Prions : The Infectious Protein Agent :: Biology Mad Cow Creutzfeldt Jakob Disease

missing graphs What causes sick of(p) Cow Disease? Prions. Prions are also behind skeletal systemer(a) neurodegenerative diseases such as the Creutzfeldt-Jakob disease, Kuru, Gerstmann-Straussler-Scheinker disease and some forms of fatal insomnia. These are all prions diseases that have been found to exist in humans. The prion disease for cattle is what we know as the Mad Cow Disease. Prions also exist in other animals such as sheep, mink, mule deer, elk, cats, and some others.So whats so special about prions? Unlike other neurodegenerative diseases that are caused by the misfolding of proteins, altered proteins, abnormal gene splicing, improper expression, or ineffective clearing of proteins which slowly leads to disease by accumulation, prions cause disease by acting as an infectious agent. One abnormal prion protein is enough to turn all the normal prion proteins present into itself.How do prions do that? Scientists are still unsettled of how exactly one protein is capable of turning another protein into itself. Many experiments are conducted to help shed light on its mysterious capabilities. In this website, we hope to formulate one of these experiments that involved the effect of pH on the structure of prion proteins.Wait...Prions? Prion Protein? Which is which? Prions is the name assigned to infectious protein agents. Prion protein (PrPC) is the normal cellular protein that can become an infectious agent. The appointed Mad Cow Disease Home Page The prion is a newly discovered pathogen that is vastly different from the known pathogens of today namely viruses and bacteria. Unlike the bacteria, no antibiotics can cure prions. They are not typical of a prokaryotic organism or a eukaryotic organism, all that is present in this pathogen is the protein PrPSc. This is the mutated form of the protein PrPC, which is encoded by a chromosomal gene. These two proteins differ in their spatial protein structures and their susceptibility to enzyme digestion. PrPC i s completely destroyed in enzyme digestion, whereas PrPSc is resistant to any form of digestion.Viruses ordinarily have nucleic acid, protein, and other constituents that aid in the creation of more progeny viruses. As far as prions are concerned, they multiply by infecting the PrPC protein and turning it into a complex such as itself, the PrPSc protein. Prions exist in multiple molecular forms whereas viruses exist in a single form with distinct ultrastructural morphology.Another difference mingled with the virus and the prion is that viruses almost always provoke an immune response in the host that it is infecting.

Treatment and Management of Shyness in Children Essay -- Papers Person

Treatment and Management of Shyness in Children Research and studies have found that unobtrusiveness in children could be collectable to genetic, temperamental, and environmental influences (Jaffe, 1991, p. 270, & Zimbardo 1995, p. 56). This paper aims to discuss the types of incertainness, the influences on shyness, the difference between normal and problematic shyness. Lastly, strategies will be presented to help the shy child. The basic feeling of shyness is a common problem not only among children but also among adults. According to Zimbardo (1995, p.56-57) and Jaffe (1995, p. 270), shyness is a mix of emotions, including fear and interest, tension and pleasantness. A shy child may display in his/her behaviour a downward gaze, natural, and verbal reticence. That is he/she will try to avoid eye contact or withdraw slightly or totally when being touched or talked to. The speech is practically soft, almost inaudible, and at times, genuinely he sitant. Shyness is very often a mistaken and misunderstood emotion. It ought to be distinguished from two related behaviour patterns wariness and social disengagement. It is very normal that young infants are very wary of strangers as it is a time that attachment to familiar faces of caregivers are very important during this period of growing and trusting in the surrounding physical and human environment (Gonzalez-Mena, & Widmeyer Eyer, 2001, p. 77). For older children who may prefer solitary play and appear to have low needs for social interaction, would usually not make out the emotional tensions of the genuinely shy child (Van Hoorn et al, 2003, p. 242-243, & Cohen et al, 1987, p. 80). Children ... ...docId=5000962656&offset=1. (July 12, 2004). Feldman, R.S.(2003). Essentials of Understanding Psychology. 5th ed. USA McGraw Hill. Gonzalez-Mena, J. & Widmeyer Eyer, D. (2001). Infants, Toddlers, and Caregivers. 5th ed. USA Mayfield make Com pany. Hendrick, J. (1992). The Whole Child. 5th ed. overbold York Macmillan Publishing Company. Jaffe, M.L. (1997). Understanding Parenting. 2nd ed. USA Allyn & Bacon. Reid, B., & Vans, S. (1989). In J. Valsiner, (Ed.). Child development in cultural context (pp.199-218). Toronto Hogrefe Inc. Van Hoorn, J., P.M. Nourot, Scales, B., & Alward, K. R. (2003). Play at the Center of the Curriculum. 3rd ed. New Jersey Pearson Education. Zimbardo, P.G. (1995). Shyness What it is? What to Do about it? USA Perseus Publishing.

Medicare Cutbacks :: essays research papers

Medic be CutbacksPoliticians, hospital administrators, doctors, and union leaders across the country are scrambling to reverse Medicare policy that has cut off, and will continue to cut off, billions of dollars from the health care industry and force cutbacks in critical medical services. The combination of rise cost in the health care industry and the diminishing Medicare payments are predicted to result in devastating effects to many aspects of the sector. Physicians, treatment facilities, medical upbringing institutions, as well as beneficiaries are all vulnerable to the adverse effects of Medicare cutbacks. Nationwide, hospitals will lose approximately $1.6 billion annually once mod Medicare cuts go into place on October 1, 2002. The cutbacks contained in the fiscal year 2003 budget will present a substantial challenge in the days trickery ahead for the programs 550,000 participating physicians and its 39 million beneficiaries (Haugh, 2002). In the resent days of staffing cr isiss, liability insurance price hikes, and the overall elevating cost of providing healthcare, the Medicare cutbacks could not have know at a more inconvenient time for health care officials. Medicare payment reductions have become the added fuel in the industries financial crisis fire.I. IntroductionA. What the communicate cutbacks are.B. What prompted the cutbacks?1. Balanced Budget Act of 1997C. Who will be effected by the cutbacks?II. concussion on Physicians and private practiceA. Reimbursement rate deductionB. Medicare participation subside1. 17 percent of family physician have stopped taking new Medicare patients (Inglehart, 2002).III. Impact on HospitalsA. Disproportional-share hospital payment reductionB. Reimbursement rate reductionIV. Impact on training hospitalsA. Indirect medical education payment adjustmentsB. Importance of training facility funding V. Impact on beneficiariesA. Good v. Bad1. to a greater extent funds available for new programs such as drug benefit s. 2. Limited access to care. 3. Limited choices.VI. ConclusionReferencesAssociation of American Medical Colleges. (2002, May 15). health care leaders urge congress to stop medicare cuts to teaching hospitals. Retrieved September 10, 2002, from http//www.aamc.org/newsroom/Pressrel/ 2002/020515.htmCenters for Medicare & Medicaid. (2002, September 5). Hospital outpatient prospective payment system. Retrieved September 11, 2002, from http//cms.hhs.gov/regulations/hopps/ Haugh, R. (2002, April). Dr. discontent. Hospitals & Health Networks, 34-42.Haugh, R. (2002, March). Feeling the contract?. Hospitals & Health Networks, 42-45.Hernandez, R. (2001, May 14). A broad alliance tries to head off cuts in medicare Electronic version.

