Introduction to working with children Essay Example for Free

Introduction to working with children Essay There are three different provisions that provide care and education to children. Upton Infant School is a statutory provision; they are funded by the government. Upton Infant School educates and cares for children from 4 years to 7 years of age. They follow the National Curriculum, and the EYFS. They support and work with the children and family by observing the children, and producing written or verbal feedback to the parents; this can be done by holding parent evenings. They are also supporting the children and parents by having fully trained SEN staff in the setting; so they help the children who require additional support. (Upton Infants School, 2012) The DEBRA charity is an organisation which supports and helps to find a cure to heal or help the children and families that are suffering from a generic skin blistering condition. This condition is called Epidermolysis Bullosa (EB). This is a voluntary organisation; this is funded by the public. They support and help children of all ages from birth. They provide emotional and physical support for families coping with EB. (DEBRA, 2008-2012) Private provisions are organisations that make profits from their services. Buckholme Towers in Parkstone; is an independent day school and nursery, which cares for both boys and girls from 3 to 12 years of age. They provide classes for individual learning. The staff quickly gets to know pupils so that their strengths and talents and be enhanced, and their weaknesses are developed upon. They provide a supportive environment this makes the children feel secure and ready for challenges of school life. They support families that have children with; Emotional Needs, ADHD, Dyslexia, Asthma and Serious Allergy’s. (Poole Family Information Service, 2012) There are various legislations in the UK that supports working with children, these are:- Health And Safety At Work Act 1974 Children’s Act 1989 Children’s Act 2004 Children’s Act 2006 Equality Act 2010 United Convention On The Rights Of The Child 1989 Data Protection Act 1998 The Children’s Act 1989 came into force in October 1990. It aims to help children in every situation; at home, at day-care, or in full time care. Some of the principles are that the welfare of the child is paramount and every child has the right to be free from neglect and abuse, every child should be brought up by their parents, if the child is in need, help and guidance should be provided. Both parents and professionals should consult the child when decision making. (Beaver, et al, 2008) Children’s Act 2004 promotes the five outcomes for the Every Child Matters (2003) legislation for every child; this was created because some of the points in 1989 were not being done. These five points are; 1. Be healthy 2. Stay safe 3. Enjoy and achieve 4. Make a positive contribution 5. Achieve economic well-being (Beaver, et al, 2008) The needs of the child and family are central in the Children’s Act 2006. Local authorities must improve the outcomes for children less than 5 years of age. This was created to focus on the children in question and their families. This is where the EYFS came into practice. This was introduced to support the delivery of quality of education and care in the early years. This Act also entitles parents to get the information they need. (Beaver, et al, 2008) The United Convention On the Rights Of The Child came into force in 1989. This Act contains 54 articles. All the articles were put into place to ensure every child enjoys health and education; every child should be within a caring family and have the right of survival. Every child should be protected from exploitation and abuse at all times and should have the freedom to have their voice and opinions taken into account on significant issues. (Beaver, et al, 2008) The Data Protection Act was put into place in 1998, to protect Information of individuals as this is confidential. Other than the care worker, the information can only be shared between the guardian or parent and the child in question. It is very important that you maintain confidentiality when working with children. This is important because it protect the child in question and the family. (Legislation, 2012) Principles and values are very important when working with children. Principles are a professional rule of action of conduct. Values are beliefs and ideas that are shared between groups of people that are from the same culture. This is important because it will give you an understanding of what is good or desirable and what is not. (Tassoni, et al, 2007) Through positive relations the children learn to be strong and to be independent. According in the EYFS (2012) every child is a unique child; they can have a strong character, confident and are self-assured. Enabling environments are essential in helping the children develop and learn. Every child learns and develops in a different way, every child should be treated equally, and their needs to be taken into account. The education and care of all the children in early year’s provision, including children with special educational needs and disabilities, are covered by this framework. Without a unique child, positive relationships and enabling environment’s there would not be any learning and development. The CWDC principles are to reinforce that the welfare of the child and young person is paramount. The safeguarding, learning and development is reflected in practice and service provision. Practitioners work closely with parents as they are very important in their child’s upbringing, recognising they are the children’s most important careers and educators. The values of CWDC are that every child’s individuality is valued and respected and celebrated. Also the children’s personal and physical safety is safeguarded, whilst allowing for risk and challenge as appropriate to the capabilities of the child. Self-esteem is very important to every child’s development. Also confidentiality and agreements about confidential information are respected as appropriate unless a child’s protection and well-being are at stake. Best practice requires a continuous search improvement and self-awareness of how workers are perceived by others. (Children’s Workforce Development Council, 2012). Inclusion and diversity is very important in respecting and valuing each child at a place setting. If this is done correctly it should build the child’s confidence and improve their concentration. This will also remove learning barriers; whether this is emotional or learning where a child may need extra support. (Beaver, et al, 2008) Everyone is different and entitled to their own opinions this means everyone should get treated equally, as they are a unique child, this complies with the EYFS curriculum (Moylett.et al. 2012) According to article.10 UNCRC states that every child has the rights to be able to be heard, valued and listened to. ‘The United Nations Convention On The Rights Of The Child, article 12, says that we must listen to the child’s view and take those views into account in any planning that effects the child’ (Fajerman,2001:12). Both `the children and the staff are benefitting by taking into account the views and the opinions of the child. This builds upon the child’s self-esteem, the children become independent, creative learners, this also makes them aware they have rights and that they do matter. This benefits the staff because they gain an increased awareness of children’s needs, rights and abilities. Also the parents will benefit from this by them feeling involved with their children’s development and their contribution to the setting. (Fajerman, 2001) An example of the place settings giving the children the freedom to express themselves and have their own opinions is at tea time or snack time; this enables them to be able to decide what they want to eat from a plate of food. This way the children will eat what they like and feel valued. According to an early years consultant Margret Collins (2006) children with low self-esteem are timid and are easily bullied. They struggle to take up challenges, and rarely reach their full potential, on some cases people with low self-esteem look at themselves as a failure! On the other hand children with high self-esteem embrace new challenges and see themselves as a success. Children with high self-esteem do usually have an excellent relationship with their teachers as they receive praise. From September 2008, The EYFS emphasis that every person who cares for the children, e.g. child minders and the EYFS practitioners under the age of five have to show the evidence of ‘Look, Listen, and Note’. This shows what development stage the children are at and what the children like doing, also this gives the practitioner a clear understanding of what the child can do or not and if the child needs extra support or not. By doing this you are treating the children like individuals. (Renouf, 2008). People have different opinions this gives them a sense of themselves and others around them. They can also see how individual everyone is. (Graham, 2002). The children will learn that other people have different opinions and feelings; this enables them to be sensitive to others. They will learn that every child believes and their personal views on things can vary, every child has the right to, and need to be treated with respect. Encouraging children to talk about their opinions and their feelings is important because this will build greater relationships with the child and you will be able to understand and help that child more. It is also important for the child to express what they like or dislike doing, and why. (Graham, 2002) There are many professional skills that will support you when working with children. Some of the professional skills are being an effective practitioner: this covers everything from being empathetic and sensitive to having effective communication skills, Being professional: this includes skills such as being reliable and an anti-bias approach, and ensuring you know your roles and responsibility; this involves putting the needs and rights of the child and the family first. (Beaver, et al.2008) Professional standards are essential in working with children; this covers all the professional standards that are needed to be an affective practitioner. Time keeping; is essential because this reflects well on