Thursday, September 3, 2020
Dish arabism and Pan-islamism - Essay Example Dish Arabism is a political hypothesis of embracing solidarity of the North Africa and West Asia nations from the Atlantic Ocean to the Arabian Ocean. This segment is known as the Arab World. Skillet Islamism then again is a political development suggesting the solidarity of Muslims under one Islamic state, order, or authority that is like International Organization. One regular factor between Pan-Arabism and Pan-Islamism is the way that Islam as a religion is established on Arabic as a language. The greater part of the Pan-Arabic nations have Muslims as their tenant and they maintain the religionÃ¢â¬â¢s conventions as a component of the constitution of the nations. Arabic language is likewise the national language in the Pan-Arabic nations. In any case, there are a few nations, which have Muslims however don't maintain Arabic as a national language. The two belief systems are totally extraordinary. Dish Arabism has conviction that there ought to be one country in the Arabic world; like Umayyad Caliphate as in was in 750 C. E. at the point when it had no Persia or Southern Spain. (Schmid) They accepted that Turks, Europeans, and avaricious rulers misleadingly drew Arab fringes from Arab and that Arab individuals had a nature of being in an enormous country like the United States.
Posted by Dakota Lanham at 7:36 AM
Saturday, August 22, 2020
Instances of Simple Sentences With the Verb Learn As an English student, youll need to think about the verbÃ learn.Ã LearnÃ is one of only a handful scarcely any action words in English that have two worthy structures forÃ¢ the past straightforward and as a participle.Ã LearntÃ orÃ learnedÃ is adequate in both American and British English, butÃ¢ learnedÃ¢ is increasingly basic in American English.Ã¢ Base Form: Ã¢â¬â¹Learn Utilize the base type of the action word in basic tenses including the current straightforward. The base type of learn is additionally utilized with the future structure and modular structures such asÃ¢ can,Ã¢ should,Ã¢ andÃ¢ must: I typically gain proficiency with a great deal when I travel.Will you pick up anything about math today?Ã¯ » ¿You ought to learn at any rate one unknown dialect. Past Simple: Learned or Learnt Use either learnedÃ¢ orÃ¢ learntÃ¢ in past straightforward positive sentences: The youngsters found out about squirrels in school yesterday.I figured out how to play the piano at five years old. Past Participle:Ã Learned or Learnt Utilize the past participleÃ¢ learnedÃ¢ orÃ¢ learntÃ¢ in past, present, and future immaculate structures. This past participle structure is likewise utilized in aloof sentences. Immaculate Forms: Shelleys took in a ton in the United States.Peter had figured out how to check to ten preceding he turned one year old.They will have taken in their exercise before the following week's over. Uninvolved Forms: Latin was found out by most understudies in the mid 1900s.Patience is an exercise that has been learned by anybody attempting to contemplate a language. Present Participle: Learning The present participleÃ¢ learningÃ¢ is maybe the most widely recognized structure as it is utilized in past, present, and future ceaseless structures, just as with the past, present, and future immaculate persistent structures: Ceaseless Forms: Hes learning a little Chinese this month.I wasnt picking up anything new when you interfered with the meeting.Hell be learning a great deal of new things this time one week from now. Flawless Continuous Forms: Shes been learning English for a couple years.Theyd been taking in a great deal from Tom before Alice returned.Tom will have been learning Japanese for a long time before the finish of next term. Model Sentences with Learn Here are model sentences in eachÃ¢ tense in English. As you study these models, envision a course of events on which the activities occur to help become acquainted with tense usage.Ã Please note that latent structures are considerably less normal in ordinary English than dynamic structures. Present Simple: She learns dialects quickly.Present Simple Passive: Math is found out gradually by some.Present Continuous: Jack is right now learning Russian.Present Continuous Passive: Russian is being educated by the students.Present Perfect: Angela has learnt four languages.Present Perfect Passive: Four dialects have been learnt by Angela.Present Perfect Continuous: Angela has been learning Arabic for as long as not many months.Past Simple: Jennifer figured out how to play poker yesterday evening.Past Simple Passive: Poker was found out rapidly by all.Past Continuous: She was learning her exercise when he telephoned.Past Continuous Passive: The exercise was being realized when he arrived.Past Perfect: She had taken in the melody by heart before Jack did.Past Perfect Passive: The tune had learnt by heart by the class before the artist arrived.Past Perfect Continuous: Our youngsters had been learning English for two months before we moved.Future (will): She will learn quickly.Futur e (will) inactive: another tune will be found out soon. Future (going to): She will gain proficiency with another dialect next year.Future (going to) uninvolved: another tune will be found out next week.Future Continuous: This time one week from now we will learn in another classroom.Future Perfect: She will have picked up everything before the finish of the month.Future Possibility: She may get the hang of something new.Real Conditional: If she learns Russian, she will make a trip to Moscow.Unreal Conditional: If she learnt Russian, she would venture out to Moscow.Past Unreal Conditional: If she had learnt Russian, she would have gone to Moscow.Present Modal: She can learn easily.Past Modal: She cannot have discovered that so rapidly! Test Conjugate with Learn Utilize the action word learnÃ¢ to conjugate the accompanying sentences.Ã In a few cases, more than one answer might be right. Angela _____ Arabic for as long as not many months.Math _____ gradually by some.Poker _____ rapidly by all.She _____ the tune by heart before Jack did.A new tune _____next week.She _____ everything before the finish of the month.If she _____ Russian, she would have ventured out to Moscow.Angela _____ four languages.She _____ dialects quickly.Jack _____ presently _____ Russian. Answers: has been learningis learnt/is learnedwas learnt/was learnedhad learnt/had learnedis going to be scholarly/will be learnedwill have learnt/will have learnedhad learnt/had learnedhas learnt/has learnedlearnsis learning