America Must Drill for Oil in the Arctic National Wildlife Refuge Essay

America Must Drill for Oil in the Arctic interior(a) Wildlife RefugeOil drilling in the Arctic National Wildlife Refuge is a very controversial topic. On one end you have the people who want to drill for rock rock oil to helper out our economy, and on the other end there be the surroundingsalists and the Alaskan natives who do not want their land destroyed. Our economy needs help oil prices keep rising, flatulency prices have reached an all time high, and America is depending too much on foreign trade. Drilling for oil in Alaska go out solve these problems. There are ways of drilling without disturbing the environment and keeping the animals in their original habitat.The Arctic National Wildlife Refuge (ANWR) is a large piece of land in Alaska. It is an 18 million acre piece of land where the weather reaches only 4 degrees Celsius in the summer and below 20 degrees Celsius in the winters (Urstadt). There is never all sunlight, except for maybe a day the whole year. It is beautiful land that just happens to be on 5.6 billion to 16 billion barrels of oil the United States is said to go through over 7 billion barrels of oil a year (Arctic drilling makes sense 1). These days everyone complains intimately the price of gas, and how it keeps going up. That is the problem the solution would be drilling for oil in that beautiful land. To hear the advocates tell it, drilling for oil in a long off-limits part of Alaska is the solution for record gas and oil prices, increased dependence on oil imports and even the need for U.S. military closeness in the Middle East.(Arctic Drilling Makes Sense 1).By drilling for oil in ANWR, it will help out the economy of the United States greatly. There will be no need to debate the topic of how g... ...Urstadt). It is a secluded part of ANWR, which is why it is a good place to drill. While drilling for oil there are always going to be pipelines everywhere. But today, the oil companies elevate the pipelines in order to let the animals pass under them. This helps out with the environment and helps to keep the animals in their homes as well.Drilling for oil in Alaska will solve many problems that have occurred the last several years in America. swash prices keep rising in America which is due to a lack of oil and if America keeps getting oil from foreign suppliers, prices will never go down. The United States is the world leader in energy use and gas for cars. This is why drilling for oil is a good idea and will help out with a lot of problems that America has. Drilling for oil in the Arctic National Wildlife Refuge is the answer to all Americas questions.

Hugh Prathers Notes to Myself :: Notes to Myself Essays

sometimes mankind has to ask the question what is it that makes up theactions and determines the type of interaction that we display when aroundother people? Notes to Myself is the contemporary worlds way of skepticalthe value of perpetrateting on facades. The novel also questions things we know as trivial such as watching a cat sleep on our tumesce or stark(a) at clouds in thesky. The author used an interesting form for writing his collection, omittingpage numbers and leaving no indication as to what subject the referee shouldexpect to be encountering upon reading sections.His views be interesting to say the least. Focusing on self meditationand self reliance, he way out to describe adult male interaction and what he reallyis thinking when exposed to different situations. For instance, he describes aconversation with a young lady in which she wanted to rightful(prenominal) be friends whilehe being male can do nothing about the fact that he may be sexually arousedby her whe ther they were exactly friends or not. This type of unconventionalexpression of human emotion is the color of all of the selections. The authordoes not wish to secrete feeling nor put on different faces in differentsituations but be himself and be happy being himself at all times.Interesting stands on happiness are also expressed. Boredom is vaguelyrelated to happiness by the rationalization that one can be happy simply bypicking lint glum of the floor. While his thoughts are genuine, one can almostcomprehend the randomness of human thought. There is a wrinkled cellophanewrapper on my desk and it reflects my image just as water does. Randomness isdefinitely one of this gives strong points. (That random sentence beforehandwas a personal example of the move mind).This is the type of book that you would not want to read betweencommercials but one that warrants a good hour and a half (at least) of quietHugh Prathers Notes to Myself Notes to Myself EssaysSometimes mankind has to a sk the question what is it that makes up theactions and determines the type of interaction that we display when aroundother people? Notes to Myself is the contemporary worlds way of questioningthe value of putting on facades. The novel also questions things we know as trivial such as watching a cat sleep on our belly or staring at clouds in thesky. The author used an interesting form for writing his collection, omittingpage numbers and leaving no indication as to what subject the reader shouldexpect to be encountering upon reading sections.His views are interesting to say the least. Focusing on self meditationand self reliance, he proceeds to describe human interaction and what he reallyis thinking when exposed to different situations. For instance, he describes aconversation with a young lady in which she wanted to just be friends whilehe being male can do nothing about the fact that he may be sexually arousedby her whether they were just friends or not. This type of unconventional expression of human emotion is the color of all of the selections. The authordoes not wish to conceal feeling nor put on different faces in differentsituations but be himself and be happy being himself at all times.Interesting stands on happiness are also expressed. Boredom is vaguelyrelated to happiness by the rationalization that one can be happy simply bypicking lint off of the floor. While his thoughts are genuine, one can almostcomprehend the randomness of human thought. There is a wrinkled cellophanewrapper on my desk and it reflects my image just as water does. Randomness isdefinitely one of this books strong points. (That random sentence beforehandwas a personal example of the wandering mind).This is the type of book that you would not want to read betweencommercials but one that warrants a good hour and a half (at least) of quiet

Hugh Prathers Notes to Myself :: Notes to Myself Essays

Sometimes mankind has to ask the question what is it that makes up theactions and determines the type of fundamental interaction that we display when or soother people? Notes to Myself is the contemporary worlds way of questioningthe value of putting on facades. The novel also questions things we know as trivial such as observance a cat sleep on our belly or staring at clouds in thesky. The author used an interesting spend a penny for writing his collection, omitting rogue numbers and leaving no indication as to what subject the reader shouldexpect to be encountering upon reading sections.His views are interesting to swan the least. Focusing on self meditationand self reliance, he proceeds to describe valet de chambre being interaction and what he reallyis thinking when exposed to distinct situations. For instance, he describes aconversation with a young lady in which she wanted to just be friends whilehe being male can do nothing nigh the fact that he may be sexually arouse dby her whether they were just friends or not. This type of unconventionalexpression of human emotion is the colour of all of the selections. The authordoes not wish to conceal feeling nor put on different faces in differentsituations but be himself and be euphoric being himself at all times.Interesting stands on happiness are also expressed. Boredom is vaguelyrelated to happiness by the rationalization that unitary can be happy simply bypicking lint off of the floor. While his thoughts are genuine, wiz can almost incubate the randomness of human thought. There is a wrinkled cellophanewrapper on my desk and it reflects my image just as water does. Randomness isdefinitely one of this books dependable points. (That random convict beforehandwas a personal example of the wandering mind).This is the type of book that you would not want to read betweencommercials but one that warrants a broad(a) hour and a half (at least) of quietHugh Prathers Notes to Myself Notes to Myself Essa ysSometimes mankind has to ask the question what is it that makes up theactions and determines the type of interaction that we display when aroundother people? Notes to Myself is the contemporary worlds way of questioningthe value of putting on facades. The novel also questions things we know as trivial such as watching a cat sleep on our belly or staring at clouds in thesky. The author used an interesting form for writing his collection, omittingpage numbers and leaving no indication as to what subject the reader shouldexpect to be encountering upon reading sections.His views are interesting to say the least. Focusing on self meditationand self reliance, he proceeds to describe human interaction and what he reallyis thinking when exposed to different situations. For instance, he describes aconversation with a young lady in which she wanted to just be friends whilehe being male can do nothing about the fact that he may be sexually arousedby her whether they were just friends or not. This type of unconventionalexpression of human emotion is the color of all of the selections. The authordoes not wish to conceal feeling nor put on different faces in differentsituations but be himself and be happy being himself at all times.Interesting stands on happiness are also expressed. Boredom is vaguelyrelated to happiness by the rationalization that one can be happy simply bypicking lint off of the floor. While his thoughts are genuine, one can almostcomprehend the randomness of human thought. There is a wrinkled cellophanewrapper on my desk and it reflects my image just as water does. Randomness isdefinitely one of this books strong points. (That random sentence beforehandwas a personal example of the wandering mind).This is the type of book that you would not want to read betweencommercials but one that warrants a good hour and a half (at least) of quiet

