Why the Falling U.S. Birth Rates Are So Troubling Essay

Why the Falling U.S. Birth Rates Are So Troubling - Essay Example The USA birth rates fall every year the government reported with the experts calling it a proof that the weak economy has continued to reduce enthusiasm for having children. The drop in the preceding year was just by 1 %, not as a big drop as to 3% drop which was seen in the recent years. It may be an effect of the fertility rate and the aging population. The falling birth is a new phenomenon in this state that they had been on since the late 1990s. In the last year, fewer than four million births were reckoned last year the lowermost number since 1998. They theory behind the drop of the birth rate is couples who work hard get time being together, feeling that they are no need of having children because of their busy schedules. Across the U.S, the birth rates are falling, and family is shrinking. The fertility rate is less than two children a woman. As a result, U.S populations are growing extremely slowly and are beginning to decrease. Mark R. Montgomery states that the demographic trends portend that there are difficult times ahead for the United States economy because there are not enough people for jobs (206). A workforce that does not have enough workers can decrease productivity over time for any workforce. At the same time, the growing population of the elderly individuals threatens the solvency of social insurance and pension systems (Montgomery 206). As the household decreases, because people move away or some people die, the ability to care for the elderly diminishes.

Effects of Derivatives

Effects of Derivatives Abstract Banks and other financial institutions have progressively understood the need to measure and manage the credit risk they are exposed to. Derivatives, therefore have ascended in retort to the surge in demand of financial institutions to create vehicle tools for hedging and shifting credit risks. Derivatives over the years have become a valuable financial tools with system-wide benefits. However as innovative as the derivatives have been, they carry inside themselves so many threats that in the hand of inexperienced market participants, destabilize the whole economic system. Inside such a Pandora box were the instruments that would participate in amplifying the 2008 financial crisis. This paper postulates that derivatives may have contributed to the 2008 crisis. Derivative contracts are probabilistic bets on future events, as defined on Investopedia they are securities with a price that are dependent upon or derived from one or more underlying assets. Many people argue that derivatives reduce systemic problems, in that participants who cannot bear certain risks are able to transfer them to stronger hands. These people believe that derivatives act to stabilize the economy, facilitate trade, and eliminate bumps for individual participants (Buffett, 2016). We have now reached the stage where those who work in finance, and many who work outside finance, need to understand how derivatives work, how they are used, and how they are priced (Hull, 2015). For this reason, derivatives are at the center of everything. However, in 2008 the world witnessed a financial and economic hurricane that left massive financial and economic damages. It was universally recognized as the worst economic crash since the Great Depression. The old saying has it that success has a hundred fathers, but failure is an orphan (Davies, 2016). In this situation, it was the opposite as this failure had a long list of guilty men. While some argued that the changes in the law are the cause of the crisis, others pointed out the role derivatives played via the crash in the value of subprime mortgage-backed securities. The main thesis of this paper is that, while derivatives contributed a lot for the financial market would we be better off them? After a discussion of the positive effects of derivatives (their ability in refining the management of risk), the paper will analyze the negative aspects of them (enhancing risk-taking, evading taxes and creating financial crises). And we finish by looking at how derivatives fueled the financial crisis. Derivatives are instruments that derive their performance from some other instruments or assets. In contrary to the spot market, derivative markets require less capital and usually are more liquid.   Higher liquidity means more efficiency such that prices change more rapidly in response to new information, which is a good thing (Chance, 2008). There are different types of derivatives that an individual can use to protect himself against volatile time. Derivatives confer to the financial market different types of benefits such as risk management, price discovery, enhancement of liquidity. Fundamentally they are instruments that permit the transfer of risk from a seller to a buyer. Exporters, exposed to foreign exchange risk, can reduce their risk using derivatives (forward, futures, and options) (Viral Richardson, 2009). Derivatives can be viewed as insurance; one party gives up something in order for the other party to accept the risk. Some say that derivatives are nothing mo re than gambling (Peery, 2012). But derivatives can be compared more to insurance than be called gambling. In insurance, we have an insurer collecting the premiums where in derivatives, we have speculators receiving fees for speculation. Without