Posted by Dakota Lanham at 11:08 PM
A Comparison of Prince Hamlet and Machiavelli's The PrinceÃ¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã¢ Ã Ã Ã¢ Machiavelli expresses that it is essential for a sovereign, who wishes to look after himself, to figure out how not to be acceptable, and utilize this information and not use it, as indicated by the need of the case. Machiavelli's thoughts both thoroughly analyze to the strategies utilized by Hamlet. Hamlet's longing to make the ruler frantic and inevitably execute him, is the thing that he figures he should do so as to fix things. Hamlet battles to keep up his situation as ruler. Maybe he does not have the fundamental characteristics of a ruler delineated by Machiavelli. Ã As indicated by Machiavelli, the quest for all things viewed as prudent and admirable will just prompt the ruler's ruin. This is totally evident on account of Hamlet, since he is on a journey to vindicate his dad's demise. The fight among great and shrewdness is continually in the cutting edge of Hamlet's brain, as he falters between acting common or seeking retribution inside and out. In the first place, Hamlet battles to stay great consistently, however this causes him extraordinary anguish. Hamlet is a legit man, who laments for his dad. He endures on account of the deceptive nature of the others in the court, particularly his mom and his uncle, and later, Rosencrantz and Guildenstern. Hamlet can see through them all, and understand that they're unscrupulous. He expresses these words to Guildenstern: Anything besides to th' reason. You were sent for, and there is a sort of admission in your looks, which your modesties have not make enough to shading. I know the great King and Quee n have sent for you. (Hamlet, II, ii., 278-280) Ã Hamlet's genuineness is likewise observed when he is talking with his mom. In act I, scene ii, Gertrude asks him for what reason the de... ...e his objective was to get and hold power. He needed to demonstrate Claudius to be an unfit ruler, and he did as such, yet just as Hamlet himself was going to kick the bucket. Hamlet needed to cause distress by executing the ruler, however at long last, he is viewed as a legend, since he exposed his dad's executioner. Ã Sources Cited and Consulted: Dim, Terry A. Mr. William Shakespeare and the Internet. http://www.palomar.edu/Library/shake.htm. Jones, W. T. Experts of Political Thought. Ed. Edward, McChesner, and Sait. Vol. 2. Boston: Houghton Mifflin, 1947. Lee A. Jacobus.Ã¢ A World of Ideas: Essential Readings for College Writers.Ã¢ fifth release. Boston, MA: Bedford/St. Martin's, 1998. Machiavelli, Niccolo. The Prince. Trans. Slope Thompson. Norwalk: The Easton Press, 1980. Shakespeare, William. The Three-Text Hamlet. Eds. Paul Bertram and Bernice Kliman. New York: AMS Press, 1991.
Posted by Dakota Lanham at 6:38 PM
Friday, August 21, 2020
The American dream that made individuals leave their countries in the past just stayed a fantasy in light of the fact that there are individuals who despite everything have not Ã¢â¬Å"made itÃ¢â¬ in America. There is something out of order in the fuss that is about the American Dream. On one side, the American Dream stays a fantasy wherein the defilement and the indifference of individuals keeps on keeping it from working out while on the opposite side, the American Dream accompanies too high a cost. We will compose a custom paper test on My meaning of the american dream or on the other hand any comparative point just for you Request Now It requests the individualÃ¢â¬â¢s culture, it torments the individual and persuades him into feeling that on the off chance that you don't acclimatize the American culture, you will never make it. For example, the principles for acknowledgment are sufficiently unpretentious to be forgotten about in regular conversations yet for the run of the mill outsider who is either yellow or dark, the message of Ã¢â¬Å"embrace of effaceÃ¢â¬ reverberates like a boisterous gong. The American Dream will consistently be an Utopian dream until individuals understand that material riches isn't the main way for progress and bliss. For together with the positive qualities that the American measure has assisted with achieving, there is the basic analysis that such dream has eventually brought about the dismissal of that which associates the Ã¢â¬Å"selfÃ¢â¬ to the Ã¢â¬Å"other.Ã¢â¬ Just as opportunity in America has realized or allowed huge salary imbalances, so did American independence that came about because of this fantasy, help to create an environment of pride and noninterference, and in increasingly outrageous cases, propagate destitution, prejudice, sexism, and extravagance. At the point when left unchecked, this can cause disunity among our kin. Americans should offset independence with sympathy for other people. Pinnacle entertainers who show the incomparable American maverick qualities start with potential. However history is covered with the bones of individuals who never changed over potential into accomplishment. Characteristic gifts turn helpful just when one looks at what is his. One characteristic that makes the United States incredible is its comprehensiveness. Everything gets taken in, including an intriguing condition of pressure between a longing for accomplishment from one viewpoint and the standards of uniformity on the other. The American dream is a fantasy that is realistic however everything relies upon oneÃ¢â¬â¢s mentality. To show this plainly, in Arthur MillerÃ¢â¬â¢s Death of a Salesman, the creator utilizes the area of Willy with Wagner, which should be only a short experience with his chief. In any case, as the scene advances, the perusers really want to sympathize with WillyÃ¢â¬â¢s condition. Willy is by all accounts truly stuck before. He brings all the guarantees of a dead man and depends on that more than his relationship with Howard and what was going on among them by then (Miller). Would we be able to keep our own fantasies alive and not get disrupted without anyone else or by life? The American Dream guarantees individuals from varying backgrounds and all nations of birthplace that inside this land, there is opportunity from persecution, opportunity from destitution and material riches yet for others, it will just stay a fantasy for them. As Langston Hughes remarks,Ã¢ Ã¢â¬Å"I am the individuals, unassuming, hungry, meanÃ¢â¬Hungry yet today in spite of the dream.