC gives emphasis to the negative consequences occurring due to this act rather than taking into consideration the intent behind such acts. In order to identify whether and act is sexually harassing is dependent on whether the victim believes that the act was unwelcoming or unasked for. The main method through which an act can be defined as unasked for is the negative impacts of that particular act on the behavior of workers. Sexual harassment researchers have asserted several areas that have been negatively impacted due to such activity; these areas include psychological and physical health of the workers, career, and perception of self and social areas. Victims of sexual harassment cases report elevated amount of stress as a result of being harassed. The level of symptoms further elevate as the contact between the victim and the criminal increases, when victims’ contact with those who witnessed the act taking place increases and when the victim ex periences retaliation as result of taking the complain to the authorities of the organization. Studies that are longitudinal in nature prove that the negative consequences of this activity last for a long period of time and even take the shape of future harassing activities if not countered (Paludi 96). One who is a victim of the act experiences several cognitive issues such as guilt of being victimized, escape from settings that are social in nature, shame of being harassed, fear, feeling of loneliness, agitation and decrease in the degree of self esteem. Physical issues experienced by the victim includes: abuse of substance, sleep depreciation, abnormal eating patterns and failure to concentrate. Further empirical studies prove that sexual harassment has negatively impacted the manner in which a victim used to work before being harassed and he even experiences negative impacts on his/her career goals (Goldstein 266). These negative impacts may or may not include increased level of leaves, alterations in goals related to career and alterations in working techniques. The person who is victimized may even experience distortion in important skills including interpersonal and social skills,

Model for Integrating Physical and Virtual Identity Management Systems Thesis

Model for Integrating Physical and Virtual Identity Management Systems - Thesis Example This research will begin with the presentation of theories in the field of security and identity. Secure authentication protocol for the multi-server environment using dynamic ID. This theory relies on the nonce-based (a value or counter) mechanism rather than timestamp. The authentication key of the user is based on two factors such that the theft of one cannot be used to recreate the other, thereby improving the level of security. The theft of the past session key cannot serve to provide access to any individual twice since the key is nonce-based and unique every time. User anonymity is protected with the dynamicity of the variables of the login session. The user Ui sends the following login message to the desired server Sj: (CIDi, Pij, Qi, Ni) where CIDi is the dynamic and ID of Ui, Pij and Qij are nonce-based variables and Ni is the nonce value. The above-mentioned variables are computed by hash functions in accordance with the uniquely generated nounce. This technique not only p rovides a unique session but also hides the identity of the user.   Its attributes: Two-factor authentication; Single registration for multi-server access; User anonymity; Avoidance of time-synchronization problem. These authors have not implemented their approach in the physical environments; however, the attributes of their theory seem effective enough to facilitate a secure service in multi-server environments.... Several laws and security measures are deployed to protect the identity of individuals in the physical world but minimal efforts have been witnessed for the provision of such laws in online spaces. Control of personal information Clear mapping between physical and virtual identity Conceal information This theory is relevant since it provides an individual certain rights to control the exposure of his personal information. This enhances the level of privacy and security of the data. The authors explain the implementation of the concept of e-ID federation which provides access across multiple platforms [21]. e-ID federation implements a security token service (STS) that is based on the Windows Identity Framework. The authentication mechanism is based on security certificates, login forms, Windows Authentication and OpenID credentials [22]. A common platform is established by the STS that can be accessed by different sources to authenticate the individuals. The interoperability takes pl ace on an intermediate layer that serves as an abstraction of the authentication mechanism. The federated authentication mechanism of STS can be seen in Appendix A.2 Security certificates OpenID credentials WS Federation Specification The STS authentication mechanism has been explained in a comprehensive manner with the aid of a diagram. Windows Identity framework can serve as the basis of the authentication mechanism for the chosen research study. Perspectives Theory name Definition of the theory The reason for selecting this theory Its attributes If the theory and attributes can be applied in virtual or physical environments Acceptability and