you. Regular attendance is an individual responsibility; you also need to make sure you have everything with you to get the best out of the day. Appropriate dress code; this is important as this will show you have self-respect and that you value the children by not wearing anything inappropriate. It is very important that everyone in each setting understand the different ways of communicating with individual children’s needs. (Beaver, et al, 2008) It is important that everyone smells fresh, and they need to ensure they regularly wash their hands during the course of the day. Smoking is not allowed in public areas, due to a new law that has been recently created. Workers who choose to smoke should do this by going off site, and out of sight of parents and the children. (Beaver, et al, 2008) It is also a good idea to take in hoody or spare clothing so that you do not smell of smoke when you go back. You could also chew on gum, but remember to get rid of it before you go back to the children. All of this is being an effective role model. Study skills are important to being an effective practitioner. Basic needs are the most important one of them all. Without fulfilling your personal needs you will not be able to get the most from your experience and learn properly. Even looking at things like your health and mental health is important, as if you are ill, you are unable to learn to the best of your abilities and get the most from your day. (Northedge, 2005) Motivation is needed in childcare; this is what gets you through the days. Self-motivation comes from deep within, only you can motivate yourself, someone else can only inspire you to do something. By setting yourself little goals, you are able to achieve big goals. (Beaver, et al, 2008) Time management is also important, and this will need to be developed, you need to be able to manage your home life with your college life-try to keep these separate. You need to make sure you are realistic with your time scales to do something, and to be able to do them to your best abilities. (Beaver, et al, 2008) Note taking is important in studying as you will not be able to remember everything that you have learnt over the course of the day. (Beaver, et al, 2008) Planning is essential in childcare, without planning nothing will run smoothly and the days will be hectic. It is also important to plan your assignments this will help you complete it to the deadline. There are many things that learning environments provide to help their students achieve. There things such as learner support, they will help you to improve your work to a higher standard, they provide all sorts of help with your assignments they help you to plan them, they can proof read and check for spellings, and they can help you with referencing. (Beaver, et al, 2008) In childcare it is very important to develop and maintain appropriate relationships with the children, parents and other professionals. A practitioner’s role is to behave in a professional manner. (Tassoni, et al, 2007) Bowlby attachment theory, helps understand relationships, he understands the relationships between; children and carers, and parents and EYP. EYP’s now understand that there will be some children that need a little extra time to feel secure in the setting. This benefits the child because they become more independent and confident. EYP work in partnership with parents, and they should never undermine the relationship between the parent and child. By having a good relationship between the parent and EYP, will benefit the child, this will meet the child’s needs more effectively as the parent has the most knowledge of their child. (Tassoni, et al, 2007) By keeping the family informed about their child performance and any injury or discomfort will build trust. Building and maintaining relationships between colleagues, is essential. This can be done by sharing responsibility and duties equally. (Tassoni, et al, 2007) It is also important to share the information about the child you are about to work with, with the appropriate people. This also needs to be kept updated, by all the members that are working with that child. If there are any frictions between colleagues, the line manager will need to be contacted to help sort out such issues. (Tassoni, et al, 2007) Consistency is the key point in working with children, as you are a role model for children. The information the child receives from adults should be the same, this can have a negative effect on the children, as they pick up things like consistency and tension between parents, EYP, Colleagues and the children. (Tassoni, et al, 2007) Some children may need more than one organisation to help and support them and their families for any additional support. This is called multi-agency team. This consists of various professional that join their skills to help the children to the best of their abilities. It is a practical mechanism to deliver the integrated working required of public services by Every Child Matters, published in 2003, and by The Children Act 2004. (Beaver, et al, 2008) Multi-agency teams benefit the children because they receive tailor-made support for their needs. Some of the benefits of this is easier and quicker access to services and expertise, and reduced needs for specialist services. (Beaver, et al, 2008) Parents are also part of the multi-agency team, and their choices should also be respected and valued. E.g. parents may choose to discuss the situation to other professionals; this is their decision. (Beaver, et al, 2008) It is very unprofessional to discuss another child’s situation with other parents. Some parents find it very daunting for professionals to have contact with them on a daily basis. (Beaver, et al, 2008) Characterises of working with other colleagues and professionals in a multi-agency team are cooperation, this encourages the children to learn to work well with each other. Every team member needs to be consistent this is to ensure that everyone has the same approach of caring for children and working with their family. All members of the team should encourage, praise, stimulate, and support one another. Every member should share their ideas and aims and should feel respected; they should also feel a sense of belong. Every team member needs to be efficient, so all the skills of each individual can be used to the best of their ability. The responsibilities should be shared between every member in the multi-agency team. Workers need to be willing to learn and develop new ways of learning and thinking, and to balance out their weakness and strengths between them. It is also important you remain confidential within a multi-agency team, this shows that you respect your role and the child; you will also be complying with the Data Protection Act. (Beaver, et al, 2008) Common Assessment Framework (CAF) is a process to make sure that children needs are met in the most efficient and pro-active way. This is also a key component in the ‘Every Child Matters-change for children’ program. The CAF aim is to ensure every child receives the universal to which they are entitled and the additional services they need at the earliest opportunity. (Children’s Workforce Development Council 2008) Child-Centred approach is where the children get the freedom to experience, think, question, and research for their own answers. Nursery practitioners get to see how play develops between the children, and not telling them what to do. This enhances the children’s communication skills. This is the complete opposite of Adult-Led; this is where the adult’s initiates play. (Beaver, et al, 2008) The benefits of a Child-Centred approach are that the children get fully involved in activities and are proud of what they can achieve by themselves. They can actively explore the environment and enjoy playing with others. (Beaver, et al, 2008) Although some children find this situation awkward, as they believe the teacher should be in control, whereas others believe they are fully responsible for their play. (Beaver, et al, 2008) There can be issues with the parents too, as they believe children should not learn through playing they prefer their children to learn through literacy and numeracy skills. (Beaver, et al, 2008) Child-Centred approach links to the EYFS because every child is given the opportunity to choose what they want, this encourages every child to be unique. (Beaver, et al, 2008) The practitioners and teachers work in partnership to create a positive relationship and create and enabling environment for the children. The ‘Look, Listen and Note’ observation links to the adult led approach because you can have a better opportunity for observation this way. (Beaver, et al, 2008) The Reggio Emilia approach supports the child-centred approach; an approach based on children’s ideas, thoughts and observations they have gathered through the environment. This was founded by Loris Malaguzzi. (Beaver, et al, 2008) Reggio Emilia believed that the environment, in which the children learn, should be considered as a third teacher. (Wenex Technologies, 2006) Some of the characteristics of the Reggio Emilia approach are that the teachers work in pairs this is called ‘co-teaching’. ‘There is no staff structure, i.e. no head teacher; and staff such as cooks and assistants are regarded as equal with teachers.’ (Beaver, et al, 2008:251) ‘Teachers do plan and make preparations, but there is not a strict curriculum or timetable. Teaching and learning is allowed to evolve and unfold at the pace of the children and follows the interests they develop along the way’ (Beaver, et al, 2008:252) There is four main areas that are Important within your role, limits and boundaries these are; Health and Safety, managing children’s behaviour, child protection and confidentiality. (Tassoni, et al, 2007) It is everyone’s responsibility to ensure the child’s safety. It varies from a basic level by doing little things such as; shutting doors and gates behind you, to a more extreme level; what to do when there is a fire alarm. You also need to consider other aspects of physical safety; this includes things such as one of the children you are with has an accident or the child is unsafe. You will also need to follow policies on personal hygiene this could be simple things such as; wearing a uniform, tying your hair back, and using the supplied resources. (Tassoni, et al, 2007) It is essential to follow the settings policies and procedures, and the policies on hygiene. (Tassoni, et al, 2007) By following the policies and procedures you are reducing the risk of being accused of something such as neglectful behaviour or being in an abusive situation, it also ensures that everyone’s rights and responsibilities are respected, this also shows that the setting is running smoothly and everyone is doing what is expected of them. Having written policies is a requirement of OFSTED. (Tassoni, et al, 2007) It is very important to be aware of how different settings deal with managing children’s behaviour and where it is appropriate to intervene or when not to. (Tassoni, et al, 2007) Also it is important to observe how other professionals deal with the situation. Child protection is very important this will give you the knowledge of how to follow the correct policies to protect children from harm, and abuse. This is to ensure the child id receiving similar messages, so they can feel secure. (Tassoni, et al, 2007) Some children may tell practitioners things that are a cause of concern, this information should be immediately passed onto the appropriate people and no one else. Confidentiality is very important in -settings, as this protects the child and the families. (Tassoni, et al, 2007)