Ã¢â¬ Ã¢ There have been setbacks during this battle for the American Dream. The place where there is the free is as yet a place where there is persecution and despite the fact that individuals might want to see it as a place that is known for fresh chances to succeed, it turns out to be progressively similar to a place where there is duplicity and bogus expectations. Another outline on this issue is on page 77 of BarlowÃ¢â¬â¢s book, Between Fear and Hope: Globalization and Race in the United States, he makes reference to, Ã¢â¬Å"The worldwide eraÃ¢â¬â¢s pressure implies that an expanding number of Americans get a handle on left of the social orderÃ¢â¬ saying that Ã¢â¬Å"morbid side effects particularly prejudice and dread of outsiders have showed up. To put it plainly, globalization is delivering an emergency in the white collar class social order.Ã¢â¬ (Barlow, p. 77). I imagine that more than the weight of globalization on Americans, it is the utilization of the U.S. globalization as their apparatus for global control that is tension inciting. The US, as indicated by numerous onlookers utilizes globalization to make remote economies open up their business sectors to such an extent that these can be overflowed with US-made vehicles, garments, food, even famous actors, to such an extent that these outside business sectors excitedly expend these items without truly knowing who at long last advantages from this game. As the entrepreneur economy of the United States has endure communism, numerous remote countries are currently being denied of much-required assets for their own turn of events, and are left reliant on outside made items, which thus exhaust their own dollar holds. The outcome is an outrageous polarization of riches, and the overextension of the hole between the worldÃ¢â¬â¢s most extravagant and least fortunate countries. This is so evident as in creating countries, for example, India, there are really numerous clients ready to purchase the results of the capitalists.Ã¢ For example, in the city of India, we see numerous announcements of Ã¢â¬Å"CokeÃ¢â¬ , or of US cigarettes.Ã¢ An individual who buys this item once in a while has the opportunity to contemplate on the way that piece of the income made out of that deal advances these effectively rich industrialist countries. Maybe captivating in patriot arrangements, for example, belittling oneÃ¢â¬â¢s own items with a coordinating mindfulness and instruction crusade will help cause these individuals to understand that the time has come to enhance oneÃ¢â¬â¢s own nation first, before adding to the economies of others. An open door lies here in light of the fact that nearby makers in creating nations will be compelled to accomplish more innovative work to deliver merchandise and enterprises that can rival remote ones. The American dream and globalization play a significant and noteworthy job in continuing gainfulness regardless of what the endeavor is or where such is found or how it is getting along business.Ã¢ Reality shows that any business undertaking can't make due without embracing the serious worldwide business framework using innovation. In fact, societies crash through exchange, and whether during the time spent exchanging, innovation wrecks the local expressions and dumps down the social orders all over the place. The impacts of family standards, religion, or habits and even social practices have enormous impact in generally speaking appraisal of globalization.Ã¢ Focusing on the business sectors and deciding the accessible opportunity practiced in investigating the commercial center are zones influenced by these influences.Ã¢ It is in every case best to contemplate the mechanics of how the economy functions in reality. Studies show that the estimation of achievement in the economy is controlled by specific recipes and applied financial standards yet one should likewise understand that inventiveness and advancements that start from non-monetary foundation should likewise be applied to think of the correct sort of blend. ManÃ¢â¬â¢s resourcefulness, his diagnostic psyche and legitimate thinking must be shared, examined with other people who are into a similar exercise so better answers for issues are defined to make the countryÃ¢â¬â¢s economy work in this quickly evolving world. The American dream has cleared the way where the U.S. is overseen just as approach choices that were detailed. Works refered to Barlow, Andrew. Among Fear and Hope: Globalization and Race in the United States, 2003. Rowman Littlefield Publishers, Inc. Mill operator, Arthur. Passing of a Salesman. Hughes, L.Ã¢ Let America Be America Again. 1938.Ã¢ Retrieved Jan 2, 2007 at: http://www.poetryconnection.net/writers/Langston_Hughes/2385 Step by step instructions to refer to My meaning of the american dream, Essay models
Posted by Dakota Lanham at 8:50 PM
Joblessness in the European Nations Italy, Spain, Portugal and Greece - Essay Example Joblessness in the European countries of Italy, Spain, Portugal and Greece What makes joblessness most perilous is that it legitimately influences the development of a country. Relentlessly significant levels of joblessness have become a typical situation all through the vast majority of the European Union. In spite of the fact that, it stands out impressively from the similarly low joblessness levels in neighboring created countries, particularly in those of the United States and Japan. Inspite of the way that high joblessness rate is rendered as a typical issue in European associations, there are huge varieties in the joblessness paces of every one of its members1. Notwithstanding being among the created European nations, joblessness rate in Spain, Italy, Portugal, and Greece is ascending at a stunning rate. The Problem of Unemployment in Spain The differentiating contrast in the joblessness pace of the European countries was basically perceived in the joblessness pace of Spain. In the time of March 2004, it was prove that the joblessness rate in Luxembur g was at a low of 4.0%, while in Spain, it arrived at a mammoth 11.1%. It is huge that there are different components eccentric to every one of those countries with taking off joblessness rate results to this issue. This wonder is basically obvious on account of Spain, as industriously significant level of joblessness has been recorded there. The situation in Spain was once so terrible that joblessness rate recorded was double the normal of the European nationÃ¢â¬â¢s joblessness rate. High joblessness rate is right now a