Passive Heating Essay Example | Topics and Well Written Essays - 3000 words

Passive Heating - Essay Example The analysis comprises of examples from both the KYOTOi protocol of the United Nations and the Energy performance of Buildings Directive of the European Union that is being enforced across the west for energy efficiency and savings of the conventional sources of energy. The analysis predominantly focuses upon the energy efficiency of the buildings using the passive heating strategy. Nuclear sources also cater the energy requirements in certain cases where it generates the electricity required for the generation of electricity. In all the aforementioned cases, the pollution into the atmosphere due to heating is enormous indirectly because the generation of electricity in case of electric heaters causes pollution of the atmosphere if not in the immediate vicinity of the users whilst the gas heating systems cause the pollution in the vicinity itself. The atmosphere being a single entity, the greenhouse effect spreads across the entire spread of the atmosphere irrespective of the location of emission of Carbon Monoxide and Carbon di-oxide gases. David Taylor (2005)ii further argues that the main reason for the increase in the energy consumption by the domestic buildings is the inability or the reluctance of the people to utilise the energy of sunlight and natural means for cooling during the summer. This is also due to the fact that the increase in the density of the buildings in the urban areas like the busy areas of London where the density of the domestic buildings has increased by more than 10 times in the six years as argued by W. L. Lee and F. W. H. Yik (2005)iii. The study by the authors have proved that the population density increase in the urban areas has accompanied with the steep density of the buildings thus presenting a congested environment for the energy management and the use of natural resources of energy for cooling during the summer. Furthermore, the use of each kWh (kilo Watt hour) of energy Douglas Lancashire (2005) has identified the emission rations as described below 1.5 lb (680 grams) of Carbon Di-Oxide 0.2 ounce (5.67 grams) ounces of Sulphur Di-oxide and 0.08 ounces (2.27 grams) of nitrogen oxides The information presented above reveals that through saving every kWh of electricity alone, a building could contribute to the reduction of emission and pollution of the atmosphere. Even though the pollution is not caused at the surroundings of the building, the fact that the consumption of energy is directly proportional to the emission of gases and pollution by the power generation plant justifies the need for energy efficiency in the buildings. The aforementioned makes it clear that the costs involved with the energy consumption and the maintenance of the heating systems is a critical element both to the homeowners, which is a direct cost whilst the indirect cost is mainly the loss of non-renewable sources of energy and atmospheric pollution. In order to overcome this problem, passive heating is proposed by researchers as an effective alternative. Passive heating as argued by Raymond Ward (2005) is the method of using the non-conventional sources of energy like the solar energy to generate the energy required to cater the heating requirements in domestic buildings. Another source of energy is the wind energy that is in abundance especially in the UK where the sunlight is treated as a rare commodity with only short spells of summer every year. Alongside, passive heating can

Describe and evaluate the multi-store model of memory Essay

Describe and evaluate the multi-store model of memory - Essay Example This essay will focus on the â€Å"multi-store model of memory developed by Richard Atkinson and Richard Shiffrin in the year 1968† (Kipp & Shaffer, pp. 300, 2009). Multi-store memory model revolves around three basic types of memories, namely, â€Å"sensory memory, short-term memory and long-term memory† (Nash & Bernstein, pp. 209, 2006). Therefore, it is essential to understand the types in detail. Many a times, one realizes that they have seen an object and have a picture of it in their mind. However, within a fraction of a second, it fades away. Other times, one asks another to repeat a certain thing just to realize they know it already. These instances depict the sensory memory. According to an experiment, when subjects are asked to report all the three letters they can see in a brief flash of a letter array, they usually can report only four of five letters. The number of reported letters is independent of the number of displayed letters. However, according to demonstration of a partial-report procedure, subjects are able to store a dozen or more items in a very short-term memory" (Gegenfurtner & Sperling, pp. 1, 1999). Another type of memory is the short-term memory. Whenever a person is thinking about a certain situation, their short-term memory begins its functioning. At any one time, the short-term memory may get its input from the external environment i.e. the surroundings of a person or from the long-term memory of that individual. An example of the former case may be a thought process of a conversation a person is into while the example of the latter may be the thoughts occurring about an event that happened in the distant past, which may be stored in the long-term memory. The short-term memory of any individual may show increment by recoding information. â€Å"Miller (1956) summarized evidence that people can remember about seven chunks in short-term

Same Sex Marriage Controversy in the United States Essays -- gay marri

In a very real sense, it is reasonable to argue that the government should have no say at all in the processes of marriage, or decide which adults may or may not legally marry. State and federal governments play a role, of course, in that marriage is a civil union, and provides benefits and legal protections for the couple. Historically, marriage serves the interests of the society by promoting stability and future generations of citizens, and governments usually act in ways to promote this very vital element. At the same time, it is highly questionable whether this governmental authority should have any voice in who chooses to marry, provided those involved are adults and wish to do so. This is in fact, at the heart of the same-sex marriage controversy still gripping the United States. Gay men and women, eager to gain the legal benefits and cultural recognition of legal marriage, demand it as a right, while others assert that marriage itself is defined as a union between only a man and a woman. Meanwhile, states today vary and alter individual state laws, as further debate rages over whether legally permitting same-sex marriage is a federal or state prerogative. As the following will examine and support, same-sex marriage should be at best only a state concern, and the federal government should play no part beyond upholding states’ rights in the matter. This is essentially because governmental jurisdiction over the right to marry should be at a minimum, given the right to marry as not defined by gender within the Constitution or any other foundational law. Moreover, as states increasingly legalize same-sex marriage, a process occurs that is purely democratic in principle; the people are by degrees influencing the nation as ... ...of Chicago Press, 2013. Print. Meezan, W., & Rauch, J. â€Å"Gay Marriage, Same-Sex Parenting, and America's Children." The Future of Children 15.2 (2005): 97-113. Print. Mello, M. Legalizing Gay Marriage: Vermont and The National Debate. Philadelphia: Temple University Press, 2008. Print. Murray, M. â€Å"Marriage rights and parental rights: Parents, the state, and proposition 8.† Stan. JCR & CL 5 (2009): 357-407. Web. Rimmerman, C. A., & Wilcox, C. The Politics of Same-Sex Marriage. Chicago: University of Chicago Press, 2007. Print. Schram, S. After Welfare: The Culture of Postindustrial Social Policy. New York: NYU Press, 2000. Print. Strasser, M. P. On Same-sex Marriage, Civil Unions, and the Rule of Law: Constitutional Interpretation at the Crossroads. Westport: Greenwood Publishing, 2008. Print.