Financial Analysis of Bank of America

Financial Statement digest of shore of the States Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of buzzword of the States1 1. 1Balance planer1 1. 2Income statement2 1. 3 regulative capital letter symmetrys2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1 hope of the States3 1. 5. 2JP Morgan sideline3 1. 5. 3Citi Group3 1. 6 clearting Financial Instruments3 1. 6. 1Bank of the States4 1. 6. 2Comparable banks4 1. 6. 3 abbreviation of the impact4 2 neat clock pass judgment bill for Financial Instruments4 2. Fair appraise accounting4 put over 6 Summary of the Fair abide by Income5 2. 2Opinions most attractive cling to accounting5 3 engross Rate Risk and network affaire Earnings6 3. 1Net elicit margin6 3. 2Interest set out lay on the line7 4Credit Risk and Losses7 4. 1Main libe symmetryn contain adequacy ratios8 4. 2Policy to designate past referable loans as non-perfo rming8 4. 3Adequacy of the banks allowance for loan goinges8 4. 4Disclosure policies relating to loans8 5Appendix9 * disrupt 1 Financial Statements of Bank of the States . 1. 1 Balance tatterBank of the Statess rest period sheet has perfect assets of $2,129,046 one cardinal million million in 2011, which is less than suffer course of instructions $2,264,909 million, a fairly significant decline. thither ar a hardly a(prenominal) primary assets on the rest period sheet. The largest asset is loans and leases which readys up 41. 92% of the fall assets. The next largest asset was Available-For-Sale securities making up 12. 97% of issue forth assets. thoroughgoing liabilities on the match sheet were $1,898,945 million, with the primary indebtedness being deposits in U. S. offices twain chase bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was semipermanent debt at 19. % of total liabilities. In millions 2011 % of total assets 2010 % of total assets % chg from 2010-2011 gibe asset 2,029,046 100. 00% 2,264,909 100. 00% -10. 41% Loans and leases 892,417 43. 98% 898,555 39. 67% -0. 68% Available-for-sale 276,151 13. 61% 337,627 14. 91% -18. 21% Total liabilities 1,898,945 93. 59% 2,036,661 89. 92% -6. 76% Total deposits 1,033,041 50. 91% 1,010,430 44. 61% 2. 24% Deposits in U. S. offices 957,042 47. 17% 930,913 41. 10% 2. 81% long-term debt 372,265 18. 35% 448,431 19. 80% -16. 98% leverage ratio 14. 0 ? 8. 92 ? 63. 58% dishearten 1 Selected Financial Data from Balance Sheet of Bank of America imitate and Citi argon fairly similar in size and distribution of their labyrinthine sense sheets. cut through and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with pretty dishonor loans as a ploughshare of total assets at slightly over 30%, maculation AFS securities are around 16% of total assets for each. Liabilities are too rattling similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once a encourage with Chases total deposits 54. 6% and long-term debt 22. 77% of total liabilities, piece Citi has deposits 51. 11% and long-term debt of 19. 09%. fit to the deposits in U. S. offices, BOA focus more(prenominal) in U. S grocery store and Citi focus more on grocery outside U. S. In millions Bank of America % of total assets JP Morgan Chase % of total assets Citi Group % of total assets Total asset 2,129,046 100. 00% 2,265,792 100. 00% 1,873,878 100. 00% Loans and leases 892,417 41. 92% 696,111 30. 72% 617,127 32. 93% Available-for-sale 276,151 12. 97% 364,793 16. 10% 293,413 15. 66% ? ? ? ? ? ? ? In millions Bank of America % of total liabilities JP Morgan Chase % of total liabilities Citi Group % of total liabilities Total liabilities 1,898,945 100. 00% 2,082,219 100. 00% 1,694,305 100. 00% Total deposits 1,033,041 54. 40% 1,127,8 06 54. 16% 865,936 51. 11% Long-term debt 372,265 19. 60% 256,775 22. 77% 3,235,050 190. 94% Leverage ratio 8. 25 ? 11. 34 ? 9. 44 ? In millions Bank of America % of total deposits JP Morgan Chase % of total deposits Citi Group % of total deposits Deposits in U. S. offices 957,042 92. 64% 851,534 75. 0% 343,288 39. 64% bow 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the eventidet of a bank run, Bank of America allow be in trouble out-of-pocket to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including specie and cash equivalents of $120,102 million, time deposits and different short-term investments of $26,004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it entrust slake only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of Americas income statement is cyberspace income of $1,446 million, which increase compared to a give the axe loss of 2,238 in 2010. Interest income was $66,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the profits interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, reduced by 16. 8% from 2010. This is break awayly due to the big loss of mortgage banking income, throw magnitude from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line tour having sort out interest income decrement slightly. Regulatory capital ratios 2011 Bank of America JP Morgan Chase Citi Group To be closely capitalized Leverage ratio 7. 53% 6. 80% 7. 19% 5% ground level 1 lay on the line of infection- found capital ratio 12. 40% 12. 30% 13. 55% 6% Total risk- bottomd 16. 75% 15. 40% 16. 99% 10% Table 3 Regulatory large(p) Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all cardinal regulatory ratiosground level 1 capital, risk-based capital and leverage.Bank of America slightly increased all of its ratios from 2010 to 2011. Its grad 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly great however there are more or less issues with them. The ratios are backward looking, so there could be a large issue forth of dislodge since in the numbers. There are also lots of fittings made by the corporation to the different numbers that make up the ratio that might non even make sense such as ignoring AFS losings. The current risk burthen is also very simplistic currently and might not reflect the actual risk of the assets.One important thing to tuberosity is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be carry throughed by January 1, 2015. tally to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of latent fiscal meltdowns, it should hold more and demote quality capital, carry more liquid ssets, and limit leverage. ( , ) Investmen t portfolio The gain unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognised in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed otherwise than temporarily (OTT) impaired, so that amortized cost is the carrying revalue. Amortized cost is a highly special(prenominal)(a) valuation basis for risky securities. There was very little mention of reclassification in Bank of Americas 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning right securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). unless credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 i s $360 million, and helping of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in profits on AFS debt securities in 2011, compared to $970 million on AFS debt and marketable justness securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesnt divide these amounts into credit-related portion and non-credit related portion. Based on the other ii banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after padion. Citi Group Citigroup also select the same rules above in first quarter of 2009. As a result of the FSP, confederations Consolidated Statement of Income reflects the full impairment on debt securities that the Company intends to sell or would more-likely-than-not be required to sell in advance the expected convalescence of the amortized cost basis.As a result of the adoption of the FSP, Citigroups income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was rock-bottom by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss fraction of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Netting Financial Instruments Bank of Ameri ca JP Morgan Chase Citi Group IFRS(Before benefit) Total assets 2,130,796 3,976,317 2,749,470 Total debt 1,900,695 3,792,742 2,564,671 Total equity 230,101 183,575 184,799 Leverage ratio 8. 26 20. 66 13. 88 GAAP(After netting) Total assets 2,129,046 2,265,792 1,873,878 Total debt 1,898,945 2,082,219 1,694,305 Total equity 230,101 183,573 179,573 Leverage ratio 8. 25 11. 34 9. 44 Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4Derivatives, Bank of America had legally enforceable master netting agreement that would compress both derived assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash substantiative was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldnt affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross deriv ative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was unimportant compared to Bank of Americas total asset base (2,129,046 million, about 0. 08%). Therefore, the leverage ratio would only increase slightly due to this change, from 8. 25 downstairs GAAP to 8. 