Social Cognitive Perspective and Phenomenological Perspective

Social Cognitive Perspective and Phenomenological Perspective The quoted text is taken from Social Psychology (Hollway et al 2007, p.35). It challenges the accountability of certain methods in their ability to accurately reflect the reality of social phenomena. Implicitly understood in this statement is that qualitative methods are better suited than quantitative methods. Qualitative methods are better able to reflect richness and complexity of lived experience than quantitative methods which are capable of limiting, constraining and distorting it. This is a polemical stance that has accompanied the growth in qualitative methods since the 1980s. The Social Cognitive Perspective (SCP) and Phenomenological Perspective (PP) demonstrate how strikingly different methods can be. They have different epistemological stances and make different ontological claims. The nature of being (ontology) is understood differently in social psychology, such as the information-processing individual in a social context (SCP) or the experiencing, embodied individual in relation with  others (PP). Limitations and benefits of the SCP and the PP are illustrated by a critical review of Milgrams 1970s experiment on obedience to authority and the works of Eatough and Smith (2006) on feelings of anger in the context of the lives of individual women. Gregen, K.J. (1973) in his account of social psychology as History gave voice to a debate about the relative merits of social psychology methods. In particular whether social psychology as a discipline was scientific in nature or should be considered as contemporary history. Gregen argued that social psychology was a product of historical and cultural climates which constantly changed, producing theories and knowledge that did not prove to be consistent. In this light it was suggested that the prevailing quantitative scientific methods should give way to more descriptive accounts with appreciation for how knowledge is situated within a social-cultural-historic context. These themes of situated knowledge are highlighted by Milgrams findings on obedience to authority. Milgram demonstrated through his experimental conditions the potential for acts of cruelty to be committed by a stranger (research participant and executant) to another stranger (researcher assistant and victim) because they were following orders (researcher and authority figure). His findings have been widely cited and used in psychological text books as factual scientific accounts. They have however been criticised on a number of ethical and substantive terms (Holloway et al 2007, p.53). For example Milgram recorded that participants were observed to sweat, tremble, stutter, bite their lips, and groan as they found themselves implicated (Milgram, 1977, p. 112; in Holloway et al 2007, p.54). The use of deception and unnecessary stress to research participants is seen by many as being unjustifiable. Milgram himself was less concerned with the immediate distress caused and was satisfied that questionnaires sent after one year showed participants felt positively towards the experiment (Milgram, 1974, p.195 within Hollway et al 2007, p.52). In Milgrams time research ethics were not as developed as they are today. Arguably the overall benefit of the research was deemed more important than any minor stress caused. This insight is perhaps justifiable given Milgrams interest in trying to understand how hatred and persecution of Jews under Hitlers Nazi Germany could have happened. Milgrams experimental conditions in which one agent commands another to hurt a third reflected his underlying theory that elements of authority, executant and victim were central to obedience and hostility (Milligram, 1977, p.102; in Holloway et al 2007, p.53). Apart from ethics critics such as Harre 1979, p.105 argues that there are substantive problems with his study. Harre notes that the issue of trust was overlooked; trust as a possible response to power was likely key to participants behaviour as an executants. In fact 40% of participants did not follow the instruction to inflict pain on the victim, however these accounts are given little attention. Similarly the research setting was changed because of a perceived influence of Yale University on giving authority to the instruction to the executant. It was moved from the universitys laboratory to the basement and then to a nearby town called Bridgeport. But, Milgram, 1977, p. 116 believed that the level of obedience in Bridgeport, although somewhat reduced, was not significantly lower than that obtained at Yale with 48% vs. 65% opposed. 17% between sites can be interpreted as statistically significant (Holloway et al 2007, p.53). Ultimately the reliability and validity of Milgrams findings can be questioned on a number of points. Although Milgram sort scientific objectivity he failed to consider ethical questions fully, did not explore the relevance of the research settings or participants personal experiences. PP provides an interesting perspective to juxtapose with traditional scientific methods. It has in its own right a long established history dating back to the C18th from philosophical works by Edmund Husserl, Martin Heidegger, Maurice Merleau-Ponty, Jean-Paul Sartre, et al (Smith Woodruff 2009). As an approach to social psychology it became popular alongside a humanistic perspective in USA during the second half of the C20th. It seeks detailed descriptions instead of explanations for human behaviour, addressing all aspects of a topic, and suspending judgements and assumptions that may be held by the researcher (Hollway et al 2007, p131). Linda Finlay (2009) in Debating Phenomenological Research Methods acknowledges that variations in methodology have flourished within PP. The competing visions of how to practice phenomenology stem from different philosophical values, theoretical preferences, and methodological procedures. Smiths Interpretative Phenomenological Analysis (IPA) is however one that has become popular. Smith argues that his idiographic and inductive method, which seeks to explore participants personal lived experiences, is phenomenological in its concern for individuals perceptions. He also, however, identifies more strongly with hermeneutic traditions which recognize the central role played by the researcher, and does not advocate the use of bracketing (Smith, 2004). The competing visions of how to practice phenomenology stem from different philosophical values, theoretical preferences, and methodological procedures. Eatough and Smith (2006) used interpretative phenomenological analysis of feelings of anger in the context of the lives of individual women. Specifically they used descriptive tools to explore three analytic themes the subjective experience of anger, forms and contexts of aggression, and anger as moral judgment. They concluded that mean making is a fundamental process in how the participants formed emotions. The descriptive accounts from the interviews with Marilyn (one of the research participants) were given as a case in point. Eatough and Smith (2006) believed that Marilyns anger towards her mother was changed by her self-reflections and counselling. It can be argued that richness and complexity provided by PP in its account of womens anger by Eatough and Smith (2006) far outreaches that by its SCP counterparts. The SCP remains however the dominant perspective in social psychology and has been helped by innovations in research methods. For example, Fazio et al (1995) work that has built on the concepts of cognitive errors and biases implicated in prejudice thinking (Fiske and Taylor, 1991). Their research has suggested that subtle forms of prejudice are now more pervasive than blatant forms. Their experiment measured response times of white undergraduates when classifying stimulus words as either being positive or negative meaning; after viewing random photos of black and white faces. They found evidence of inhibition and facilitation effects which were largely automatic, unconscious associations, between the colour of faces and positive or negative evaluations. In conclusion, the quoted text implicitly suggests that methods such as those used by SCP can be limiting, constraining and distorting but perhaps this is only half the story. Although quantification can be accused of being myopic, failing to appreciate richness and complexity in the account of the social phenomena under question they often do so knowingly. The scientific tradition of looking for cause and effect relationships in social psychology continues to be dominant over other methodologies. This reflects the willingness of the discipline to continue to strive for objectivism, statistical reliability and validity, and ultimately for the advancement of practical application. Moreover, as Gregen, K.J. (1973) noted social psychology methods are constantly adapting and evolving the work of Fazio et al (1995) on subtle forms of prejudice being testament to this. In contrast richness and complexity of qualitative methods such as PP often comes at a cost as the research is time-consu ming may have limited practical application.