difficult that is experienced by all practically all the significant countries of the European Union. ... condition is terrible to the point, that it is the elevated level of joblessness that basically recognizes the economies of the European part nations with that of the United States. The circumstance is risky as, underutilization of assets happens because of the low degree of joblessness. This at the same time brings about decay of the all out creation of merchandise that could have been accomplished in a steady business circumstance. This impels the resident of Spain to move into different nations on the off chance that they can't get legitimate business conditions in their local nation. It is a general marvel that individuals need to allot to work places where they get higher wages for their work. Recognizing the explanation of joblessness from a neo old style point of view, a few key components can be distinguished. The essential among them is the genuine components identified with pursuit of employment. The activity advertise is rarely steady, as the recurrence of laborers changin g occupations is basically high. In spite of the fact that the issue takes a bigger shape when this adjustments in work takes quite a while because of heterogeneity of the work power and employment opportunities. This infers there is no huge harmony between the work gracefully and the work assimilation in the market. This condition is because of the absence of employment opportunities, absence of legitimate data about business, and the expense of retraining that numerous specialists can't adapt up to. Another factor that adds to low business is inflexibility in the wages of laborers, because of work enactment and noteworthy impact of trade guilds. The pay rigidityÃ¢â¬â¢s impact is basically noted when the costs of merchandise fall because of the lessening sought after for items, which all the while diminishes the minor efficiency of laborers. In this situation, because of inflexibility of work flexibly in
Posted by Dakota Lanham at 4:19 PM
Wednesday, July 1, 2020
1.#ProtectOurPatients Ã¢â¬Å"IÃ¢â¬â¢m asking you to believe--not in my ability to create change, but in yours.Ã¢â¬ ~Barack Obama, Farewell Address, January 11, 2017 In the wake of TrumpÃ¢â¬â¢s election and serious threats to the Affordable Care Act, many health professionals are working to organize and advocate for equitable access to health care, womenÃ¢â¬â¢s reproductive rights, and more. As a student dreaming of a career in the health profession, itÃ¢â¬â¢s never too early to get involved or spearhead some efforts of your own. We need all hands on deck! Political advocacy and understanding the intricacies of the healthcare marketplace are not required pre-med classes or extracurriculars, but they are absolutely fundamental to the well-being of our patients and our ability to practice medicine effectively. Health insurance determines who has access to you, as a future health practitioner, and influences when and in what state of health patients might come see you (e.g., to the emergency room with an advanced disease that might have been prevented with inexpensive screening). Many of us in the health profession believe that healthcare is a basic human right, but in our country it is treated as an economic commodity, with large for-profit corporations such as insurance and pharmaceutical companies exerting a heavy hand in its distribution. If youÃ¢â¬â¢re interested in a primer on the ACA and understanding why 18 million Americans stand to lose coverage if it is repealed, I recommend this 6 minute video from the Kaiser Family Foundation. This is another short, excellent, and shocking video on the health of Americans, quality of care, cost of care, and prices of certain services compared to other countries. Whether youÃ¢â¬â¢re a student interested in getting involved on your own or are part of a larger pre-med/pre-health organization at your school, there is no need to re-invent the wheel in terms of advocacy. Here are some great groups to get linked up with and actionable items you can tackle: 1.#ProtectOurPatients This is a grassroots movement started by future health care professionals around the country, who traveled to DC on January 9th to protest repeal of the ACA. One of the big take-aways they learned from their meetings with senators on the Hill is that phone calls do make a difference. When a congresspersonÃ¢â¬â¢s office is swamped with calls and the phone never stops ringing, how constituents are feeling is palpable and cannot be ignored in a way thatÃ¢â¬â¢s not the same with e-mails flooding an inbox. An easy action is setting up phone banking at your dining hall or another busy spot on campus. This great tool features a script for phone calls, phone numbers, and a list of the most important offices to call (AK, TN, OH, ME, LA, WI, KY, AZ). Call these senators and your own. For more actions or to reach out and collaborate, see the Protect Our Patients Facebook page. 2. Center for Reproductive Rights If youÃ¢â¬â¢re passionate about advocating for womenÃ¢â¬â¢s health rights that are under threat, the Center for Reproductive Rights is a great organization to follow. Many medical schools also have a chapter of Medical Students for Choice which you may be able to collaborate with as a pre-med student. You can also follow the 10 Actions for the first 100 Days coming out of the WomenÃ¢â¬â¢s March on Washington. 3. Looking Ahead: Swing States Control of the House will be decided in 2018 by a handful of swing districts, which have been mapped out here. Take a look to see if you live in or near one, and can mobilize your fellow students to canvas, volunteer, etc. 4. Write your Local Newspaper Write an op ed for your local newspaper, especially if you are a constituent of or a student in a state that is expected to have a swing vote ACA repeal (see above). A friend, classmate, and fellow CC tutor, Margaret Hayden, wrote this excellent op ed in the Portland Herald for an idea of how to get started on your own. 5. Hold a Health Justic Forum Lastly, donÃ¢â¬â¢t worry alone! Hold a Health Justice Community Forum - Invite students, faculty, and staff at your school to come together to share stories, support one another, and exchange ideas for how your community can organize together. I hope this post has inspired you not to despair and to get involved, fighting for the rights of your future patients! Reach out to me with any questions or thoughts at Anna_Morenz@hms.harvard.edu.