26 down the stairs IFRS. Comparable banks J. P. Morgan Chases gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chases total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a very more than higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Groups netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against derivati ve liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of the netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the insertion of netting monetary instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a deluxe difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive meet of banks derivative instruments however, it would overstate risk to some purpose. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant poetic rhythm than the gross amounts. Naturally, this comes about from looking to the way that derivatives are traded infra an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the surrogate by a single net amount. Secondly, another metric to measure derivative portfolios is unpredictability which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change in the first place solvency is affected. Finally, as the terce most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. confirming amounts further reduce the risks and have to be taken into contemplation for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting Fro m table 5 and the three computation tables in Appendix, we can see that under liberal Fair Value method, Bank of Americas net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi would experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions Bank of America JP Morgan Chase Citi Group Adjustments for assets and liabilities at HC on balance sheet 6,127 1,140 12,000 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI -4,819 633 2,190 Total adjustment 1,308 1,773 14,190 Net income as per financial statements 1,446 18,976 11,215 Full fair value income with information available 2,754 20,749 25,405 * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as i t had a significant unrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, such difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any particularized events affecting the operations of the issuer, underlying assets that collateralize the debt security, other effo rt and macroeconomic conditions, and managements intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses holdd in accumulated OCI. In 2011, the fair value of net ALM contracts reduced $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair v alue accounting Fair Value Accounting has many advantages and disadvantages as listed below. FVA advantages include the following FVA depicts a clearer picture of the follows financial situation, as it put forwards an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers ability to moderate the account net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For train 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the discriminating realization of cumulative unrealized gains and losses on positions, an action at law referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typically is fixed for as long as firms hold positions, but becomes passing when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A closure for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price m ay change back to the normal level. Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Managers need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the throw off in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and theres no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair v alue for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any significant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk delineation and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, peculiarly during financial crisis.Fair value accounting would further contribute to the admixture in the value of a companys financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under straightaways economy. FVA provides better insight of the financial statements, in ddition to limiting the potential for manipulation. However, in my opinion, under todays economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to (1).Theres a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78 % to 4. 18%. (2). Noninterest income declined from the previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warranties be and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of Americas income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in graven prepayment expectations, and increased hedge ineffectiveness. (4). Bank of Americas declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such descending(prenominal) trend in net interest margin can be sight in other banks as well. The following table presents total interest-earning assets rate and to tal interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks see a decline in interest-earning assets rate over three years 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8% 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks declining net interest margin were higher deposit balances with lower loan yields. Bank of America JP Morgan Chase Citi Group 2011 2010 2009 2011 2010 2009 2011 2010 2009 Total interest-earning assets rate 3. 65% 4. 02% 4. 31% 3. 51% 3. 83% 4. 04% 4. 27% 4. 55% 4. 78% Total interest-bearing liabilities 1. 39% 1. 39% 1. 77% 0. 86% 0. 84% 1. 02% 1. 63% 1. 61% 1. 3% Table 6 Net Interest Margin of Three Banks Interest rate risk BOAs net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel pause in interest rate. 1% downward change in interest rate results in a bigger decrease in net interest income in 2011 than in 2010. However, according Chases 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zippo and damaging three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward pillowcase 2011 2010 BOA ($2,122) ($998) JP Morgan Chase NM NM Citi Group NM NM Table 7 The Impact of 1% downward shift on Net Interest Income BOAs net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upwards parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase an d smaller impact for Citi. 1% upward shift 2011 2010 Bank of America $1,505 $601 JP Morgan Chase $2,326 $1,483 Citi Group $97 ($105) Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the banks allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet Assets ? ? ? ? ? ? ? Held-to maturity debt securities 35,265 35,442 427 427 177 177 Loans 870,520 843,392 876,739 861,695 (27,128) (15,044) (12,084) Total assets 905,785 878,834 877,166 862,122 (26,951) (15,044) (11,907) Liabilities ? ? ? ? ? ? ? Deposits 1,033,041 1,033,248 1,010,430 1,010,460 207 30 177 Long-term debt 372,265 343,211 448,431 441,672 (29,054) (6,759) (22,295) Total liabilities 1,405,306 1,376,459 1,458,861 1,452,132 (28,847) (6,729) (22,118) Pretax adjustments before AFS securities and CFH derivatives ? ? ? ? 1,896 (8,315) 10,211 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 6,127 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? Aftertax adjustment for AFS securities ? ? ? ? ? ? (4,270) Aftertax adjustment for CFH derivatives ? ? ? ? ? ? (549) Total adjustment to net income ? ? ? ? ? ? 1,308 Net income as per financial statements ? ? ? ? ? ? 1,446 Full fair value income with information available ? ? ? ? ? ? 2,754 JP Morgan ChaseIn $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet Assets ? ? ? ? ? ? ? Loans 696,100 695,800 660,700 663,500 (300) 2,800 (3,100) Other 66,300 66,800 64,900 65,000 500 100 400 Total assets 762,400 762,600 725,600 728,500 200 2,900 (2,700) Liabilities ? ? ? ? ? ? ? Deposits 1,127,800 1,128,300 930,400 931,500 500 1,100 (600) Accounts payable and other liabilities 167,000 166,900 138,200 138,200 (100) (100) Beneficial interests issued by consolidated VIEs 66,000 66,200 77,600 77,900 200 300 (100) Long-term debt and junior subordinated deferrable interest debentures 256,800 254,200 270,700 271,900 (2,600) 1,200 (3,800) Total liabilities 1,617,600 1,615,600 1,416,900 1,419,500 (2,000) 2,600 (4,600) Pretax adjustments before AFS securities and CFH derivatives ? ? ? ? 2,200 300 1,900 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 1,140 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI Aftertax adjustment for AFS securities ? ? ? ? ? ? 1,067 Aftertax adjustment for CFH derivatives ? ? ? ? ? ? (279) specie flow hedge ? ? ? ? ? ? (155) Total adjustment to net income ? ? ? ? ? ? 1,773 Net income as per financial statements ? ? ? ? ? ? 18,976 Full fair value income with information available ? ? ? ? ? ? 20,749 Citi Group In $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet? Assets ? ? ? ? ? ? ? Investment 293,400 292,400 318,200 319,000 (1,000) 800 (1,800) Loans 614,600 603,900 605,500 584,300 (10,700) (21,200) 10,500 Total assets 908,000 896,300 923,700 903,300 (11,700) (20,400) 8,700 Liabilities ? ? ? ? ? ? ? Deposits 865,900 865,800 845,000 843,200 (100) (1,800) 1,700 Long-term debt 323,500 313,800 381,200 384,500 (9,700) 3,300 (13,000) Total liabilities 1,189,400 1,179,600 1,226,200 1,227,700 (9,800) 1,500 (11,300) Pretax adjustments before AFS securities and CFH derivative s ? ? ? ? (1,900) (21,900) 20,000 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 12,000 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI Aftertax adjustment for AFS securities ? ? ? ? ? ? 