Analysis of the Housing Market in the UK

Analysis of the Housing Market in the UK Introduction For most people in the UK, as in other countries, the purchase of a house is the single largest expenditure they ever make. In contrast with other purchases, a house is not only something that provides highly desirable services – convenient and independent housing – but it is also the single largest element of household wealth. For homeowners, this asset motive for buying a house is becoming increasingly important. As a store of value, houses are increasingly becoming both a critical component in households’ long term financial planning as well as a basis for raising consumption. Just like possessing a portfolio of valuable stocks and bonds, owning a house whose market price amounts to greater wealth. It follows, then, that a change in the market value of a house will change the owner’s wealth, and, consequently, the owner’s consumption expenditure. While the housing market in the U.K. has experienced several dramatic phases in the past three decades[1], its behavior in the last decade or so is not only without precedence but it is also a reflection of a fundamental transformation in the economy’s financial system. Whether being labeled as the product of ‘irrational exuberance’[2] or being described as a ‘bubble’, housing market developments have spawned a wide body of thinking that is increasingly taking on a nervous tone – especially among economists. A quick survey of the macroeconomic literature related to the housing market reveals that the period from the late 1990’s to around 2004 saw a confluence of several phenomena that seem to be related via a series of strong theoretical linkages. Key among these are historically high levels of home-ownership and housing wealth, an extreme housing-price boom, a generously liberal credit regime, unanticipated levels of borrowing, the lowest interest rates in generations, massive consumption expenditures/dangerously low savings rates, general economic prosperity, and, a rising trend in bankruptcies and house possessions. The objective of this project is to highlight the linkage between housing wealth and consumption expenditures with special focus on the events of the last decade. Given the nature of macroeconomic linkages, it turns out that in order to study this relationship in the context of UK, it is necessary to tell an economic tale that incorporates all of the phenomena mentioned above. While there are rather straightforward theoretical reasons as to how and why the national housing wealth affects aggregate consumption, the historical and institutional realities of the financial industry, the changing consumer behavior with respect to credit, the evolving demography etc. have played an important role in shaping this relationship in the UK. Over two-thirds of UK households owned their home and it is typcially their biggest investment they make. At the aggregate level, housing wealth is now greater than the size of their financial holdings[3]) and it is distributed in a considerably more equitable manner across socioeconomic and demographic segments as compared to the latter. Such investments bring reasonable returns over the long term, and in the last five years house price appreciation has more than doubled the value of the stock. It follows, then, that changes in housing wealth have the potential, in theory, to have sizeable effects on consumption, GDP, unemployment etc. The theoretical mechanism by which changes in housing wealth are transmitted into consumer demand, called the ‘wealth effect’ (discussed in detail later in the paper), is of critical importance to the economy because its impulses also affect an array of other macroeconomic variables and processes. Clearly, the ability to draw on this major store of purchasing power has serious implications for the financial health and prosperity of homeowners and, hence, the economy. With respect to access to the ‘frozen’ housing equity, the UK experience has been uniquely successful as compared to those of almost all other OECD countries. A series of policy moves to deregulate and ‘liberalize’ lending practices resulted in democratizing the credit market such that loan products once provided to the privileged, became common-place. Households that had faced credit barriers could now affordably borrow large amounts thus unleashing the power of the wealth effect. Therefore, the ways in which UK households obtain and dispose off the equity is of particular interest to this study.[4] This paper is organized as follows: the next section lays out the key issues involved in this study; the third section discusses the theoretical and analytical matters concerning the wealth effect in the context of the recent UK housing boom; the fourth section surveys the empirical research in this area; the fifth section presents the empirical work done for the study, including a description of the findings from regression analysis using Microfit; and the last section offers some conclusions from the work. (There are graphs and figures associated with the text and they are appended at the end.) A Review of the Peculiar Issues and Macroeconomics of the UK Housing Market Nature of the boom With focus on the 1995-2004 period, this section lays out the key issues involved in understanding of the structure and strength of the relationship between housing wealth and consumption. At the outset it is necessary to have an overview of developments in UK’s housing market during the pertinent period to highlight the generation of housing wealth, the manner in which it is accessed in the form of equity, and channels of disbursement of the equity. The UK housing market became truly energized in the mid-to-late 1990’s, beginning with a property boom in the London area and then gradually spreading to virtually every region. Homeownership levels reached historic levels and so did the share of ‘buy-to-let’ residential investments in the country’s portfolio. Using data published by Halifax-Bank of Scotland, Graph 1 provides the salient market metrics: the price boom accelerated to push the price of the typical house from around  £61,000 in 1995 to over  £161,000 by 2004 – an increase of over 160%; not only was the speed and tenacity of housing prices unprecedented, the annualized percentage growth rate seem to rise with the level of prices. Far from being a localized phenomenon, this housing boom covered the entire UK, as Graph 2 demonstrates. While, the origin of the boom was in Greater London and the Southeast in the mid 1990’s, it quickly enveloped East Anglia and the Southwest. However, by 2001 the boom entered its most vigorous phase as it spread to the peripheral regions with prices almost doubling in a five-year period. Since most of the home purchases are financed through mortgages, the two variables that shape housing demand decisions are the interest rate and property prices. As it turned out, with historically low nominal lending rates (see discussion later), the home prices was the chief determinant behind purchases. The feeding frenzy that was the housing market pumped prices to such a level that placed typical accommodations out of reach of most would-be buyers. The Affordability Index, calculated as the ratio of housing prices to household disposable income, rose from 3.09 in 1995 to 5.45 in 2004. It is useful to note that higher aggregate housing wealth can be a product of a rise in housing prices and/or a growth in the stock of housing. As is displayed in Graph 3, the early 1980’s saw housing wealth grow due to a steady rise in prices while in the late 1980’s and early 1990’s we see stability in it despite declining prices. There was rising home ownership during all three intervals; in the early 1980’s it was engendered by the privatization of some public housing [5, p. 12] while the late 1980’s and early 1990’s it was due to stimulated demand spurred by declining prices and interest rates. With housing prices rising at around 20% per annum, vast slices of society saw the value of their homes reach unseen levels as the market injected equity. This store of equity was virtually a battery filled with purchasing power that was steadily getting charged by the market and that could be tapped into, if needed, to finance purchases. Halifax (2005) reports on it website that at the end of 2005, UK’s housing wealth reached a historic peak at  £3,408 billion which amounts to triple the figure in 1995 with the last five years seeing a 60% increase. As Graph 3 illustrates, since the mid-1990’s the unprecedented spurt in housing wealth can be attributed mainly to rising prices. Clearly, an index of housing prices is an excellent proxy for housing wealth. [5] What generated the price boom? As compared to the preceding 15 years, the last decade saw the housing market subjected to a variety of macroeconomic and financial forces. Following Her Majesty’s Treasury (2003) and Farlow (2004), one can identify demand- and supply-side factors responsible for shaping the current housing market. On the demand side, the key market forces were: According to Her Majesty’s Treasury (2003) the early 1980’s saw a sustained campaign of liberalization of the credit market that led to increased competition among banks and non-traditional lenders, rampant development of new credit products, and enhanced capacity of banks to create liquidity; all of which made obtaining housing loans easier and a more egalitarian process by lowering transaction costs. [6] Low and declining interest rates pushed down the cost of mortgage credit thereby stimulating housing demand; Macroeconomic prosperity with higher disposable income and lowered unemployment rates allowed for more purchasing power; Expectations of continuous expansion and future employment created an optimism among households Despite an ageing population, members of typical home-buying age-cohort (especially baby-boomers) saw their households grow, thus creating a greater demand for family housing; And lastly, the explosion in ‘buy-to-let’ purchases led to a massive speculative demand fueled by expectations of sustained housing price increases. On the supply side, the major market forces according to Farlow (2004) and Her Majesty’s Treasury (2003)were: a low price-elasticity of supply due to a combination of policy regulations, regional scarcity of land, and lags in obtaining licence/local approval; Scarcity of existing housing available for purchase i.e. low vacancy rate; Rising costs of construction, especially due to labour shortage and rising prices of materials. When a strong level of demand and a limited and inelastic housing supply are combined, one can see why prices have risen so quickly. Housing wealth vs. Financial Wealth To understand the rising significance of the recently acquired housing wealth, it is interesting to compare it with the ownership of financial assets in UK. Housing remains UK’s greatest asset with the total of shares, bonds, and cash amounting to  £1.6 trillion. In the past, financial assets pensions and holdings of shares, bonds, and bank accounts accounted for bulk of the nation’s wealth. However, recent history has created housing as the asset that is held more widely and equitably – across geographic regions, age cohorts, and income groups – than financial wealth. Pensions were clearly concentrated among the older age groups and the bulk of other financial assets were held largely by a small opulent minority. Data provided by National Statistics (www.statistics.gov.uk) and Her Majesty’s Treasury (2004) describe UK’s home ownership as widespread across all income and age categories with older segments having a larger rate. Whereas shares and bonds are owned largely by people in higher income groups – for obvious reasons – the housing boom has proved to be a moderating or equalizing force as all homeowners have benefited from rising property values.