Posted by Dakota Lanham at 12:47 AM
Wednesday, June 10, 2020
This briefing paper provides background on the derivatives markets and their role in the financial crisis, evaluates aspects of the main reform proposals and whether or not these reforms should be implemented. One of the least understood but potentially among the more damaging factors contributing to the crisis in global financial markets is an asset class known as over-the-counter (OTC) derivatives and one OTC product in particular known as credit default swaps or CDS. Indeed, even were there not multiple financial market crises underway, reforming the CDS market would still be an urgent problem. Warren Buffett famously described CDSs as weapons of financial mass destruction in Berkshire Hathaways 2002 annual report. However, Buffett recently admitted that his company has sold at least 251 derivative contracts with a total face value of more than $14 billion. Buffett says he plans to continue selling CDSs because the odds strongly favor making money. The architecture of derivatives markets is now in play because of two, related policy concerns that arose from the financial crisis: systemic risk and market efficiency. Systemic risk is the danger that failing financial institutions will destabilize the financial system and thereby threaten the wider economy. When unconstrained by effective risk management or regulation, derivatives enable high concentrations of risk in individual financial institutions. Derivatives markets are efficient if trading costs are low and risk is well distributed among investors. The most important ingredient for market efficiency is competition, which in turn depends on price transparency and on relatively unencumbered access to trading by a broad set of market partic ipants. Why people blame CDS for the recent financial crisis? The financial crisis was exacerbated by derivatives markets in two basic ways. First, insurance companies such as AIG, Ambac, and MBIA used CDS to sell protection on CDOs backed by sub-prime mortgages to such an extent that they were severely impaired when those CDOs experienced large losses from mortgage defaults. This in turn contributed to the weaknesses of the banks that had bought and relied upon the protection of these credit default swaps. Second, the failures of the large investment banks Bear Stearns and Lehman Brothers were exacerbated by a run of their OTC derivatives counterparties. The flight of these derivatives counterparties, as they sought new positions with other dealers, may also have contributed to the fragility of global financial markets. In the same vein, a number of other large dealer banks had to be bailed out for reasons that included the dangers posed by the potential flights of their derivatives portfolios. The AIG Fiasco AIG, the most egregious ex ample of the first type, was bailed out in response to losses suffered by its subsidiary AIG FP, which had sold CDS protection on over $400 billion of CDOs. As AIGs losses mounted, downgrades to its credit rating were about to trigger contractual obligations for AIG to post large amounts of additional collateral on its CDS positions. AIG did not have the resources to meet these calls for more collateral. The federal government stepped in to support AIG, at a massive cost to U.S. taxpayers. Clearing would not have helped here. The AIG credit derivatives contracts were customized to the particular CDOs that they covered. Even had CDS clearing existed at the time, these AIG CDS would not have been sufficiently standard to have been cleared. Only better risk management by AIG and better regulatory supervision could have prevented this disaster. Flaws in CDS: In my view, CDS and the entire OTC derivatives market represents a form of regulatory arbitrage a retrograde and deliberate evasion of established prudential norms masquerading under the innocent guise of innovation. As in the case for the OTC market for unregistered securitizations, OTC derivatives are essentially designed to generate supernormal returns for a relatively small group of global banks which traffic in these officially sanctioned, but private gaming contracts. The practical problems with CDS contracts come from several basic flaws in the regulatory, legal and business model for these instruments, deliberate flaws that include: An archaic, bilateral clearing scheme that has only recently begun to be reformed, A deliberate lack of standardization and price transparency that advantages the CDS dealer No common central counterparty to guarantee all trades and to hold collateral, and thus no effective limit dealer leverage A schizophrenic pricing methodolog y that has little connection to the several different types of underlying market and credit risk contained in CDS contracts Are the reforms really needed? Reform is necessary to re-establish confidence in the financial system, particularly among global investors. The reform proposal is well thought out, at least in theory; it attempts to fill most of the cracks in the regulatory framework, cracks that contributed significantly to the current financial crisis. Even with the reforms implemented we would have decreased the impact of this financial meltdown. Reforms which are being implemented: BigBang protocol: On March 12, 2009, International Swaps and Derivatives Association, Inc. (ISDA), published the Credit Derivatives Determinations Committee and Auction Settlement Supplement (the Supplement) and Protocol (the Big Bang Protocol). The Supplement will introduce four broad changes into the Credit Default Swap (CDS) market that will be applied to new CDS trades and can be applied to existing CDS contracts via adherence to the Big Bang Protocol. Each of these changes is outlined in the discussion below. And these became effective from April 8 2009. The changes made by the ISDA were: Adopts the auction model as the default settlement mechanism based on the documentation used in connection with previous credit derivative auction protocols; Establishes Credit Derivatives Determinations Committees (Determinations Committees) for the purpose of making determinations with respect to credit events and succession events, for overseeing the auction process (and any modification required for a specific credit event) and for addressing other issues presented by the CDS market; Establishes a credit event backstop date and a successor event backstop date; and Modifies currency exchange rates and related provisions for physical settlement and the auction settlement process to eliminate the perceived inequity relating to foreign exchange provisions with respect to the use and amendment of a Notice of Physical Settlement during the settlement of CDS trades. 