Personal Growth and Development

Psychology 101 TuThu 3:30-4:45 The concept of personal development has been an important factor that shapes the characters we develop, and the overall person we become. Research suggests that many of the values and traits we possess stem from both genetics and the environment. In terms of genetics, hereditary traits are passed down from the mother and father, which play a huge role in personal development, but research and personal experience also suggest that the impact of the environment parallels the importance of genetics.Environmental factors have been proven to significantly impact the growth and development of an individual. The home the individual is raised in, the people they are surrounded by and the individual’s role model all play an important role in the molding of the individual. Such is the reason why cultural relativism impacts individuals, and guides the way they perform tasks, execute decisions, and their way of thought. The American culture, for example, has slowed down the transition of adolescence into adulthood due to cultural ideals, and the greater need to pursue a higher education in order to compete successfully in the country.Research by the 1958 National Child Development Study, and the 1970 British Cohort Study support these statements, and have shown that we have reached a generation in which adolescents are transitioning into adulthood more slowly, yet more psychological stress is placed on them, and reports of depression have raised since the 50s. Personal growth and development traces back to genetics. Each individual is born with a specific set of genes depending on the mother and father.Genetic traits such as weight, height, appearance, and in some cases, personality, are passed down the hereditary line, and predisposes individuals to certain traits and qualities. The health of the individual is also largely influenced by the care taken by the mother while the fetus was developing within the womb. Proper nutrition, and avoiding neglectful habits such as drinking and smoking, all help to shape the health of the individual from the time they are born. The environment we are raised in is also another factor in the shape and development of an individual.Take for instance the study that examined how environment affects individuals such as siblings, twins, and kids not related by blood, but raised in the same environment. It is shown that even twins who exited the womb during the same birth can come out profoundly different in their adulthood if they were raised in a different environment from their twin. The food that we eat, the habits that we employ, and the overall lifestyle of the individual play an important role as well as genetics.Two similar children who are raised in different environments may possess the same genetic traits, but overall can be distinguished by the environment they were raised in. Cultural relativism plays a role as well in the well-being of the individual. Being raised in Ame rica sets a different standard for living vs. being born elsewhere. In America, individuals are taught to be creative and unique, rather than conform to group ideals. It is in this culture that children are taught to employ creative ideas, and to break away from the grain.In other cultures, such as those in China, kids are raised to follow the grain, and rather than question elders and peers, are taught to accept what is given and told to them. With that in mind, the transition into adulthood has also slowed down due to various factors such as cultural acceptance, and the need to pursue a higher education in order to be more competitive in the job market. As the years pass, so does the standard of education raise as more occupations open up to individuals with special skills and knowledge achieved through a higher education in college.Although this slower transition into adulthood and independence may seem less stressful for individuals, studies from the British Cohort Study show th at individuals in the 70s vs. the 50s reported more cases of depression, and stress due to factors such as economic recessions which hindered the job market availability. This generation is especially pressed to reach higher educational goals as the market for unskilled labor reduces as the market for skilled labor increases hindering the transition into adulthood and independence.In conclusion, personal development and growth are influenced by several factors such as genetics, environment, cultural relativism. These factors shape an individual in specific ways. Genetics passed on influence one’s height, personality, and predispositional thinking that affect the person in everyday situations. Proper health from the time the embryo is implanted is necessary for a healthy baby. The environment also plays a role in the shaping of the individual. The home one was raised in, the nutrition, and overall lifestyle impact the health and behavior of a person.Cultural relativism also pl ays a role, as culture follows an individual around regardless of location, and influences what one finds acceptable, and follows due to social norms. Because of the need for a higher education in today’s job market, a slower transition into adulthood can be traced to the need for more schooling, and a slower transition to independence.References Spiro, Melford E. (2001). Cultural determinism, cultural relativism, and the comparative study of psychopathology. Ethos. Berkeley:. Vol. 29, Iss. 2; pg. 218, 17 pgs. Huffman, Karen (2010). Life Span Development I. John Wiley and Sons, Psychology in Action 314-347. Personal Growth and