The Rise and Fall of Salomon Brothers Essays

The Rise and Fall of Salomon Brothers Essays The Rise and Fall of Salomon Brothers Paper The Rise and Fall of Salomon Brothers Paper Essay Topic: O Brother Where The Rise and Fall of Salomon Brothers Treasury Bond Scandal- 1991 Executive Summary Salomon Brothers was at one time, the largest bulge bracket firm on Wall Street. Although it offered a number of financial services, it had established its name through the legacy of bond trading. Its bond trading department boasted of iconic traders of 1980’s era- John Meriwether and Myron Sholes. Salomon Brothers can be considered as the founder father of mortgaged back securities trading on the Wall Street, an area in which it was a near monopolist for a long time with not much competition from other firms. In 1981, Salomon Brothers which operated as partnership was taken over by Phibro Corporation and became known as Phibro-Salomon. With a lot of ups and downs in its fortune during the late 1980’s and early 1990’s, finally in 1997, it merged with Citigroup and became their Investment Banking arm called Salomon Smith Barney. Finally the existence of the name of â€Å"Salomon† ceased when Citigroup decided to drop the name in 2003 and branded its investment bank and underwriters as Citigroup Global Markets. We chose to work on the topic â€Å"The Rise and Fall of Salomon Brothers† as this topic offers an insight into the development of a particular securities market- the Mortgaged backed securities, the dominance of the market player, the culture of the firm and finally the scandal which served as the turning point of fortunes of ‘once the market leader’ or metaphorically- the final nail in the coffin. Background Salomon Brothers was founded in New York City in 1910 when three brothers-Arthur, Herbert, and Percy Salomon broke away from their father Ferdinands money-brokerage operation and went into business for themselves. The company was primarily a bond trading firm. The private company entered equities in the mid-1960s and between 1962 and 1964, Salomon more than tripled its underwriting business, from $276 million to $873 million. They entered investment banking in the early 1970s and established themselves with Pepsi-ICI merger among others. Since till 1981, the firm operated as a partnership, it had a close-knit culture and partners put the firm’s interest before their own. There were no issues over compensation or credit for work and slowly but surely Salomon was climbing the ladder of being a bulge bracket firm of Wall Street. As Salomon partner Abraham Eller once explained, â€Å". . . what helped make Salomon Brothers was not only the partners, but that the men they hired were hungry. †¦ We weren’t the sons of rich men. † However, in 1981, it was taken over by the Phibro Corporation and became a corporation with the name Phibro-Salomon Inc. until 1986, when Salomon gained control and changed the name of the parent company to Salomon Inc. In 1980’s under the leadership of John Gutfreund, Salomon participated in the leveraged-buyout boom of the 1980s and did deals like Xeroxs acquisition of Crum Foster and was also the adviser by ATT. In 1985, the firm’s peak year, Salomon brought in $760 million in pre-tax profits. In 1987, the company’s capital reached $3. 4 billion. Legislations which fuelled growth The following changes in legislation led to a conducive environment for bond trading and the development of the mortgage backed securities market which in turn impacted the fortunes of Salomon Brothers: * In 1979, the Federal Reserve announced that that the money supply would cease to fluctuate with the business cycle. Bond prices moved inversely with interest rates. Bonds became the means of â€Å"creating wealth rather than merely storing it. † The industry’s revenues rose from $16 billion in 1980 to $51. 8 billion in 1988. * In 1981, Congress passed a tax break which allowed thrifts to sell all their mortgage loans in order to put their money to work for higher returns. Subsequently, the volume of outstanding mortgage loans increased from $700 billion in 1976 to $1. 2 trillion in 1981, and the mortgage market surpassed the combined U. S. stock markets as the largest capital market in the world. The SEC’s Rule 415, enacted in 1982, where corporations were allowed to register in advance all the securities they intended to issue over the next two-year span (â€Å"shelf registrations†) and Salomon Brothers was the industry’s leader. * The protection of the Glass-Steagall Act, which stopped commercial banks to underwrite and distribute most securities ended and the competition intensified. Overall, the beginning o f the 1980’s decade led to an explosive growth in the bond markets and Salomon was ready to jump on the opportunity as it was one of the few Wall Street firms to have a proper mortgage trading department. Culture of the firm In order to understand the culture of the firm, we read the book Liar’s Poker written by Michael Lewis who was a bond salesman in Salomon Brothers and gives an inside account of the culture prevalent in the firm. Bond Traders and Salesmen: The two major classes of people at Salomon were the bond traders and salesmen. More than any other firm on the Wall Street, Salomon was run by bond traders who kept an eye on the market and made most of arbitrage opportunities while the salesmen gave information to the traders about the sentiments in market. The CEO of the company John Gutfreund also started off as a trader and spent his time at a large desk over seeing one end of Salomon’s bond trading room. The trading