Earth Science and Society Essay Example | Topics and Well Written Essays - 500 words

Earth Science and Society - Essay Example From this study it is clear that  geography has been based on physics and astronomy and has focused on both physical and human nature. The other scientific disciples mostly study living things in general. A good definition will entail the study of both non-living and living things on earth and also in space. The strength associated with geography is the ability of connecting all functioning interrelationship which are not usually noticed in simple defined schools of thought. The weakness with geography is that in most cases important facts on causes and effects are usually missed because of holistic understanding. The mentioned strength has made it possible to come up with theories which can be proved to be true, but the weakness has led to generalization of theories which are not necessarily true.According to the report  weather entails the events that happen on a daily basis in the atmosphere such as temperature, humidity and rainfall, and it varies from one environment to the other. Climate basically is the weather pattern of a particular wide area averaged over so many years. A town can experience the day’s weather to be wet, cold and rainy. The climate pattern of Antarctica is always rainy and stormy.  Greenhouse effect is the process by which the atmospheric airs consisting of water vapor, methane, nitrous oxide and carbon dioxide trap the heat from the sun and radiate it back to the surface of the earth.

Economic Development of East Asia

Economic Development of East Asia The East Asia Miracle: Lessons for the developing countries The East Asia region has been drawing global attention as fruits of its growth and development over the past thirty years continuously awe many. The most successful developing countries over the last half century apparently have come form this region. ­Ã‚  [1]  It has a remarkable record of high and sustained economic growth as 23 economies in it grew faster that those in other parts of the world.  [2]  However, when the Asian Financial Crisis hit this region in 1997 some structural and institutional weaknesses have cast doubt on the East Asian Miracle. Hasty recovery and resiliency which the region revealed in fighting off and prevailing over most of the negative drawbacks brought by the crisis was enough to sustain the belief in the miracle. Although East Asian economies applied varying strategies in their economic development, a salient and strong factor common to all is the presence and the role of the government in their development. East Asian countries have assume d a role of a developmental state in which the government played an important hands-on role in the process of industrialization and economic development.  [3]   Thus, understanding the economic development and experiences of East Asia may offer helpful lessons that other developing countries trapped in stagnation may want to consider. According to Thorbecke and Wan (2004) there are two critical factors and corresponding phases of development that occurred in East Asia. First, countries need to reach first a take-off point which emphasizes on promotion of education, to build up on human capital and the promotion of the agricultural sector in order to eventually finance investments on physical infrastructure. The second phase, development calls for industrialization that brings structural and technological upgrading.  [4]   First lesson implied in the first phase of development is that economic development cannot be hurried. There are certain processes that need to be readied before countries reach the take-off point. At the beginning of the development process a country is predominantly agrarian and the economy is relatively closed.  [5]  East Asian governments understood that the major mechanism for obtaining the resources needed to escape the poverty trap and for industrialization was through and inter-sectoral transfer out of agriculture. The major role of the agricultural sector was to generate the necessary capital to finance the outset of the industrialization process.  [6]  The main lesson to be drawn from the experience was summarized by Thorbecke and Morrison cited in the Revisiting East and (South East) Asias development model (2004): A lesson learned from those countries which were most successful in achieving both growth and equity throughout their development history (e.g. Taiwan and South Korea) is that a continuing gross flow of resources should be provided to agriculture in the form of such elements as irrigation, inputs, research and credit, combined with appropriate institutions and price policies to increase this sectors productivity and potential capacity of contributing an even larger flow to the rest of the economy In addition, the East Asian countries invested heavily on universal education with a long-term goal in mind. They spread of education in the rural areas provided farmers and their children the skills they need to operate in non-farming activities after the take-off.  [7]  They sponsored education of technical skills in the college level. This strategy resulted in a very competitive labor force able to man their industries.  [8]   In the second phase, East Asian economies recognized that the international economy is highly interdependent and that a development process of interdependence is much more favorable than individual growth.  [9]  Interaction among countries lets in trade, investment and technology transfer. East Asian economies took advantage of the positive spill over effects the interactions brought with it. It should be noted however that Thorbecke and Wan perceived of openness as a necessary yet insufficient condition for successful development. Catching up though is impossible without openness.  [10]   In an increasingly interdependent world, competition is much potent. To ensure high economic growth rate major structural changes like industrialization should undertaken. Structural changes needed by less developed countries require acquisition of technology. This is a step familiar to East Asian economies. They took advantage of the technology and knowledge transfer by making their countries attractive to foreign direct investments; they became subcontractors of high-tech firms and studied how they can localize the ideas and eventually create their own. Case in point is Taiwan which invested in industrial parks and attracted many foreign firms.  [11]  They acquired technology and idea transfer from joint ventures and foreign direct investments. Policies also played a great role in the development of East Asian economies. Although there are certain differences in the initial conditions for development and growth, economic development and growth pattern that East Asian economies that are common to them also is linked to growth factors and the policy system they adopted.  [12]   East Asian economies have growth led by investments, exports and enforcing of sound policies to support their industries. Moreover, the governments in East Asian countries are very much involved and unhesitatingly intervene in the market-oriented economies.  [13]  The role of the government is to maintain macroeconomic stability, overcome possible coordination failure and act as an intermediary in promoting growth initiations.  [14]  The economic system was based on wide ranging cooperative relationship between government and the local and transnational firms based in their country.  [15]   The industrial policies enforced seek to encourage the development of industries through various government measures such as tax incentives, Research and Development subsidies, credit allocation and protection against foreign imports.  [16]  In addition, the export-oriented industries did not develop without these particular measures of the government to accelerate investment in such industries; provision of infrastructure, universal education.  [17]  The role of the government was mainly to set up institutional policy foundations required for growth and overcoming coordination failures that can stop a the economy from flourishing.  [18]   The Asian Financial Crisis unearthed and exposed certain weaknesses of the East Asian economic model. Weak and inefficient financial systems, lack of corporate transparency and accountability, and widespread corruption became apparent after the crisis broke out.  [19]  This occurrence explicitly calls for constant improvement on institutions in the country which serves as the pillar of economic development. This is a lesson not only for developing countries but for the East Asian economies as well. The East Asia economic development model is applicable to the Philippines to a certain extent. The former policies and steps undertaken needed to be modified to suit the condition of the Philippines. The Philippines can consider setting its neighbors and the East Asia Miracle as benchmark of development and a goal to be achieved. The Philippines always has to remember that East Asian economies started modestly and took advantage and cultivated the initial conditions and resource endowments to their advantage. A step back to reexamine where the Philippines went wrong, why it seems to be experiencing a prolonged period at the take-off stage, would be a humble at the same time brave gesture on the part of the countries leaders. Although it may be too late to shift the focus back on agriculture because of changing conditions, it is still important that the government invest in infrastructure (i.e. farm-to-market roads) and R D as many in the country still rely on agriculture for a living ._ If it is possible that the government nurture the current industries it has and the agricultural sector at the same may be beneficial for the country. The Philippines have a lot of catching up to do, the East Asian miracle may also come true for the Philippines if it would only reconsider some of the policies being implemented and strengthen its institutions that would foster economic development. Sources: Chang, H. The Economic Theory of the Developmental State. 182-199. East Asia Analytical Unit. The Philippines: Beyond the Crisis . Manila: Department of Foreign  Affairs, 1998. Page, John. The East Asian Miracle: Four Lessons for Development Policy. NBER  Macroeconomics Annual, 1994: 219-269. Park, Jong. The East Asian Model of Economic development and developing countries.  Journal of Developing Societies, 2002: 330-335. Sakurai, Makoto. The Sustainable Development of East Asia and accompanying issues.  Economic and Social Research Institute, 2003. Thorbecke, E, and H Wan. Revisiting East and (South East) Asias development model. Cornell Conference on Seventy five years of Development. New York, 2004. 1-38. Wade. Lessons from East Asias Development Experience. 2005.

The Effects of Domestic Violence on Children Essay -- Violence Against

How does domestic violence between parents and parental figures affect the children who witness it? This is a question often asked by Sociologists and Psychologists alike. There have been studies that prove that children who witness domestic inter-parental violence experience mental health problems, issues with gender roles, substance abuse, the committing of crimes and suicide/suicide attempts later in their lives. This paper will explore all five of these 'effects' of domestic violence on children and show that there is evidence of a clear relationship in which increasing parental violence is associated with increasing outcome risks (Fergusson & Horwood, 1998, p.8). When a child witnesses domestic abuse it can have many different effects on the child. From my research I found that one of the most common effects on the child were mental health problems. In one study, conducted in New Zealand, young people that reported high levels of exposure to inter-parental violence had elevated rates of mental health problems (Fergusson & Horwood, 1998, p.1). Some of the least severe mental health problems included anxiety, inability to focus, and nightmares (Brescoll & Graham-Bermann, 2000, p.2). But these problems, which appear to be less severe, can also be the symptoms of Post Traumatic Stress Disorder (Brescoll & Graham-Bermann, 2000, p.2). In a study conducted in 2001 the results indicated that higher levels of symptoms indicative of post traumatic stress were associated with children who have witnessed domestic violence (Hill & Nabors & Reynolds & Wallace & Weist, 2001, p.1). ?Children who have witnessed domestic violence are more likely to develop sy mptoms associated with Post Traumatic Stress Disorder; that is, high levels of an... ... The Journal of the American Medical Association, 286, Retrieved February 10, 2002, from Expanded Academic ASAP database. Brescoll, V., & Graham, S.A. (2000). Gender Power and Violence: Assessing the Family Stereotypes of the Children of Batters. Journal of Family Psychology, 14, 600- 612. Retrieved February 13, 2002, from PsycARTICLES database. Fergusson, D.M., & Horwood, L.J. (1998). Exposure to Interparental Violence in Childhood and Psychosocial Adjustment in Young Adulthood. Child Abuse & Neglect, 22, 339-357. Retrieved February 17, 2002, from Science Direct database. Hill, T.F., & Nabors, L.A., & Reynolds, M.W., & Wallace, J., & Weist, M.D. (2001). The Relationship between Gender, Depression, and Self-Esteem in Children who have Witnesses Domestic Violence. Child Abuse & Neglect, 25, 1201-1206. Retrieved February 12, 2002, from Science Direct.