Development Personal Development and Growth Zoheb Osmani Psychology 101 TuThu 3:30-4:45 The concept of personal development has been an important factor that shapes the characters we develop, and the overall person we become. Research suggests that many of the values and traits we possess stem from both genetics and the environment. In terms of genetics, hereditary traits are passed down from the mother and father, which play a huge role in personal development, but research and personal experience also suggest that the impact of the environment parallels the importance of genetics.Environmental factors have been proven to significantly impact the growth and development of an individual. The home the individual is raised in, the people they are surrounded by and the individual’s role model all play an important role in the molding of the individual. Such is the reason why cultural relativism impacts individuals, and guides the way they perform tasks, execute decisions, and their way of th ought. The American culture, for example, has slowed down the transition of adolescence into adulthood due to cultural ideals, and the greater need to pursue a higher education in order to compete successfully in the country.Research by the 1958 National Child Development Study, and the 1970 British Cohort Study support these statements, and have shown that we have reached a generation in which adolescents are transitioning into adulthood more slowly, yet more psychological stress is placed on them, and reports of depression have raised since the 50s. Personal growth and development traces back to genetics. Each individual is born with a specific set of genes depending on the mother and father.Genetic traits such as weight, height, appearance, and in some cases, personality, are passed down the hereditary line, and predisposes individuals to certain traits and qualities. The health of the individual is also largely influenced by the care taken by the mother while the fetus was devel oping within the womb. Proper nutrition, and avoiding neglectful habits such as drinking and smoking, all help to shape the health of the individual from the time they are born. The environment we are raised in is also another factor in the shape and development of an individual.Take for instance the study that examined how environment affects individuals such as siblings, twins, and kids not related by blood, but raised in the same environment. It is shown that even twins who exited the womb during the same birth can come out profoundly different in their adulthood if they were raised in a different environment from their twin. The food that we eat, the habits that we employ, and the overall lifestyle of the individual play an important role as well as genetics.Two similar children who are raised in different environments may possess the same genetic traits, but overall can be distinguished by the environment they were raised in. Cultural relativism plays a role as well in the well -being of the individual. Being raised in America sets a different standard for living vs. being born elsewhere. In America, individuals are taught to be creative and unique, rather than conform to group ideals. It is in this culture that children are taught to employ creative ideas, and to break away from the grain.In other cultures, such as those in China, kids are raised to follow the grain, and rather than question elders and peers, are taught to accept what is given and told to them. With that in mind, the transition into adulthood has also slowed down due to various factors such as cultural acceptance, and the need to pursue a higher education in order to be more competitive in the job market. As the years pass, so does the standard of education raise as more occupations open up to individuals with special skills and knowledge achieved through a higher education in college.Although this slower transition into adulthood and independence may seem less stressful for individuals, studies from the British Cohort Study show that individuals in the 70s vs. the 50s reported more cases of depression, and stress due to factors such as economic recessions which hindered the job market availability. This generation is especially pressed to reach higher educational goals as the market for unskilled labor reduces as the market for skilled labor increases hindering the transition into adulthood and independence.In conclusion, personal development and growth are influenced by several factors such as genetics, environment, cultural relativism. These factors shape an individual in specific ways. Genetics passed on influence one’s height, personality, and predispositional thinking that affect the person in everyday situations. Proper health from the time the embryo is implanted is necessary for a healthy baby. The environment also plays a role in the shaping of the individual. The home one was raised in, the nutrition, and overall lifestyle impact the health and beh avior of a person.Cultural relativism also plays a role, as culture follows an individual around regardless of location, and influences what one finds acceptable, and follows due to social norms. Because of the need for a higher education in today’s job market, a slower transition into adulthood can be traced to the need for more schooling, and a slower transition to independence.References Spiro, Melford E. (2001). Cultural determinism, cultural relativism, and the comparative study of psychopathology. Ethos. Berkeley:. Vol. 29, Iss. 2; pg. 218, 17 pgs. Huffman, Karen (2010). Life Span Development I. John Wiley and Sons, Psychology in Action 314-347.