floor- the 41st floor, which was known as â€Å"Power Central†- was actually the power centre of the firm. He promoted an environment of risk-taking and agility and the Salomon Trading floor had minimal supervision, minimal controls and no position limits. That is, a trader could buy or sell as many bonds as he thought appropriate without asking. With an increase in business, the firm recruited widely. The firm, which had employed 2,000 people in 1982, tripled to 6,000 people by 1987. † Due to excessive focus on generating revenues, one insider put it as, â€Å"competing fiefdoms replaced interconnected businesses. † and â€Å"Making money was mostly what mattered. † Also, the mortgage department which made the maximum money had a culture of its own promoted by Ranieri (head of the department) which alienated it even more. According to Ranieri, â€Å"The reason everything was separate was because no one in the firm would help us. They wanted us to fail. † The Scandal This scandal was unique in itself as it shook the foundation of the sacrosanct $2. trillion government securities market which was considered too big to rig. The conventional wisdom was shaken to a great extent and regulations tightened for all the 40 primary designated dealers of T-bills and government bonds. Orchestration of the fraud: Paul Mozer, Managing Director of Salomon Inc. ’s government securities trading desk, submitted three separate bids for the U. S. Treasury’s $9 billion 5-year treasury note auction on Feb. 21,1991. Each of the bids was for $3. 15 billion, or 35% of the total bond offering, the maximum bid the Treasury would recognize from any individual buyer. Since two of the bids were submitted under the names of outside firms who were Salomon customers, Warburg and Quantum, the Treasury accepted all three bids. The Treasury was unaware that only Mozer’s bid in Salomon’s name was legal. The other two were unauthorized customer bids placed by Mozer trying to get Salomon a larger share of the auction. However, what Mozer did not know was that Warburg had taken part in the auction with a $100mn bid and with combined bid of more than 35% in name of Warburg; Treasury started an investigation which uncovered the plot of Mozer. This scandal led to the firing of Mozer, resignation of the top brass including Gutfreund and a loss of reputation of Salomon Brothers which they never recovered. Aftermath: This scandal shook the confidence of participants in the government securities market and led to investigations by Federal Reserve Bank, the Justice Department and the Securities and Exchange Commission. The Treasury Department re-examined the records of every auction since 1986, a total of more than 200, searching for evidence of collusion with customers to violate the 35% rule. Salomon was fined $290 million as damages but it escaped criminal charges. The Treasury however, banned Salomon from bidding in Government Securities market. After the resignation of John Gutfreund, majority stakeholder Warren Buffet was made the chairman to revamp the organisation. He also convinced the Treasury to lift the ban as it would lead to Salomon towards bankruptcy. The firm became a victim of its own culture and finally the name of Salomon ceased to exist on the Wall Street which it had once dominated. Joining the dots Having done a course on Ethics, analysed case studies of Enron, WorldCom etc, made us realise that the frauds/scandals do not germinate over night; rather they are fruits of greed which is perpetrated by the Top management either directly or indirectly. As mentioned earlier, the culture of Salomon Brothers was such that traders were given a free hand as long as they generated revenues and were never questioned. This led to the audacity of Mozer wherein he submitted false bids not just the time when he was caught but in other auctions as well and had landed in trouble with the Treasury before. Had a proper system of reporting and accountability existed, the previous instances would have been known to top management and the entire scandal could have been averted which tarnished the reputation of the firm. At the same time, we believe, Treasury department should have been more vigilant as market participants i. e the 40 primary dealers could always collude and try to take the maximum out of the pie of the auction. Having a system which was transparent such that the bids could have been monitored by all the participants would have lead to detection of anomaly of bids in much short period of time without any extensive examination. The main learning that we can derive out of this study is twofold- * Promotion of Ethics and fair dealing as a part of corporate culture of the organisation following a top-down approach such that lower level employees get motivated from the conduct of senior levels * No matter who the participant is and the financial market in question, the regulator has to be vigilant at all times and have a stringent set of rules and regulations as well as penalties in place which deters market participants from erring. References: fundinguniverse. com/company-histories/Salomon-Inc-Company-History. html http://en. wikipedia. org/wiki/Salomon_Brothers#Long_Term_Capital_Management time. com/time/magazine/article/0,9171,973726-2,00. html answers. com/topic/salomon-brothers Robert Sobel, Salomon Brothers 1910-85: Advancing to Leadership Michael Lewis, Liar’s Poker Salomon Brothers: â€Å"Apologies are Bullshit†- pdf

Manufacturing and Urbanization Essay Example | Topics and Well Written Essays - 1750 words