BPR and Enterprise Systems

Some of the factors that a process engineer should take into consideration when designing a BPR project includes the following; first of all the project engineer should consider developing a decision making framework, which should be relevant at the very initial stages of the project in relation to the project requirements and objectives as well as goals. The framework is the most important tool, which will be used through the whole life of the project.This factor is unique to the BPR projects as it is not taken into consideration in establishing the ERP projects (Portougal and Sundaram p13-150). The second factor is the recruitment of recognized individuals, who should be recognized persons from the various departments that they represent. These leaders will be required to participate in the various aspects of the project, especially the selection and implementation phases of the project.This is important as it will encourage free flow of information in carrying out the projects. Th e third factor is that, the engineer should take into consideration to the project management as well as planning measures, to ensure that innovation advances are encouraged in carrying out the project as well as avoid unnecessary project expenses (Harmon, Rosen and Guttman, p52-67).The fourth factor the engineer should consider should be the use of consultants as, well as the decisions of the peers where a given proportion of the project is assigned to the outsiders to encourage the application of new knowledge skills which will improve the project. Finally, among other considerations the project engineer should consider developing a kind of special office environment which will be deciced to the project team.So as to improve on the performance of the project, the engineer should consider the training programs which will enable the project team members to improve on their performance skills. Some of the factors that are considered to be unique in relation to the BPR projects, when considered with the other projects are that the process is carried out as a continuous process, whereby evaluations are carried out on a regular basis to improve on the areas with display some forms of difficulties (Portougal and Sundaram p13-150).Some of the problems encountered while undertaking the BPR projects include the organizations failing to offer the necessary support in carrying out the projects; many of the projects fail to take off well in cases where the organizational resources are not dedicated in carrying out the projects. In such situations, the management of the project does not carry out strategic planning activities, which will seek to establish the market focus for their project.In relation to that, the project may have been initiated by the wrong people or in the wrong department in the organization, which does not initiate the management of the organization to dedicate its resources as they feel they may lose in the process (Harmon, Rosen and Guttman, p52-67) . The other difficulty experienced in carrying such kind of projects is that the work groups, which are involved in carrying out the project activities lack inspiration, as well as innovation tactics in carrying out the projects, and this are the most important requirements for the success of the projects.This can be caused by the management of the organization as well as that of the project injecting too much pressure on the project members, and also the participants would lack the needed knowledge and skills to carry out the project activities. On the other hand, there are problems in cases where underestimations are made in relation to carrying out the project activities. In any BPR project, there is usually social career as well as the procedural dimension which need to be carried out to ensure that the project is successful.The problem in this area arises as to the management of the human aspects, which involve change that is usually comprehensive to manage as compared to other environmental changes (Portougal and Sundaram p13-150). To address the issue of support from the organization when carrying out the BPR projects, there is need for the management of the organization to come up with ways in which they allocate the resources of the company towards the projects by developing budgets before the projects are implemented.So as to ensure the project members will carry out their project activities well, the training programs should be used to initiate competency in the project members. To improve their morale to work, they should be compensated according by initiating a number of remuneration packages that will be of benefit to the project members. Considering that the management of change is an issue in carrying out the BPR projects, it is important for the management of the organization to initiate flexible management structures, which would initiate a culture of change within an organization before the projects are undertaken.In doing so, the project me mbers will find it more ease to adapt to changes in the project activities, as they will have been used to a culture of change (Langer, p268-230). Given that most of the projects fail as a result of inefficiencies in the management functions, the is need for the management of the organization and that of the project to carry out strategic management activities before and as they carry out the project activities. This is to ensure that the uncertainties in the future of the project are dealt with in a more efficient way.The advantages of carrying strategic planning activities is that they enable an organization to handle its strengths and weaknesses as well as the emerging business opportunities at the market place and in that way could be able to come up with effective strategies. This will enable the project management team and the organization to utilize their potential in achieving project success with the limited resources (Harmon, Rosen and Guttman, p52-67). In carrying out BPR projects they are usually a number of tools that can be used in carrying out the requirements of the project.One of these tools includes the use of the IT architecture. In using this instrument a number of packages have been developed which could enable the user to carry out the different aspects of the project, which include process analysis to redesigning as well as project modelling. The tool enables the organization to determine the difference between the level of work required to be carried out in a given project, and the ways in which the difference can be narrowed so as to achieve the objectives of the project.Despite the tool being useful to the organization, it seems to a complex technique in carrying out the project activities and sometimes could act as a hindrance to the various project activities, which could affect the general results off the projects. The challenge which comes from the use of this tool is that it demands that the decisions of the project needs to be m ade early enough, so as to make the necessary adjustments as the project progresses and within a limited time period (Langer, p268-230).So as to deal with this major challenge in the use of the IT architecture, there is need to simplify the technique so as to enable the project members to implement its use with ease. In addition to that, early planning measures need to adopt. Some of the common goals that are aimed at in carrying out the BPR and enterprise systems involve; analyzing as well as suggesting ways in which the organization can be able to improve on it most critical business activities, which form part of the organizational structure.This is all intended at increasing the general performance of the organization, so as to create value for the various stakeholders of the organization (Langer, p268-230). The second most important goal relates to the successfully coordinating the various resources of the organization such as its hardware, software and many others so as to mak e them be in line to the organizational culture thus achieve an optimally functioning organization system.Some of the similarities between the BPR and the enterprise system are that, they both are focused towards initiating change in the organization, which will eventually improve on the performance level of the organization. The main difference between the two approaches is that the process orientation in the two is totally different. In BPR, the manner in which change is initiated is through innovations and also encompassing of knowledge which has been used in the past, whereas for the enterprise approach such measures are not taken into consideration (Langer, p268-230).BPR is considered to be more suitable especially if it is done in appropriate manner in carrying out organizational change, which is one of the ingredients needed to create value for the customers. On the other hand, the BPR projects can involve the customers in initiating the creation of value thus end up engaging the organizational members in activities that will seek ;to establish a competitive advantage for the organization (Harmon, Rosen and Guttman, p52-67).The enterprise system is more suitable in situations where trade offs need to be made between the various project techniques that need to bring about change in the organization under various situations (Harmon, Rosen and Guttman, p52-67). References Portougal, V, Sundaram, D. Business processes: operational solutions for SAP implementation. Idea Group Inc (IGI), 2005. Harmon, P, Rosen, M and Guttman, M. Developing E-business systems & architectures: a manager's guide. Morgan Kaufmann, 2001. Langer, A. Analysis and Design of Information Systems. Springer, 2007.

Chance & Story Essay

In third grade through sixth, I had a friend named Chance. We were best friends and often spent long days and nights over at each other’s house. Whenever I stayed at Chance’s, the house was filled with noise from the two of us and his six brothers and sisters. Chance’s family was Mormon, a religion that my family knew nothing about except the name. He once explained why his family was so large, but it made little sense to me at that time. During the summer between sixth and seventh grade Chance’s family moved away to Utah. I’ve learned a bit more about Mormons since but this assignment offered me an opportunity to learn more about the religion of my friend and how Mormons feel about how they are perceived in the United States, especially concerning the law and discrimination. Chance’s family was only one of many Mormons in my town and surrounding areas. Patty is a good friend of mine who attends the Mormon church in town since she was a baby, so through her I was able to find three people to interview. Her parents were not available, but she introduced me to a Mormon missionary Brian, a neighbor Barbara, and Chris, her mother’s home- teacher. Brian is twenty years old and is originally from Nova Scotia, Canada. He is currently nearing the end of his Mormon mission, which is a semi-required two year work for Mormon young men to an area chosen by the head church in Salt Lake City, Utah. He had just graduated high school when he began the training for the mission. His mission is to go door to door in the neighborhoods to share his beliefs and teach anyone interested about the basics of the church. Barbara is also not originally from this area. She was born and raised in Provo, Utah, which is where the Mormon university Brigham Young is located. She moved here ten years ago when her husband’s job transferred. She is forty-three years old, has five children between six and fifteen, has a college degree from BYU in marketing but doesn’t currently work outside her home, and has been married for twenty-three years. Chris is from this area and has lived here all of his fifty-six years. He is an elder at the church, has four children and sixteen grandchildren so far, works as a machine repairer, and volunteers for the church as a home-teacher in which he regularly visits church members for further teaching about the church. Having such different subjects to interview proved very interesting. Each shared that they have dealt with some sort of discrimination in their lifetimes as Mormons. They all indicated that the problems are rarely very serious and never violent, but are more subtle. Barbara notices the negative attitude towards Mormons most of the three because she lived for so long in Utah, which is heavily populated with Mormons, especially where she lived in Provo. She said that when the family moved, she was surprised to find that there are people who still believe Mormons are the many-wives religion. One woman at her children’s school even asked once if Barbara was one of several wives of her husband. Neither Brian nor Chris said that they have had this problem. Brian said his problem is more centered on his mission work. He has often heard people say ‘there go the two-by-twos. ’ The missionaries work in pairs, so he said the term stuck. For the most part, he says people are friendly towards him and often comment that Mormons are the nicest people they know, but very few choose to actually discuss the church’s teachings. Instead Brian and Chris both said that most people are interested in if Mormons are a cult that traps unsuspecting victims. Barbara also said this is something people have asked in round-about ways such as through her kids. All three said that it is often frustrating the poor view that they feel the majority of Americans have toward the Mormon Church. Barbara and Chris’s children mostly have other Mormon friends, and those that are not Mormon are seldom allowed to attend activities organized for the Mormon youth such as dances, outings, or sport activities if they are to be held at the church. They say that no one has said directly why the kids can’t attend, but all three believe that it is related to the negative view of the church. They all also indicated that any issues that arise are always social in nature, that they have never had a problem with employers or the law regarding discrimination. Interestingly, as I interviewed each person, I found myself also curious about the ‘oddities’ of the Mormon church. When Barbara mentioned the many-wives idea, I wanted to know more about it. So I was doing exactly what the three had said most people do: expressing curiosity about the strangeness instead of the good qualities of the church or its teachings. However, I did learn quite a bit about the basic structure of the church, why it is based in Utah, and how Mormons view the world and the after-life. Since the problems that Mormons experience are almost always social, it is a matter of slowly changing the public’s view of the church. Chris believes that the commercials the church has put on television have gone a long way in changing perceptions about the church. Brian said that attitudes are better in Canada towards the church most likely because it started in the USA, where it experienced a lot of discrimination in its beginnings. So it is a matter of time and continued sharing for the Mormon Church to be recognized as a legitimate religion and not as a cult.

Definition of Majority Opinion for the Supreme Court

Definition of Majority Opinion for the Supreme Court The majority opinion is an explanation of the reasoning behind the majority decision of a supreme court. In terms of the United States Supreme Court, the majority opinion is written by a justice selected by either the Chief Justice or if he or she is not in the majority, then the senior justice who voted with the majority. The majority opinion is often cited as precedent in arguments and decisions during other court cases. Two additional opinions that justices of the US Supreme Court might issue include a concurring opinion and a dissenting opinion. How Cases Reach the Supreme Court Known as the highest court in the nation, The Supreme Court has nine Justices who decide if they will take a case. They use a rule known as the Rule of Four, meaning if at least four of the Justices  want to take the case, they will issue a legal order called a writ of certiorari to review records of the case.  Only about 75 to 85 cases are taken per year, out of 10,000 petitions. Often, the cases that are approved involve the entire country, rather than individual people. This is done so that any case that can have a large impact  that can affect a significant amount of people, such as the entire nation, are taken into consideration. Concurring Opinion While a majority opinion stands as the judicial opinion agreed upon by more than half of the court, a concurring opinion allows for more legal support. If all nine justices cannot agree on the resolution of a case and/or reasons that support it, one or more justices can create concurring opinions which agree with the way to solve the case considered by the majority. However, a concurring opinion communicates additional reasons for reaching the same resolution.  While concurring opinions support the majority decision, it ultimately stresses various constitutional or legal basis for the judgment call. Dissenting Opinion In contrast to a concurring opinion, a dissenting opinion directly opposes the opinion of all or part of the majoritys decision.  Dissenting opinions analyze legal principles and are often utilized in lower courts.  Majority opinions may not always be correct, so dissents create a constitutional dialogue about underlying issues that can involve a change in the majority opinion. The main reason for having these dissenting opinions is because the nine Justices commonly disagree on the method for solving a case in the majority opinion. Through stating their dissent or writing an opinion about why they disagree, the reasoning can eventually change the majority of a court, causing an overrule over the length of the case. Notable Dissents in History Dred Scott v. Sandford, March 6, 1857Plessy v. Ferguson, May 18, 1896Olmstead v. the United States, June 4, 1928Minersville School District v. Gobitis, June 3, 1940Korematsu v. the United States, December 18, 1944Abington School District v. Schempp, June 17, 1963FCC v. Pacifica Foundation, July 3, 1978Lawrence v. Texas, June 26, 2003