Silent Differences Between American And British English Essay

Silent Differences in English that Divide American and British Spelling (Rough Draft) Guiding Question: What is the origin of and reasoning for different word endings that have no effect on pronunciation between American and British English? Does one go to the theater or does one go to the theatre? Are one’s eyes the color blue or the colour blue? The answer to both of these questions will differ depending on where they are asked. In England, the answers will most likely appear as theatre and colour respectively. However, in America, the opposite answers would be given, but only if the questions were in written format. If these questions were posed verbally, the answers would appear the same and no difference would be discerned. Therefore, why is one considered correct and one considered incorrect if they are phonetically equivalent and why do such differences exist? The answer to these questions is rooted in the history of the language itself. Whether it is the French influence or the American Revolution, British and American English are products of their history and culture. The evolution of phonetically equivalent word endings in British and American English reflect political situations, language shifts, and fo reign influences while evoking historical pride on both sides that carry the differences into present day. The move towards standardization of spelling for word endings can be seen in the seventeenth century. The fluidity of spelling was still prevalent as shownShow MoreRelatedAmerican English And British English1520 Words   |  7 PagesChamyan IEP UK 6 JUL 16 American English and British English The usage of the many forms of English dialects have often led to miscommunication. The knowledge gained beforehand can help to limit that, and to provide those visiting with an idea of what the local culture is like. There are specific words and phrases that may prove useful, words and phrases to avoid, and many key differences between American English and British English. Many useful words and phrases in the English language can mean manyRead MoreThe Lines Form The Backbone Of Communication1947 Words   |  8 Pagesvariations include differences in classification of the words, the meaning of the words and the usage of the word among other differences. Furthermore, the uniqueness of the word or phrase can also reveal information such as age group, ethnical background gender the socioeconomic status of the users. In others words, the uniqueness of words forms the foundation upon which the silent languages and communications are founded. This research will focus on a unique British English word that shows semanticRead MoreNoah Webster Essay925 Words   |  4 PagesNoah Webster Noah Webster, familiar to most Americans as the writer of the first American dictionary, worked as a schoolteacher in the late eighteenth century. As he taught, he came to realize that there were some major problems with the way English was taught in the American schools. The United States of America had recently declared its independence from England, and was struggling to form its own identity. The schools were still using textbooks from England, and these books varied inRead MoreEnglish As A Second Language Essay1497 Words   |  6 PagesLearning Academic English as a Second Language When I started searching about topics that are related to Academic English I came up with the features of Academic English but this was a general topic so I looked for other topics. I searched on google about other topics, such as the importance of Academic English. I noticed a website that is about the importance of Academic English for non-native speakers. That really interested me because it is a personal topic since English is my second languageRead MoreThe Constitutional Development Of Canada1372 Words   |  6 Pagesand common law derived from the French and British respectively. Canada did not always have a written constitution. The territory we now refer to as Canada was once populated by the French and English colonial masters. These colonists extended the laws of their home countries to their colonies. As the population of this territory grew and the UK gained control of more colonies including those from the French, making regional laws became a necessity. Between the eighteenth ad nineteenth centuries, theRead MoreThe Modern Day Legal Systems1671 Words   |  7 Pagescivil and common law derived from the French and British respectively. Canada did not always have a written constitution. The territory we now refer to as Canada was once populated by the French and English colonial masters. These colonists extended the laws of their home countries to their colonies. As the population of this territory grew and the UK gained control of more colonies including those from the French, regional laws became a necessity. Between the eighteenth and nineteenth centuries, theRead MoreHow Language Changes Start and Spread Essay948 Words   |  4 PagesPeople have always argued about the causes of language change and tried to control the changes that occurred but ultimately they accomplished nothing. Languages changes and spread as a result of the people who use it daily. African American English and California English are both examples of the different ways language can change. People try to resist the changes in their language because they do not want to see it change. Language change is a natural process that can be affected by others but neverRead MoreBritish vs American English6929 Words   |  28 Pagesby adding citations to reliable sources. Unsourced material may be challenged and removed. (June 2009) | The English language was first introduced to the Americas by British colonization, beginning in 1607 in Jamestown, Virginia. Similarly, the language spread to numerous other parts of the world as a result of British trade and colonization elsewhere and the spread of the former British Empire, which, by 1921, held sway over a population of 470–570 million people, approximately a quarter of theRead MoreSpelling Reforms1719 Words   |  7 PagesThe English Language originates from a Germanic language of the Indo-European family from several local languages brought by 6th century invaders.It has since spread throughout the British Isles and into various regions where Britain held overseas colonies. Today, as the second most spoken language in the world, it has been subjected to multiple prejudices concerning its acquisition, reception and learnability as a second language. As the language of business, science and technology, English shouldRead MoreAmerican and British English Pro nunciation Differences2740 Words   |  11 PagesAmerican and British English pronunciation differences From Wikipedia, the free encyclopedia Jump to: navigation, search Comparison of American and British English | American English British English | Computing | Keyboards | Orthography | Spelling | Speech | Accent Pronunciation | Vocabulary | American words not widely used in BritainBritish words not widely used in AmericaWords having different meanings in British and American English: A–L  Ã‚ · M–Z | Works | Works with different titles