speculators, hedging risk is impossible. Another benefit is price discovery; derivatives provide information to the market about the expectations of people on the future spot price. The ABX indices (i.e., a portfolio of collateralized debt obligations (CDOs) of subprime mortgages) which were one of the first instruments to provide information to the marketplace on the deteriorating subprime securitization market (Viral Richardson, 2009). Moreover, they also give the opportunity to market participants to extract forward information instead of historical information. Such information is used, among others, by central banks in making policy decisions, investors for risk and return decisions on their portfolios and corporations for managing financial risk (Viral Richardson, 2009). An additional positive benefit is the enhancement of liquidity. When derivatives are added to an underlying market, it brings additional players who use the derivatives and give the opportunity to companies to earn income that would not be available to them or available but the cost would be high. By and large, spot markets with derivatives have more liquidity and thus lower transaction costs than markets without derivatives (Viral Richardson, 2009). If derivatives provide to the financial market all those useful benefits, how come they were accused of player a role in the financial crisis of 2008? Derivatives play an important role in reducing the risk that companies face, but they are a synonym of danger to the stability of the financial market and in doing so, the economy in general. Within the field of finance, derivatives are the most dynamic instruments because they have no limits unless parties, markets, or governments set them (Peery, 2012). In his annual letter to shareholders in 2002, Warren Buffett branded derivatives as time bombs, both for the parties that deal in them and the economic system (Buffett, 2016). However, that fear of derivatives existed way before Warren Buffett expressed it.   Max Webers 1896 essay on the stock exchange lingered over the concern that derivative contracts encouraged speculation and increased market instability (Maurer, 2002). Years after the financial crisis, (Hoefle, 2010) argued that derivatives were doomed from the start, that they were the answer to the stock market crash of 1987, the demise of the SL industry, and bankrupt cy of U.S banking system. Why are some people against the use of derivatives? At first, derivatives were tools that can be used to hedge against pre-existing risks, in another word a form of insurance. But as time went on, people realised that they can use derivatives in another form than insurance. They went from hedge to speculation, implying that they tried to earn a profit by prophesying future events better than another can, including future asset prices, interest rates, or credit ratings. While doing that most companies got themselves hugely exposed to derivatives. As you can see in the example I have in the appendix Table 1, most of those companies total assets cannot match the leverage the companies are facing throughout the use of derivatives. And when the corporations exposure becomes large to the overall market, that could translate to problems, for example the collapse of Long-Term Capital Management in 1998. The company at that time had capital of $4 billion, assets of $124 billion, but their exposure to derivatives was more than $1 trillion. How all of these translated into becoming one of the causes of the financial crisis? The Bank for International Settlements has only published statistics on the Credit Derivatives market since the end of 2004 when the total notional amount was $6 trillion (Stulz R. M., 2009). The market grew hugely and by the time we get to the middle of 2008 the notional amour was $57 trillion. Quickly Credit Derivatives became an important tool to manage credit exposure. There are different reasons to why market participants have found credit derivatives appealing.   First you do not need a deep pocket in order to take a position, secondly, CDs can be used as insurance against any type of loans, not just a specific. In addition to that, the largest derivatives market is for swaps. With a swap, two parties exchange the rights to cash flows from different assets (Stulz R. M., 2009). In principle, credit default swaps should make financial markets more efficient and improve the allocation of capital (Stulz R. M., 2009). As time went on people were more focused on CD contracts o n subprime mortgages. Although subprime mortgages carried inside them significant default risk, as other mortgages they were securitized. As (Stulz R. M., 2010) explained in his article, mortgages are placed in a pool, and notes are issued against that pool. In the pool, the highest notes always have an AAA rating. In the case of mortgages default, the lower-rated notes suffer first, but as the default losses increase the higher rated notes will be affected too. In 2006 the ABX indexes were introduced, it was based on the average of credit default swaps for identical superiority securitization notes. Every six months, ABX indexes played an important role as they made it possible for an investor to take positions on the subprime market, even though they have no ownership of subprime mortgages or as insurance for subprime exposure. As a result, it was possible for investors to bear more subprime risk than the risk in outstanding mortgages (Stulz R. M., 2009). As all good thing must co me to an end, in 2008 financial institutions faced counterparty risks in derivatives that they had never factored in their calculations. Renà © M. Stulz (2010) offers a more detailed explanation of the counterparty risks and the problem that can arise. As for the causes of the counterparty risk, some people argued that derivatives lead to huge web exposure across financial institutions. In case one of the financial institution fails, the others will follow. And as we saw with the failure of Lehman, which had at that time derivatives contracts with other financial firms. Those firms were expecting payments from Lehman on their derivatives. Sadly, for them, Lehman at that time had filed for bankruptcy. While they could have managed their exposure to the counterparty risk, as they were high rated counterparties something unexpected happened. The failure of Lehman had as consequence a huge increase in the price of derivatives, at that moment the collateral amount would not be enough to cover the default of other counterparties default. As a domino effect, most firms were hit by the default of Lehman and without the help of the government to bail them out some would not have survived. The CDs market grew too fast for its own good and it created a bubble that fooled the financial markets. The lack of regulations, transparency, and clarity in financial statements made it hard to prevent. And before people realised we were in what some people call the worse financial crisis of all time. No matter the instruments you give to someone the results will depend on his intention. A good instrument in the hand of an evil person who focuses on profit over ethics will make that instrument look evil. Pablo Triana in his book The number that killed us gave a perfect example of a situation where a red Ferrari was involved in an accident that had civil casualties. Should we blame the car for the accident or the driver who was guilty of speed driving in the past? Same dilemma with the derivatives, we have seen how derivatives allow firms and individuals to take risk efficiently and to hedge risks. However, they can also create risk when they are not used properly. And the downfall of a large derivatives user or dealer may create a systemic risk for the whole economy. Which is why as for any instruments that may harm the world, derivatives should be regulated more effectively. We did not ban the atomic bomb after Hiroshima, nor we did with planes for their risk of a crash, but bett er regulations were introduced to make them safe as sense to be. While derivatives have been blamed, sometimes wrongly, for large losses from Barings to Enron the benefits are widely dispersed and may not make for good headlines. On balance, the benefits outweigh the threats (Balls, 2016). Appendix Table 1 References Ahmad, I. M. (2010). Greed, financial innovation or laxity of regulation? a close look into the 2007-2009 financial crisis and stock market volatility. Studies in Economics and Finance, 110-134. Alnassar, W. I., Al-shakrchy, E., Almsafir, M. K. (2014). Credit Derivatives: Did They Exacerbate the 2007 Global Financial Crisis? AIG: Case Study. Procedia Social and Behavioral Sciences, 1026-1034. Balls, A. (2016, 12 12). The Economics of Derivatives. Retrieved from nber.org: http://www.nber.org/digest/jan05/w10674.html Buffett, W. E. (2016, 11 28). Letters. Retrieved from berkshirehathaway: http://www.berkshirehathaway.com/letters/2002pdf.pdf Chance, D. M. (2008). Essays in Derivatives . New Jersey: Jonh Wileys Sons. Crotty, J. (2009). Structural causes of the global financial crisis: a critical assessment of the new financial architecture. Cambridge Journal of Economics, 563-580. Davies, H. (2016, 11 20). The Financial Crisis: Who is to Blame? Retrieved from Google Books: https://books.google.ie/books?hl=enlr=id=MNH6q2YGEUkCoi=fndpg=PR1dq=financial+derivatives+and+crisisots=2_ZzDDFPS3sig=JW59MDMZt2HWvDWthLHWtyDyZwcredir_esc=y#v=onepageq=financial%20derivatives%20and%20crisisf=false Hoefle, J. (2010). Ban, Dont Regulate, Derivatives. Executive Intelligence Review, 32-34. Hull, J. C. (2015). Options, Futures, and other Derivatives. New York: Pearson Education. Lebron, M. W. (2016, 12 20). Derivatives: The toxic financial instrument on par with terrorism . Retrieved from rt.com: https://www.rt.com/op-edge/325982-derivatives-toxic-instrument-review/ MacKenzie, D., Millo, Y. (2016, 11 12). Negotiating a Market, Performing Theory: The historical sociology of a financial derivatives exchange. Retrieved from SSRN Electronic Journal : https://ssrn.com/abstract=279029 Maurer, B. (2002). Repressed futures: financial derivatives theological unconscious. Economy and Society, 15-36. Peery, G. F. (2012). The Post-Reform Guide to Derivatives and Futures. New Jersey: John Wisley Sons. Stout, L. A. (2011). Derivatives and the legal origin of the 2008 credit crisis. Harvard Business Law Review, 1-38. Stulz, R. M. (2009). Financial Derivatives: lessons from the subprime crisis. The Milken Institute Review, 58-70. Stulz, R. M. (2010). Credit Default Swaps and the Credit Crisis. Journal of Economic Perspectives, 73-92. Triana, P. (2012). The Number That Killed Us: A Story of Modern Banking, Flawed Mathematics, and a Big Financial Crisis. New Jersey: John Wiley Sons. Viral , A. V., Richardson, M. (2009). Restoring Financial Stability: How to Repair a Failed System. John Wiley Sons.