The Psychology of Deceit

The Psychology of Deceit Hashtag: #TypicalLies The Psychology of Deceit Everyone lies but the rate, objective, and extent of those lies vary among people. Many #TypicalLies are attempts to avoid punishment and they emerged during childhood (â€Å"No mom, I did not eat any cookies†) and continue into adulthood (â€Å"Officer please, I was only driving maybe 1 or 2 miles per hour over the speed limit†). People lie for many different reasons and the most typical include exploratory lying, bragging, make-believe, and cover-up. However, lies that aim to mislead or cover-up are the most serious and become more sophisticated as people get older. The study shows that majority of people lie to cover up past misdeeds or attempts to get out of some unpleasant situation. Some people lie through facial expression such as hiding their anger, fear, sadness, and distress through a smile. In fact, increased blinking, blushing, blanching, and facial sweating are signs of lying. White lies are falsehoods but often not intended to harm anyone. For instance, if your grandmother asks, â€Å"Did I knit your sweater too big?† most us might reply, â€Å"Oh, it’s perfect, I love roomy sweaters† just to avoid hurting her feelings. Similarly, we lie to uplift other people’s spirits through flattery such as â€Å"You look so sexy in that dress† to boost her confidence about the weight loss program. Intentional false statements are a moral issue but most people believe that trivial lies are beneficial. In fact, study shows that academic dishonesty in the form of white lies, altruistic lies, and trick lies are common in schools. Related articles: College Students Why Students Hate Monday? Why Some Students Hate Their Teacher? Students Right to Conscientious Objection   Helping Autistic Students Shine in Mainstream Classroom   White Lies in the Classroom â€Å"Do you understand?†Ã¢â‚¬ ¦Ã¢â‚¬ Yes, mam!† Lying is a common occurrence in the classroom, as students tend to avoid social losses by hiding the truth. However, the most typical are lying about his or her understanding of the lesson, the real reason for not doing the assignment, and respond over an irritating reprimand with a poker face. Some students lie to avoid getting into trouble or doing additional tasks thus often responding with a â€Å"Yes Mam!† rather than telling the truth of his or her lack of knowledge. Similarly, it is far more convenient for students to lie about his assignment than to admit that he spent the night out with friends. Most students, regardless of rage over teacher’s reprimand respond with silence and a poker face. This according to the study of students learning and classroom behavior is the negative result of reinforcing classroom teaching with punishment. Punishment produces a rapid and significant behavioral effect and although such reinforcement can result in permanent suppression of potentially injurious behavior, it can lead to aggression, escapes, apathy, abuse, and imitation of those who punished them. An infuriated student with a poker face is trying to escape or avoid the source of punishment by cheating and lying about his true feelings. Similarly, a student saying ridiculous excuses like â€Å"The dog ate my assignment† or copying someone else’s homework is escaping the punishment by lying. Other students’ escape tactics include flattery, crying, and showing remorse. However, it is important to note that aggression becomes a viable alternative to cheating and lying when escape is no longer possible. In fact, aggression becomes all too common and not always directed to the source of injury such as vandalizing valuable school property and shooting rampage in worse cases.

Recognizing an unhealthy work environment

Recognizing an unhealthy work environment When it comes to our professional lives, most of us have a clear hierarchy of needs, including a viable salary, acceptable benefits, and responsibilities that align well with our abilities. After all, we spend so much of our lives at work (nearly 90,000 hours over our lifetimes, according to a recent Business Insider article) that it stands to reason that our core needs and wishes should be met in order to make it all seem worthwhile. But all too often, having a healthy and productive environment doesn’t make the list of priorities when we think about what’s really important for us to be satisfied at work- and that’s a real miss when thinking about your overall career happiness. Need some convincing? Forbes recently reported that â€Å"a toxic workplace environment will overtake the culture of any organization, interfering with employee performance, destroying relationships and demotivating top performers. It is important to understand your organization’s exposure to such an environment so that strategies are implemented to either eradicate or mitigate its effects.†The question that likely remains for many of you is this: Am I stuck in an unhealthy work environment? Good question- and don’t be ashamed if you don’t have a clear answer. The truth is, it can be hard to tell what’s unhealthy and what’s normal and acceptable in a high-pressure, high demand modern workplace, in which â€Å"doing more with less† is the new normal. But don’t worry, we’re here to help you figure out what side you’re currently on. Use the following indicators to determine if you’re currently in an unhealthy workplace.Monitor the avoidance factorDo you find yourself regularly going out of your way to avoid both people and situations at work? If so, then chances are you’re working in an environment with some real unhealthy elements. These can include everything from toxic coworkers to a n unsavory and insincere corporate culture that’s misaligned with reality.The effects are similar: you dread going to work in the morning and can’t wait to leave at the end of the day. Many folks tend to take a â€Å"bare minimum† approach to their jobs when in this sort of unhealthy environment- they do just enough to squeak by and stay under the radar. The result? They often deny themselves the ability to evolve in their positions. Staying in a job like this is not a formula for career satisfaction and positive growth.Do a regular office â€Å"mood check†Most of us make it a point to check the weather each day before we head out to work, but not nearly enough of us stay on top of our â€Å"mood temperature.† An unhealthy work environment often has an unfortunate trickle-down effect on people’s moods, which makes it a great diagnostic tool for determining if your workplace has problems.Everyone from top management to their direct reports on down through the organizational chart can feel the impact of an unhealthy environment. If the overall mood of your colleagues (or a few key personnel who have a significant impact on others) is more â€Å"doom and gloom† than â€Å"happiness and sunshine,† you better believe that this has a significant impact on the company’s productivity, employee turnover, and long-term success.Beware of negative spillover into your personal lifeThe unfortunate reality is this: what happens at work doesn’t always stay at work. On top of encroaching on your personal time (if you choose to spend more hours working than you’re required to), the effects of an unhealthy workplace can spill all over the rest of your life.According to a recent Psychology Today article, â€Å"If you are so miserable at work that you find yourself miserable at home, in your relationships and with your hobbies than your toxic professional life is seeping into every other aspect of your l ife. You may find yourself constantly talking about work and complaining about your boss when you should be enjoying your time off. Eventually, your loved ones will become tired of your negative talk and complaining, and your personal life will take a major hit.†If this sounds all-too-familiar to you, then you’re likely in an unhealthy work situation and may warrant taking a closer look.If you’re curious about whether or not you’re currently in an unhealthy work environment, do a serious self-assessment using the information provided here to help diagnose your workplace. If you find more negative than positive, consider taking active steps towards either improving your satisfaction and happiness at work, or finding a new job that will meet your needs.

Combined joint task force-horn of Africa Research Paper

Combined joint task force-horn of Africa - Research Paper Example Terrorism has been one of the key issues in countries such as Yemen, Djibouti, Sudan, Ethopia, Eriteria, Somolia, and Kenya, commonly known as Horn of Africa. Lot of efforts and key strategies have been formulated over a period of time to counter this menace One such effort to combat terrorism was the establishment of a Combined Joint Task Force which was formed to address the issues of terrorism in Horn of Africa.The paper understudy is aimed at giving an overview of this task force and its operations typically in Kenya The paper understudy is aimed at giving an overview of this task force and its operations typically in Kenya with a view to address the efforts launched in by this team in combating and reducing terrorist activities. Moreover, it also accentuates on the manner in which the contribution of Kenya with respect to war on terrorism has attracted the United State’s attentions and interest in the region. The establishment of Combined Joint Task Force - Horn of Africa took place on 19  October, 2002  (Combined Joint Task Force- Horn of Africa, 2011)  in North Carolina under the oversight of United State Central Command. CJTF - Horn of Africa conducts operations in East Africa, namely in Yemen, Djibouti, Sudan, Ethiopia, Criteria, Somalia and Kenya to build and foster an effective counterterrorism partnership. This was done to promote regional security, ensure stable conditions within the horn of Africa AOR, oversee conflict and dispute prevention, and safeguard and protect the interest of the United States and its allies. Prior to the creation of the CJTF – Horn of Africa, Kenya was plagued by rampant, unchecked terrorism that had impacts within the local, regional and global theaters. Once established however, Kenya’s ability to combat terrorism within the horn of Africa AOR bolstered dramatically.  Ã‚   The discussion of CJTF - Horn of Africa would remain incomplete without its role in Kenya which holds a very substantial and significant place in the war against terrorism. Many experts have regarded Kenya as a harbor of increasing terrorist activities and branded it as a helpless state victimized by waves of terrorism throughout the country. In 2003 the Government of Kenya accepted that western countries had been targeted by a possible member of the Al Qaeda network, affirming the potential of Al Qaeda operating within national boundaries. Beginning with a bombing attack on the American Embassy  (Ploch, 2011), the country’s capital showed signs of terrorist activities as far back as 1998.  Ã‚  The acknowledgement from government however, came very late. Since then, Kenya has become a regular victim of groups having international terrorism expertise. Further investigation determined that poor immigration laws and security legislature have greatly contributed to  the terrorism flourishing in the region. The cells in Kenya were completely under control by foreign groups from within the Gul f States and Somalia.  Ã‚  These groups eventually involved locals, helping them to establish their businesses and using these as fronts for their networks. The leaders of these Kenyan Cells were found to have connections with the Al Qaeda network and disappeared soon after the attacks on the US embassy. The government, in cooperation with FBI, then made endeavors to destroy these Al Qaeda controlled cells in various parts of country, including arrests in July and November of 2001 of Yemeni and Somali people.  Ã‚  Despite of all these efforts, the situation in Kenya never fully regained control and an Israeli airliner was shot down in Mombasa in  2002. The investigation led to another connection with Al Qaeda and revealed terrorist control over major elements of the national security system, as evident by their transportation of surface-to-air missile which was fired at an American military jet at the Prince Sultan Air Base in Saudi Arabia  (Menkhaus, 2011). After this devel opment, the Kenyan government officially acknowledged the

The physiology of anhydrobiosis Essay Example | Topics and Well Written Essays - 1500 words

The physiology of anhydrobiosis - Essay Example The following critical discussion will detail the process of anhydrobiosis and the means by which organisms affects it within a chemical sense. Further, distinct differentials of this process will be discussed as well as the stages of growth, dormancy, and re-animation that it involves. The process of anhydrobiosis can be briefly defined as a process whereby organisms purge themselves of liquid water and slow respiration to the point of near stasis; as a means of surviving environmentally challenging situations for a very long period of time. As a function of seeking to understand and define this process to a greater degree, the following discussion will represent the ways in which this process takes place within various organisms and describe the chemical changes that facilitate the anhydrobiotic process to begin and to end. One of the most interesting aspects of the evolutionary process has to do with the fact that it is oftentimes currently represented within existing metabolic processes. One of these processes is what is known as â€Å"anhydrobiosis†; or life without water. Whereas the definition that has been given is somewhat flawed, due to the fact that even within organisms that do experience certain degrees of anhydrobiosis – a very small percentage of water is still evident, the process itself allows for a variety of different organisms to adapt and continue to survive environmentally challenging periods of time; periods that are invariably categorized by very low levels of available water (Womersley, 1981). This process in turn allows for the nut, seed, pollen, spore, or nematode to go into a state of dormancy until liquid water returns to its native environment and it can once again begin the process of cell respiration as it had prior to going into anhydrobiosis. As a function of critically analyzing this particular process and discussing some of the compote and molecular

Computer Literacy Coursework Example | Topics and Well Written Essays - 1500 words