Implications Of The Debt Crisis Essay Online For Free - Free Essay Example

Sample details Pages: 14 Words: 4090 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? The recent global crisis had multiple causes: The general cause appears to be a rapid growth of the level of debt (especially in the case of households), accompanied by sharp increases in real estate prices. However, the complexity of the crisis was increased by the existance of individual reasons in each country. The article aims to synthesize some of the most important reasons that led to the current crisis both general and country-specific (USA, Iceland, Ireland, Greece, Portugal, Spain). Don’t waste time! Our writers will create an original "Implications Of The Debt Crisis Essay Online For Free" essay for you Create order Last but not least, the article analyses some of the implications of the crisis for the markets and for the regulators. Introduction The financial crisis that hit the global economy in 2007 and is still continuing in 2011 has been the largest such crisis in the post-world war period. Its implications have been so numerous and some of them so radical that understanding this crisis has become a necessity for all of us. Having started as a liquidity crisis, it developed to the extent that it generated a recession in many countries, and it has had implications not only on the banking system, but also on the real economy and on the economic dynamics. The current article aims to make a synthesis of current research on this topic with regard to the multiple causes of the recent crisis (in the USA and in Europe) and to its implications. Causes of the crisis Despite the unprecedented global reach of the recent crisis, the European Commission (2009) believes some of its causes are similar to causes of previous crises, such as the Asian crisis in late 1990s or the crisis of the Nordic countries in the early 1990s. The common feature was that all these crises were preceded by long periods of rapid credit growth, low risk premiums, abundant availability of liquidity, strong leveraging, soaring asset prices and the development of bubbles in the real estate sector. Indeed, McKinsey (2010) made a quantitative and qualitative analysis of the evolution of debt levels during the pre-crisis period in several countries in the world, which revealed that after 2000 debt grew significantly in most mature economies, enabled by the globalization of banking and a period of unusually low interest rates and risk spreads. The borrowing increased substantially in the case of households, especially through home mortgages. The household debt level increased s ignificantly relatively to the household disposable income, which was ignored because the ratio of debt to assets appeared stable before the crisis due to the rising house prices. The level of debt was less worrying at the start of the crisis with regard to the business sectors, with the exception of the commercial real estate sector and some banks. Coming back to the level of debt, the McKinsey (2010) piece of research also quantified the structure of debt for a selection of 10 developed countries and 4 emerging countries in 2008. These results are summarized in the chart below, which shows what percentage of the debt of each country was issued by government, financial institutions or non-financial institutions, and what percentage of a countrys total debt is represented by household debt. All the numbers represent a percentage of the countrys GDP. Figure 1: The structure of debt for several countries as of 2008, as % of GDP. (Source: McKinsey (2010) report). These numbers have also been used by the Economist (2010a), which took the previous study further by analysing the dynamic of the increase of the government debt in analysed countries. Thus, in the 10 developed countries, the total debt increased from 200% of GDP in 1995 up to 300% of GDP in 2008. Some countries displayed even higher increases in the ratio between debt and GDP, such as 1200% for Iceland and 900% for Ireland. In the case of the latter two countries, the debt level proved unsustainable and pushed them into crisis in 2010. The chart shows that the countries for which the ratio between debt and GDP reached the highest level are the peripheral countries of the Eurozone (Greece, Portugal, Italy), but also USA, Japan, Canada and othes. The countries with the lowest ratio of debt to GDP in the sample were Russia, India and China, which also happenned to have a spectacular recovery recently following the crisis. At a more specific level, each of the countries hit by the recent financi al crisis had individual causes which influenced the development of the crisis both in specific countries and overall, since in some situations a strong contagion effect of the crisis could be noticed. With regard to the specific contry reasons detailed below, several economic indicators may be mentioned. The charts below detail the evolution of these economic indicators for the countries included and for the period 1995 2011. All data is available from the IMF and it is updated as of October 2010: Figure 2: GDP % change for a selection of countries, 1995 2011. (Source: IMF Database). The numbers represent the percentages of year-on-year changes for the constant price GDP. The numbers for 2010 and 2011 are IMF estimates, updated as of October 2010. Figure 3: Current account balance for a selection of countries, 1995 2011. (Source: IMF Database). The current account includes all transactions other than those in financial and capital items. The major classifications are go ods and services, income and current transfers. The focus of the balance pf payments is on transactions (between an economy and the rest of the world) in goods, services, and income. The numbers for 2010 and 2011 are IMF estimates, updated as of October 2010. Figure 4: General government gross debt as a % of GDP for a selection of countries, 1995 2011. (Source: IMF Database). Gross debt consists of all liabilities that require payment or payments of interest and/or principal by the debtor to the creditor at a date or dates in the future. This includes debt liabilities in the form of SDRs, currency and deposits, debt securities, loans, insurance, pensions and standardized guarantee schemes, and other accounts payable. The numbers for 2010 and 2011 are IMF estimates, updated as of October 2010. Figure 5: Evolution of the unemployment rate for a selection of countries, 1995 2011. (Source: IMF Database). The numbers for 2010 and 2011 are IMF estimates, updated as of October 2010 . The USA was the first country to be hit by the crisis, and this was due to a