100/500 Trading style: ISDA has also announced a new Standard North American Corporate CDS contract, nicknamed SNAC. SNAC is a single-name CDS contract with a fixed coupon of 100 or 500 basis points, depending on whether the Reference Entity is considered investment grade (for which the fixed coupon is 100 basis points) or high yield (for which the coupon is 500 basis points). SNAC contracts will also trade without Restructuring as an applicable credit event. Note that adhering to the Big Bang Protocol will not convert existing CDS contracts to SNAC. The Big Bang Protocol and the new SNAC contract are separate ISDA initiatives that will take effect on the same date. Reforms which are being proposed: The three main derivative reform proposals under discussion On July 30, 2009, the chairs of the House Financial Services Committee and the House Agriculture Committee outlined their joint principles for new derivatives legislation (the Frank- Peterson principles) On August 11, 2009, the Obama administration released its proposed Over-the-Counter Derivatives Markets Act of 2009 (the Treasury plan) On June 26, 2009, the House passed the American Clean Energy and Security Act (Waxman-Markey), can be evaluated with respect to several stated policy options that are believed, in varying degrees, to reduce systematic risk and improve the efficiency of the derivatives markets. They are: Centralized clearing, Improved price transparency, Improved position transparency, Migration of over-the-counter trading to exchanges, Speculative position limits, and Improved corporate governance in the area of risk management. Centralized clearing: A move towards the centralized clearing of OTC derivatives is an important component of all of the proposed packages of reforms. A contract is cleared when a central clearing counterparty, informally known as a clearing house, legally assumes the position of buyer from the original seller, and seller to the original buyer. The original counterparties post initial performance margin with the clearing house. As the position is marked to market each day, they pay or receive variation margin in recognition of any reductions or increases in the market values of their positions. These margin payments are normally made in cash or treasury securities. Clearing insulates counterparties from each other, provided that the clearing houses are themselves well designed and capitalized. In addition to any direct reductions in counterparty risk, clearing reduces the sort of run-on-the-bank behavior that was likely to have quickened the failures of Bear Stearns and Lehman. The main concern is ho w to encourage the growth of effective central clearing. Clearing is a relatively expensive process. For each type of derivatives contract, a clearing house must set up standard terms for acceptable contracts, determine formulas for initial margins, and set up a methodology for pricing cleared derivatives for the purpose of determining variation margin payments. Proper financial controls and carefully crafted legal contracts are required. Systems for the processing of trades and collateral are needed. Because of these costs and because of the requirement for daily or even more frequent pricing, it only makes sense to clear types of derivatives that are relatively commoditized, that is, widely and heavily traded in a standard form. In July 2009, Eurex began clearing CDS contracts, partly in response to the European Commissions demand that dealers arrange for separate Europe-based clearing of Eurozone credit default swaps. In general, counterparty risk is higher when clearing is separated across clearing houses. This follows from the lost opportunity to offset the exposures that can arise when a financial institutions cleared derivatives positions have a net negative market value at one clearing house and a net positive market value at another clearing house. From this viewpoint, it is better to have a small number of central clearing counterparties, and to have joint clearing of interest-rate swaps, credit default swaps, and other derivatives. National regulators would do well to cooperate on the regulation and supervision of clearing houses. Among the issues to be resolved for the effective international supervision of clearing houses is the division of responsibility for bailouts, should a clearing house need government support. Overall, while the clearing of inter-dealer OTC derivatives positions is still quite limited, the clearing of positions between dealers and their customers is even less common. The New York Fed has asked dealers to arrange fo r more clearing of customer positions. The development of new frameworks for clearing customer-to-dealer CDS positions is in progress. In summary, the increased use of central clearing represents the most powerful way to reduce systemic risk arising from OTC derivatives markets. Some key steps that regulators should take are: (1) pressuring dealers to adopt specific numerical targets for lowering exposures (before collateral) on uncleared derivatives positions, (2) increasing regulatory capital requirements for uncleared versus cleared derivatives, (3) persuading dealers to clear a greater fraction of dealer-to-customer positions, and (4) fostering international coordination in the regulation, supervision, and failure resolution of clearing houses. It would be counterproductive, in my opinion, for regulators to reach for legal definitions of the types of derivatives that are to be cleared. Improved Price Transparency: Markets tend to be more efficient when the going price is well known by market participants. OTC derivatives markets have limited price transparency. For relatively standard types of derivatives, such as certain interest-rate swaps and credit default swaps, representative quotes are published through financial reporting services such as Markit Partners and Bloomberg, or on inter-dealer broker screens. Customers of dealers are nevertheless normally much less well informed about recent execution prices than are the dealers with whom they execute their trades, and are thus at a bargaining disadvantage to the dealers. This is not a big issue from the viewpoint of systemic risk, but it is a relevant concern with respect to market efficiency and the division of gains from trade between dealers and their customers. But on the other side from dealers point of view with more improved price transparency would reduce the incentives of dealers to make markets because the customers will be h aving the price of previously traded contract and in the end reduce market liquidity. Improved Position Transparency: A separate issue is the availability of data on the sizes of derivatives positions, which allow the monitoring of risk concentrations that can have systemic implications. There are concerns, however, about what amount and type of data is appropriate to be disclosed, and to whom. The Treasury plan and the Frank-Peterson principles call for all OTC derivative trades to be reported to qualified trade registries. The Treasury plan also calls for public disclosure of aggregate position information, and proposes that individual positions should not be disclosed. Aggregate position information Public disclosure of market-aggregated position sizes seems well warranted. Currently, for example, for each of 1,000 large corporate or sovereign borrowers, DerivServ discloses the total quantity of CDS positions that are held as protection against the default of the borrower. This open interest information assists investors in judging the degree to which investors, in aggregate, are concerned about the creditworthiness of individual borrowers, as well as the degree to which sellers of protection in the CDS market could be harmed, in aggregate, if the borrower defaults. The BIS, the Office of the Comptroller of the Currency, ISDA, and other agencies provide some aggregate market position information, although the frequency of these reports and their coarse levels of aggregation leave room from significant improvements