Computer Literacy - Coursework Example By means of comparison, it must also be understood that even though personal computing has taken on a life all its own throughout the past several decades, the uniformity of computing has not yet existed. This is of course due to the fact that rapid shifts in technology, growth in hardware, software, and the development of faster processors and lighter weight computing devices have slowly shifted the market away from tethered desktops and PCs towards the era of mobile computing. As a direct result of this shift, tablet computers, to include a litany of different manufacturers and operating systems, have begun to define the way in which personal computing and professional applications are run. As with any trend, the rate and extent to which businesses can integrate with the recent shifts in tablet use and employees with regards to business operations will have a direct effect with regards to the growth and relevance of whatever firm or entity pursue such a path. Accordingly, the follo wing analysis will engage the reader with an understanding of analyzing the benefits and risks of deploying tablet computers within organizations; specifically focusing upon issues related to productivity, accessibility, and compatibility. Is the further hope of this author that such a level of understanding will provide a more broad and nuanced level of appreciation for the way in which mobile computing is slowly but surely changing the face of the world with regards to the way in which business is conducted. Although no specific business will be held as a test case, the broad rationale for this is with regards to the fact that focusing upon any special business would necessarily reduce the applicability of the analysis with regards to any other firms might seek to utilize this information. Productivity Concerns: Firstly, it must be understood that the benefits of deploying tablet computers within organizations is necessarily the added benefit of providing rapidly accessible inform ation to the stakeholders in question (Baltzer, 2013). Even though it has thus far been determined that no specific industry will be analyzed, whether or not a given organization is performing a service industry or directly integrating products with the consumer, the ability to rapidly engage with information and presented, either in a sales or service type format, has a direct level of bearing with regards to the relevance and power of engagement that a given firm could display (Lowry, 2009). Rather than necessitated placing an individual in a queue while the customer service representative more stakeholder retrieves the information, the use of tablet computing would allow more rapid integration with this individual; thereby increasing representative would be able to handle a higher volume of inquiries and information on a daily basis (Choi et al., 2013). This of course has a direct level connotation with regards the overall volume of business and can be conducted in the overall le vel of profitability that the firm can seek to accrue during the course of normal business day. Accessibility Concerns: Further issue with regards to t

Samurai Essay Example | Topics and Well Written Essays - 3000 words

Samurai - Essay Example The samurai has played an important part in Japan's record and traditions all over the centuries. Some narrations show samurai as legends who have played a very important role in developing Japan. This research would further describe the origins of samurai, who they were, how they came into being, their way of living, their standards and their importance in the world today. It will illustrate the significance of samurai in the history of Japan and why they are still known as great soldiers of their times. In the earlier times of Japan the battles fought are known to take place in the starting centuries of the AD. The wars that took place in these centuries show that many of the Japanese soldiers at that time crossed the sea to Korea to assist one empire who was having a battle with two other empires consequently. It is recorded that four hundred or above men left for the battle but were easily beaten up by the enemy because of the heavy armor which the enemy had. These four hundred men fought on foot while the enemy rode on horses. At this time the Japanese were unknown of the usage of horses in wars but after the century passed it is evident that horses were also used in the history of Japan by warriors who later were known as samurai. Samurai is a word which was used in the 10th century and the exact meaning of samurai is "those who serve". When the word samurai was derived, it was used mainly for men who defended the capital for the king. At times the people who collected tax were also known as samurai. Afterwards the person who joined military or the person who served any influential landlord was known as the samurai. These samurai used to travel on the horses and at times used to collect taxes from the peasants. This money was then given to the landlord or the emperor by the samurais and was later on used by them for their luxurious way of living. The word samurai made its ground in Japans history and it became quite known to the common people who started to value or dread the samurai. Later on the samurai became famously known for their strength and were used by the rich people to protect their land and wealth. As the land was a source of income for the rich people, they started to keep armies of samurai to protect their lands from intruders. In due course many of the rich people joined hands together and formed clans which ultimately became even more powerful than the ruler of Japan. Later on in the 12th century two of the influential clans (Minomoto and Taira) fought a battle in which the clan of Taira won. But after some years the Minomotos who had escaped from the battlefield came back to fight with the Taira clan. A battle took place between the Minomotos and Taira clans and this battle is known as the Gempei war. This battle however was successfully won by the other clan this time i.e. Minomotos. After the battle the ruler made Minamato Yoritomo shogun the chief of the armed forces. However Yoritomo was not satisfied with the power he got and soon he took o ver from the emperor and declared himself as a dictator. The new dictator gave a new foundation to the samurai and raised their position by giving them land. Gempei War marked an important step for the existence of the samurai. The battles fought during the war put the samurai to a position which was respected and honored. This respect and honor for the samurai is still known and will last forever. The

See instructions Research Paper Example | Topics and Well Written Essays - 750 words

See instructions - Research Paper Example With its fastly growing population rate and sprawling cities, economic disparity between the social classes is increasing. Moreover, the high population growth poses several other problems to development including poverty, living conditions, health, social progress, and most importantly economic progress. Although Brazil has always been â€Å"bullish† about their population rise (Merrick, 1976), it is true that its population is constraining its economic development. Despite its high incomes and drop in unemployment rates, Brazil still struggles to keep economic inequality to a low level. Income inequality is high and these are reflected in the historical trends that show an unequal distribution of wealth and resources among the rich and the poor. There are much evidences to show that income inequality has detrimental impacts on the economic growth and development of a particular country. These factors go beyond the usual effect on poverty but relatively more important is that fact that it essentially curbs growth (Meier and Rauch, 2000). Although Brazil’s economy is apparently doing well with high incomes and a decline in the unemployment rates however these figures are not good determinants of its general well being (Baer, 2001). Historical figures of income distribution suggest that a high percentage of the income goes to the pockets of the rich while the poor only get a small share of the income. Coupled with the increasing population, economic disparity is increasing among the people. Moreover, the migration from rural to urban areas of Brazil has created severe health and sanitary problems. It is pleasing to see, though, that Brazil has made rapid progress since the Great Depression in the 1930s in terms of demographic transformation (Baer, 2001), to doing spectacularly well between 1968-73 during the Brazilian Miracle

Division and Classsification Essay Example | Topics and Well Written Essays - 1250 words

Division and Classsification - Essay Example the wedding planners and participants such as the Groomsmen, best man, Bridesmaids, flower girls among others; however, these are not guests because of their roles. Decisively, most people have attended weddings and observed the type of different guests there based on their behavior, contributions in certain areas and their dialogue. There is certain group of guests that one can point out in almost every wedding ceremony no matter how carefully or executive the couple does the event planning. Some of the brides complain that most of these guests are from the groom’s side of the family but even some are from the bride’s side and there is no single person to blame. Comparatively, this essay focuses on evaluating and analyzing the different types of guests commonly found in weddings based on behavior, reception by the other guests, dialogue and other unusual traits. Relatives are probably the first people on the guest list of every wedding because they are the most supportive. However, in every group of relatives there is that one person who is either incongruous or random based on their dialogue around other guests and behavior around the couple. The random or inappropriate has very poor social skills because they say anything that comes to mind and to anyone. Additionally, they tend to sit around people that they have nothing or very little common with, which makes them inappropriate and weird; their conversations are out of place and generally painful, matter of fact, very people opt to sit the next to them, especially the relatives. The only time the inappropriate relatives are fun is when they meet with the group of the couple’s friends that likes to party; however, they are only hilarious to these friends when they are all drunk. Remember the only reason that they attend the ceremony is because they overheard people talking about the wedding and decided to attend. Most of the time, they are introduced to the couple during the

See instructions Research Paper Example | Topics and Well Written Essays - 750 words

See instructions - Research Paper Example With its fastly growing population rate and sprawling cities, economic disparity between the social classes is increasing. Moreover, the high population growth poses several other problems to development including poverty, living conditions, health, social progress, and most importantly economic progress. Although Brazil has always been â€Å"bullish† about their population rise (Merrick, 1976), it is true that its population is constraining its economic development. Despite its high incomes and drop in unemployment rates, Brazil still struggles to keep economic inequality to a low level. Income inequality is high and these are reflected in the historical trends that show an unequal distribution of wealth and resources among the rich and the poor. There are much evidences to show that income inequality has detrimental impacts on the economic growth and development of a particular country. These factors go beyond the usual effect on poverty but relatively more important is that fact that it essentially curbs growth (Meier and Rauch, 2000). Although Brazil’s economy is apparently doing well with high incomes and a decline in the unemployment rates however these figures are not good determinants of its general well being (Baer, 2001). Historical figures of income distribution suggest that a high percentage of the income goes to the pockets of the rich while the poor only get a small share of the income. Coupled with the increasing population, economic disparity is increasing among the people. Moreover, the migration from rural to urban areas of Brazil has created severe health and sanitary problems. It is pleasing to see, though, that Brazil has made rapid progress since the Great Depression in the 1930s in terms of demographic transformation (Baer, 2001), to doing spectacularly well between 1968-73 during the Brazilian Miracle

Compar and Contrast Essay Example | Topics and Well Written Essays - 1250 words

Compar and Contrast - Essay Example The elements of history were engraved in the stories that were left by the two writers. Scott Fitzgerald and Ernest Hemingway have similar time frame to tell but different experiences to share in their stories throughout their lives. In terms of the time they became popular in the field of literature, they boomed in different years but they both became famous for their works. Their works may conflict at times in terms of ideas, but throughout their career, they became friends that had eroded after certain number of years. Their friendship started when they first met each other in a bar called Dingo. Fitzgerald had accustomed to ask too much and flatter the strangers during first time conversations that gave Hemingway a negative connotation about the personality of Fitzgerald. A good example is the instance when Fitzgerald interrogated Hemingway regarding â€Å"having slept with his wife before they were married did not seem appropriate conversation, particularly from a total strange r,† (Lombardi). Despite of that incident, their friendship continued as both of them became prolific writers. Hemingway was not yet that famous during that time but Fitzgerald already had known something about Hemingway as Fitzgerald told his editor that Hemingway had the potential in literature (Lombardi). Fitzgerald assisted Hemingway in editing and promoting Hemingway’s work. Despite of the help given by Fitzgerald, it was said that Hemingway later on paid back Fitzgerald by mockery and deception as their friendship corroded (Kakutani). Some said that Hemingway had a habit of associating himself with famous and great writers to promote his works and advance his writing career. He associated himself with Gertrude Stein, John dos Passos, Dorothy Parker and many more (Lombardi). The friendship corroded especially in 1936 when Fitzgerald published the confessional article which he called The Crack-Up and the series of insults continued. Hemingway told something about Fit zgerald in his work The Snows of Kilimanjaro. Up until the death of Fitzgerald, Hemingway showed some insults for Fitzgerald through his works (Gent). For the next part, a focus would be given for the analysis of the short stories made by each writer and how the stories reflected their lives. The short story analysis begins with the works of Fitzgerald. Fitzgerald became well-known for his short stories in Flappers and Philosophers that reflected the youth culture and pursuit for wealth during the Roaring Twenties. During that time, the demands for stories in popular magazines were the type of stories made by Fitzgerald. His major success was in the field of short stories though in public he was known as the Poet Laureate of the Jazz Age and he even influenced other famous writers like J. D. Salinger and John O'Hara (Mangum 1368). The image of Fitzgerald really differs from his real accomplishment like his real self is different from the way he projected himself in public. Also as h e deemed himself to be good at writing short stories for popular magazines, he explained it to Hemingway the reason why he had chosen to write short stories as revealed in A Moveable Feast by Hemingway: he was â€Å"whoring but that he had to do it as he made his money from the magazines to have money ahead to write decent books,† (Mangum 57). He was both a professional writer and a literary artist though he focused on