Manufacturing and Urbanization - Essay Example Because of the rise of industrialism in the nineteenth century, United States became an industrialized society. This change was sped up by transportation revolution as well as immigration. Urbanization, along with the need for a market economy, also contributed America’s industrialization. Industrialization changed the lives of everyone. The farmers had become workers in factories and mills. Agriculture became mechanized, and with technology, the food production increased. Coupled with fast production and mechanization, the farmers worked faster. Since the transportation network was also quite effective, goods were also transported throughout America, boosting commerce and industry throughout the regions. Urbanization also went hand in hand with industrialization as with the expansion of farming. The mechanization of the textile industry was not until mid-nineteenth century when the likes of Lowell Mills (in Massachusetts) sprouted. In fact, Lowell Mills was the most profitabl e mill in Massachusetts. In 1814, the Boston Manufacturing Company was established and it built a mill near the Charles River. It became the first integrated mill in the United States: it was the first mill to have had carding, spinning and weaving. For several years, the town of Lowell in Massachusetts became the default place for putting up mills in America as ten textile corporations opened more than thirty mills in Lowell. The city became world famous as the â€Å"center of efficient industry†. These mills had eight thousand workers, women between ages 16 to 35 as their workers and they were promised high wages by men who told them that these jobs were available to all social classes, since being a mill girl is considered being degrading. The Lowell Mills had a large-scale mechanization with the goal of improving the stature the women in the workforce. The mills usually hired employees for a year and they were renewed every year (the average employee lasts for four years) . The new ones had a fixed wage while the older employees were paid by the piece. The workers usually worked for fourteen hours each day and their work averages for seventy three hours each week. The workers were overseen by two male managers. The rooms are hot with eighty workers to a room, and the windows are closed to maintain thread count and thread work. The workers were also housed in boarding houses that were provided by the company, with six workers in a bedroom. Because of the economic depression of the 1830s, the board of directors of the mills proposed a reduction in the women’s wages and the employees had strikes. The women lost and the employees left town, and this was seen as a â€Å"betrayal of femininity†. In 1845, the Lowell women started the Lowell Female Labor Reform Association. It demanded a ten hour work for the women of Lowell Mills. The movement became unsuccessful then but in 1847, their work hours were reduced by 30 minutes. In New Hampshire, however, the State Board passed a law for a ten hour workday. This development in the industrialization of America brought forth inequality in the working class, particularly in the lives of female white workers as exemplified by the working women of Lowell Mills. The inequality was not only sexist as it only affected women. Then inequality stretched to the point where the capitalists have used the term â€Å"more wages† as they hired women, on the premise of them providing better lives, with these women not knowing that they will be in for more

Maketing Report Essay Example | Topics and Well Written Essays - 750 words

Maketing Report - Essay Example Currently, Fashion Sense is based on providing popular wear to teenagers and young adults. However, most of this caters to the youth that are in the United States. Since Fashion Sense is at an international level, there is the need to find popular trends that are based on newer concepts and fusion wear that can be used in different countries. To begin, Fashion Sense will need to develop a line of products and second brand name that can be used within a different market. To begin, there will be an analysis of the most popular areas that are looking into international trends which are considering the option of moving into Western styles. Fusion wear is now becoming popular in places such as Singapore, Eastern Asia and parts of India. However, the melting pot regions in these areas are also known to be more conservative than most of the Western wear styles. For Fashion Sense to move into this region is the need to develop a new line of products that is specific to each area, specificall y with a focus on trends and styles that are incorporated into the Eastern regions (Patel, 2010). Since international trends are becoming more popular in Eastern regions, but there are still cultural borders, Fashion Sense will be most effective by looking into a product line and brand name that is specific to each region. Creating a brand based on western wear while combining different aspects of ethnic looks will provide an appeal for trends that can easily be accepted in the culture while remaining fashion forward. More importantly, this line of products will help to diversify and establish the product line of Fashion Sense. By creating this branch of products, there will be the ability to move into more than one target market for youth while remaining fashion forward with the line of products. The traditional promotions of Fashion Sense will be the first way in which the line is promoted. The marketing mix of the product, price, place and promotion will be

Literature Review on Stress and Stressors in Bangladesh