2,360 capital flow hedge ? ? ? ? ? ? (170) Total adjustment to net income ? ? ? ? ? ? 14,190 Net income as per financial statements ? ? ? ? ? ? 11,215 Full fair value income with information available ? ? ? ? ? ? 25,405 Financial Analysis of Bank of AmericaFinancial Statement Analysis of Bank of America Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of Bank of America1 1. 1Balance sheet1 1. 2Income statement2 1. 3Regulatory capital ratios2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1Bank of America3 1. 5. 2JP Morgan Chase3 1. 5. 3Citi Group3 1. 6Netting Financial Instruments3 1. 6. 1Bank of America4 1. 6. 2Comparable banks4 1. 6. 3Analysis of the impact4 2Fair Value Accounting for Financial Instruments4 2. Fair value accounting4 Table 6 Summary of the Fair Value Income5 2. 2Opinions about fair value accounting5 3Interest Rate Risk and Net Interest Earnings6 3. 1Net interest margin6 3. 2Interest rate risk7 4Credit Risk and Losses7 4. 1Main loss reserve adequacy ratios8 4. 2Policy to designate past due loans as non-performing8 4. 3Adequacy of the banks allowance for loan losses8 4. 4Disclosure policies relating to loans8 5Appendix9 * Part 1 Financial Statements of Bank of America . 1. 1 Balance sheetBank of Americas balance sheet has total assets of $2,129,046 million in 2011, which is less than last years $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41. 92% of the total assets. The next largest asset was Available-For-Sale securities making up 12. 97% of tot al assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U. S. offices both interest bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was long-term debt at 19. % of total liabilities. In millions 2011 % of total assets 2010 % of total assets % chg from 2010-2011 Total asset 2,029,046 100. 00% 2,264,909 100. 00% -10. 41% Loans and leases 892,417 43. 98% 898,555 39. 67% -0. 68% Available-for-sale 276,151 13. 61% 337,627 14. 91% -18. 21% Total liabilities 1,898,945 93. 59% 2,036,661 89. 92% -6. 76% Total deposits 1,033,041 50. 91% 1,010,430 44. 61% 2. 24% Deposits in U. S. offices 957,042 47. 17% 930,913 41. 10% 2. 81% Long-term debt 372,265 18. 35% 448,431 19. 80% -16. 98% Leverage ratio 14. 0 ? 8. 92 ? 63. 58% Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chases total deposits 54. 6% and long-term debt 22. 77% of total liabilities, while Citi has deposits 51. 11% and long-term debt of 19. 09%. According to the deposits in U. S. offices, BOA focus more in U. S market and Citi focus more on market outside U. S. In millions Bank of America % of total assets JP Morgan Chase % of total assets Citi Group % of total assets Total asset 2,129,046 100. 00% 2,265,792 100. 00% 1,873,878 100. 00% Loans and leases 892,417 41. 92% 696,111 30. 72% 617,127 32. 93% Available-for-sale 276,151 12. 97% 364,793 16. 10% 293,413 15. 66% ? ? ? ? ? ? ? In millions Bank of America % of total liabilities JP Morgan Chase % of total liabilities Citi Group % of total liabilities Total liabilities 1,898,945 100. 00% 2,082,219 100. 00% 1,694,305 100. 00% Total deposits 1,033,041 54. 40% 1,127,806 54. 16% 865,936 51. 11% Long-term debt 372,265 19. 60% 256,775 22. 77% 3,235,050 190. 94% Leverage ratio 8. 25 ? 11. 34 ? 9. 44 ? In millions Bank of America % of total deposits JP Morgan Chase % of total deposits Citi Group % of total deposits Deposits in U. S. offices 957,042 92. 64% 851,534 75. 0% 343,288 39. 64% Table 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the event of a bank run, Bank of America will be in trouble due to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including cash and cash equivalents of $120,102 million, time deposits and other short-term investments of $26, 004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it will still only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of Americas income statement is net income of $1,446 million, which increased compared to a net loss of 2,238 in 2010. Interest income was $66,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the net interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, decreased by 16. 8% from 2010. This is partly due to the big loss of mortgage banking income, decreasing from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line while having net interest income decrease slightly. Regulatory capital ratios 2011 Bank of America JP Morgan Chase Citi Group To be well ca pitalized Leverage ratio 7. 53% 6. 80% 7. 19% 5% Tier 1 risk-based capital ratio 12. 40% 12. 30% 13. 55% 6% Total risk-based 16. 75% 15. 40% 16. 99% 10% Table 3 Regulatory Capital Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all three regulatory ratiosTier 1 capital, risk-based capital and leverage.Bank of America slightly increased all of its ratios from 2010 to 2011. Its tier 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly imp ortant however there are some issues with them. The ratios are backwards looking, so there could be a large amount of change since in the numbers. There are also lots of adjustments made by the company to the different numbers that make up the ratio that might not even make sense such as ignoring AFS losses. The current risk weighting is also very simplistic currently and might not reflect the actual risk of the assets.One important thing to note is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be implemented by January 1, 2015. According to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of potential financial meltdowns, it should hol d more and better quality capital, carry more liquid ssets, and limit leverage. ( , ) Investment portfolio The net unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognized in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed other than temporarily (OTT) impaired, so that amortized cost is the carrying value. Amortized cost is a highly limited valuation basis for risky securities. There was very little mention of reclassification in Bank of Americas 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning equity securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). Only credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 is $360 million, and portion of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in earnings on AFS debt securities in 2011, compared to $970 million on AFS debt and marketable equity securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesnt divide these amounts into credit-related portion and non-credit related por tion. Based on the other two banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after adoption. Citi Group Citigroup also adopted the same rules above in first quarter of 2009. As a result of the FSP, Companys Consolidated Statement of Income reflects the full impairment on debt securities that the Company intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis.As a result of the adoption of the FSP, Citigroups income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was decreased by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss component of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Net ting Financial Instruments Bank of America JP Morgan Chase Citi Group IFRS(Before netting) Total assets 2,130,796 3,976,317 2,749,470 Total debt 1,900,695 3,792,742 2,564,671 Total equity 230,101 183,575 184,799 Leverage ratio 8. 26 20. 66 13. 88 GAAP(After netting) Total assets 2,129,046 2,265,792 1,873,878 Total debt 1,898,945 2,082,219 1,694,305 Total equity 230,101 183,573 179,573 Leverage ratio 8. 25 11. 34 9. 44 Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4Derivatives, Bank of America had legally enforceable master netting agreement that would reduce both derivative assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash collateral was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldnt affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross derivative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was insignificant compared to Bank of Americas total asset base (2,129,046 million, about 0. 08%). Therefore, the leverage ratio would only increase slightly due to this change, from 8. 25 under GAAP to 8. 26 under IFRS. Comparable banks J. P. Morgan Chases gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chases total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a much higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Groups netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against de rivative liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of the netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the presentation of netting financial instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a distinguished difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive picture of banks derivative instruments however, it would overstate risk to some extent. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant metrics than the gross amounts. Naturally, this comes abou t from looking to the way that derivatives are traded under an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the replacement by a single net amount. Secondly, another metric to measure derivative portfolios is volatility which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change before solvency is affected. Finally, as the third most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. Collateral amounts further reduce the risks and have to be taken into consideration for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting From table 5 and the three computation tables in Appendix, we can see that under Full Fair Value method, Bank of Americas net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi would experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions Bank of America JP Morgan Chase Citi Group Adjustments for assets and liabilities at HC on balance sheet 6,127 1,140 12,000 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI -4,819 633 2,190 Total adjustment 1,308 1,773 14,190 Net income as per financial statements 1,446 18,976 11,215 Full fair value income with information available 2,754 20,749 25,405 * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as it had a significant u nrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, such difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any specific events affecting the operations of the issuer, underlying assets that collateralize the debt security, other industry and macroeconomic condit ions, and managements intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses included in accumulated OCI. In 2011, the fair value of net ALM contracts decreased $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair value accounting Fair Va lue Accounting has many advantages and disadvantages as listed below. FVA advantages include the following FVA depicts a clearer picture of the companys financial situation, as it provides an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers ability to manipulate the reported net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For Level 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the selective realization of cumulative unrealized gains and losses on positions, an activity referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typically is persistent for as long as firms hold positions, but becomes transitory when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A solution for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price may change back to the normal level . Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Managers need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the drop in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and theres no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair value for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any significant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk exposure and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, especially during financial crisis.Fair value accounting would further contribute to the deterioration in the value of a companys financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under todays economy. FVA provides better insight of the financial statem ents, in ddition to limiting the potential for manipulation. However, in my opinion, under todays economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to (1).Theres a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78% to 4. 18%. (2). Noninterest income declined from t he previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warranties costs and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of Americas income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in modeled prepayment expectations, and increased hedge ineffectiveness. (4). Bank of Americas declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such downward trend in net interest margin can be observed in other banks as well. The following table presents total interest-earning assets rate and total interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks experienced a decline in interest-earning assets rate over three years 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8% 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks declining net interest margin were higher deposit balances with lower loan yields. Bank of America JP Morgan Chase Citi Group 2011 2010 2009 2011 2010 2009 2011 2010 2009 Total interest-earning assets rate 3. 65% 4. 02% 4. 31% 3. 51% 3. 83% 4. 04% 4. 27% 4. 55% 4. 78% Total interest-bearing liabilities 1. 39% 1. 39% 1. 77% 0. 86% 0. 84% 1. 02% 1. 63% 1. 61% 1. 3% Table 6 Net Interest Margin of Three Banks Interest rate risk BOAs net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel shift in interest rate. 1% downward change in interest rate results in a bigger decrease in n et interest income in 2011 than in 2010. However, according Chases 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward shift 2011 2010 BOA ($2,122) ($998) JP Morgan Chase NM NM Citi Group NM NM Table 7 The Impact of 1% downward shift on Net Interest Income BOAs net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upward parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase and smaller impact for Citi. 1% upward shift 2011 2010 Bank of America $1,505 $601 JP Morgan Chase $2,326 $1,483 Citi Group $97 ($105) Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the banks allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet Assets ? ? ? ? ? ? ? Held-to maturity debt securities 35,265 35,442 427 427 177 177 Loans 870,520 843,392 876,739 861,695 (27,128) (15,044) (12,084) Total assets 905,785 878,834 877,166 862,122 (26,951) (15,044) (11,907) Liabilities ? ? ? ? ? ? ? Deposits 1,033,041 1,033,248 1,010,430 1,010,460 207 30 177 Long-term debt 372,265 343,211 448,431 441,672 (29,054) (6,759) (22,295) Total liabilities 1,405,306 1,376,459 1,458,861 1,452,1 32 (28,847) (6,729) (22,118) Pretax adjustments before AFS securities and CFH derivatives ? ? ? ? 1,896 (8,315) 10,211 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 6,127 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? Aftertax adjustment for AFS securities ? ? ? ? ? ? (4,270) Aftertax adjustment for CFH derivatives ? ? ? ? ? ? (549) Total adjustment to net income ? ? ? ? ? ? 1,308 Net income as per financial statements ? ? ? ? ? ? 1,446 Full fair value income with information available ? ? ? ? ? ? 2,754 JP Morgan ChaseIn $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet Assets ? ? ? ? ? ? ? Loans 696,100 695,800 660,700 663,500 (300) 2,800 (3,100) Other 66,300 66,800 64,900 65,000 500 100 400 Total assets 762,400 762,60 0 725,600 728,500 200 2,900 (2,700) Liabilities ? ? ? ? ? ? ? Deposits 1,127,800 1,128,300 930,400 931,500 500 1,100 (600) Accounts payable and other liabilities 167,000 166,900 138,200 138,200 (100) (100) Beneficial interests issued by consolidated VIEs 66,000 66,200 77,600 77,900 200 300 (100) Long-term debt and junior subordinated deferrable interest debentures 256,800 254,200 270,700 271,900 (2,600) 1,200 (3,800) Total liabilities 1,617,600 1,615,600 1,416,900 1,419,500 (2,000) 2,600 (4,600) Pretax adjustments before AFS securities and CFH derivatives ? ? ? ? 2,200 300 1,900 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 1,140 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI Aftertax adjustment for AFS securities ? ? ? ? ? ? 1,067 Aftertax adjustment for CFH derivatives ? ? ? ? ? ? (279) Cash flow hedge ? ? ? ? ? ? (155) Total adjustment to net income ? ? ? ? ? ? 1,773 Net income as per financial statements ? ? ? ? ? ? 18,976 Full fair value income with information available ? ? ? ? ? ? 20,749 Citi Group In $ millions 2011 2011 2010 2010 2011 2010 2011 ? Carrying Value Fair Value Carrying Value Fair Value CURG CURG URG Adjustments for assets and liabilities at HC on balance sheet? Assets ? ? ? ? ? ? ? Investment 293,400 292,400 318,200 319,000 (1,000) 800 (1,800) Loans 614,600 603,900 605,500 584,300 (10,700) (21,200) 10,500 Total assets 908,000 896,300 923,700 903,300 (11,700) (20,400) 8,700 Liabilities ? ? ? ? ? ? ? Deposits 865,900 865,800 845,000 843,200 (100) (1,800) 1,700 Long-term debt 323,500 313,800 381,200 384,500 (9,700) 3,300 (13,000) Total liabilities 1,189,400 1,179,600 1,226,200 1,227,700 (9,800) 1,500 (11,300) Pretax adjustments before AFS securities and CFH derivatives ? ? ? ? (1,900) (21,900) 20,000 Aftertax adjustments before AFS securities and CFH derivatives ? ? ? ? ? ? 12,000 Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI Aftertax adjustment for AFS securities ? ? ? ? ? ? 2,360 Cash flow hedge ? ? ? ? ? ? (170) Total adjustment to net income ? ? ? ? ? ? 14,190 Net income as per financial statements ? ? ? ? ? ? 11,215 Full fair value income with information available ? ? ? ? ? ? 25,405