in the information that investors can collect on OTC market risks. Regulators should push, in broad set of active OTC derivatives markets, for something akin to t he frequency (weekly) and degree of refinement of DerivServ open-interest reporting. For example, had the DerivServ Trade Information Warehouse, which now provides electronic documentation of almost all standard CDS contracts, not existed by the time of the financial crisis, the default of Lehman Brothers would probably have been accompanied by substantially greater market uncertainty, and potentially by panic as dealers and others attempted to determine the extents of their CDS exposures. In fact, the CDS positions triggered by Lehmans default were well documented and were settled in an orderly manner. All recorded sellers of protection performed on their obligations. Individual position information It is sometimes claimed that OTC derivatives pose dangerous risks because the public does not have the opportunity to see the sizes of positions held by individual investors. OTC derivatives markets are no more opaque in this respect than organized derivatives exchanges. Indeed, individual positions are almost never disclosed in any financial markets. The main exception is the SEC requirement for investors in the common shares of public corporations to disclose holdings once they exceed given thresholds, relative to the total number of outstanding shares. These equity position disclosures are not motivated by systemic risk monitoring, but are instead designed to address issues related to the potential control of U.S. corporations. Derivatives positions do not convey control. In general, the public disclosure of individual derivatives positions would reduce the incentives of investors to collect and analyze fundamental information. The efficiency with which prices are determined would decline correspondingly. Privacy concerns might also be raised. The public disclosure of individual derivatives positions should not be mandated as an approach to reducing systemic risk unless there is compelling evidence that disclosure to regulators alone is not sufficient. There is, however, a good case for mandating the public disclosure of derivatives positions (whether obtained on exchanges or over the counter) that offset the economic exposures of major holders of debt or equity in public corporations. For example, the public has an interest in discovering whether a major shareholder, who ostensibly contributes to proper corporate governance, has severely diluted its governance incentives through a derivatives position. Likewise, the major creditors of a distressed corporation are normally presumed to act in a manner that mitigates distress costs. If, however, a creditor has purchased protection against default using credit derivatives, the creditor may even have a n et incentive to accelerate the default or may have a substantially diluted interest in raising the recovery value of debt claims. In general, regulators should rationalize disclosure requirements for derivatives positions that raise substantial concerns over moral hazard in corporate governance. Migration of derivatives trading onto exchanges: Because derivatives traded on exchanges have almost immediate price transparency and are almost invariably cleared, exchanges offer obvious improvements over OTC trading for those types of derivatives that have enough volume of trade to justify the setup costs of exchange trading. Once traded on exchanges, moreover, a broader set of investors can take part in the benefits of hedging and speculation, and can further add to market efficiency and, particularly, liquidity. Dealers, however, reap substantial profits from OTC trading, and have little incentive to foster the migration of trading from the OTC market to exchanges, even after a derivative product achieves a high level of standardization and breadth of investor activity. Anyone suggesting otherwise should be embarrassed by the examples of standardized and extremely heavily traded derivatives that are available only in the OTC market, such as CDX.NA.IG default-swap index derivatives, which are based on a basket of bonds iss ued by large investment-grade North American corporations. I can think of no good reason that the public interest is best served by having such benchmark financial products available only through negotiation with dealers. There also exist electronic trading platforms that offer a degree of price transparency and breadth of access lying between the extremes represented by fully private OTC negotiation and central exchange trading. These platforms are organized by dealers, inter-dealer brokers, or specialty financial services firms such as TradeWeb or BrokerHub. On such platforms, dealers compete for orders by displaying quotes. Typically, counterparties can contact other counterparties offering quotes, and then complete the negotiation of trades in private. More extensive use of electronic trading platforms and of TRACE-like price transparency would reduce the inefficiencies associated with OTC market opaqueness. Indeed, the Treasury plan would require that all standardized der ivatives be traded on exchanges or on alternative swap execution facilities, apparently referring to trading platforms of the sort mentioned above. Forcing derivatives trading onto exchanges by regulation must nevertheless be done with caution. It is not easy to gauge the costs and benefits, case by case. Simple rules based on measured volume might encourage unintended behavior by dealers, such as using excessive customization to limit the development of liquidity. Further, even for relatively high-volume products, OTC markets are sometimes able to handle very large trade sizes more easily than exchanges, just as large blocks of equities are often handled by private negotiation despite the availability of active equity exchanges. Beneficial financial innovation could also be stifled if OTC derivatives are regulated onto exchanges before dealers can generate a sufficient return on their investment in developing new financial products. Curbing Speculative Trade: It has been proposed that speculative derivatives trading should be severely curbed, or even in the case of CDS markets outlawed. These proposals are based, at least in part, on a misconception of the role of speculation. The U.S. House of Representatives has voted in favor of Waxman-Markey, which, if passed without alteration, would prevent an investor from entering into a credit default swap unless the investor has an associated commercial business exposure to the borrower named in the CDS. (The disallowed trade has been called a naked CDS.) This measure is seriously flawed. If it is enacted, an investor that does have a commercial hedging need for CDS protection would often face difficulty finding a suitable counterparty. Apparently, the counterparty would also be legally required to have a commercial need to hedge against the default of the same borrower. The elimination of speculation through this measure is analogous to regulation against hurricane insurance. Insurers have no natural hedging motive in offering hurricane insurance. They are effectively speculators. That is, they believe that the likelihood of a hurricane is low enough relative to the insurance premium that they can generate an expected profit on each new policy, although