Commodity Futures and Markets

Commodity Futures and Markets Chapter 1 Introduction to Commodity Market What is â€Å"Commodity†? Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Indian Forward Contracts (Regulation) Act (FCRA), 1952 defines â€Å"goods† as â€Å"every kind of movable property other than actionable claims, money and securities†. In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea, rubber and spices. Etc. What is a commodity exchange? A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority. What is Commodity Futures? A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange. The need for a futures market arises mainly due to the hedging function that it can perform. Commodity markets, like any other financial instrument, involve risk associated with frequent price volatility. The loss due to price volatility can be attributed to the following reasons: Consumer Preferences: In the short-term, their influence on price volatility is small since it is a slow process permitting manufacturers, dealers and wholesalers to adjust their inventory in advance. Changes in supply: They are abrupt and unpredictable bringing about wild fluctuations in prices. This can especially noticed in agricultural commodities where the weather plays a major role in affecting the fortunes of people involved in this industry. The futures market has evolved to neutralize such risks through a mechanism; namely hedging. The objectives of Commodity futures: * Hedging with the objective of transferring risk related to the possession of physical assets through any adverse moments in price. Liquidity and Price discovery to ensure base minimum volume in trading of a commodity through market information and demand supply factors that facilitates a regular and authentic price discovery mechanism. * Maintaining buffer stock and better allocation of resources as it augments reduction in inventory requirement and thus the exposure to risks related with price fluctuation declines. Resources can thus be diversified for investments. * Price stabilization along with balancing demand and supply position. Futures trading leads to predictability in assessing the domestic prices, which maintains stability, thus safeguarding against any short term adverse price movements. Liquidity in Contracts of the commodities traded also ensures in maintaining the equilibrium between demand and supply. * Flexibility, certainty and transparency in purchasing commodities facilitate bank financing. Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks associated with running the business of trading commodities. This would make funding easier and less stringent for banks to commodity market players. Benefits of Commodity Futures Markets:- The primary objectives of any futures exchange are authentic price discovery and an efficient price risk management. The beneficiaries include those who trade in the commodities being offered in the exchange as well as those who have nothing to do with futures trading. It is because of price discovery and risk management through the existence of futures exchanges that a lot of businesses and services are able to function smoothly. 1. Price Discovery:-Based on inputs regarding specific market information, the demand and supply equilibrium, weather forecasts, expert views and comments, inflation rates, Government policies, market dynamics, hopes and fears, buyers and sellers conduct trading at futures exchanges. This transforms in to continuous price discovery mechanism. The execution of trade between buyers and sellers leads to assessment of fair value of a particular commodity that is immediately disseminated on the trading terminal. 2. Price Risk Management: Hedging is the most common method of price risk management. It is strategy of offering price risk that is inherent in spot market by taking an equal but opposite position in the futures market. Futures markets are used as a mode by hedgers to protect their business from adverse price change. This could dent the profitability of their business. Hedging benefits who are involved in trading of commodities like farmers, processors, merchandisers, manufacturers, exporters, importers etc. 3. Import- Export competitiveness: The exporters can hedge their price risk and improve their competitiveness by making use of futures market. A majority of traders which are involved in physical trade internationally intend to buy forwards. The purchases made from the physical market might expose them to the risk of price risk resulting to losses. The existence of futures market would allow the exporters to hedge their proposed purchase by temporarily substituting for actual purchase till the time is ripe to buy in physical market. In the absence of futures market it will be meticulous, time consuming and costly physical transactions. 4. Predictable Pricing: The demand for certain commodities is highly price elastic. The manufacturers have to ensure that the prices should be stable in order to protect their market share with the free entry of imports. Futures contracts will enable predictability in domestic prices. The manufacturers can, as a result, smooth out the influence of changes in their input prices very easily. With no futures market, the manufacturer can be caught between severe short-term price movements of oils and necessity to maintain price stability, which could only be possible through sufficient financial reserves that could otherwise be utilized for making other profitable investments. 5. Benefits for farmers/Agriculturalists: Price instability has a direct bearing on farmers in the absence of futures market. There would be no need to have large reserves to cover against unfavorable price fluctuations. This would reduce the risk premiums associated with the marketing or processing margins enabling more returns on produce. Storing more and being more active in the markets. The price information accessible to the farmers determines the extent to which traders/processors increase price to them. Since one of the objectives of futures exchange is to make available these prices as far as possible, it is very likely to benefit the farmers. Also, due to the time lag between planning and production, the market-determined price information disseminated by futures exchanges would be crucial for their production decisions. 6. Credit accessibility: The absence of proper risk management tools would attract the marketing and processing of commodities to high-risk exposure making it risky business activity to fund. Even a small movement in prices can eat up a huge proportion of capital owned by traders, at times making it virtually impossible to payback the loan. There is a high degree of reluctance among banks to fund commodity traders, especially those who do not manage price risks. If in case they do, the interest rate is likely to be high and terms and conditions very stringent. This posses a huge obstacle in the smooth functioning and competition of commodities market. Hedging, which is possible through futures markets, would cut down the discount rate in commodity lending. 7. Improved product quality: The existence of warehouses for facilitating delivery with grading facilities along with other related benefits provides a very strong reason to upgrade and enhance the quality of the commodity to grade that is acceptable by the exchange. It ensures uniform standardization of commodity trade, including the terms of quality standard: the quality certificates that are issued by the exchange-certified warehouses have the potential to become the norm for physical trade. Chapter 2 History of Evolution of commodity markets Commodities future trading was evolved from need of assured continuous supply of seasonal agricultural crops. The concept of organized trading in commodities evolved in Chicago, in 1848. But one can trace its roots in Japan. In Japan merchants used to store Rice in warehouses for future use. To raise cash warehouse holders sold receipts against the stored rice. These were known as â€Å"rice tickets†. Eventually, these rice tickets become accepted as a kind of commercial currency. Latter on rules came in to being, to standardize the trading in rice tickets. In 19th century Chicago in United States had emerged as a major commercial hub. So that wheat producers from Mid-west attracted here to sell their produce to dealers distributors. Due to lack of organized storage facilities, absence of uniform weighing grading mechanisms producers often confined to the mercy of dealers discretion. These situations lead to need of establishing a common meeting place for farmers and dealers to transact in spot grain to deliver wheat and receive cash in return. Gradually sellers buyers started making commitments to exchange the produce for cash in future and thus contract for â€Å"futures trading† evolved. Whereby the producer would agree to sell his produce to the buyer at a future delivery date at an agreed upon price. In this way producer was aware of what price he would fetch for his produce and dealer would know about his cost involved, in advance. This kind of agreement proved beneficial to both of them. As if dealer is not interested in taking delivery of the produce, he could sell his contract to someone who needs the same. Similarly producer who not intended to deliver his produce to dealer could pass on the same responsibility to someone else. The price of such contract would dependent on the price movements in the wheat market. Latter on by making some modifications these contracts transformed in to an instrument to protect involved parties against adverse factors such as unexpected price movements and unfavorable climat ic factors. This promoted traders entry in futures market, which had no intentions to buy or sell wheat but would purely speculate on price movements in market to earn profit. Trading of wheat in futures became very profitable which encouraged the entry of other commodities in futures market. This created a platform for establishment of a body to regulate and supervise these contracts. Thats why Chicago Board of Trade (CBOT) was established in 1848. In 1870 and 1880s the New York Coffee, Cotton and Produce Exchanges were born. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New York market to a system in terms of storage, pricing, and transfer of agricultural products. In 1933, during the Great Depression, the Commodity Exchange, Inc. was established in New York through the merger of four small exchanges the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The largest commodity exchange in USA is Chicago Board of Trade, The Chicago Mercantile Exchange, the New York Mercantile Exchange, the New York Commodity Exchange and New York Coffee, sugar and cocoa Exchange. Worldwide there are major futures trading exchanges in over twenty countries including Canada, England, India, France, Singapore, Japan, Australia and New Zealand. Chapter 3 India and the commodity market History of Commodity Market in India:- The history of organized commodity derivatives in India goes back to the nineteenth century when Cotton Trade Association started futures trading in 1875, about a decade after they started in Chicago. Over the time datives market developed in several commodities in India. Following Cotton, derivatives trading started in oilseed in Bombay (1900), raw jute and jute goods in Calcutta (1912), Wheat in Hapur (1913) and Bullion in Bombay (1920). However many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities, resulting in to banning of commodity options trading and cash settlement of commodities futures after independence in 1952. The parliament passed the Forward Contracts (Regulation) Act, 1952, which regulated contracts in Commodities all over the India. The act prohibited options trading in Goods along with cash settlement of forward trades, rendering a crushing blow to the commodity derivatives market. Under the act only those associations/exchanges, which are granted reorganization from the Government, are allowed to organize forward trading in regulated commodities. The act envisages three tire regulations: (i) Exchange which organizes forward trading in commodities can regulate trading on day-to-day basis; (ii) Forward Markets Commission provides regulatory oversight under the powers delegated to it by the central Govern ment. (iii) The Central Government- Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution- is the ultimate regulatory authority. The commodities future market remained dismantled and remained dormant for about four decades until the new millennium when the Government, in a complete change in a policy, started actively encouraging commodity market. After Liberalization and Globalization in 1990, the Government set up a committee (1993) to examine the role of futures trading. The Committee (headed by Prof. K.N. Kabra) recommended allowing futures trading in 17 commodity groups. It also recommended strengthening Forward Markets Commission, and certain amendments to Forward Contracts (Regulation) Act 1952, particularly allowing option trading in goods and registration of brokers with Forward Markets Commission. The Government accepted most of these recommendations and futures trading was permitted in all recommended commodities. It is timely decision since internationally the commodity cycle is on upswing and the next decade being touched as the decade of Commodities. Commodity exchange in India plays an important role where the prices of any commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in the market judged upon the prices. Others never had a say. Today, commodity exchanges are purely speculative in nature. Before discovering the price, they reach to the producers, end-users, and even the retail investors, at a grassroots level. It brings a price transparency and risk management in the vital market. A big difference between a typical auction, where a single auctioneer announces the bids and the Exchange is that people are not only competing to buy but also to sell. By Exchange rules and by law, no one can bid under a higher bid, and no one can offer to sell higher than someone elses lower offer. That keeps the market as efficient as possible, and keeps the traders on their toes to make sure no one gets the purchase or sale before they do. Since 2002, the commodities future market in India has experienced an unexpected boom in terms of modern exchanges, number of commodities allowed for derivatives trading as well as the value of futures trading in commodities, which crossed $ 1 trillion mark in 2006. Since 1952 till 2002 commo dity datives market was virtually non- existent, except some negligible activities on OTC basis. In India there are 25 recognized future exchanges, of which there are three national level multi-commodity exchanges. After a gap of almost three decades, Government of India has allowed