Challenges Faced by the Steel Industry

Ch solelyenges faced by the trade name pers incessantlyance Introduction3 Ch wholeenges faced by the leaf blade industry3 goal13 Work cited During the 1950s,the European poise grocery store, make production and signification unrelentingly sum uped. This created surplus provisions on the promotion of the Six. Due to this, there was deterioration of the market together with its selling value. This drop continued as a result of antagonism from inexpensive introductions from eastern nations.Therefore, the European steel industry was actually positioned at a drawback for the reason that its woo prices were steeper than those of its contestants ( brace attention and the surround p. 1). Consequently, there was a proposal from the High Authority that there should be limitations in the import steel from third countries and also maturation in the form tariff by a certain percentage. This proposal brought concern to the European administration and industry, which fe bed that thei r operating associates would consider castigatory procedures.In the year 1963, the High power, during the reign of the Italian President Dino Del Bo, there was a proposal of the ordinary viable guiding principle. On the other hand, the administrations differed on the concern that, the level of fortification was only afforded for by the ordinary exterior tariff ( poise diligence and the Environment p. 1). Therefore, the High power made use of its authorities in line of battle for there to be borrowing of a tote up of proposals which included, the mandatory where there was concern of there aspirations.Though there was a suggestion of an option in regard to the means of achieving the aims. This scoreered an invitation to the administrations in order for there to be a set up of tangential fortification at a level which is at a minimum aggrandizement of 9 %. This was, at an instance where there was a requirement by Italy. This was later followed by the French G everywherenment cri ticism that the alternative had been made to the international technique, though this was the only available alternative despite the divergence amid the administrations.In the end, there was a challenge by the role of the High Authority, by numerous administrations, which turned to be a question once again (The European Steel Industry p. 6). The encouraging substance outcome attained during 2004 by the steel mills are still being working out their optimistic impact on the in general movement of this commerce throughout the archetypical half of 2005. There has been a great c everywhere on the stipulation for the steel inventions on the entire manufacture of the first section regardless of the increase in the quantity of mills.Therefore, there has been augmentation in their production, which in turn leave alone offer response to the promotion necessities that drop confirmed a stipulation in the expansion, fifty-fifty though this has emerged lethargic in some areas and burly in ot hers (The European Steel Industry p. 6). The Arab area was possibly among those main sections, which fuddle observe an augment in manufacture of, and also stipulation for the steel products throughout the first quarter of this year.In more or less it has been made known that the construction statistics of the most prolific nations in the Arab region have exposed an augment in the production expansion speed of extended and level manufactures. According to the predictions of the International exhort and Steel Institute (IISI) the global stipulation for the steel creations there was an spy growth of 3. 7% throughout the year of 2005. Therefore, there is an expected increase in the demand by the IISI that the stipulation will surpass one billion lots for the first time that is up by 36 million tons in comparison to 2004 (Challenges and Opportunities of Steel industry . . 1). According to Areclor, which is the largest steel manufacturer globally, there has been a contradiction in t he views expressed by number of companies in the decision making in the reduction of their own production due to the slowdown in the demand and also in the maintenance of the supply or stipulation demand. All this is in spite of the growth of the statistics, which point out to the augmentation in stipulation and an increase in the production in a number of regions in the globe (Analysis of economic indicators of the EU metals industry p. 1).This has led to the declaration that there will be reduction in the manufacture of flush formations by a number of tons in the first half of that year due to the low stipulation in the promotion of the European Union. Although, this mitigate unreservedly aspires at offering support to the advertising costs that the company has already publicized. This has clinched an augmentation of Euro 15/ton effectual early in the here and now quarter. The second largest steel producer, Mittal Steel, provided some analysis that opted to taking comparable ap plications to that of Arcelor (Analysis of economic indicators of the EU metals industry p. ) This offered assistance in the reduction of the creations in spite of appearance the perception of the requirement of upholding the provisions and stipulation stability of sustaining the values at the cost of measure. Therefore, that is what the steel industries have been determined to attain in 2005, particularly aft(prenominal) the augmentations that took place in the prices of the raw substance. Particularly, the iron ore industry, which had indentures concluded in the year 2005 with an augment of up to 71. 5% over the stage of preceding year.There may be an illustration to a new path for this steel manufacturing during this year (The European Steel Industry p. 6). Therefore, this tendency of the modifications observed by the global steel markets, which are determined in the light of the promotion actions and through the proposals which were being taken by the main corporations. This controlled the majority of the steel production internationally, which may return a new path for this production during that year. This track was set as a foundation on viewpoint punctuality from, sustaining value at the cost of measure.Therefore, this may somehow or one more, signify that the steel cost will keep on going in the same drift observed by the steel creations during 2004 in leaveition to the first quarter of 2005, to be precise, the increasing tendency of prices. Therefore, this may lead to the increase on the complexities facing the steel customers in a number of the main overwhelming segments at the front of which are the sectors of building, manufacturing productions and cylinders and conduit manufacturing (The European Steel Industry p. ). The Arab steel manufacturing saw an apparent ebullition throughout the year 2004 and early 2005. Therefore, this development is symbolized in escalating the manufacture, which had a powerful justification in entering into inden ture on the measure manufactured throughout the first quarter and measures of some fractions of that year. There must be a stimulation of the necessity of making as a severe review of the mail of the markets as to take into deliberation of the well-matched provisions and stipulations.This is all in order to shun any saturation under the force of the requirements of manufacturers for there to be an augmentation in the production which may result in a turn down in cost and materialization of the price antagonism in the promotions. Despite, there was a hold back, which commenced to come into continuation for a number of steel creations in a number of promotions (The European Steel Industry p. 8). The mo makeary recuperation experient by most Arab promotions because of the high gas and oil costs comp bob upd an encouragement to the surroundings for the affluence of the preponderance of the other different divisions.This led to the prevention of the dissipated appearance of the holdin g back circumstances of stipulation in some intense segments. Nevertheless, this delay came into continuation when the steel overwhelming segments became powerless in the take up of the sustained augment in the cost of the produces, which may enlarge into a higher enlargement in the prospect (The European Steel Industry p. 8). The increase observed in the steel costs, which were further than many prospects, stand in itself occasions and confronts.These occasions were to be made use of, hence requiring that the confrontations should have been examined that the steel manufacturers will be required to maintain the explosion, which it has observed. This detonation was given a productive suggestion in the enhanced circumstances of the steel industries, which have also offered contribution to inspiration of the expansion procedures of the steel manufacturing. This is only achieved by having reflections of coming up with a number of many innovative developments (The European Steel Industry p. 6. ).Privatization of the European steel manufacturing has made a significant move in the direction of a more competent manufacturing organization. The major confrontation of the industry is the post-privatization and is required to convene the prospect of the industrys innovative stakeholders. This is in different to the administrations, classified shareholders who in turn have different or even more monetarily familiarized objectives. Those industries that are possessed by the state have more focus on the maintenance of the production volume in order to secure jobs rather than on their end product presentation.Differently in the case of the private shareholder, there is more focus on the average return, which implies that there is a look into the enjoyment of the price of the share together with its bonuses. This takes place over a given period of time in order for theyre to be an evaluation of the presentation of the reserves of the steel markets (Directorate Science, Technol ogy And Industry p. 2). . More and more, the European steel market is required to have an international challenger with other different segments in the steel industry for capital to investment prospects.Therefore, the steel industry is required to show and at the same time picture the worth formation possible of their approaches to the worldwide monetary society. Increase in the concealed possession and commercial awareness has offered assiststance to the steel corporations to function outside nationwide limitations and optimize their possessions organizations in the European background, focusing construction in the first place in superior worth creations that are added.Over a number of years, the European steel makers have combined productions, exchanged possessions, cooperative undertaking, easing unity of the European steel industry (Metal Bulletin Research p. 1). In the opening new Challenges in the industry, if continued at present circumstances, the companys improvement is likely to put additional damage on the energy, blow dioxide and on our ecological bob in universally and also the raw material possessions. Other challenges that come approximately in this steel industry will be due to the high anticipation on the increase of energy stipulation.Therefore, the demand in energy will add to with about 60 % amid 2002 and 2030. In excess of 66% of the augment in global power stipulation amid 2002 and 2030 is likely to originate from those nations that are on the rise. Such countries are particularly in Asia. excessively chinaware counts for over 20% of the entire augment (Metal Bulletin Research p. 1). In the enhancement of the carbon dioxide confrontation, there is a likeliness of ArcelorMittal decreased carbon dioxide emanations by over 20% since 1990, through scientific expansion and reservations.Therefore this consequence surpasses the European Kyoto target by about two and half times. Although there is still frequently further development to comprehend as steel creation in countries, for instance like the CIS or China has a much higher carbon dioxide emanation speed, up to two times the heights which are allowed in, North America and Western Europe (The European Steel Industry 2001 p. 6. ). Despite all the challenges, there is no jeopardy of shortage, although a number of features are likely to lead to a good deal of lower quality resources.There are also, steel corporations that offer protection to their enduring supplies through upright incorporation. Since 1999, there has been an increase in the stipulation in the world steel steadily. Nevertheless, this augmentation has been in speedup since 2002 and has symbolized up to around 50 million tones additional yearly. In 2003, there was an increase in the world steel expenditure increased by about 6. 