Write a feature article about Travel, great places to go to in the Essay

Write a feature article about Travel, great places to go to in the world, Muslim woman in different countries, comparing different cultures to Saudi - Essay Example Today, global economic organisations and institutions have come up with several laws and regulations that have made the cross-border transfer of people from one place to another, which used to be very difficult in the time past very easy and simple now. Because of this, a lot more people are now able to travel easily to other places regardless of cultural or religious differences. Having established the point that cross-border traveling has now been made simple, the next aspect of discussion to look at is the choice of place to visit. Without any doubt, there are several excellent places a person may choose to visit for whatever leisured intentions the person may have. Most of these places are major cities of the world and they offer almost everything that makes a person’s stay away from home a memorable one. Talk of natural land sites, sports events and infrastructure, education and academic excellence, cultural integration, economic enhancement, historical symbolism, architectural innovations and technological advancements: there are countless number of cities to visit to have a feel of all these. Happily, each continent in this world can boast of a number of cities and countries that will readily give a person all of such travel expectations. The freedom to travel and abundance of choice notwithstanding, there are a number of factors that really aff ect the conduct of a particular traveller to and from different places of the world. One of such factors is religious and moral differences. A typical case can be given with Muslim women who may want to travel to some of the world’s most renowned destination. Making Europe the first point of call, one place that cannot be left out as an exquisite destination is Madrid. Sabina (2011) notes that ‘’the city of Madrid is located in the Community of Madrid (La Comunidad de Madrid). Â   The Community of Madrid is located almost exactly in the centre of Spain.’’ This is a

Napoleon and the French Revolution Essay Example for Free

Napoleon and the French Revolution Essay Some of historys greatest rulers such as Peter the Great, Catherine the Great, Frederick the Great, and Joseph II have been considered to be enlightened despot. One of these was also Napoleon Bonaparte. They ways by which Napoleon has been considered to be a despot are through his economic policies, religious and educational policies, and the Code Napoleon. The term enlightened despot has been used to describe many great rulers, but it might be misinterpreted. The word enlightened means to be influenced by the values and ideas of the Enlightenment. Also, the word despot is defined as to exercise dictatorial authority. Considering the definitions of these two words, the term enlightened despot would be defined as a person who believes to be influenced by the ideas of Enlightenment and exercises authority similar to that of a dictator. Napoleon had many accomplishments through his economic policies, such as establishing the Bank of France and reorganizing and centralizing tax collection. He also established the Continental System, which attempted to block England from continental trade. Napoleon also put into effect the Berlin Decree in 1816, which  prohibited trade with England. In 1807, the Milan Decree was passed which stated that any ship which traded or even been stopped by the British Navy was to be confiscated. French manufacturing was wholly unable to makeup for the loss of British goods. Soon afterwards, the French manufacturers and merchants began to resent the restrictions. Napoleon regarded his allies and conquered territories as a source for raw materials, conscripts, and a market for French goods. Eventually, Napoleons economic policies contributed to his fall. Religious and educational policies were also part of Napoleons accomplishments, which lead for him to be the greatest enlightened despot. One of the religious policies was the Concordat of 1801, which gave the Catholic Church special status. The Concordat also gave power to the government to nominate bishops who then had the power to appoint the priests. One of Napoleons educational policies was the establishment of the  Lycà ©es, which were state run elite secondary schools. The curriculum was to glorify Napoleon and teach obedience. He also founded the École Polytechnique, which was an engineering school. The final way by, which Napoleon became a despot, is through his Code Napoleon. It codified and reconciled the customary law of northern France with Roman law of the South. The Code Napoleon also provided equality of all before the law, religious freedom, and freedom of work, which reaffirmed the Le Chapelier law banning workers associations. A benefit of the Code Napoleon was that workers were not allowed to strike and were required to carry passports that could be checked by government officials or employers. Napoleon could be considered a sexist because the Code stated that a womans income would pass to her husbands family and not to hers. Another thing was that women workers wages did not belong to them; instead it belonged to their husband. Napoleon said, In France, women are considered too highly. They should not be regarded as equal to men. In reality they are nothing more than machines for producing children. This is an example of Napoleons discrimination towards women, which also relates to him being an enlightened despot. Rulers such as Peter the Great, Catherine the Great, Frederick the Great, and Joseph II have all been considered to be enlightened despots, but Napoleon Bonaparte is known to be the greatest enlightened despot until today. In a pattern similar to other despots, the people of France loved Napoleon at first, but enough they began to hate him. The ways through which he became the greatest enlightened despot are economic policies, religious and education policies, and the Code Napoleon. Only time will be able to show us if there a greater enlightened despot than Napoleon Bonaparte.