forward transactions in commodities through Online Commodity Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of commodities. The three exchanges are: National Commodity Derivatives Exchange Limited (NCDEX) Mumbai, Multi Commodity Exchange of India Limited (MCX) Mumbai and National Multi-Commodity Exchange of India Limited (NMCEIL) Ahmedabad.There are other regional commodity exchanges situated in different parts of India. Legal framework for regulating commodity futures in India:- The commodity futures traded in commodity exchanges are regulated by the Government under the Forward Contracts Regulations Act, 1952 and the Rules framed there under. The regulator for the commodities trading is the Forward Markets Commission, situated at Mumbai, which comes under the Ministry of Consumer Affairs Food and Public Distribution Forward Markets Commission (FMC):- It is statutory institution set up in 1953 under Forward Contracts (Regulation) Act, 1952. Commission consists of minimum two and maximum four members appointed by Central Govt. Out of these members there is one nominated chairman. All the exchanges have been set up under overall control of Forward Market Commission (FMC) of Government of India. National Commodities Derivatives Exchange Limited (NCDEX) National Commodities Derivatives Exchange Limited (NCDEX) promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank of Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSC). Punjab National Bank (PNB), Credit Ratting Information Service of India Limited (CRISIL), Indian Farmers Fertilizer Cooperative Limited (IFFCO), Canara Bank and Goldman Sachs by subscribing to the equity shares have joined the promoters as a share holder of exchange. NCDEX is the only Commodity Exchange in the country promoted by national level institutions. NCDEX is a public limited company incorporated on 23 April 2003. NCDEX is a national level technology driven on line Commodity Exchange with an independent Board of Directors and professionals not having any vested interest in Commodity Markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency. NCDEX is regulated by Forward Markets Commission (FMC). NCDEX is also subjected to the various laws of land like the Companies Act, Stamp Act, Contracts Act, Forward Contracts Regulation Act and various other legislations. NCDEX is located in Mumbai and offers facilities to its members in more than 550 centers through out India. NCDEX currently facilitates trading of 57 commodities. Commodities Traded at NCDEX:-  · Bullion:- Gold KG, Silver, Brent  · Minerals:- Electrolytic Copper Cathode, Aluminum Ingot, Nickel Cathode, Zinc Metal Ingot, Mild steel Ingots  · Oil and Oil seeds:- Cotton seed, Oil cake, Crude Palm Oil, Groundnut (in shell), Groundnut expeller Oil, Cotton, Mentha oil, RBD Pamolein, RM seed oil cake, Refined soya oil, Rape seeds, Mustard seeds, Caster seed, Yellow soybean, Meal  · Pulses:- Urad, Yellow peas, Chana, Tur, Masoor,  · Grain:- Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR- 36/IR-64), Indian raw Rice (ParmalPR-106), Barley, Yellow red maize  · Spices:- Jeera, Turmeric, Pepper  · Plantation:- Cashew, Coffee Arabica, Coffee Robusta  · Fibers and other:- Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian 28 mm cotton, Indian 31mm cotton, Lemon, Grain Bold, Medium Staple, Mulberry, Green Cottons, , , Potato, Raw Jute, Mulberry raw Silk, V-797 Kapas, Sugar, Chilli LCA334  · Energy:- Crude Oil, Furnace oil, Thermal Coal, Brent Crude Oil, Natural Gas, Gasoline, Heating Oil Multi Commodity Exchange of India Limited (MCX) Multi Commodity Exchange of India Limited (MCX) is an independent and de-mutulized exchange with permanent reorganization from Government of India, having Head Quarter in Mumbai. Key share holders of MCX are Financial Technologies (India) Limited, State Bank of India, Union Bank of India, Corporation Bank of India, Bank of India and Cnnara Bank. MCX facilitates online trading, clearing and settlement operations for commodity futures market across the country. MCX started of trade in Nov 2003 and has built strategic alliance with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India, pulses Importers Association and Shetkari Sanghatana. MCX deals wit about 100 commodities. Commodities Traded at MCX:-  · Bullion:- Gold, Silver, Silver Coins,  · Minerals:- Aluminum, Copper, Nickel, Iron/steel, Tin, Zinc, Lead  · Oil and Oil seeds:- Castor oil/castor seeds, Crude Palm oil/ RBD Pamolein, Groundnut oil, Mustard/ Rapeseed oil, Soy seeds/Soy meal/Refined Soy Oil, Coconut Oil Cake, Copra, Sunflower oil, Sunflower Oil cake, Tamarind seed oil,  · Pulses:- Chana, Masur, Tur, Urad, Yellow peas  · Grains:- Rice/ Basmati Rice, Wheat, Maize, Bajara, Barley,  · Spices:- Pepper, Red Chili, Jeera, Cardamom, Cinnamon, Clove, Ginger,  · Plantation:- Cashew Kernel, Rubber, Areca nut, Betel nuts, Coconut, Coffee,  · Fiber and others:- Kapas, Kapas Khalli, Cotton (long staple, medium staple, short staple), Cotton Cloth, Cotton Yarn, Gaur seed and Guargum, Gur and Sugar, Khandsari, Mentha Oil, Potato, Art Silk Yarn, Chara or Berseem, Raw Jute, Jute Goods, Jute Sacking,  · Petrochemicals:- High Density Polyethylene (HDPE), Polypropylene (PP), Poly Vinyl Chloride (PVC)  · Energy:- Brent Crude Oil, Crude Oil, Furnace Oil, Middle East Sour Crude Oil, Natural Gas  · Whether:- Carbon (CER), Carbon (CFI) National Multi Commodity Exchange of India Limited (NMCEIL) National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-mutualised Electronic Multi Commodity Exchange in India. On 25th July 2001 it was granted approval by Government to organize trading in edible oil complex. It is being supported by Central warehousing Corporation Limited, Gujarat State Agricultural Marketing Board and Neptune Overseas Limited. It got reorganization in Oct 2002. NMCEIL Head Quarter is at Ahmedabad. Chapter 4 INTERNATIONAL COMMODITY EXCHANGES Futures trading is a result of solution to a problem related to the maintenance of a year round supply of commodities/ products that are seasonal as is the case of agricultural produce. The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures exchanges in the world. The New York Mercantile Exchange (NYMEX):- The New York Mercantile Exchange is the worlds biggest exchange for trading in physical commodity futures. It is a primary trading forum for energy products and precious metals. The exchange is in existence since last 132 years and performs trades trough two divisions, the NYMEX division, which deals in energy and platinum and the COMEX division, which trades in all the other metals. Commodities traded: Light sweet crude oil, Natural Gas, Heating Oil, Gasoline, RBOB Gasoline, Electricity Propane, Gold, Silver, Copper, Aluminum, Platinum, Palladium, etc. London Metal Exchange:- The London Metal Exchange (LME) is the worlds premier non-ferrous market, with highly liquid contracts. The exchange was formed in 1877 as a direct consequence of the industrial revolution witnessed in the 19th century. The primary focus of LME is in providing a market for participants from non-ferrous based metals related industry to safeguard against risk due to movement in base metal prices and also arrive at a price that sets the benchmark globally. The exchange trades 24 hours a day through an inter office telephone market and also through a electronic trading platform. It is famous for its open-outcry trading between ring dealing members that takes place on the market floor. Commodities traded:- Aluminum, Copper, Nickel, Lead, Tin, Zinc, Aluminum Alloy, North American Special Aluminum Alloy (NASAAC), Polypropylene, Linear Low Density Polyethylene, etc. The Chicago Board of Trade:- The first commodity exchange established in the world was the Chicago Board of Trade (CBOT) during 1848 by group of Chicago merchants who were keen to establish a central market place for trade. Presently, the Chicago Board of Trade is one of the leading exchanges in the world for trading futures and options. More than 50 contracts on futures and options are being offered by CBOT currently through open outcry and/or electronically. CBOT initially dealt only in Agricultural commodities like corn, wheat, non storable agricultural commodities and non-agricultural products like gold and silver. Commodities Traded: Corn, Soybean, Oil, Soybean meal, Wheat, Oats, Ethanol, Rough Rice, Gold, Silver etc. Tokyo Commodity Exchange (TOCOM):- The Tokyo Commodity Exchange (TOCOM) is the second largest commodity futures exchange in the world. It trades in to metals and energy contracts. It has made rapid advancement in commodity trading globally since its inception 20 years back. One of the biggest reasons for that is the initiative TOCOM took towards establishing Asia as the benchmark for price discovery and risk management in commodities like the Middle East Crude Oil. TOCOMs recent tie up with the MCX to explore cooperation and business opportunities is seen as one of the steps towards providing platform for futures price discovery in Asia for Asian players in Crude Oil since the demand-supply situation in U.S. that drives NYMEX is different from demand-supply situation in Asia. In Jan 2003, in a major overhaul of its computerized trading system, TOCOM fortified its clearing system in June by being first commodity exchange in Japan to introduce an in-house clearing system. TOCOM launched options on gold futures, the firs t option contract in Japanese market, in May 2004. Commodities traded: Gasoline, Kerosene, Crude Oil, Gold, Silver, Platinum, Aluminum, Rubber, etc Chicago Mercantile Exchange:- The Chicago Mercantile Exchange (CME) is the largest futures exchange in the US and the largest futures clearing house in the world for futures and options trading. Formed in 1898 primarily to trade in Agricultural commodities, the CME introduced the worlds first financial futures more than 30 years ago. Today it trades heavily in interest rates futures, stock indices and foreign exchange futures. Its products often serves as a financial benchmark and witnesses the largest open interest in futures profile of CME consists of livestock, dairy and forest products and enables small family farms to large Agri-business to manage their price risks. Trading in CME can be done either through pit trading or electronically. Commodities Traded: Butter milk, Diammonium phosphate, Feeder cattle, frozen pork bellies, Lean Hogs, Live cattle, Non-fat Dry Milk, Urea, Urea Ammonium Nitrate, etc Chapter 5 How Commodity market works? There are two kinds of trades in commodities. The first is the spot trade, in which one pays cash and carries away the goods. The second is futures trade. The underpinning for futures is the warehouse receipt. A person deposits certain amount of say, good X in a ware house and gets a warehouse receipt. Which allows him to ask for physical delivery of the good from the warehouse. But some one trading in commodity futures need not necessarily posses such a receipt to strike a deal. A person can buy or sale a commodity future on an exchange based on his expectation of where the price will go. Futures have something called an expiry date, by when the buyer or seller either closes (square off) his account or give/take delivery of the commodity. The broker maintains an account of all dealing parties in which the daily profit or loss due to changes in the futures price is recorded. Squiring off is done by taking an opposite contract so that the net outstanding is nil. For commodity futures to work, the seller should be able to deposit the commodity at warehouse nearest to him and collect the warehouse receipt. The buyer should be able to take physical delivery at a location of his choice on presenting the warehouse receipt. But at present in India very few warehouses provide delivery for specific commodities. Following diagram gives a fair idea about working of the Commodity market. Today Commodity trading system is fully computerized. Traders need not visit a commodity market to speculate. With online commodity trading they could sit in the confines of their home or office and call the shots. The commodity trading system consists of certain prescribed steps or stages as follows: I. Trading: At this stage the following is the system implemented- Order receiving Execution Matching Reporting Surveillance Price limits Position limits II. Clearing: This stage has following system in place- Matching Registration Clearing Clearing limits Notation Margining Price limits Position limits Clearing house. III. Settlement: This stage has following system followed as follows- Marking to market Receipts and payments Reporting Delivery upon expiration or maturity. Chapter 6 Investments in Commodities How to invest in a Commodities? With whom investor can transact a business? An investor can transact a business with the approved clearing member of previously mentioned Commodity Exchanges. The investor can ask for the details from the Commodity Exchanges about the list of approved members. What is Identity Proof? When investor approaches Clearing Member, the member will ask for identity proof. For which Xerox copy of any one of the following can be given a) PAN card Number b) Driving License c) Vote ID d) Passport What statements should be given for Bank Proof? The front page of Bank Pass Book and a canceled cheque of a concerned bank. Otherwise the Bank Statement containing details can be given. What are the particulars to be given for address proof? In order to ascertain the address of investor, the clearing member will insist on Xerox copy of Ration card or the Pass Book/ Bank Statement where the address of investor is given. What are the other forms to be signed by the investor? The clearing member will ask the client to sign a) Know your client form b) Risk Discloser Document The above things are only procedure in character and the risk involved and only after understanding the business, he wants to transact business. What aspects should be conside Commodity Futures and Markets Commodity Futures and Markets Chapter 1 Introduction to Commodity Market What is â€Å"Commodity†? Any product that can be used for commerce or an article of commerce which is traded on an authorized commodity exchange is known as commodity. The article should be movable of value, something which is bought or sold and which is produced or used as the subject or barter or sale. In short commodity includes all kinds of goods. Indian Forward Contracts (Regulation) Act (FCRA), 1952 defines â€Å"goods† as â€Å"every kind of movable property other than actionable claims, money and securities†. In current situation, all goods and products of agricultural (including plantation), mineral and fossil origin are allowed for commodity trading recognized under the FCRA. The national commodity exchanges, recognized by the Central Government, permits commodities which include precious (gold