Literature Review on Stress and Stressors in Bangladesh A Critical Review on Stress Scenario in Bangladesh Jannatul Ferdous Introduction Stress is a disruptive physiological and psychological reaction to events that make us feel vulnerable. A certain amount of stress is a foreseeable part of life; but acute stress can hinder our daily activities. It may causes disintegration of general health, frustrations, depression, anxiety, hysteria, cardiovascular accidents, muscular aches and pains, insomnia, hypertension, high blood pressure, cancers, sexual dysfunctions, allergies and other mental disorders (Rahman et al., 2012). Childhood cancers are increasingly becoming a matter of growing apprehension. In Bangladesh, yearly 5000-6000 children have been developing different type of cancers. Diagnosis of a chronic disease like cancer or coronary heart disease (CHD), and its treatment has a massive impact on all aspects of a patient’s life, their acquaintances and families. Sometimes these may cause post traumatic stress syndrome (PTSS) to the parents of the sufferer (Basher et al., 2012). Stress due to mental retardation is another significant area to focus. Parents experience epidemic physical and mental stress in the process of nurturing the mentally retarded children (Islam, Shanaz, Farjana; 2013). Socio-demographic factors play a crucial role in stress and coping mechanisms (Siddiqui, 2014). Psycho-education can be effectual in alleviating somatic symptoms, anxiety, insomnia, and social dysfunction of exaggerated family members or caregivers at a greater percentage (Ara Chowdhury, 2014). There are some contradictory in research findings about the impact of age, sex, occupation, education, type of family, socio-economical status on stress. Differences in the design, sample and measures used in those studies also exist. The aim of this critical review is to understand the stress scenario in Bangladesh, their strengths and weakness in general. Method of Review A critical review was applied to explore the stress scenario in Bangladesh. In order to find out the appropriate published literature for the current review, available journals for psychological research: Bangladesh Psychological Journal, Dhaka University Psychological Journal, Dhaka University Journal of Biological Science, and Google Scholar, were consulted. The key words used in this literature search were â€Å"stress†, â€Å"education†, â€Å"psychology† and â€Å"Bangladesh†. A number of studies were initially found, but not all were appropriate for this review. Finally, a total of 5 original and most applicable published articles were incorporated for the review. These articles reflected studies conducted only in Bangladesh. Table 1 shows the studies with necessary information such as sample size, design, variables, and data analysis techniques. Table 1. Descriptions of the study Results Stress and Cancer Cardiac Patients Rahman et al. (2012) investigated the attitude toward stress of cancer and cardiac patients. They found that both cancer and cardiac patients expressed higher stress attitudes as compared to normal individuals. Regardless of gender and SES, cancer patients expressed higher stress attitude. In spite of type of individual and SES, female patients expressed higher stress attitude than their male counterparts that is partially supported by Islam et al. (2013). They also found that lower middle SES subjects expressed higher stress attitudes than upper middle SES subjects despite of type of individual and gender which are consistent with the findings of Havik et al. (1986). Childhood Cancer Parents Stress Basher et al. (2012) assessed the intensity of stress of the parents with a child anguishing from cancer. Their study may attempt to assess psychological misery and post traumatic stress reactions among the parents. They found leukemia in the highest frequency among all age groups of the sufferers. About 63.8% of the parents had certainly affected, 6.7% had severely affected due to the cancers of their children. 21.8% of the middle class parents (6-10 class educated, 31-40 years of age) with one child suffering from cancer in between 7-12 months, at the time of assessment, were found certainly and severely suffering from post traumatic stress syndrome (PTSS). These findings are partially supported by Siddiqui (2014). Mental Retardation Parents Stress In a study, Islam et al. (2013) found that parents of children with mental retardation (PCMR) shared greater stress score than the parents of children with no mental retardation (PCNR). Mental stress score was significantly higher among PCMR. Moreover, mothers had significantly higher mental stress score than the fathers of mentally retarded children that is partially in consonance with the findings of Rahman et al. (2012) which indicated that female patients were more exaggerated in coping with stress than their male counterpart. Parents shared more mental stress than physical stress which was supported by Gupta, 2010. But the overall study suffers from adequate generalizations due to convenient selections of schools. Socio-demographic Profile of Families Stress Siddiqui (2014) assessed the relation between various socio-demographic variables of families with mentally retarded children and stress. He found that mild to severe stress was perceived by the families of mental retardation. None of the families showed very severe stress. No statistical significance was found between family stress and affected children’s age, sex. Rahman et al. (2012) also reported no relation between stress and