[7] The English Longitudinal Study of Ageing (2002) provides some supporting evidence in this respect. The study finds that because of the relatively even distribution of recent gains, housing wealth has become more important than non-pension financial wealth, especially in the 50+ age group. The following table shows that not only is the typical size of housing wealth ownership greater than net financial wealth (non-pension), but that it is far less concentrated across society as reflected by the lower inter-quartile ratio and lower Gini coefficient. Table 1. Net Housing Wealth approx. Net Financial Wealth – approx. Mean  £73,000  £44,000 Median  £52,000  £12,000 Inter-quartile ratio 5.14 69.3 Gini Coefficient 0.575 0.761 Source: English Longitudinal Study of Ageing (2002), IFS. The data shown in Graph 4 reveals though financial wealth had dominated all through the 1990’s, the rapid growth of housing wealth since the mid 1990’s coupled with the stock market bust has again placed the two neck and neck. Even with parity in value, the prominence that housing wealth commands in the national balance sheet is the consequence of its relatively equitable distribution and the fact that in spite of recent volatility in housing prices, it is historically far more reliable as an investment than the market value of corporate shares – the dominant component of financial assets. With growth in house prices outstripping the growth in mortgage debt, mortgage equity has increased from  £700 billion in 1995 to  £2.4 trillion at the end of 2005 – a 250% increase. In real terms, the last five years have seen the value of housing stock rise by over 60%. Thanks to housing values rising faster than mortgage debt in each of the last ten years, UK homeowners now have a greater financial buffer for leaner times. Ten years ago, the typical home was worth 2.8 times as much as the typical mortgage; at the end of 2005, this ratio had increased to 3.5, underlining the fact that the country has more equity than a decade ago. Tapping into housing wealth A survey of related literature from Bridges et al (2004), Davey (2001), Farlow (2004), Nickell (2004), and Salt and Macdonald (2004) reveals a variety of ways in households can access the equity stored in the residences. The manner in which a particular household harvests equity depends on the circumstances under which the action is taken. Table 2 below has categorized the possible scenarios. The table explains that households that continue to occupy their home can draw equity by re-mortgaging, i.e. borrow by treating their property as collateral. Households who move could access equity either by over-mortgaging the new home, or by buying a cheaper house in the new location, or by selling their house move to a rental unit (thereby liquidating their asset and obtaining the entire stock of equity). The last possibility covers cases where the owner id deceased or leaves the country, leading to the final sale of the house and the release of 100% of the equity. Table 2. Category of Homeowners Method of Extracting Equity Houseowners retaining possession Re-mortgaging: by taking out additional mortgage(s), borrowers could access equity up to a maximum percentage of value Houseowners that move Down-grading: these households move to a cheaper home, thereby harvesting the equity that equals the difference between the value of sale and the portion of mortgage that was owed Over-mortgaging: these households move to a new residence but manage to obtain a mortgage loan that exceeds the value of the new purchase. This typically occurs in regional markets where there is strong expectations of continuous property-value appreciation Final sale with return to rental: some households sell their houses in order to move to a rental property ostensibly due to either lack of affordability (those with diminished earnings) or convenience (mostly the elderly and the infirm) Households in which the owner(s) are deceased Final sale: when the owners dies, the property is sold with the receipts being used for purposes other than purchase of a house Having harvested the equity, how a given household’s chooses to allocate it across possible uses depends on a range of socio-economic and demographic factors like income level, family size, amount and composition of wealth, age(s) of the members, their geographical location, and even their ethnicity. The following section provides a detailed discussion of the conversion of equity into a specific one use – consumption. Housing wealth and the consumption function: Theory, Analysis, and UK Evidence In this section we begin with outlining the macroeconomic theory behind the consumption function with special reference to the wealth effect. The aim is to both explain the causal relationships behind the various ways in changes in the housing market can impact consumption as well as to identify the factors and circumstances under which the wealth effect might be weakened. The issues in this discussion are with explicit reference to the specific case of the UK. The original Keynesian consumption function was presented as: C = a + bYd(1) Where C denotes real consumption, ‘a’ is the autonomous consumption expenditures, ‘b’ is the parameter symbolizing the marginal propensity to consume (hereafter, mpc) that was postulated as being a constant fraction, and Yd the real disposable income. Shifts in the consumption function are considered as being caused by ‘shocks’ or changes in variables other than Yd. Given the historical period when Keynes first conceived this relationship, it is not surprising that income was the chief driver of consumer spending. Presumably, because wealth was highly concentrated within the aristocracy and credit was a privilege for the few, Keynes decided to lump all non-income influences on consumption into the autonomous term. Over time, with growing sophistication of macroeconomic theory and of market-based economies in general, the consumption function came to be recognized as the following general formulation: C = Æ’(Yd, Real Interest Rate, Price Level, Wealth, Expectations)(2) This explicitly recognized the influence of, among other variables, wealth on consumption decisions, i.e. the wealth effect. However, the formulation stuck with the original assumption of the mpc being constant. That, after all, was acceptable because Keynes’s thinking was anchored in short run considerations and the assumption of unchanging consumers’ sensitivity to income changes was consistent with the model. However, empirical testing of the formulation revealed that not only did the mpc vary with the length of time over which the estimation was conducted (it increased with time), but that its value tended to approach one. This certainly cast a cloud over the consumption function’s relevance and reliability in terms of explaining behaviour.[8] With new thinking about consumption expenditures and about the time-horizon over which a household’s economic decisions were made, two new theories emerged. The Life Cycle Hypothesis (LCH)[9] and the Permanent Income Hypothesis (PIH)[10] both began from the fundamentally un-Keynesian assumption that households make decisions based on their assessment of not only the present but also the anticipated or likely future circumstances. In addition, both also held that rational spending and hence saving decisions necessarily involved long term planning – plausibly for rainy days, growth in family size, and old age. According to Miller (1996) and Gordon (2003), the LCH assumes that permanent incomes are determined over the entire lifetime of the consumer, with allowance for a transitory element that depends on the consumer’s professional status. While the lifetime-oriented income could rise or fall in response to changes in productivity and unexpected events, consumption is smoothed and maintained at an even keel with dissaving (or borrowing) making up any shortfall in spending power. Similarly, in boom periods households save and accumulate purchasing power as wealth for future use. The long term level of income is assumed to follow a smooth path. Clearly, wealth plays a critical part in this model as the household accumulates savings in periods when smoothed consumption is below income. Similarly, as needed, wealth is accessed or made liquid for spending when planned consumption exceeds earnings.