and silver) and non-ferrous metals, cereals and pulses, ginned and un-ginned cotton, oilseeds, oils and oilcakes, raw jute and jute goods, sugar and gur, potatoes and onions, coffee and tea, rubber and spices. Etc. What is a commodity exchange? A commodity exchange is an association or a company or any other body corporate organizing futures trading in commodities for which license has been granted by regulating authority. What is Commodity Futures? A Commodity futures is an agreement between two parties to buy or sell a specified and standardized quantity of a commodity at a certain time in future at a price agreed upon at the time of entering into the contract on the commodity futures exchange. The need for a futures market arises mainly due to the hedging function that it can perform. Commodity markets, like any other financial instrument, involve risk associated with frequent price volatility. The loss due to price volatility can be attributed to the following reasons: Consumer Preferences: In the short-term, their influence on price volatility is small since it is a slow process permitting manufacturers, dealers and wholesalers to adjust their inventory in advance. Changes in supply: They are abrupt and unpredictable bringing about wild fluctuations in prices. This can especially noticed in agricultural commodities where the weather plays a major role in affecting the fortunes of people involved in this industry. The futures market has evolved to neutralize such risks through a mechanism; namely hedging. The objectives of Commodity futures: * Hedging with the objective of transferring risk related to the possession of physical assets through any adverse moments in price. Liquidity and Price discovery to ensure base minimum volume in trading of a commodity through market information and demand supply factors that facilitates a regular and authentic price discovery mechanism. * Maintaining buffer stock and better allocation of resources as it augments reduction in inventory requirement and thus the exposure to risks related with price fluctuation declines. Resources can thus be diversified for investments. * Price stabilization along with balancing demand and supply position. Futures trading leads to predictability in assessing the domestic prices, which maintains stability, thus safeguarding against any short term adverse price movements. Liquidity in Contracts of the commodities traded also ensures in maintaining the equilibrium between demand and supply. * Flexibility, certainty and transparency in purchasing commodities facilitate bank financing. Predictability in prices of commodity would lead to stability, which in turn would eliminate the risks associated with running the business of trading commodities. This would make funding easier and less stringent for banks to commodity market players. Benefits of Commodity Futures Markets:- The primary objectives of any futures exchange are authentic price discovery and an efficient price risk management. The beneficiaries include those who trade in the commodities being offered in the exchange as well as those who have nothing to do with futures trading. It is because of price discovery and risk management through the existence of futures exchanges that a lot of businesses and services are able to function smoothly. 1. Price Discovery:-Based on inputs regarding specific market information, the demand and supply equilibrium, weather forecasts, expert views and comments, inflation rates, Government policies, market dynamics, hopes and fears, buyers and sellers conduct trading at futures exchanges. This transforms in to continuous price discovery mechanism. The execution of trade between buyers and sellers leads to assessment of fair value of a particular commodity that is immediately disseminated on the trading terminal. 2. Price Risk Management: Hedging is the most common method of price risk management. It is strategy of offering price risk that is inherent in spot market by taking an equal but opposite position in the futures market. Futures markets are used as a mode by hedgers to protect their business from adverse price change. This could dent the profitability of their business. Hedging benefits who are involved in trading of commodities like farmers, processors, merchandisers, manufacturers, exporters, importers etc. 3. Import- Export competitiveness: The exporters can hedge their price risk and improve their competitiveness by making use of futures market. A majority of traders which are involved in physical trade internationally intend to buy forwards. The purchases made from the physical market might expose them to the risk of price risk resulting to losses. The existence of futures market would allow the exporters to hedge their proposed purchase by temporarily substituting for actual purchase till the time is ripe to buy in physical market. In the absence of futures market it will be meticulous, time consuming and costly physical transactions. 4. Predictable Pricing: The demand for certain commodities is highly price elastic. The manufacturers have to ensure that the prices should be stable in order to protect their market share with the free entry of imports. Futures contracts will enable predictability in domestic prices. The manufacturers can, as a result, smooth out the influence of changes in their input prices very easily. With no futures market, the manufacturer can be caught between severe short-term price movements of oils and necessity to maintain price stability, which could only be possible through sufficient financial reserves that could otherwise be utilized for making other profitable investments. 5. Benefits for farmers/Agriculturalists: Price instability has a direct bearing on farmers in the absence of futures market. There would be no need to have large reserves to cover against unfavorable price fluctuations. This would reduce the risk premiums associated with the marketing or processing margins enabling more returns on produce. Storing more and being more active in the markets. The price information accessible to the farmers determines the extent to which traders/processors increase price to them. Since one of the objectives of futures exchange is to make available these prices as far as possible, it is very likely to benefit the farmers. Also, due to the time lag between planning and production, the market-determined price information disseminated by futures exchanges would be crucial for their production decisions. 6. Credit accessibility: The absence of proper risk management tools would attract the marketing and processing of commodities to high-risk exposure making it risky business activity to fund. Even a small movement in prices can eat up a huge proportion of capital owned by traders, at times making it virtually impossible to payback the loan. There is a high degree of reluctance among banks to fund commodity traders, especially those who do not manage price risks. If in case they do, the interest rate is likely to be high and terms and conditions very stringent. This posses a huge obstacle in the smooth functioning and competition of commodities market. Hedging, which is possible through futures markets, would cut down the discount rate in commodity lending. 7. Improved product quality: The existence of warehouses for facilitating delivery with grading facilities along with other related benefits provides a very strong reason to upgrade and enhance the quality of the commodity to grade that is acceptable by the exchange. It ensures uniform standardization of commodity trade, including the terms of quality standard: the quality certificates that are issued by the exchange-certified warehouses have the potential to become the norm for physical trade. Chapter 2 History of Evolution of commodity markets Commodities future trading was evolved from need of assured continuous supply of seasonal agricultural crops. The concept of organized trading in commodities evolved in Chicago, in 1848. But one can trace its roots in Japan. In Japan merchants used to store Rice in warehouses for future use. To raise cash warehouse holders sold receipts against the stored rice. These were known as â€Å"rice tickets†. Eventually, these rice tickets become accepted as a kind of commercial currency. Latter on rules came in to being, to standardize the trading in rice tickets. In 19th century Chicago in United States had emerged as a major commercial hub. So that wheat producers from Mid-west attracted here to sell their produce to dealers distributors. Due to lack of organized storage facilities, absence of uniform weighing grading mechanisms producers often confined to the mercy of dealers discretion. These situations lead to need of establishing a common meeting place for farmers and dealers to transact in spot grain to deliver wheat and receive cash in return. Gradually sellers buyers started making commitments to exchange the produce for cash in future and thus contract for â€Å"futures trading† evolved. Whereby the producer would agree to sell his produce to the buyer at a future delivery date at an agreed upon price. In this way producer was aware of what price he would fetch for his produce and dealer would know about his cost involved, in advance. This kind of agreement proved beneficial to both of them. As if dealer is not interested in taking delivery of the produce, he could sell his contract to someone who needs the same. Similarly producer who not intended to deliver his produce to dealer could pass on the same responsibility to someone else. The price of such contract would dependent on the price movements in the wheat market. Latter on by making some modifications these contracts transformed in to an instrument to protect involved parties against adverse factors such as unexpected price movements and unfavorable climat ic factors. This promoted traders entry in futures market, which had no intentions to buy or sell wheat but would purely speculate on price movements in market to earn profit. Trading of wheat in futures became very profitable which encouraged the entry of other commodities in futures market. This created a platform for establishment of a body to regulate and supervise these contracts. Thats why Chicago Board of Trade (CBOT) was established in 1848. In 1870 and 1880s the New York Coffee, Cotton and Produce Exchanges were born. Agricultural commodities were mostly traded but as long as there are buyers and sellers, any commodity can be traded. In 1872, a group of Manhattan dairy merchants got together to bring chaotic condition in New York market to a system in terms of storage, pricing, and transfer of agricultural products. In 1933, during the Great Depression, the Commodity Exchange, Inc. was established in New York through the merger of four small exchanges the National Metal Exchange, the Rubber Exchange of New York, the National Raw Silk Exchange, and the New York Hide Exchange. The largest commodity exchange in USA is Chicago Board of Trade, The Chicago Mercantile Exchange, the New York Mercantile Exchange, the New York Commodity Exchange and New York Coffee, sugar and cocoa Exchange. Worldwide there are major futures trading exchanges in over twenty countries including Canada, England, India, France, Singapore, Japan, Australia and New Zealand. Chapter 3 India and the commodity market History of Commodity Market in India:- The history of organized commodity derivatives in India goes back to the nineteenth century when Cotton Trade Association started futures trading in 1875, about a decade after they started in Chicago. Over the time datives market developed in several commodities in India. Following Cotton, derivatives trading started in oilseed in Bombay (1900), raw jute and jute goods in Calcutta (1912), Wheat in Hapur (1913) and Bullion in Bombay (1920). However many feared that derivatives fuelled unnecessary speculation and were detrimental to the healthy functioning of the market for the underlying commodities, resulting in to banning of commodity options trading and cash settlement of commodities futures after independence in 1952. The parliament passed the Forward Contracts (Regulation) Act, 1952, which regulated contracts in Commodities all over the India. The act prohibited options trading in Goods along with cash settlement of forward trades, rendering a crushing blow to the commodity derivatives market. Under the act only those associations/exchanges, which are granted reorganization from the Government, are allowed to organize forward trading in regulated commodities. The act envisages three tire regulations: (i) Exchange which organizes forward trading in commodities can regulate trading on day-to-day basis; (ii) Forward Markets Commission provides regulatory oversight under the powers delegated to it by the central Govern ment. (iii) The Central Government- Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution- is the ultimate regulatory authority. The commodities future market remained dismantled and remained dormant for about four decades until the new millennium when the Government, in a complete change in a policy, started actively encouraging commodity market. After Liberalization and Globalization in 1990, the Government set up a committee (1993) to examine the role of futures trading. The Committee (headed by Prof. K.N. Kabra) recommended allowing futures trading in 17 commodity groups. It also recommended strengthening Forward Markets Commission, and certain amendments to Forward Contracts (Regulation) Act 1952, particularly allowing option trading in goods and registration of brokers with Forward Markets Commission. The Government accepted most of these recommendations and futures trading was permitted in all recommended commodities. It is timely decision since internationally the commodity cycle is on upswing and the next decade being touched as the decade of Commodities. Commodity exchange in India plays an important role where the prices of any commodity are not fixed, in an organized way. Earlier only the buyer of produce and its seller in the market judged upon the prices. Others never had a say. Today, commodity exchanges are purely speculative in nature. Before discovering the price, they reach to the producers, end-users, and even the retail investors, at a grassroots level. It brings a price transparency and risk management in the vital market. A big difference between a typical auction, where a single auctioneer announces the bids and the Exchange is that people are not only competing to buy but also to sell. By Exchange rules and by law, no one can bid under a higher bid, and no one can offer to sell higher than someone elses lower offer. That keeps the market as efficient as possible, and keeps the traders on their toes to make sure no one gets the purchase or sale before they do. Since 2002, the commodities future market in India has experienced an