the sufferer’s gender. This may be due to rising information resources and amend in social attitude. But in a study Peshwaria (1995) have indicated significantly greater impact on parents due to having a girl retarded child. As regards the age of the child, some studies have shown lower age of the retarded child to have significant relation with stress (Upadhyaya et al., 2008), while Peshwaria (1995) have shown more psychosomatic problems as the age of their child increases. In this study, no significant relation was found between child’s severity of retardation and stress in the families that is supported by Upadhyaya et al. (2008). But Pisula Gorska (2002) indicated that parents of severe and profoundly retarded children have higher stress. Except maternal education, there were no significant relations between stress and mothers’ and fathers’ demographic variables. The reason behind the significant association of stress with maternal education may be because educated mothers can better understand the clinical aspect of their child’s condition. This is consistent with findings of Behari (1995). Another finding of this study is that stress is not significantly related with the family variables (nuclear/joint family, SES, presence of sibling). In contrast, Rahman et al. (2012) found that lower middle SES subjects expressed significantly higher stress attitude. Hornby (1994) shows that grandparental support decreases stress. Moreover, no significant difference was found in families with or without presence of siblings. But lower stress is reported by Leyser (1990) for higher number of siblings. Psycho-education Stress Ara Chowdhury (2014) investigated the impact of psychoà ¢Ã¢â€š ¬Ã‚ educational intrusion for care givers of children with autism. They found that care givers, who acknowledged psychoà ¢Ã¢â€š ¬Ã‚ educational interventions, showed significant decline in the score of mental health commotion on the GHQà ¢Ã¢â€š ¬Ã‚ 28 except Ê ¹severe depressionÊ ¹ than those who did not. That means psychoà ¢Ã¢â€š ¬Ã‚ educational intervention is effective in training the care givers to handle their children and in enhancing their quality of life. It may also be beneficial to deal with cancer cardiac patients, mentally retarded children. Conclusions Accessible literature on stress reports mixed evidence. In the first two studies, purposive sampling technique was used, and data of cancer and cardiac patients were collected from different reliable sources. So, research findings can be generalized for entire population of our country. Purposive sampling technique was also used for collecting data from two special schools of autism of Dhaka city in the last study. But the other two studies suffer from adequate generalization due to convenient sampling. Further ample studies are needed to conduct with a representative sample to determine more reliable information. Both prospective and retrospective studies are required to enumerate the incidence and prevalence of unfavorable consequences in delegate allies of survivors. Information about possible late-effects and psychological supports need to be provided by the treatment care providers to the parents and survivors (Sloper, 2000). Familial support, social support, positive emotional regulation, self help networks etc. act as defensive shield during times of crisis. Apposite program may be facilitated to help people managing crisis and their stresses. References Ara, J., Chowdrury, K. U. A. (2014, January). Impact of psycho-education on care givers  mental health and perceived stress of children with autism. Dhaka University Journal of  Biological Science, 23(1), 39-45. Basher, M. A. R., Karim, M. R., Sultana, N., Hossain, K. J., Kamal, M. M. (2012). Parents  stress in childhood cancer. Bangladesh Medical Journal, 41(1). Behari, R. (1995). The maternal attitude- Child rearing link for mentally retarded children: A case study. Disabilities and Impairments, 9, 44-51. Gupta, R. K., Kaur, H. (2010). Stress among Parents of Children with Intellectual Disability.  Asia Pacific Disab. Rehab, 21(2), 119- 126. Havik, O. E., Maeland, J. G. (1986). Dimensions of verbal denial in myocardial infarction.  Scandinavian Journal of Psychology, 27, 326-339. Hornby, G., Ashworth, T. (1994). Grandparents support for families who have children with  disabilities. Journal of Child and Family Studies, 3, 403-412.   Islam, M. Z., Shanaz, R., Farjana, S. (2013, January). Stress among parents of children with  mental retardation. Bangladesh Journal of Medical Science, 12(1). Leyser, Y., Deckel, G. (1990). Stress in Parents of Mentally Challenged Children. The Journal  of Psychology,125(4), 251-254. Peshwaria, R. (1995). Understanding Indian Families having Persons with Mental Retardation.  National Institute for the Mentally Handicapped (NIMH), Secundrabad. Pisula, E., Gorska, S. (2000). The childs intellectual disability and the parents marital quality.  Studia Psychologiczne, 40, 87-106. Rahman, A., Ara, S., Haque, E., Shahrier, A. (2012). Attitude towards stress of cancer and  cardiac patients. Journal of Life Earth Science, 7, 33-41. Siddiqui, A. F. (2014, October). Socio-demographic profile of families with mentally retarded  children and its relation to stress. Bangladesh Journal of Medical Science, 13(4). Sloper, P. (2000). Predictors of distress in parents of children with cancer: a prospective study.  Journal of pediatric Psychology, 25(2), 79-91. Upadhyaya, G. R., Havalappanavar, N.B. (2008). Stress in Parents of the Mentally Challenged  Journal of the Indian Academy of Applied Psychology, 34, 53-59.