Effectiveness of Educational Intervention for Mothers

Effectiveness of Educational Intervention for Mothers CHAPTER V DISCUSSION, SUMMARY, CONCLUSION, IMPLICATIONS, LIMITATIONS AND RECOMMENDATIONS This chapter deals with discussion, summary and conclusions drawn. It clarifies the limitations of the study, the implications and recommendations given for different areas in Nursing practice, Nursing education, Administration and Research. The primary purpose of the intervention was, â€Å"care of premature babies†. DISSCUSSION: The birth of a baby before the developing organs is mature enough to allow normal postnatal survival. Premature infants are at greater risk for short and long term complications, including disabilities and impediments in growth and mental development. Significant progress has been made in the care of premature infants, but not in reducing the  prevalence  of preterm birth. Preterm birth is among the top causes of death in infants worldwide DEMOGRAPHIC DESCRIPTION: Mean age of the respondents were years. Most of the respondents were in the age group of 21-30 years (72.5%). In regard to education out of 40 respondents 13(32.5%) were post graduate, occupation 32(80%) were employed, religion 37 (92.5%) belonged to Hindu religion, with regard to monthly income 16(40%) were under 11000-20000, as for the years of marriage 25(62.5%) respondents were married for 1-5 years. Regarding type of family 25(62.5%) were in nuclear family. Demographic variables of the babies were included, out of 40 mothers 25 (62.5%) were having male baby. Considering the weight of the baby 17 (39.5%) were having more than 2 kg, considering the type of delivery 32(80%) had LSCS. Regarding the gestational age 22(55%) was under 32+1-35 weeks of gestation. Regarding the number of hospitalization 19(47.5%) were less than 10 days. The first objective of the study was to assess the caring skills of mothers with premature babies The present study findings revealed that, the mean pretest knowledge score of the respondents were 12.12. The mean post test knowledge score obtained was 18. The findings revealed that, the mean coping abilities of mothers with premature baby was 82.65. Chen TJ et al., (1998) conducted a study on effectiveness of videotape education for mothers of prematurity. The researcher selected Sixty two mothers were randomly assigned to a control group or experimental group. During hospitalization mothers were assigned to the experimental group received additional study regarding the knowledge and skills of caring for premature infants. The mothers in the control group received routine educational care. The findings indicated that mothers who received a videotape education reported having more knowledge and confidence of caring their preterm babies than the mothers who were in the control group. Moreover mothers in the experimental group have perceived lower stress than in the control group. The second objective of the study was to determine the effect of educational intervention on caring skills and coping ability of mothers with premature babies The present study findings revealed that, that the mean pretest and post test knowledge score of respondents before and after the educational intervention on care of premature babies were 12.12 and 18 respectively. The t’ value is 21.32 for the mean difference in the pretest and post tests knowledge score of mothers with premature babies, it is significant at 0.05 levels. These findings substantiate that the educational intervention is effective intervention of knowledge gain. The finding is consistent with swati.s.,(2013) conducted a study on to assess the effectiveness of structured teaching programme on knowledge regarding management of low birth weight babies among postnatal mothers in selected community. Researcher selected forty postnatal mothers by using convenient sampling technique. Researcher used one group pretest posttest design. The conclusion of the study showed that overall mean score of the subjects in pretest was 56.25% with the standard deviation of 2.80, and the overall mean score of the posttest was 76.25%with the standard deviation of 2.28. The ‘t’value 13.96 was greater than the table value. It found to be a highly significant level of p The findings revealed that, the mean coping abilities of mothers with premature baby was 82.65.the percentage of overall coping score was 65.59%. The third objective of the study was to correlate the caring skills and coping abilities of mothers with premature babies For correlation of caring skills and coping abilities of mother’s formula of correlation coefficient was used. The obtained value is .76 which shows that there exists a correlation between the caring skills and coping abilities of mothers with premature babies. The finding is consistent with Han, et al., study on the report of coping strategies and psychosocial adjustment in Korean mothers of children with cancer. Researcher selected 200 Korean mothers. The conclusion of this study was the Korean mothers reported coping strategies related to maintaining family integration of an optimistic outlook for the situation as being most helpful. The most frequent use of coping pattern was maintaining family integration and an optimistic outlook for the situation. And the less frequent use of coping pattern was the information seeking were significantly associated with lower physiological distress and better family relationship after children’s medical and maternal characteristics were controlled for. Coping pattern, seeking social support was only predictive of social support. The fourth objective of the study was to associate the caring skills and coping ability of mothers with selected demographic variables In this study there is no association between pretest and posttest knowledge of caring skills and coping abilities of mothers with premature babies with demographic variables of mothers with premature babies (education, occupation monthly income and type of the family). SUMMARY The study was done to determine the effectiveness of educational intervention on caring skills and coping abilities of mothers with premature babies in KMCH hospital at Coimbatore, for which the following objectives are formulated. Assess the caring skills of mothers with premature babies Determine the effect of educational intervention on caring skills and coping ability of mothers with premature babies Correlate the caring skills and coping abilities of mothers with premature babies Associate the caring skills and coping ability of mothers with selected demographic variables The present study adopted single pretest posttest design forty respondents were selected by purposive sampling technique. The study is based on Modified Ludwigvon Bertalanffy