[11] The theoretical significance of the LCH – which forms the basis of much of the empirical research reviewed – is easy to see because the way it explicitly incorporates the wealth effect into the household’s lifetime decision horizon with respect consumption, it makes it convenient to model housing wealth. Like the stylized household in the model that begins income-earning phase of her life with modest income and some debt (incurred because of current consumption expenditures exceeding lifetime income), the typical new homeowner is relatively young with a mortgage debt that is several times her annual income and little in terms of savings. Over time, in the absence of tumultuous booms, population and income growth in the economy lead to a steady rise in property values and mortgage equity accumulates. With growing needs for durables, the homeowner then has the possibility of ‘cashing in’ some of the stored housing wealth when current income and savings prove inadequate, much in the same way as the theoretical consumer enters a life-phase during which dissaving takes place. The key idea here is that just like the accumulated housing equity is part of purchasing power for the lifetime, the consumption decision also cannot be inconsistent with a long term budgetary process. This model also suggests that there are periods (or life phases) in the household’s lifetime when wealth is accumulated and when it is used up in the form of consumption. This clearly defines when and under what circumstances mortgage equity is spent. For a young family that continues to occupy a house, the prime motivation is to accumulate equity and harvest it for emergencies or for planned increases in spending that are in balance with expected lifetime earnings which presumably are adjusted for the debt service associated with the additional mortgage. This scenario is consistent with, say, a home improvement project that allows for a larger or growing family or with purchase of durables for a similar purpose. For older homeowners who are approaching retirement or are actually retired, withdrawing equity is consistent with their position in the ‘life-cycle’. Since the income stream is either expected to end or has ended, spending decisions warrant the use of sa vings and/or mortgage equity withdrawals (MEW). Critical to this model is how it treats the rapidly accumulated wealth gains due to a market-driven housing price boom like UK just experienced. Analyzing the housing wealth effect in the context of the LCH, Bridges et al (2004) liken the rise in housing wealth to raising the household’s lifetime budget constraint. Assuming easy access to credit, they identify two pertinent theoretical relationships: one between housing price increases and the lifetime incomes of the wealthier households and the other between housing wealth and the newly acquired debt obligations of the re-mortgaging households. In theory, then, higher housing prices generate wealth effects depending on whether or not the price change is interpreted as permanent or temporary. If households perceive the gains to be permanent or unlikely to be reversed by a sudden housing bust (like what the UK witnessed in the 1980’s and early 1990’s), then it amounts a rise in lifetime income and higher consumpti on expenditures induced by it are ‘allowed.’ On the other hand if the price (and wealth) increases are due to random market activity and will most likely be followed by a decline, then the realized buildup of mortgage equity ought to be regarded as a temporary development and no serious consumption outlays need be planned to spend it. LCH holds that households that are pleasantly surprised by equity gains and choose to borrow against it for extravagance or pleasure spending are fully aware of the future debt-service implications and have made the necessary budgetary calculations that reveal that these actions related to the wealth-effect are compatible with their lifetime income. Curiously, O’Sullivan and Hogan (2003) report that Ireland also experienced a housing boom (though not as extreme as the one in UK), but that there were no signs of a wealth effect. This was presumably because Irish consumers did not put much faith in the housing market’s longevit y and construing the recent price gains as transitory, let the accumulated equity stay ‘frozen.’ However, it is possible that there were indeed impulses related to a housing wealth effect but simultaneously counteracting forces offset it, resulting in generally unchanged aggregate consumption.[12] The above discussion opens up three related and important issues: (i) the process by which accumulated housing wealth translates into consumption expenditure, i.e. the anatomy of the wealth effect in the housing context, (ii) the implications of multiple possible uses of MEW for the strength of the wealth effect, and (iii) other macroeconomic factors that can offset the wealth effect or perhaps prevent it from materializing. Anatomy of the Housing Wealth Effect There are two channels through which homeowners are able to raise their consumption via the wealth effect. As explained above, one way for homeowners to convert their housing wealth is by harvesting mortgage equity MEW. Table 2 outlined the variety of ways in which households obtain equity. Benito and Power (2004), Bridges et al (2004), and Davey (2001) provide insight into how MEW has become a major source of consumer financing in the UK. Graph 5 clearly shows the close relationship between housing prices and MEW[13]. Throughout the last three decades, except for the 2003-2004 interval, UK’s homeowners have reacted to the housing market’s wealth rewards. As Davey (2001) explains, MEW was relatively unimportant in the 1970’s but rose sharply in the following decade. In the early 1980’s despite a recession, MEW climbed because the period coincided with the privatization of public housing. The first half of 1990’s, however, saw a steep decline in hou seholds use of withdrawn equity.In fact there was a brief period when there was a net injection of equity into the housing stock. It could be argued that this was a reflection of a rational economic behaviour on the part of homeowners’ as they assessed a downward trend in housing prices as being detrimental to their long term finances. With a declining value of their housing wealth, UK’s homeowners cut back on withdrawals. Since the mid-1990’s price boom, that downward trend in MEW was quickly reversed. This period saw MEW grow faster than housing prices hinting at the possibility of a overly optimistic body of borrowers who expected housing prices and equity accumulation to continue rising at an ever increasing rate. Since at least part of the MEW is withdrawn by homeowners re-mortgaging their houses (see Table 2), this translates into loans secured by their properties. Halifax – BOS (2005) offer compelling evidence in this respect. They report that in 2 004, total gross lending secured by dwellings was an astronomical  £291 billion – 4% more than the previous year. The figure that was a mere  £57 billion in 1995, doubled by 1999 and with growth rates sometimes exceeding 35% had risen to five times that level in 2004. This monumental withdrawal can be interpreted as a major windfall for the homeowners who suddenly found themselves swimming in an ocean of purchasing power made available by the housing market. The other channel through which housing wealth engenders greater purchasing power in the hands of homeowners is comparatively subtle mechanism. Bridges et al (2004) discuss in great detail, how even without using their property s collateral, homeowners have gained access to ever rising amounts of unsecured credit. The rising value of housing wealth was interpreted by banks and other lenders as indicative of greater borrowing ability, i.e. greater creditworthiness. Naturally, this perception of the lenders was shaped, in part, by expectations of continuous a housing boom. A side implication of this phenomenon is that homeownership in the UK had become a screening device or filter for lenders’ decisions about whom to consider for loans. It follows that this would place renters at a disadvantage with respect to access to credit. Several studies, including Bridges at al (2004) have cited evidence of homeowners being supplied credit on terms far more favorable than those offered to non-owners. It can be reasonably expected that a large portion of the unsecured borrowing was directed toward consumption. Critical to both these channels is the issue of the ease with homeowners are able to obtain credit in lieu of their housing wealth. The mere existence of mortgage equity must be complemented with an efficient system to gain access to it for the wealth effect to take place. Benito (2004), Bridges et al (2004), and Her Majesty’s Treasury (2003) all stress that the liberalization of UK’s financial system that began in 1979 (see footnote 6 in Sec. 2) has been instrumental in creating a credit market that has facilitated the historic levels of MEW. With rising competition among banks and building societies and tremendous product innovation, the lending industry has created a series of affordable and accessible ways in which homeowners can obtain credit. All three studies portray the boom in housing prices and MEW in the UK as unique as compared to all other OECD economies. The coincidence of rising housing prices created huge reserves of withdrawable mortgage equity and supply-side changes in the form of lower restrictions on lending practices and other financial reform is responsible for the explosion in MEW sin

Acupuncture: Treatment for Stress :: Medicine Research Medical Essays

Acupuncture: Treatment for Stress Acupuncture involves the insertion of tiny needles into "acupuncture points," specific nerve endings under the skin. These needles are extremely small, so small in fact that ten to fifteen acupuncture needles can fit in a regular hypodermic needle (http.//www.acupuncture.com/Acup/Acupuncture.htm). There are three claims for why acupuncture is effective: reflexes, hormones, and energy transfer. When the needle is inserted into the skin, the nerves send signals that travel up the spinal cord, into the brain, and block the pain center in the brain. This prevents pain and other signals from entering and exiting the brain and severity of the symptoms is suppressed. This allows the body to heal itself while the individual is unaware of any pain or other distress (http://www.acupuncture.com/Acup/Works.htm). After the needle is inserted into the skin, the surrounding area becomes red. This may be a result of the release of hormones into the bloodstream. These hormones may be the body's natural pain killers, which stimulate blood circulation as well reduce pain (http://www.acupuncture.com/Acup/Works.htm). The third explanation is the ancient Chinese explanation that the acupuncture points are doors to energy channels and that by inserting the needles into these points, one can open and close these doors. This brings about energy circulation and harbors energy balance, resulting in improved health (http://www.acupuncture.com/Acup/Works.htm). Acupuncture is believed to be highly effective. In a nation-wide survey of acupuncture users, conducted by Dr. Claire M. Cassidy, 91.5% reported "disappearance" or "improvement" of symptoms after their treatment, 84% see their MDs less often, 79% use fewer prescription drugs, and 70% were able to avoid previously recommended surgery (http://www.acupuncture.com/Acup/AcuStats.htm). Said one man from San Francisco: Acupuncture had immediate effects on my levels of stress. I simply was not the same person at work. Co-workers could not believe the difference in my disposition. Clients continually comment on my relaxed nature given the stressful environment I have put myself in (CPA, working with taxes). I believe it has helped me stay healthy over the last 9 years... (http://www.acupuncture.com/Acup/AcuStats.htm). Acupuncture is a treatment with few, if any, reported side effects. The most common side effect is deep relaxation and a slight, temporary heaviness. In the treatment of stress, the side effect of deep relaxation is often a desired result. In these cases, very few side effects are noticed. Most of the information on acupuncture is circulated by acupuncture therapists and clinics, with one such therapist being Dr.