Date Rape :: essays research papers

The following morning is a dreadful, long one that stays with you forever. The memories in your mind keep crawling up every night when you fall asleep. You keep asking yourself, â€Å"Why did it happen to me? What did I do wrong?† Yet no answer comes to mind, all that you can think of is being violated, being misled for a simple task-rape. Why does it happen to us? What do the men see when the door is opened and a gorgeous women stands in front of their eyes. The mind collapses trying to find a solution to the problem. It's like having an exam and the only way for you to score is to cheat. So all girls are just scores guys try to push themselves upon? The mind grows blank and the human body works with sexual instinct. Date rape is one of those things that one man can't find a proper answer for. There are so many possibilities that one might think of as the cause of the problem. Which one is the right one? Is there one specific answer that is physiologically correct? No. Everyo ne has his or her own opinion, whether it is from experience or from common knowledge. Date rape is mainly cased by the in-proper behavior of the rapist. A man who can rape a woman has obviously been brought up in an uncomfortable, improper raised environment. A young boy who watches violent sex related movies, is most likely to be sexually violent in his life. A child who is not taught from right and wrong is not going to understand what a girl might want out of a date compared to his urges. Men don't necessarily understand that "No" actually means no. Stubbornness works strongly with the mind. A young boy looks up to his father, he wants to be like his father, and act like his father. When the parents ignore their children it causes them to become very free in their decisions; it makes them believe that they can do whatever they please. For example, if a child is being ignored by both o his parents, than they are not around that child when he or she do something wrong. Yet the child doesn’t know that. The child thinks that if no one stops his or her actions than he can do it again. That is how bullies are raised-it leads the mind to more. Date Rape :: essays research papers The following morning is a dreadful, long one that stays with you forever. The memories in your mind keep crawling up every night when you fall asleep. You keep asking yourself, â€Å"Why did it happen to me? What did I do wrong?† Yet no answer comes to mind, all that you can think of is being violated, being misled for a simple task-rape. Why does it happen to us? What do the men see when the door is opened and a gorgeous women stands in front of their eyes. The mind collapses trying to find a solution to the problem. It's like having an exam and the only way for you to score is to cheat. So all girls are just scores guys try to push themselves upon? The mind grows blank and the human body works with sexual instinct. Date rape is one of those things that one man can't find a proper answer for. There are so many possibilities that one might think of as the cause of the problem. Which one is the right one? Is there one specific answer that is physiologically correct? No. Everyo ne has his or her own opinion, whether it is from experience or from common knowledge. Date rape is mainly cased by the in-proper behavior of the rapist. A man who can rape a woman has obviously been brought up in an uncomfortable, improper raised environment. A young boy who watches violent sex related movies, is most likely to be sexually violent in his life. A child who is not taught from right and wrong is not going to understand what a girl might want out of a date compared to his urges. Men don't necessarily understand that "No" actually means no. Stubbornness works strongly with the mind. A young boy looks up to his father, he wants to be like his father, and act like his father. When the parents ignore their children it causes them to become very free in their decisions; it makes them believe that they can do whatever they please. For example, if a child is being ignored by both o his parents, than they are not around that child when he or she do something wrong. Yet the child doesn’t know that. The child thinks that if no one stops his or her actions than he can do it again. That is how bullies are raised-it leads the mind to more.