taking the risk of a significant loss in the event of a hurricane. To the extent that insurers are prevented from speculating in this manner, those with a desire to reduce risk by purchasing insurance would lose access to counterparties willing to bear the risk, or would pay a much larger insurance premium given the resulting scarcity of risk-bearing capacity. A related measure, proposed by George Soros and included as a legislative option in the Frank-Peterson principles, would allow speculators to sell default protection but not to buy default protection. Such a rule would lead to a loss of market liquidity and a reduced quality of price discovery. Suppose, for example, that the CDS market currently offers p rotection on a named borrower at a premium that is much lower than the borrowers poor financial condition actually warrants. Under the proposed regulation, speculators would not have the incentive to discover the true financial health of the borrower, buying protection until the market price of protection rises, thereby revealing the weakness of the borrower to everyone. Outlawing the speculative use of credit default swaps to buy protection would have the unintended consequences of reducing market liquidity (because those selling protection would have less incentive to incur the costs of remaining informed and active traders) and of driving this form of speculation under the radar, through the use of less effective and transparent types of financial products. There are no specific regulatory limits on the sizes of OTC derivatives positions that may be held by a hedge fund, although dealers holding the other sides of these positions indirectly limit systemic risk to some extent t hrough their own limits on counterparty exposures and with the collateral requirements that they impose on hedge funds. Through laws that prohibit price manipulation, the SEC and the CFTC already have an adequate legal framework for pursuing anyone attempting to corner or otherwise manipulate organized securities or derivatives markets. For example, both the CFTC and the Federal Energy Regulatory Commission (FERC) charged Amaranth with market manipulation over its natural gas futures positions. The proposed Treasury plan includes several new measures designed to limit manipulation of OTC derivatives markets, mainly with respect to trading on alternative swap execution facilities. Improved corporate governance in the area of risk management: Derivatives that are not easily cleared or exchange traded are typically those customized to suit the specific business uses of investors. There should be some tolerance for financial innovation and customization. Economic efficiency is harmed if those with commercial needs for hedging are forced entirely into standard derivatives positions that are relatively poor hedges, or if derivatives markets are unable to innovate along with changes in the economy. For example, when interest-rate swaps first appeared in the 1980s, they were low-volume customized financial instruments. Had non-standard derivatives been heavily penalized at that time, a useful financial innovation could have been stifled. The AIG derivatives fiasco was extremely costly to taxpayers. The AIG credit default swaps would not have been sufficiently standard to be cleared. By their nature, the risks of customized derivatives are more difficult to monitor than those of standard derivatives. Risk management by AIGs senior management and board, and supervision by the regulator of its derivatives activities, the Office of Thrift Supervision, were inadequate. In my opinion, corporate boards and regulatory supervisors should have more effective risk management credentials or training. The quality of risk management by corporate boards might also be raised by the increased use of professional services in risk auditing, in the manner that boards currently rely on independent financial accounting auditors. Rules should be flexible to allow for and react to changes in markets: Policymakers should keep in mind that markets evolve. Markets cannot be created by government fiat, and they are distorted by government intervention.Where regulation is necessary, it should be flexible enough to allow continued market evolution and to respond to that evolution in appropriate ways. Sound regulation interacts with markets rather than insisting that markets conform to preconceived government categories and jurisdictions.While central clearing for many CDS contracts is now feasible, regulations should remain sufficiently flexible to allow new or revised credit products to trade and develop in non-cleared markets.Over time, successful products will develop sufficient volume and standardization to permit clearing or exchange trading. However, imposing such requirements on new products when they are initiated initiated would prevent useful experimentation and market evolution.Those who would disrupt derivatives market improvements by mandating a change in regulatory juri sdiction should be required to meet the high burden of proof that the regulatory disruption is both necessary and likely to improve current arrangements. The House Agriculture Committees proposal to restrict derivative clearing to CFTC-regulated clearinghouses fails both prongs of this test. Conclusion: In order to reduce systemic risk arising in derivatives markets, regulators should push for more extensive clearing through immediate pressure on dealers for numerical targets and, as soon as possible, through revisions to regulatory capital requirements. Regulatory language that defines the specific types of derivatives to be cleared would have counterproductive unintended consequences. Derivatives positions should be comprehensively disclosed to regulators, and should be disclosed to the public only after aggregation, except for cases in which the disclosure of specific individual positions would inform the public about significant moral hazards in corporate governance. In order to improve market efficiency, over-the-counter prices should be published much more systematically, for example through TRACE-like post-trade reporting systems, which should be mandated for at least all cleared derivatives. Greater competition, even within the OTC market, can be achieved with more effe ctive and widespread use of electronic trading platforms. Regulators should foster the migration of trading from over-the-counter markets to exchanges whenever warranted by sufficiently active trading. Severe curbs on speculation detract from market efficiency and increase price volatility. Speculative position limits should be adopted only where valid concerns over systemic risk or market manipulation cannot be addressed by other means. Corporate boards should be encouraged to improve their corporate governance in the area of risk management, for example from increased representation on boards of suitable specialists or by the retention of professional risk auditors. All that I am suggesting today is that we bring the CDS market fully into the light of transparency by listing most of these contracts on exchanges, that we require adequate capital and collateral for all players in both exchange and OTC markets, for end users and dealers alike; and that we force parties writing def ault protection to show that they understand the risk implications of same.
Posted by Dakota Lanham at 7:17 PM