series of issues. Firstly, the large mortgage debts, which were mentioned above. Secondly, some large financial institutions in the USA were confronted with a gradual decline in the quality of capital, as they had asset growth with increasing amounts of hybrid capital instruments, such as certain forms of preferred stock (McKinsey (2010)). Such capital instruments were unable to compensate for credit losses during the crisis, which brought a degree of vulnerability for those financial institutions in front of the crisis. Thirdly, instead of keeping loans on their own balance sheets, the banks moved towards the originate and distribute model, which led to a decline in lending standards (Brunnermeier (2009)). The banks used to create diversified portfolios of credit instruments (mortgages, corporate bonds, credit card receivables etc), then slice these portfolios into a number of tranches and sell these slices to various categories of investors. Each slice used to receive a credit rating from rating agencies and as a result, the slices were ranging from the superior senior tranche (the safest tranche, AAA credit rating, the first in line to be paid out of the cash flows of the portfolios, but with the lowest interest rate) to the equity tranche (the most junior tranche, lowest credit rating among the tranches, the last in line to be paid out of the cash flows of the portfolios, but with the highest interest rate). The low lending standards generated by such actions from the banks, combined with the cheap credit available at that time resulted in the housing frenzy that laid the foundations for the crisis. Icelands specific reason behind the financial crisis was, according to The Economist (2008), the fact that it had built a financial house of cards. Iceland represents an extreme case of a huge financial system towering over a small economy. Behind the encouraging image of low u nemployment, income per person above the average in the European Union, huge investments in green energy and inflows of foreign investment, the countrys 3 largest banks and its households built huge amounts of debt. The credit crisis was enough to make Icelands banking system, its credit rating and its currency all collapse at the same time. As a result, Icelands GDP fell by 15% from its top point to the bottom reached during the crisis. Ireland also proved to be different with regard to the way in which it was hit by the crisis. Morgan Kelly, an economist at University College Dublin, cited by The Economist (2011a), said that What happened in Ireland was very boring. There were no complex derivatives or shadow banking systems. This was a good old 19th-century, or even 17th-century, banking collapse. It appears that Irelands only reason to become hardly hit by the crisis was that during the previous decade, Ireland had turned into a nation of property developers. Ireland enjoyed average annual GDP growth of almost 10% between 1993 and 2000, which continued even afterwards, fueled by the low interest rates environment and excessive lending. Irelands fall started when property prices started falling in 2006 2007, and it continued with the crash of shares in Irish banks, the transformation of the banking crisis into a sovereign-debt crisis, the big rise in its borrowing costs and it culminated with Irelands acceptance of a bail-out from the EU and the IMF in November 2010 (the second such situation for a EU country). The rescue package received was EUR 85bn, out of which EUR 35 bn is aimed at recapitalising the Irish banking system. The cost of recapitalising the Irish banks has indeed proved to be significant. According to Deutsche Bank (2011), if the EUR 35bn amount previously mentioned would be fully used for this purpose, the estimated total cost of recapitalisation of Irish banks would reach 52% of Irelands 2009 GDP. Greece was the first EU country to receive a bail-out from the EU and the IMF in May 2010, worth EUR 110bn. Some of its greatest issues have been its high level of public debt and its high budget deficits. As The Economist (2010c) noticed, in 2001 when joining the euro, Greece already had a public debt in excess of 100% of GDP. Adoption of the euro currency allowed more favourable terms for the refinancing of government debt, and the strong GDP growth masked the weakness of Greeces public finances. Greeces government debt reached 115% of GDP in 2009 and its current account deficit reached 14.6% of GDP in 2008. Greece had leant too heavily on consumer spending and relied on foreign capital to supplement its low savings (The Economist (2010c)).Nelson et al (2010) went into further detail and listed additional reasons behind the Greek crisis: high government spending, weak revenue collection, weak enforcement of EU rules regarding debt, and others. In addition to these facts, Greece also faced certain restrictions, suc h as: impossibility to devalue the currency due to the membership into the eurozone, and the lack of competitiveness of its economy partly due to overhiring and overpayment in the public sector (The Economist (2010d)). Last but not least, Nelson et al (2010) noticed that complex financial instruments may have played a role in helping Greece accumulate and conceal its debt. One implication of the Greek crisis was the contagion effect to other European countries. Even if these countries only shared few of Greeces issues, investors still have become more prudent with respect to Portugal (which also has a high budget deficit), Spain (in need to restructure its economy) and Italy (heavily indebted). Portugal increasingly started to be seen as a potential victim of the sovereign debt crisis following Greeces crisis. Portugals weaknesses have been a large public debt and a high budget deficit, but its situation has been slightly different from that of Greece. Portugal enjoyed rapid econ omic growth before joining the euro in 1999, but afterwards it has been impacted by a steady loss of competitiveness in wages. The 1990s have been a lost decade for the economy and as a result, it became difficult to manage the countrys public finances (The Economist (2010c)). Moreover, the further expansion of the European Union towards Eastern Europe in 2004 has diverted part of the foreign direct investment away from Portugal towards the new members. Investors expect April and June 2011 to be an important test for Portugal, as Portugal will need to refinance EUR 9.5bn of public debt then. The yield of 6.7% paid by Portugal for the ten year bonds sold in January 2011 is very close to 7%, which some Portughese officials have declared that is not a sustainable level (FT, 7th Jan 2011). Spain also started to be seen as a potential victim of the sovereign debt crisis following Greeces crisis, even if Spains public debt level (at less than two thirds of its GDP) is not large relativ ely to the other countries. However, Spains problems lay with its local banks (cajas) and