Hedging Currency Risk at TT Textiles Essay

It was a hot March morning in Kolkata in the year 2009. Sanjay K. Jain, —Joint Managing Director of TT Textiles, watched the sunlight stream in through his office windowpane. But his mind was elsewhere, tracking the movements of the Swiss franc (CHF) in the last few months and the world events that had caused them. The Swiss franc had touched 1.17 CHF/US$ from the previous year’s record of 0.96CHF/US$. That was good news for him. Or was it? The irony of the situation was not lost on him. Once, the Swiss had franc barely figured among all the different currencies that vied for his attention in the normal course of things. Yet, lately, it was the movement of the CHF that weighed on his mind most heavily. As an exporter to more than 30 countries, TT Textiles was no newcomer to the area of currency risk. TT Textiles usually used forwards to manage currency risks. However, during 2006-07, when the INR was expected to appreciate to an unprecedented high of 35 INR/US$, the company had entered into a swap deal based on the historical stability of the CHF against the US$. At the time, the deal had looked relatively safe and very lucrative. However, when  the global financial crisis struck in 2008, it started making sizeable mark-to-market losses. Luckily it turned around in 2009 and was no longer in the red. But with three months left on the contract, the big question Jain faced was whether to quit now or hold it till maturity. The textile and clothing industry in India had traditionally been an export-oriented industry. In 2008, it contributed four per cent to the overall GDP of India and accounted for 14 per cent of the industrial production and 14 per cent of total exports of goods . More importantly, India earned about 27 per cent of its total foreign exchange through textile exports. It was also the second largest employer after agriculture, providing direct employment to 35 million people and indirect employment to 45 million people. In 2008-09, the total sales generated by the textile and clothing sector amounted to US$33.4 billion from the domestic market and US$21.6 billion from exports. Professor Rajesh Chakrabarti prepared this case solely as a basis for class discussion. This case is not intended to serve as an endorsement, a source of primary data, or an illustration of effective or ineffective management. The author thanks Shashvat Rai and Anurag Sharma from ISB’s PGP Class of 2011 for assisting in the writing of this case. This case was developed under the aegis of the Centre for Teaching, Learning, and Case Development, ISB. Copyright @ 2013 Indian School of Business. The publication may not be  digitised, photocopied, or otherwise reproduced, posted or transmitted, without the permission of the Indian School of Business. This document is authorized for use only by Christopher Alt at Clark University until July 2014. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860. As a mature industry, the textile industry was marked by relatively low margins ï £ § varying from three per cent to 12 per cent depending on where in the value chain a specific company operated. The total market for textiles and clothing was expected to reach US$100 billion by 2015, with 43 per cent of revenues coming from exports. Specifically, textile exports were expected to yield US$22 billion and the domestic textile market was expected to yield US$28 billion by 2015.2 The US dollar was the dominant currency for pricing textile products worldwide, in a large measure even for exports to Europe or Latin American countries. TT Textiles Limited, the flagship company of the TT Group, was founded in 1978 by the family of Dr. Rikhab Chand Jain. It was India’s first knitwear company to go public. TT Textiles was a vertically integrated textile company with a presence in the entire cotton chain, from fibre to yarn to  knitted fabric and garments. It had manufacturing facilities in all the major garment centers ï £ §Tirupur, Kolkata, Delhi, Varanasi, Saharanpur and Kanpur. It had ginning units in Gondal, Gujarat and branches for cotton in Jalna, Maharashtra. The company’s core businesses were agrocommodity, cotton, yarn, fabric and garments, and its markets were spread all over the world, as shown below (also see Exhibit 1): Sanjay Jain, an MBA gold medalist from IIM, Ahmedabad and an Associate Member of the Institute of Company Secretaries of India (ACS) and Institute of Cost Accountants of India (AICWA), began his career at ICICI Bank before starting his own brokerage firm, which he later sold. He joined TT Textiles in 2001 and was instrumental in expanding the textile business and setting up the marketing network for raw cotton yarn in over 20 countries around the world. Approximately 75 per cent of TT Textiles’ revenues came from exports, and at any particular point of time, the company had an exposure of roughly US$25 million. The life of a typical export transaction in the industry   particularly of the kind that TT was party to   was less than three months. TT Textiles enjoyed a margin of five to six per cent in its business. Currency derivative products were relatively new entrants in India. Most Indian companies depended on their banks to hedge currency exposures. In a 2009 newspaper article, Ramesh Kumar, Senior Vice President and Head, Debt and Currency Markets of Asit C. Mehta, explained: This document is authorized for use only by Christopher Alt at Clark University until July 2014. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860. Historically, in a controlled environment, India Inc. relied on banks for covering its foreign exchange requirements. †¦ Some of the companies trade actively in foreign exchange and have a separate treasury management unit for foreign exchange transactions. However, there are also large numbers of small and medium enterprises which participate in the currency market passively and depend on commercial banks (authorised dealers) for their requirement of foreign exchange and coverage of currency 3 The currency market was one of India’s biggest financial markets, with turnover on the spot and forward markets together yielding around US$12 billion a day in April 2007. Since September 2008, there had been both foreign exchange (forex) forwards as well as futures markets in the country trading the INR-US$. Derivatives on other currencies were not traded. The rupee-dollar forward market was an over-the-counter (OTC) market, the trades on which were settled through the Clearing Corporation of India Ltd (CCIL), which was the clearing house for forex and interest rate trades in India. This minimized the credit risk associated with these agreements in the Indian market. According to Chakrabarti and De, â€Å"In 2006-07, 85,106 forex forward transactions went to CCIL for settlement, with a notional value of US$342 billion. By late 2006, forward market turnover was nudging US$2 billion a day. Foreign institutional investors were able to do transactions on the currency derivatives market that could be characterized as ‘hedging’ of the currency risk exposure on their Indian investment.† In addition to the domestic rupee-dollar forward market, there was active trading for cash-settled rupee-dollar forwards in Hong Kong, Singapore, Dubai and London on what were termed â€Å"nondeliverable forwards† (NDF) markets. For foreign institutional investors who had limited access to the forwards markets on the domestic INR-US$ markets, the NDF market did not suffer from the constraints imposed by capital controls. However, for domestic investors, this led to limited participation by financial institutions of the onshore currency forward market.