I Know Why The Caged Bird Sings Essay -- Maya Angelou

In the novel I Know Why The Caged Bird Sings, by Maya Angelou goes from a little southern black girl who wishes to be a â€Å"a long and blonde haired, light-blue eyed, white girl†, to a very mature young adult that is proud of her race. Throughout ’s (Maya’s) life she goes through many difficulties and triumphs. Some of which a person could never imagine of going through. Maya goes from being a very shy and strange black girl, to a certain and self-confident young woman. In I Know Why The Caged Bird Sings, by Maya Angelou, has to deal with prejudice, rape, and also the issues of abandonment in her course of becoming a mature woman. I Know Why The Caged Bird Sings takes place in the 1930s to the 1940s. During this time period Blacks were discriminated against. Being a child in this period, Maya experiences how difficult life is with prejudice people. For example, with all the discrimination going on, Maya wishes to be a white girl. She says â€Å"Wouldn’t they be surprised when one day I woke out of my black ugly dream, and my real hair, which was long and blond, would take the place of the kinky mass that Momma wouldn’t let me straighten? My light-blue eyes were going to hypnotize them.....Then they would understand why I had never picked up a Southern accent, or spoke the common slang, and why I had to be forced to eat pigs’ tails and snouts. Because I was really white and because a cruel fairy stepmother, who was understandably jealous of my beauty, had turned me into a too-big Negro girl, with nappy black hair, broad feet and a space between her teeth†. She experiences how mean an d harsh white people are to the black people. For example, Maya saw her grandmother â€Å"Momma† be insulted by a bunch of â€Å"powitetrash† kids. They were making fun of how she was standing on the front porch and how she was humming Church songs. After getting bored of mocking her, one of the girls had revealed herself to Momma. Throughout the whole episode Momma stood straight and stiff and kept humming her Hymns. This showed Maya that a black person doesn’t have to always react to what white people say or do towards them. Being strong and showing that a person is not afraid is the best thing to do when being harassed. Momma also contributes to Maya’s maturing by Maya starts to take pride in her race even with all the prejudice. Momma stands up and speaks out to the white dentist, which was... ...a lesbian or not. So, without help from her mother she goes to the first guy she sees and has sex with him. If her mother had not let her alone and guided her through this problem she would never had done this. In doing this she becomes pregnant. This is when Maya really matures and learns that she must grow up. Without any guidance through her life she never knew the difference between right or wrong. All the times that she was abandoned or not guided through her childhood resulted in her getting pregnant. If Maya was never abandoned from her parents and other people then maybe she would have never made these bad choices. During this time period and living in the South, it makes Maya’s life difficult to experience. She grows up very fast and learns about things that a normal child or teenager would not know at this time. She matures quickly by the discriminations, her rape, and being abandoned throughout her childhood. As a teenager, Maya seems to be an older woman becaus e of all the difficulties and the triumphs that she has gone through. Today, kids are growing up very quickly, and they need the help of adults and examples from adults to understand what’s going on around them. I