general system model (1968). The study was conducted for a period of six weeks in KMCH. The tool for data collection are structured self administered questionnaire for assessing the caring skills of mothers with premature babies and CHIPS(coping health inventory for parents) to assessing the coping abilities of mothers with premature babies. The educational intervention given to the mother by computer. After the seventh day post test and coping ability was assessed through CHIPS. In the post test the entire respondents gained knowledge regarding caring skills of mothers with premature babies. Descriptive and inferential statistics was used in statistical analysis. Karl person’s coefficient of correlation was used to find out the correlation between caring skills and coping abilities of mothers with premature babies. Chi –square was used to find out association between background variables with caring skills and coping abilities of mothers with premature babies. The study tested and accepted that, there is a high positive correlation between caring skills and coping abilities of mothers with premature babies. MAJOR FINDINGS OF THE STUDY The mean pretest knowledge of the respondents were 12.12 The mean posttest knowledge of the respondents were 18 The mean coping abilities the respondents were 82.65 The ‘t’ value is 21.32 for the mean difference in the pretest posttest knowledge score of respondents which is statistically significant at 0.05 level. CONCLUSION The following conclusion was drawn from the study. Effectiveness of one to one teaching programme improving the mother’s caring skills of premature babies. The study proved that there is a significant difference between pretest and posttest knowledge of caring skills of mothers premature babies. The study proved that the caring skills was positively correlated with their coping score The study proved that there is no association between the caring skills and coping abilities with their selected demographic variables IMPLICATIONS Numerous implications can be drawn from the present study for practice which promotes and creates a new dimension to nursing profession and will bring numerical changes in the practical behaviors. The present study results have several implications on nursing practice, nursing education, nursing administration, and nursing research. Nursing practice Nurses can teach the care of premature babies to mothers whose babies admitted in NICU by using LCD. Motivate the mothers to give better care to their babies. Nursing education The study helps to provide knowledge in preparing mothers to provide care to the babies. Nurse educators can encourage the students to gain knowledge in care of premature babies. Nurse educator can encourage the students to learn skills in demonstrating care of premature babies in obstetrical and gynaecological wards. Nurse educator can prepare the nurses in motivating the mothers for care of premature babies by means of explanation and demonstration. Nursing administration Nurse administrator can plan and organize in service education for nursing personnel regarding care of premature babies. Nurse administrator can encourage the nursing personnel to conduct a longitudinal study of caring skills of premature babies. Nurse administrator can organize a video show regarding the caring skills of premature babies. Nursing research Nurses must develop newer instructional technology towards nursing education and nursing practice on care of premature babies. The study gives emphasis to practice evidence based findings. The study lays down a foundation for further research LIMITATIONS Only forty samples were included in the study due to the time constraints. The study is limited to who has delivered baby before 37 weeks of gestation. RECOMMENDATIONS A similar study can be conducted for a large group in different areas on a long term basis. Similar study can be conducted among other health personnel. Similar study can be conducted by using true experimental design. Similar study can be conducted by using different teaching strategies. A comparative study can be conducted to assess the knowledge and practice in care of premature babies among normal delivery and LSCS mothers ABSTRACT The present study entitled â€Å"Effectiveness of educational intervention on knowledge regarding caring skills and coping abilities of mothers with premature babies at KMCH in Coimbatore†. The objectives of the study were as follows, assess caring skills and coping abilities of mothers with premature babies, determine the effect of educational intervention on knowledge regarding caring skills and coping ability of mothers with premature babies, compare the pretest and post test score of caring skills of mothers with premature babies, associate the caring skills and coping ability of mothers with selected demographic variables. The Design of the study was Single group pretest posttest pre experimental design experimental design. The study was conducted at KMCH maternity wards and NICU, Coimbatore, the sample size for this study was included 40 mothers with premature babies. Purposive sampling technique was adapted for this study. And the conceptual frameworks for this study we re developed by applying Ludwigvon Bertalanffy (1968) general system theory. The outcome measure of this study was knowledge regarding caring skills of mothers were assessed before and after educational intervention through administration of structured questionnaire and the coping abilities of mothers were assessed through modified coping health inventory for parents (MCHIPS) computer assisted teaching was given to the mothers. The results of the study was the mean pretest and posttest knowledge scores of the mothers with premature babies before and after educational intervention were 12.12 and 18.while mean score of coping abilities of the mothers with premature babies were 82.65.In comparison of caring skills and coping abilities, ‘t’ value of caring skills was 21.32 which is significant at 0.05 level. Coefficient of correlation between caring skills and coping ability is 0.76 which shows that there is a high positive correlation between caring skills and coping abili ty. There is no association between pretest and posttest knowledge score of the respondents on caring skills of mothers with premature babies and their education, occupation, income, type of family. The conclusions of the study were the teaching intervention of the caring skills of premature babies has significantly improved their knowledge and coping abilities.

Analysis of Momentum in Indian Stock Markets

Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There Analysis of Momentum in Indian Stock Markets Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There