its housing bust. According to The Economist (2010b), Spanish banks have outstanding loans of EUR323bn to property developers (equivalent of 31% of GDP); and they already had provisions of EUR87bn for bad loans by the end of 2010. Deutsche Bank (2011) explains that in addition to this exposure of the banking system to the constructions sector, Spain is also negatively impacted by the highest level of unemployment among the major developed countries. In this respect, Spain is similar to Ireland. Deutsche Bank (2011) also highlights the major differences between the Irish and Spanish banking systems: the better condition of the two largest and internationally diversified Spanish banks (vs the major Irish banks), the heavier reliance of the Irish banks on inter-bank sources of funding, the stronger banks overall capital adequacy before the intensification of the crisis in Spain vs Ireland. Implications of the crisis for Europe The implications of a crisis can be numerous and they can refer to the financial sector, the real economy, regulations etc. As Cogman Dobbs (2008) pointed out, the impact of previous crises on the real economy has not always been the same. The direction of the impact was due to the actions pursued by governments for recapitalizing banks, introducing stimulus measures and restoring investors confidence in the economy. According to Reinhart Rogoff (2008), countries usually need two years in order to start recovering from past recessions after major banking crisis. However, there were several situations when a much longer period was needed for starting the recovery: Japan needed almost a decade (the lost decade) following the crisis in the 1990s; the USA also needed a longer time to start recovering after the Great Depression in 1929 1933, when 28% of GDP was lost. Cogman Dobbs (2008) suggest that one important aspect to assess is the impact that financial crises have on the availability of credit in relation to this, the impact of a potential shortage of credit has on the real economy and on consumer confidence has to be assessed. With regard to the availability of credit, the McKinsey (2010) report proved that 44 out of the 45 crises identified between 1929 2010 were followed by periods of deleveraging, where they defined deleveraging episodes as periods in which the ratio between total debt and GDP declined for at least 3 consecutive quarters and the total fall was at least 10%. Along these results, the report would expect that a series of sectors in some countries would deleverage in the near future (UK, USA, Spain, Canada and South Korea). The report also concluded that deleveraging episodes usually last 6-7 years and their initial years may also witness a recession. On a different note, it is interesting to mention that Lund Ruxburgh (2009) have tried to assess how the fortunes of the power brokers have changed following the recent crisi s (McKinsey Global Institute defined in 2007 the power brokers to be four large groups of investors which seemed to have an edge over others: oil exporters, Asian sovereign investors, hedge funds and private equity firms). Their conclusion was that in almost any scenario (depending on the future development of the crisis) the previously defined power brokers would remain significant players in the global capital markets. The big winners are the oil exporters and Asian sovereign investors, as the source of their wealth will persist: trade surpluses. As noticed by the authors, the rapid growth of hedge funds and private equity firms has stopped abruptly, but they are still expected to recover in the future. With regard to Europe, the implications have also been very diverse and of a very diverse nature: the decoupling of the core European countries from the peripheral ones, the creation of the European Financial Stability Facility (EFSF), debates on the topic of European integratio n, debates on complex derivatives and their regulation, implications for the government debt issuance, and others. As mentioned above, one important aspect of the crisis is that it has not impacted all European countries uniformly. In fact there is a big divergence between the core countries (Germany, France) and the crisis-hit peripheral countries (Greece, Ireland, Portugal and Spain): while the core countries have been enjoying an economic recovery since 2010, the peripheral countries are still struggling with recession. Being part of the same monetary union (ie the eurozone), they are goverened by the same monetary policy. While all eurozone countries were at the height of a financial and economic crisis, there was no debate regarding the apropriateness of the monetary policy. However, following the recent divergence, such debates have increased, showing a difficult task ahead of the European Central Bank regarding the rising of the interest rate for the euro. The four main pe ripheral countries mentioned above do represent a significant 18% of euro area GDP. However, Germany and France together represent 50% of euro area GDP. (Deutsche Bank (2011)) One of the consequences of the financial crisis in Europe was the creation of the European Financial Stability Facility (EFSF) in June 2010 by the 16 euro area member states. The EFSF has been fully operational since August 2010 and its purpose is to finance loans for euro area member states which are experiencing difficulty in obtaining financing at sustainable rates (EFSF (2011)). EFSF will be able to borrow up to EUR 440 bn by issuing bonds guaranteed by the euro area member states, and it has received the best possible credit rating (AAA) from all three credit rating agencies (Fitch, Moodys and Standard Poors). The money borrowed through such bonds will then be lent to struggling euro zone countries. EFSF issued its first bond on the 24th of January 2011 and met spectacular demand on this occasion, bankers not being able to recall such a large order book for any bond, government or corporate (EUR 40bn in orders vs EUR 5bn notional sold) (FT (2011b)). This first bond has been seen as a landmark deal and some investors said it could be a precursor to the first common eurozone bond. The European Commission also agreed on the creation of a permanent crisis mechanism: the European Stability Mechanism (ESM). ESM will become operational in 2013 when the EFSF expires and it will build on the existing EFSF. The aim of ESM will be to support countries of the euro zone which may find themselves in financial distress. ESM loans will enjoy preferred creditor status and they will be junior only to IMF loans (EFSF (2011)). The recent crisis also brought changes in the government debt issuance practices in the 16 euro zone countries. Before the crisis, these practices had converged to a common standard which involved placement of long-term, fixed rate debt denominated in national curren cy via competitive auctions. De Broeck Guscina (2010) have proved that after