Know Why The Caged Bird Sings Essay -- Maya Angelou In the novel I Know Why The Caged Bird Sings, by Maya Angelou goes from a little southern black girl who wishes to be a â€Å"a long and blonde haired, light-blue eyed, white girl†, to a very mature young adult that is proud of her race. Throughout ’s (Maya’s) life she goes through many difficulties and triumphs. Some of which a person could never imagine of going through. Maya goes from being a very shy and strange black girl, to a certain and self-confident young woman. In I Know Why The Caged Bird Sings, by Maya Angelou, has to deal with prejudice, rape, and also the issues of abandonment in her course of becoming a mature woman. I Know Why The Caged Bird Sings takes place in the 1930s to the 1940s. During this time period Blacks were discriminated against. Being a child in this period, Maya experiences how difficult life is with prejudice people. For example, with all the discrimination going on, Maya wishes to be a white girl. She says â€Å"Wouldn’t they be surprised when one day I woke out of my black ugly dream, and my real hair, which was long and blond, would take the place of the kinky mass that Momma wouldn’t let me straighten? My light-blue eyes were going to hypnotize them.....Then they would understand why I had never picked up a Southern accent, or spoke the common slang, and why I had to be forced to eat pigs’ tails and snouts. Because I was really white and because a cruel fairy stepmother, who was understandably jealous of my beauty, had turned me into a too-big Negro girl, with nappy black hair, broad feet and a space between her teeth†. She experiences how mean an d harsh white people are to the black people. For example, Maya saw her grandmother â€Å"Momma† be insulted by a bunch of â€Å"powitetrash† kids. They were making fun of how she was standing on the front porch and how she was humming Church songs. After getting bored of mocking her, one of the girls had revealed herself to Momma. Throughout the whole episode Momma stood straight and stiff and kept humming her Hymns. This showed Maya that a black person doesn’t have to always react to what white people say or do towards them. Being strong and showing that a person is not afraid is the best thing to do when being harassed. Momma also contributes to Maya’s maturing by Maya starts to take pride in her race even with all the prejudice. Momma stands up and speaks out to the white dentist, which was... ...a lesbian or not. So, without help from her mother she goes to the first guy she sees and has sex with him. If her mother had not let her alone and guided her through this problem she would never had done this. In doing this she becomes pregnant. This is when Maya really matures and learns that she must grow up. Without any guidance through her life she never knew the difference between right or wrong. All the times that she was abandoned or not guided through her childhood resulted in her getting pregnant. If Maya was never abandoned from her parents and other people then maybe she would have never made these bad choices. During this time period and living in the South, it makes Maya’s life difficult to experience. She grows up very fast and learns about things that a normal child or teenager would not know at this time. She matures quickly by the discriminations, her rape, and being abandoned throughout her childhood. As a teenager, Maya seems to be an older woman becaus e of all the difficulties and the triumphs that she has gone through. Today, kids are growing up very quickly, and they need the help of adults and examples from adults to understand what’s going on around them.