Literary Analysis of The Notebook by Nicholas Sparks Essay -- The Note

Literary Analysis of The Notebook by Nicholas Sparks This book is a great book and it touches ones heart in ways you couldn't imagine. I seriously love this book because I love romantic stories and it's just so cute. The movie is good but the book is better. Well 'The Notebook' is about a journey of two young lovers Noah Calhoun and Allie Nelson who made a passionate summer romance and they were separated because Allie moved to the city. After fourteen years of separation due to World War 2 and class differences. Allie got engaged to a wealthy lawyer, Lon. One day Allie was looking through the newspaper and she spots Noah standing next to the plantation he restored. All of a sudden all these feelings started coming back from when she last saw him. So she decides to go back to New Burn to visit Noah. When she arrives in New Burn she checks in at a hotel and drives straight to the plantation and as she approached the house she saw Noah. Noah saw the car approach so he walked towards the car and once she steps out of the car he was shocked to see the ghost that had come to dominate his life. They spent a couple of days together making up for lost time and a hundred miles away from New Burn Allie?s fiancà ©, Lon, was getting worried because every time he called her she was never there so he decided to go to New Burn. That day Noah had a surprise for Allie he took her on a kayak ride down the creek to this special place he found that morning. When he was about to arri...

Internet working Essay

Today, the Internet and World Wide Web (WWW) are familiar terms to millions of people all over the world. Many people depend on applications enabled by the Internet, such as electronic mail and Web access. In addition, the increase in popularity of business applications places additional emphasis on the internet. The Transmission Control Protocol / Internet Protocol (TCP/IP) protocol suite is the engine for the Internet and networks worldwide. Its simplicity and power has lead to be the single network protocol of choice in the world today so the world has become a global village where the people live their life on the Internet. It has no boundaries or barriers, It is open to all who have access to Internet using computer. The e-commerce and online business has really facilitated the people nowadays. The main design goal of TCP/IP was to build an interconnection of networks, referred to as an internetwork, or internet, that provided universal communication services over heterogeneous physical networks. The clear benefit of such an internetwork is the enabling of communication between hosts on different networks, perhaps separated by a large geographical area. 1. Introduction. The internet has been a useful source of information for the public and made things possible which were impossible in the past . Such as emailing has accelerated the process of Mailing and it hardly takes seconds to reach in any part of the world as the Client are connected to Server and the Server connects the clients to world wide web . it is like cob web which keeps connected to all users at the same time . The Internet’s growth has become explosive and it seems impossible to escape the bombardment of www.com’s seen constantly on television, heard on radio, and seen in magazines. Because the Internet has become such a large part of our lives, a good understanding is needed to use this new tool most effectively. This whitepaper explains the underlying infrastructure and technologies that make the Internet work. It does not go into great depth, but covers enough of each area to give a basic understanding of the concepts involved. For any unanswered questions, a list of resources is provided at the end of the paper. Any comments, suggestions, questions, etc.are encouraged and may be directed to the author at the email address given above. The Internet Frame Work As the Internet is a global network of computers each computer connected to the Internet must have a unique address. Internet addresses are in the form nnn. nnn. nnn. nnn where nun must be a number from 0 – 255. This address is known as an IP address. (IP stands for Internet Protocol; more on this later. ) The picture below illustrates two computers connected to the Internet; your computer with IP address 1. 2. 3. 4 and another computer with IP address 5. 6. 7. 8. The Internet is represented as an abstract object in-between. (As this paper progresses, the Internet portion of Diagram 1 will be explained and redrawn several times as the details of the Internet are exposed. ) Diagram 1. a These IP addresses are actually divided into different classes, where each class has it’s own range and criteria to define the number of hosts and networks. These types of information depends on your network size, criteria and purpose. In the Diagram 1. b, you can find the detail information related with the IP address classes. Diagram 1. b. The decimal representation of Internet addresses If you connect to the Internet through an Internet Service Provider (ISP), you are usually assigned a temporary IP address for the duration of your dial-in session. If you connect to the Internet from a local area network (LAN) your computer might have a permanent IP address or it might obtain a temporary one from a DHCP (Dynamic Host Configuration Protocol) server. In any case, if you are connected to the Internet, your computer has a unique IP address. Hierarchical Versus Flat Address Space Internetwork address space typically takes one of two forms: hierarchical address space or flat address space. A hierarchical address space is organized into numerous subgroups, each successively narrowing an address until it points to a single device (in a manner similar to street addresses). A flat address space is organized into a single group (in a manner similar to U. S. Social Security numbers). Hierarchical addressing offers certain advantages over flat-addressing schemes. Address sorting and recall is simplified through the use of comparison operations. Ireland, for example, in a street address eliminates any other country as a possible location. Fig. 1. 1. Hierarchical and flat address spaces differ in comparison operations. Fig: 1. 2 Source: TCP/IP Illustrated, Volume 1, The Protocols. W. Richard Stevens. Addison-Wesley, Reading, Massachusetts. 1994. The Ping Program If any body who is using Microsoft Windows or a flavor of UNIX and have a connection to the Internet, there is a handy program to see if a computer on the Internet is alive. It is called ping, probably after the sound made by older submarine sonar systems. 1 if you are using Windows, start a command prompt window. If you are using a flavor of UNIX, get to a command prompt. Type ping www. yahoo. com. The ping program will send a ‘ping’ (actually an ICMP (Internet Control Message Protocol) echo request message) to the named computer. The pinged computer will respond with a reply. The ping program will count the time expired until the reply comes back (if it does). Also, if you enter a domain name (i. e. www. yahoo. com) instead of an IP address, ping will resolve the domain name and display the computer’s IP address. More on domain names and address resolution later. Protocol Stacks and Packets So your computer is connected to the Internet and has a unique address. How does it ‘talk’ to other computers connected to the Internet? An example should serve here: Let us say your IP address is 1. 2. 3. 4 and you want to send a message to the computer 5. 6. 7. 8. The message you want to send is â€Å"Hello computer 5. 6. 7. 8! † Obviously, the message must be transmitted over whatever kind of wire connects your computer to the Internet. Let us say you have dialed into your ISP from home and the message must be transmitted over the phone line. Therefore the message must be translated from alphabetic text into electronic signals, transmitted over the Internet, and then translated back into alphabetic text. Now there is the question that how is this accomplished? Through the use of a protocol stack. Every computer needs one to communicate on the Internet and it is usually built into the computer’s operating system (i. e. Windows, UNIX, etc. ). The protocol stack used on the Internet is referred to as the TCP/IP protocol stack because of the two major communication protocols used. The TCP/IP stack looks like this: Protocol Layer: Application Protocols Layer Protocols specific to applications such as WWW, e-mail, FTP, etc. Transmission Control Protocol Layer TCP directs packets to a specific application on a computer using a port number. Internet Protocol Layer. IP directs packets to a specific computer using an IP address. Hardware Layer Converts binary packet data to network signals and back. (E. g. Ethernet network card, modem for phone lines, etc. ) If we were to follow the path that the message â€Å"Hello computer 5. 