mid-2008 this standard could not be followed anymore, because of the increase in sovereign funding needs and the fall in investor risk appetite, which made risk premia rise. They performed a research on a sample of 3,000 debt issuances by governments in the euro zone and Denmark in 2007 2009, which was divided into a pre-crisis period (mid-2007 to mid-2008) and a crisis period (mid-2008 Dec 2009). The main findings of the research were that the new standard for issuing government debt in the countries studied was defined by shorter maturities (because such debt is less risky for the investor), foreign currency denomination (because such debt shifts currency risk exposure from the investor to the debtor), and/or floating rates (because such debt transfers the risks related to changes in global interest rates and in the countrys perceived creditworthiness from the investor to the debtor). Therefore, the im pact of the crisis was that it has forced governments to assume additional risk. This negative effect was especially pronounced in countries with high deficit and high debt. De Broeck Guscina (2010) concluded that the mentioned change in the standard for government debt issuance allowed governments to deal with the reduced risk appetite of investors and to limit the impact of high deficits and debt on interest payments, but at the same time exposed them to significantly higher risks of refinancing and repricing, and sometimes to exchange rate risk as well. One other implication of the crisis was that the use of complex financial instruments has been more and more questioned, and so were the financial regulations that are concerned with them. Nelson et al (2010) remind that during the crisis, the Greek governments used derivatives to conceal the true level of Greeces debt. For example they traded currency swaps through which they were receiving upfront payments which under EU acc ounting rules could not be recorded as loans, even if in essence they were. Some do believe that derivatives played an important role in creating Greeces debt crisis and as a result, an urgent need to tighten financial regulation for derivatives has been identified. Last but not least, on a global level, the development of the crisis also brought critics of the credit rating agencies. As stated in a previous article (Minescu (2010)), following each financial crisis there has been a lot of talk on the failure of ratings issued by credit rating agencies to predict the crises. This failure may be understood in multiple ways, such as: failure of a rating to predict default, failure of a rating to be stable, failure of multiple agencies to issue similar levels of credit rating for the same country at the same time, or failure of an agency to issue a rating in the correct category of ratings (ie investment grade or junk). Talk of the failure of ratings has been central to this recent c risis as well and in August 2007 the head of Standard Poors even resigned amid criticism received from politicians and investors about the agencies failure to signal the risk of securities backed by sub-prime mortgages. As a result of the new wave of critics directed at rating agencies during this crisis, regulators are again aiming to improve the legislation concerned with conflicts of interest that result from the business models used by certain agencies (FT (3rd Feb 2011)). Conclusions The recent global crisis had multiple causes: The general cause appears to be a rapid growth of the level of debt (especially in the case of households), accompanied by sharp increases in real estate prices. In this respect, the crisis may have similarities with previous crises, such as the Asian crisis in the early 1990s. In addition to this, there have been individual causes for each country: In USA -the increased use of hybrid capital instruments and the adoption of the originate and distribute model by the banks, which involved the creation of diversified portfolios of credit instruments and their resale as a redesigned product; in Iceland the huge growth of the debt to GDP ratio to 1200%, which led to the fall of local banks; in Ireland -the burst of the real estate bubble in the context of a debt to GDP ratio of 900% generated huge costs for recapitalizing the Irish banking system; In Greece unsustainable budget deficits, lack of competitiveness of its economy due to overhi ring and overpayment in the public sector, inappropriate use of complex financial instruments; in Portugal large public debt and high budget deficit; in Spain the housing bust and its negative impact on the Spanish banking system, and the highest unemployment rate among all developed economies. Several countries have already received external help from the IMF and other organizations: Greece, Iceland, Ireland etc. The implications of the crisis have also been very complex: lower availability of credit, the decoupling of the core European countries from the peripheral ones, the creation of the European Financial Stability Facility (EFSF), debates on complex derivatives and their regulation, implications for the government debt issuance, criticism of the credit rating agencies for failing to predict the crisis, and others.

Negative Effects of Consumerism Essay - 1753 Words

Negative Effects of Consumerism on North American Society Consumerism is damaging to our society, in our North American society consumerism is often portrayed to be a negative aspect of people’s lives. However, one can also argue positive effects that result from consumerism, or emphasize on the negative effects of consumerism and how it can be a constraining force in one’s own life. Consumerism is an idea of an economic policy that the market is shaped by the choice of the consumer and continues to emerge to shape the world’s mass markets. Some of the negative effects of consumerism that many critics may argue and that will be further emphasized on are the overexploitation of consumerism which has lead to economic poverty, and increase†¦show more content†¦The rich consume at the expense of the poor as further resources are expended maintaining this unequal balance of power. (Kaza, 2000) Additionally, many environmentalists argue that consumerism has severe affects on the environment and blame it for many issues society is currently facing. Some major concerns about consumerism are that it can cause pollution, land contamination, and forest degradation. The production and waste of products used in consumption is related to pollution. Industrial waste and automobiles are primary examples, as well as waste from industrial agriculture and individual consumer waste. A main issue that exists is the exporting of pollution and waste from developed countries to poorer countries, a process which is done due to the fact that poorer countries have lower standards or exempt from the emission reduction targets (Shah, 2010). 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