Deterrence theory requires punishment

The birth of criminology ended discussions on legal philosophy in the 18th century. Bentham and Beccaria claimed that actions were the result of free will. Deterrence theory requires punishment to outweigh the pleasures derived from the criminal act. This is the underlying rationale by which our present criminal justice system operates. Consideration for biological factors as origin of criminal behavior was proven to be insignificant. Environment was said to play a vital role in such behavior.Heredity accepts it as unavoidable and a consequence of a bad seed most likely making it like a matter of destiny. The major contenders of crime were observed to be both environmental and psychosocial like greed, desire for power, poverty, education and parenting, and population statistics. These factors most likely raised Cain and produced crime. If biological factors were not eminent in the defects of brain waves and genetics consideration for criminology, the prime consideration of crime then is not centered on the person itself but with the sociological factors that have molded character and trait.Human behavioral genetics assumes that all phenomena have a scientific causal explanation exploring the relationship between behavioral genetics and concept of criminal responsibility. It argues that it has little utility in assessing criminal responsibility as a matter of criminal law theory. Behavioral genetics do not support the idea that human actions were caused by genes. Behavioral differences between individuals were brought about by a complex interaction of biology and environment.Heritability as a statistical approximation of genetic differences against environmental differences varies by age, culture, and environment and do not translate behavioral variation into causal explanation. It does not explain the causes of any specific act done by a person. Behavioral genetics studies revealed failure to account 38% to 88% of the observed behavioral variation of the group being studied. These observations will alone limit the introduction and participation of behavioral genetics evidence in criminal cases. Instead it tends to provide an open excuse for criminal responsibility when mitigating criminal liability.Criminal responsibility determines whether and to what extent is the judgement for corrective punishment. It allegedly shifts responsibility to individual characteristics of the defendant and not of the act itself. This is but a part only of a strategic defense in criminal law proceedings. (Coleman & Farahany 2006). Many criminals have relinquished social responsibility. Their lives projects trajectory paths from the inception of their early life. They were an absolute product of misguided conscience of parental abuse and child rearing who lacks caring and education.Intimate face-to-face interactions in early life are crucial in molding a child’s personality and character. Witnessing and experiencing emotionally traumatic events within t he domain of their warring families develops their perpetuation and formation of attitudes towards the world. The experience itself created a platform for determination of self control, discipline, and modes for socially accepted behavior. (Fleisher 1997). These factors are purely social-psychological effects of the economic and environment situation of an individual.Socioeconomic variables account the consequence of the act and of the blame. Crime inevitably involves human action and subjects itself for moral evaluation. Compromising rationality on a behavior’s moral evaluation is entirely not related to the genes of the individual but of the context of the individual’s social environment and values formation. References Coleman, J. & Farahany, N. (2006). Genetics and responsibility: To know the criminal from the crime. Law and contemporary problems. 69 (1-2), 115+. Fleisher, M. (1997). Can we break the pattern of the criminal lifestyle. USA Today. 125(2624), 30+.

A Whole New Beginning

The entrance to the school gate was bursting with pupils, teachers and parents, creaking with the strain of opening and shutting as wave after wave of people came through it. The temperature was 5 degrees Celsius and the grass was still wet and appeared bedraggled from the rain that had fallen last night. The air was so cold that even when you breathed your breath was hot enough to create puffs of steam, and after stepping out of your house because of the cold your face feels like it is freezing up and it starts to get numb. Even though it was this cold there were still groups of people standing outside the gates of a high school. There were groups of children scattered around everywhere, some were new pupils and some were old but they were all in different groups; there were the athletes talking non-stop about the latest football match, the nerds all huddled up talking about if they had done all of their homework over the holidays and comparing answers. The grungers just standing silently listening to their music that would probably want to make any normal person want to kill themselves; the Asian minority groups standing around talking about things that no one can understand because it is being spoken in there native tongue. Some of the older girls were wearing the latest fashion and had put on tons of makeup, and the boys were trying to impress them with their aftershave, and sleek haircuts and a swagger in their walk which they thought made them look cool. Looking around one could see the Year Nines looking excited at being in their second year of high school; they were no longer the new kids and they can now look down on the Year Eights. However, they also appeared apprehensive as they would be choosing their GCSEs for next year. You could also see the year tens pretending to mature even though it is a cover for their feelings of worry because they must start their GCSEs this year, and they know that if they fail then they will have failed life. On the opposite side there were the new pupils, some talking with their friends from their old school about what they did in the holidays and others just hanging about walking back and forth like wound up toys, looking nervous and wondering what their first day of high school would be like, with the few who were hanging about with their parents, hoping that they would not get embarrassed and wanting their parents to leave. In the middle of this all there was a small group of teachers talking amongst them selves and the older teachers welcoming the newer ones into the school. There were some of the new teachers looking around at all of the children trying to figure out which ones were the polite students and which one were the dreadful students(the ones that were any teachers worst nightmares). Suddenly, the school bell rings with a deafening volume and all you can see is all of the children and parents staring as the teachers are first to enter the school. Shortly after the teachers entered the building all of the newer students rush towards the gate hoping to get to their classroom in time so that they are not late. All of the upper school pupils are still standing there and talking, like the school bell has not affected them because they know that there is no point in rushing to get to class because every one will make it; unlike normal school in this school it isn't the students that are late it is the teachers.