unexpected boom in terms of modern exchanges, number of commodities allowed for derivatives trading as well as the value of futures trading in commodities, which crossed $ 1 trillion mark in 2006. Since 1952 till 2002 commo dity datives market was virtually non- existent, except some negligible activities on OTC basis. In India there are 25 recognized future exchanges, of which there are three national level multi-commodity exchanges. After a gap of almost three decades, Government of India has allowed forward transactions in commodities through Online Commodity Exchanges, a modification of traditional business known as Adhat and Vayda Vyapar to facilitate better risk coverage and delivery of commodities. The three exchanges are: National Commodity Derivatives Exchange Limited (NCDEX) Mumbai, Multi Commodity Exchange of India Limited (MCX) Mumbai and National Multi-Commodity Exchange of India Limited (NMCEIL) Ahmedabad.There are other regional commodity exchanges situated in different parts of India. Legal framework for regulating commodity futures in India:- The commodity futures traded in commodity exchanges are regulated by the Government under the Forward Contracts Regulations Act, 1952 and the Rules framed there under. The regulator for the commodities trading is the Forward Markets Commission, situated at Mumbai, which comes under the Ministry of Consumer Affairs Food and Public Distribution Forward Markets Commission (FMC):- It is statutory institution set up in 1953 under Forward Contracts (Regulation) Act, 1952. Commission consists of minimum two and maximum four members appointed by Central Govt. Out of these members there is one nominated chairman. All the exchanges have been set up under overall control of Forward Market Commission (FMC) of Government of India. National Commodities Derivatives Exchange Limited (NCDEX) National Commodities Derivatives Exchange Limited (NCDEX) promoted by ICICI Bank Limited (ICICI Bank), Life Insurance Corporation of India (LIC), National Bank of Agriculture and Rural Development (NABARD) and National Stock Exchange of India Limited (NSC). Punjab National Bank (PNB), Credit Ratting Information Service of India Limited (CRISIL), Indian Farmers Fertilizer Cooperative Limited (IFFCO), Canara Bank and Goldman Sachs by subscribing to the equity shares have joined the promoters as a share holder of exchange. NCDEX is the only Commodity Exchange in the country promoted by national level institutions. NCDEX is a public limited company incorporated on 23 April 2003. NCDEX is a national level technology driven on line Commodity Exchange with an independent Board of Directors and professionals not having any vested interest in Commodity Markets. It is committed to provide a world class commodity exchange platform for market participants to trade in a wide spectrum of commodity derivatives driven by best global practices, professionalism and transparency. NCDEX is regulated by Forward Markets Commission (FMC). NCDEX is also subjected to the various laws of land like the Companies Act, Stamp Act, Contracts Act, Forward Contracts Regulation Act and various other legislations. NCDEX is located in Mumbai and offers facilities to its members in more than 550 centers through out India. NCDEX currently facilitates trading of 57 commodities. Commodities Traded at NCDEX:-  · Bullion:- Gold KG, Silver, Brent  · Minerals:- Electrolytic Copper Cathode, Aluminum Ingot, Nickel Cathode, Zinc Metal Ingot, Mild steel Ingots  · Oil and Oil seeds:- Cotton seed, Oil cake, Crude Palm Oil, Groundnut (in shell), Groundnut expeller Oil, Cotton, Mentha oil, RBD Pamolein, RM seed oil cake, Refined soya oil, Rape seeds, Mustard seeds, Caster seed, Yellow soybean, Meal  · Pulses:- Urad, Yellow peas, Chana, Tur, Masoor,  · Grain:- Wheat, Indian Pusa Basmati Rice, Indian parboiled Rice (IR- 36/IR-64), Indian raw Rice (ParmalPR-106), Barley, Yellow red maize  · Spices:- Jeera, Turmeric, Pepper  · Plantation:- Cashew, Coffee Arabica, Coffee Robusta  · Fibers and other:- Guar Gum, Guar seeds, Guar, Jute sacking bags, Indian 28 mm cotton, Indian 31mm cotton, Lemon, Grain Bold, Medium Staple, Mulberry, Green Cottons, , , Potato, Raw Jute, Mulberry raw Silk, V-797 Kapas, Sugar, Chilli LCA334  · Energy:- Crude Oil, Furnace oil, Thermal Coal, Brent Crude Oil, Natural Gas, Gasoline, Heating Oil Multi Commodity Exchange of India Limited (MCX) Multi Commodity Exchange of India Limited (MCX) is an independent and de-mutulized exchange with permanent reorganization from Government of India, having Head Quarter in Mumbai. Key share holders of MCX are Financial Technologies (India) Limited, State Bank of India, Union Bank of India, Corporation Bank of India, Bank of India and Cnnara Bank. MCX facilitates online trading, clearing and settlement operations for commodity futures market across the country. MCX started of trade in Nov 2003 and has built strategic alliance with Bombay Bullion Association, Bombay Metal Exchange, Solvent Extractors Association of India, pulses Importers Association and Shetkari Sanghatana. MCX deals wit about 100 commodities. Commodities Traded at MCX:-  · Bullion:- Gold, Silver, Silver Coins,  · Minerals:- Aluminum, Copper, Nickel, Iron/steel, Tin, Zinc, Lead  · Oil and Oil seeds:- Castor oil/castor seeds, Crude Palm oil/ RBD Pamolein, Groundnut oil, Mustard/ Rapeseed oil, Soy seeds/Soy meal/Refined Soy Oil, Coconut Oil Cake, Copra, Sunflower oil, Sunflower Oil cake, Tamarind seed oil,  · Pulses:- Chana, Masur, Tur, Urad, Yellow peas  · Grains:- Rice/ Basmati Rice, Wheat, Maize, Bajara, Barley,  · Spices:- Pepper, Red Chili, Jeera, Cardamom, Cinnamon, Clove, Ginger,  · Plantation:- Cashew Kernel, Rubber, Areca nut, Betel nuts, Coconut, Coffee,  · Fiber and others:- Kapas, Kapas Khalli, Cotton (long staple, medium staple, short staple), Cotton Cloth, Cotton Yarn, Gaur seed and Guargum, Gur and Sugar, Khandsari, Mentha Oil, Potato, Art Silk Yarn, Chara or Berseem, Raw Jute, Jute Goods, Jute Sacking,  · Petrochemicals:- High Density Polyethylene (HDPE), Polypropylene (PP), Poly Vinyl Chloride (PVC)  · Energy:- Brent Crude Oil, Crude Oil, Furnace Oil, Middle East Sour Crude Oil, Natural Gas  · Whether:- Carbon (CER), Carbon (CFI) National Multi Commodity Exchange of India Limited (NMCEIL) National Multi Commodity Exchange of India Limited (NMCEIL) is the first de-mutualised Electronic Multi Commodity Exchange in India. On 25th July 2001 it was granted approval by Government to organize trading in edible oil complex. It is being supported by Central warehousing Corporation Limited, Gujarat State Agricultural Marketing Board and Neptune Overseas Limited. It got reorganization in Oct 2002. NMCEIL Head Quarter is at Ahmedabad. Chapter 4 INTERNATIONAL COMMODITY EXCHANGES Futures trading is a result of solution to a problem related to the maintenance of a year round supply of commodities/ products that are seasonal as is the case of agricultural produce. The United States, Japan, United Kingdom, Brazil, Australia, Singapore are homes to leading commodity futures exchanges in the world. The New York Mercantile Exchange (NYMEX):- The New York Mercantile Exchange is the worlds biggest exchange for trading in physical commodity futures. It is a primary trading forum for energy products and precious metals. The exchange is in existence since last 132 years and performs trades trough two divisions, the NYMEX division, which deals in energy and platinum and the COMEX division, which trades in all the other metals. Commodities traded: Light sweet crude oil, Natural Gas, Heating Oil, Gasoline, RBOB Gasoline, Electricity Propane, Gold, Silver, Copper, Aluminum, Platinum, Palladium, etc. London Metal Exchange:- The London Metal Exchange (LME) is the worlds premier non-ferrous market, with highly liquid contracts. The exchange was formed in 1877 as a direct consequence of the industrial revolution witnessed in the 19th century. The primary focus of LME is in providing a market for participants from non-ferrous based metals related industry to safeguard against risk due to movement in base metal prices and also arrive at a price that sets the benchmark globally. The exchange trades 24 hours a day through an inter office telephone market and also through a electronic trading platform. It is famous for its open-outcry trading between ring dealing members that takes place on the market floor. Commodities traded:- Aluminum, Copper, Nickel, Lead, Tin, Zinc, Aluminum Alloy, North American Special Aluminum Alloy (NASAAC), Polypropylene, Linear Low Density Polyethylene, etc. The Chicago Board of Trade:- The first commodity exchange established in the world was the Chicago Board of Trade (CBOT) during 1848 by group of Chicago merchants who were keen to establish a central market place for trade. Presently, the Chicago Board of Trade is one of the leading exchanges in the world for trading futures and options. More than 50 contracts on futures and options are being offered by CBOT currently through open outcry and/or electronically. CBOT initially dealt only in Agricultural commodities like corn, wheat, non storable agricultural commodities and non-agricultural products like gold and silver. Commodities Traded: Corn, Soybean, Oil, Soybean meal, Wheat, Oats, Ethanol, Rough Rice, Gold, Silver etc. Tokyo Commodity Exchange (TOCOM):- The Tokyo Commodity Exchange (TOCOM) is the second largest commodity futures exchange in the world. It trades in to metals and energy contracts. It has made rapid advancement in commodity trading globally since its inception 20 years back. One of the biggest reasons for that is the initiative TOCOM took towards establishing Asia as the benchmark for price discovery and risk management in commodities like the Middle East Crude Oil. TOCOMs recent tie up with the MCX to explore cooperation and business opportunities is seen as one of the steps towards providing platform for futures price discovery in Asia for Asian players in Crude Oil since the demand-supply situation in U.S. that drives NYMEX is different from demand-supply situation in Asia. In Jan 2003, in a major overhaul of its computerized trading system, TOCOM fortified its clearing system in June by being first commodity exchange in Japan to introduce an in-house clearing system. TOCOM launched options on gold futures, the firs t option contract in Japanese market, in May 2004. Commodities traded: Gasoline, Kerosene, Crude Oil, Gold, Silver, Platinum, Aluminum, Rubber, etc Chicago Mercantile Exchange:- The Chicago Mercantile Exchange (CME) is the largest futures exchange in the US and the largest futures clearing house in the world for futures and options trading. Formed in 1898 primarily to trade in Agricultural commodities, the CME introduced the worlds first financial futures more than 30 years ago. Today it trades heavily in interest rates futures, stock indices and foreign exchange futures. Its products often serves as a financial benchmark and witnesses the largest open interest in futures profile of CME consists of livestock, dairy and forest products and enables small family farms to large Agri-business to manage their price risks. Trading in CME can be done either through pit trading or electronically. Commodities Traded: Butter milk, Diammonium phosphate, Feeder cattle, frozen pork bellies, Lean Hogs, Live cattle, Non-fat Dry Milk, Urea, Urea Ammonium Nitrate, etc Chapter 5 How Commodity market works? There are two kinds of trades in commodities. The first is the spot trade, in which one pays cash and carries away the goods. The second is futures trade. The underpinning for futures is the warehouse receipt. A person deposits certain amount of say, good X in a ware house and gets a warehouse receipt. Which allows him to ask for physical delivery of the good from the warehouse. But some one trading in commodity futures need not necessarily posses such a receipt to strike a deal. A person can buy or sale a commodity future on an exchange based on his expectation of where the price will go. Futures have something called an expiry date, by when the buyer or seller either closes (square off) his account or give/take delivery of the commodity. The broker maintains an account of all dealing parties in which the daily profit or loss due to changes in the futures price is recorded. Squiring off is done by taking an opposite contract so that the net outstanding is nil. For commodity futures to work, the seller should be able to deposit the commodity at warehouse nearest to him and collect the warehouse receipt. The buyer should be able to take physical delivery at a location of his choice on presenting the warehouse receipt. But at present in India very few warehouses provide delivery for specific commodities. Following diagram gives a fair idea about working of the Commodity market. Today Commodity trading system is fully computerized. Traders need not visit a commodity market to speculate. With online commodity trading they could sit in the confines of their home or office and call the shots. The commodity trading system consists of certain prescribed steps or stages as follows: I. Trading: At this stage the following is the system implemented- Order receiving Execution Matching Reporting Surveillance Price limits Position limits II. Clearing: This stage has following system in place- Matching Registration Clearing Clearing limits Notation Margining Price limits Position limits Clearing house. III. Settlement: This stage has following system followed as follows- Marking to market Receipts and payments Reporting Delivery upon expiration or maturity. Chapter 6 Investments in Commodities How to invest in a Commodities? With whom investor can transact a business? An investor can transact a business with the approved clearing member of previously mentioned Commodity Exchanges. The investor can ask for the details from the Commodity Exchanges about the list of approved members. What is Identity Proof? When investor approaches Clearing Member, the member will ask for identity proof. For which Xerox copy of any one of the following can be given a) PAN card Number b) Driving License c) Vote ID d) Passport What statements should be given for Bank Proof? The front page of Bank Pass Book and a canceled cheque of a concerned bank. Otherwise the Bank Statement containing details can be given. What are the particulars to be given for address proof? In order to ascertain the address of investor, the clearing member will insist on Xerox copy of Ration card or the Pass Book/ Bank Statement where the address of investor is given. What are the other forms to be signed by the investor? The clearing member will ask the client to sign a) Know your client form b) Risk Discloser Document The above things are only procedure in character and the risk involved and only after understanding the business, he wants to transact business. What aspects should be conside