Site and Situation in Urban Geography

The study of settlement patterns is one of the most important subjects of urban geography. Settlements can range in size from a small village with a few hundred residents to a metropolitan city of over one million people. Geographers often study the reasons why cities develop where they do and what factors lead to a settlement becoming a large city over time or remaining as a small village. Some of the reasons behind these growth patterns are related to the areas site and its situation. Site and situation are two essential concepts in the study of urban geography. Site The site is the actual location of a settlement on the Earth, and the term includes the physical characteristics of the landscape specific to the area. Site factors include landforms, climate, vegetation, availability of water, soil quality, minerals, and wildlife. Examples of site factors include whether an area is protected by mountains or if there is a natural harbor present. Historically, such factors led to the development of major cities worldwide. New York City, for example, is located where it is because of several site factors. As people arrived in North America from Europe, they began to settle in this area because it had a coastal location with a natural harbor. There was also an abundance of fresh water in the nearby Hudson River and small creeks, as well as raw materials for building supplies. The site of an area can also create challenges for its population. The small Himalayan nation of Bhutan is a good example of this. Located within the worlds highest mountain range, the terrain of the country is extremely rugged, making transportation within the country very difficult. This, combined with the incredibly harsh climate in many areas of the country, has made much of the population settle along rivers in the highlands just south of the Himalayas. Only 2% of the land in the nation is arable, with much of it located in the highlands, and so making a living in this nation is highly challenging. Situation The situation is defined as the location of a place relative to its surroundings and other places. Factors included in an areas situation include the accessibility of the location, the extent of a places connections with another, and how close an area may be to raw materials if they are not located specifically on the site. Though its site has made living in the nation challenging, Bhutans situation has allowed it to maintain its policies of isolation as well as its own highly separated and traditionally religious culture. Because of its remote location in the Himalayas, entering the country is challenging and, historically, this has been beneficial because the mountains have been a form of protection. The heartland of the nation has never been invaded. Bhutan now controls many of the most strategic mountain passes in the Himalayas, including the only ones into and out of its territory, leading to its title as the Mountain Fortress of the Gods. Like an areas site, however, its situation can also cause problems. For example, Canadas eastern provinces of New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island are some of that countrys most economically downtrodden areas, due in large part to their situations. These areas are isolated from the rest of Canada, which makes manufacturing and the little agriculture possible too expensive. There are very few natural resources in proximity to these provinces. Many are off the coast; due to maritime laws, the government of Canada itself controls the resources. Moreover, the traditional fishing economies of the region are today crashing along with the fish populations. The Importance of Site and Situation in Todays Cities As shown in the examples of New York City, Bhutan, and Canadas east coast, an areas site and situation played a significant role in its development, both within its boundaries and on the world stage. These phenomena have shaped history and are part of the reason why places like London, Tokyo, New York City, and Los Angeles were able to grow into the prosperous cities they are today. As nations around the world continue to develop, their sites and situations will continue to play a large role in whether or not they will be successful. Though todays ease of transportation and new technologies such as the Internet are bringing nations closer together, the physical landscape of an area, as well as its location in relation to its desired market, will still play a large role in whether or not a particular area will grow to become the next great world city.