6% measuring up to 2002, and additional enhancement by 6% in 2004 and 5% in 2005 were in expectation (Directorate Science, Technology And Industry p. 2).This quick rush in the consumption of steel is as a consequence of the spectacular acceleration of familial steel in terms of its stipulations in China where there has been an average of 2. 6% yearly steel consumption that had been increasing by over the time 1995 to 2000. This augmentation has been by some 25% yearly ever since 2001 and there is an anticipated growth which is likely to take place at a rate which is a very fast pace also in both 2004 and 2005. In comparison to this, there was a decline in the consumption of steel in the rest of the world by 4. 2% in 2001 and since then there has been an annual rate of 2. % (Directorate Science, Technology And Industry p. 2). There was a turn down in the steel expenditure OECD region by 0. 5% in 2003, which was a total difference to the year 2002. This therefore, gave an indication of an 8. 9% reduction in North America that counterbalanced a 2. 6% add to in Europe and a 4. 5% augmentation in the Asian-Pacific region. Due to the better economic condit ions in the region during 2004, the steel expenses in the OECD were anticipated to rise by nearly 3%, with the North American as the promotion grasped most of the augmentation (+5. 7%) and more reasonable increase in Europe (+2. %) and Asia (+1. 3%). Therefore, the tendency was anticipated to persist also in 2005 (Directorate Science, Technology And Industry p. 2). Other many challenges that are facing the steel industry, include, the increase in the substantial steel prices that has led to more generation of profit in the industry of steel. However this has also led to the reduction in the limitations due to the spectacular add to in prices of raw materials and shipment. There are also some jeopardizes of the scarcity for scrap and coke that help in the process of manufacturing steel.Therefore, the important enlargement in prices of most steel creations at the commencement of 2004 created troubles for many industries that were consumed steel (The European Steel Industry 2001 p. 3. ) There was an expectation that, as the cost of the raw materials begged off within that year, there was anticipation that the cost of steel was likely to stay put at comparatively high heights for the rest of that year. In general with the augmentation in the cost of the raw material, there was a dramatic increase in the transportation costs.Also there was an increase in the contract charges for vast vessels which augmented fourfold in a single years, as of 17 000 $/day in January 2003 to 68 000 $/day in early 2004. However afterwards, the grade of shipment began to decline and were likely continue with the decline taking into consideration the limitations on loaning that was introduced by the Chinese administration in order to meditate the expansion (Directorate Science, Technology And Industry p. 2). In the current years, the opening between aptitude and manufacture condensed.This lessening in the past few years was mainly significant in the OECD region, where steel-manufactu ring aptitude had confirmed a net decrease of about 41. 5 million tones, or 6. 7% a further net reduction of some 15 million tones which was anticipated by 2005. In the NIS, most of the outdated unproductive surplus aptitude has been blocked. Though, with the increase in the familial stipulation and a high level of exports, a number of innovative capacities are anticipated to come on stream in the near prospect.Also pressure and complexities in raw substance markets lasted up to the end of 2005, by which time alterations that were expected by contractors assist in the easing of the complexities (Directorate Science, Technology And Industry p. 2). There are also a number of challenges that are faced by the steel industry. They include, the steel market is experiencing a holding back in the stipulation. This is happening in both the restricted and worldwide face. Therefore, due to this, there are a number of smaller producers who are really far draw out with arrears, and are taking d amage.At that height of the promotion, there are clear indications of the effects of the backwardness. There are a number of key reasons that are accountable for the turn down of the stipulation in the steel industry. The initial cause is the rate of please indecision that has put anxiety on the customer expenditure, in general. There is also a condensed customer expense that has affected all industries to some level (Woodley, et al p. 6). As there is reduction in the expenditure of the customers in the chain value, there is a reduction in the volumes and profits of the retailers and, in turn, the contractors and manufacturers.This clearly indicates that once there is talk in the reduction of the interest rate, there is a likeliness of the opinions of people turning positive hence leading to more expenditure from the customers. The other reason that has led to the economic deceleration is the international sub prime, which commenced in the US and has been making effect throughout the monetary markets globally. Therefore, there is anticipation since the nation is still waiting to see if it will get affected.Therefore, the impact of the US hold back is likely to be insightful and it is important for the world to work through it and the extremes of the precedent (Woodley, et al p. 6). Conclusion The steel industry has had a number of challenges that have had a great impact in the sector hence lowering its income. They include, the steel market experiencing a holding back in the stipulation. This is happening in both the restricted and worldwide face. Therefore, from the observation, there is a clear indication that the steel industry had had it all in terms of its economy, demand and supply.There is a likeliness of the company observing an augmentation in its stipulation for all cold-rolled, thin measure stainless steel. This is because the readiness facilities are generally among the last things to be improved prior to any event like that (Woodley, et al p. 8 ). Therefore, in spite of the recession experienced in universally, there is likeliness that there has been fragmentation in the stainless steel market, as the tank-tainer promotion explodes in harsh contrast with the rest of the industry.This kind of campaign is not rare in the stainless steel industry in addition to the carbon steel industry. This is because the possessions have got an extensive variety of submissions together with their dapple of use on many potentially contradictory markets. Therefore, there is a possibility of a number of divisions in the promotion showing an improvement while others indicate a recession. Therefore, this is not a bad thing in the industry of steel though the most important thing is for the steel market to be prepared for the challenges Woodley, et al p. 6) Work cited Analysis of economic indicators of the EU metals industry the impact of raw materials and energy supply on competitiveness. European Commission, 2006 Challenges and Opportuniti es of Steel industry 2005. 31March 209 http//www. arabsteel. info/total/long_editor_last_e. asp? ID=18 Dirctorate Science, Technology And Industry. Recent Steel Market Developments 2004. 31March 2009 http//www. oecd. org/dataoecd/34/48/32366875. pdf.Metal Bulletin Research, Steelmaking Raw Materials periodical Issue 146, July 2008 Steel Industry and the Environment, Technical and Management Issues. IISI and UNEP Technical Report No. 38. 1997. The European Steel Industry Restructuring in an Era of Globalization 2001. http//www. hatch. ca/consulting/knowledge_base/Articles/THE%20EUROPEAN%20STEEL%20INDUSTRY%20RESTRUCTURING. pdf. Woodley, David & Wilkes, Alan. European Stainless Steel Industry Faces Fundamental Restructuring 1998. 31March 2009 http//www. hatch. ca/Consulting/Knowledge_Base/Articles/European%20Stainless%20Steel. pdf

Discipline in Schools Essay

A majority of us have families with children various ages, and the title of this article caught my spunk for the simple fact I have teenage kids in school that have previously been assigned in-school suspension for minor disciplinary acts such as being tardy or turning in incomplete assignments. Working adults and parents are the primary targets of this particular article which sparks my personal interest towards this issue. I felt the author of this article gave a somewhat neutral observation of this topic, giving both sides of the story in a calm yet quite enlightening tone.He listed infractions that resulted in suspensions as headspring as different types of suspension outcomes. Its important to note that suspending a student for being disruptive in class and suspending a student for fighting should be handled differently however both instances should require the students to continue working on their curriculum. With references from other educators as well as reports from the US Department of Education I would have to say that the contents of this article appear to be creditable.Results from out of school suspensions prove to be doing more harm than good, leaving students at home unsupervised with a couple days off with no curriculum to work on verses the substitute(a) of requiring students to attend on the weekends seems to be a better solution, however funding for weekend programs is a separate issue. The authors intend of this article is to inform and acknowledge bare-ass alternatives need to be explored when it comes to disciplinary actions such as suspensions. Additional resources will have to be implemented, academic and financial. Overall I thought this to be a particularly interesting and informative article.