6. 7. 8! † took from our computer to the computer with IP address 5. 6. 7. 8, it would happen something like this: Diagram 2 The message would start at the top of the protocol stack on your computer and work its way downward. If the message to be sent is long, each stack layer that the message passes through may break the message up into smaller chunks of data. This is because data sent over the Internet (and most computer networks) are sent in manageable chunks. On the Internet, these chunks of data are known as packets. The packets would go through the Application Layer and continue to the TCP layer. Each packet is assigned a port number. Ports will be explained later, but suffice to say that many programs may be using the TCP/IP stack and sending messages. We need to know which program on the destination computer needs to receive the message because it will be listening on a specific port. After going through the TCP layer, the packets proceed to the IP layer. This is where each packet receives its destination address, 5. 6. 7. 8. Now that our message packets have a port number and an IP address, they are ready to be sent over the Internet. The hardware layer takes care of turning our packets containing the alphabetic text of our message into electronic signals and transmitting them over the phone line. On the other end of the phone line your ISP has a direct connection to the Internet. The ISPs router examines the destination address in each packet and determines where to send it. Often, the packet’s next stop is another router. More on routers and Internet infrastructure later. Eventually, the packets reach computer 5. 6. 7. 8. Here, the packets start at the bottom of the destination computer’s TCP/IP stack and work upwards. As the packets go upwards through the stack, all routing data that the sending computer’s stack added (such as IP address and port number) is stripped from the packets. When the data reaches the top of the stack, the packets have been re-assembled into their original form, â€Å"Hello computer 5. 6. 7. 8! † Networking Infrastructure: So now you know how packets travel from one computer to another over the Internet. But what is in-between? What actually makes up the Internet? Let us look at another diagram: Diagram 3. 1 Here we see Diagram 1 redrawn with more detail. The physical connection through the phone network to the Internet Service Provider might have been easy to guess, but beyond that might bear some explanation. The ISP maintains a pool of modems for their dial-in customers. This is managed by some form of computer (usually a dedicated one) which controls data flow from the modem pool to a backbone or dedicated line router. This setup may be referred to as a port server, as it ‘serves’ access to the network. Billing and usage information is usually collected here as well. After your packets traverse the phone network and your ISP’s local equipment, they are routed onto the ISP’s backbone or a backbone the ISP buys bandwidth from. From here the packets will usually journey through several routers and over several backbones, dedicated lines, and other networks until they find their destination, the computer with address 5. 6. 7. 8. But wouldn’t it would be nice if we knew the exact route our packets were taking over the Internet? As it turns out, there is a way†¦ The Trace route Program: If you’re using Microsoft Windows or a flavor of UNIX and have a connection to the Internet, here is another handy Internet program. This one is called trace route and it shows the path your packets are taking to a given Internet destination. Like ping, you must use trace route from a command prompt. In Windows, use tracer www. yahoo. com. From a UNIX prompt, type trace route www. yahoo. com. Like ping, you may also enter IP addresses instead of domain names. Trace route will print out a list of all the routers, computers, and any other Internet entities that your packets must travel through to get to their destination. If you use trace route, you’ll notice that your packets must travel through many things to get to their destination. Most have long names such as sjc2-core1-h2-0-0. atlas. digex. net and fddi0-0. br4. SJC. globalcenter. net. These are Internet routers that decide where to send your packets. Several routers are shown in Diagram 3. 1, but only a few. Diagram 3. 1 is meant to show a simple network structure. The Internet is much more complex.

Dilemma of Asian Bags Essay

Asia Paper Bag has since 1990 operated as a manufacturer of plastic carrier bags supplying them on a contract-manufacturing basis to well-known supermarket chains, fast-food outlets, pharmacies and department stores. Lately, Asia Paper Bag exports customized plastic carrier bags to Marks n Spencer and Boots Pharmacy in the United Kingdom. During the Asian financial crisis, Asia Paper Bag had difficulties in meeting its term loan repayment, and had to restructure the term loan last year. The term loan was restructured by way of a debt moratorium of 24 months on the principal and an extension of the maturity period from five years to eight years. Currently, Asia Paper Bag‘s turnover is about Rs 3million per month with an average net profit margin of 7%. Lately, with the increase in world oil prices, raw materials for plastic bag production have increased by over 5% to USD1,200 per ton. Asia Paper Bag’s capacity utilization is still low at only 40%, after it expanded rapidly pre-crisis. Asia Paper Bag Sdn Bhd ‘s production capacity increased from 200,000tonnes per annum to 350,000tonnes per annum during the pre-crisis period. This was when the company borrowed a term loan of Rs. 10 million to finance the machinery. The raw materials, PE resins, are purchased mainly from Singapore and Thailand, whilst only 15% is sourced domestically. Q.1 List the qualitative risks of Asia Paper Bag relation to bank lending . Q.2 List and explain the appropriate financial ratios to analyze the financial performance (profitability) of Asia Paper Bag Sdn Bhd (Malay equivalent of incorporated). Q.3 State the motives for using ratio analysis as a credit evaluation tool. EQUITY RESEARCH Mr. Prashant Gupta is interested in investing in equity shares of Infosys and Hamdard. Infosys Technologies Ltd. (NASDAQ: INFY) which was started in 1981 by seven people with US$ 250. Today, it is a global leader in the â€Å"next generation† of IT and consulting with revenues of over US$ 4 billion. It offers span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing. Hamdard (Wakf) Laboratories, India is a famous pharmaceutical company in India known for its Unani and Ayurvedic products. It is the world’s largest manufacturer of Unani medicinesSome of its more famous products include Safi, Sharbat Rooh Afza, Cinkara, Roghan Badam Shirin and Pachnol. It is associated with Hamdard Foundation, India. Being conservative in nature, he wants to determine the risk associated with investments. In specific terms, he wants to seek data related to both levered and unlevered beta of these companies. He approaches Nitin Shah, a financial consultant to do the needful. Nitin has collected the relevant information detailed below: Number (i) Monthly returns on equity shares of Infosys and Hamdard for a period of 2 years (w.e.f. October 2006 to September 2008) along with portfolio of S&P CNX NIFTY. (ii) Return on 364-days treasury bills issued by Government of India for the period 2007-08 is 5.15 per cent per annum and 0.419 per month. This rate is to be used as a proxy for risk-free rate of return. (iii) Debt-equity ratio (based on the average of 2004 to 2008) is 1.6 per cent for Wipro and 31.4 per cent for Dabur. (iv) Corporate tax is 35 per cent. Q. 1 Compute the Beta and interpret it for Prashant. Examine different circumstances with analysis of data. __________________________________________________________________ SUBJECT – RISK UNDERWRITING AND CLAIMS (A) Mr. Wilson has a car which is 12 years old. The Market value of which is Rs. 1.00 Lacs. However, Mr. Wilson wishes to insure this car for Rs. 5 lacs due to his sentiments attached to it. (B) Mr. Mathew purchased a ‘Money Back Policy’ from M/s. Supreme Life Insurance’ for a Sum Assured of Rs. 2.00 Lacs for 15 years. The survival  Benefit after 5 years accrues @ 25% of Sum Insured. A bonus was accumulated to the maturity. Q.1 Discuss as a Motor Insurance Underwriter, how you would react to this? Q.2 Calculate the sum payable at the maturity of the Policy.