Huddle investigation Essay Example

Huddle investigation Essay 1. That the larger the huddle, the smaller the amount of heat lost. That is, an organism (test tube) on its own will lose more heat than if it were huddled in a group. In an experiment using test tubes, this will be supported by data which shows that a test tube by itself will lose more heat in the same amount of time than if it were in a huddle.2. The temperature loss should decrease proportionally as the size of the huddle grows.3. Also, the organism (test tube) in the centre of the huddle will lose less heat than an organism or test tube on the outside of the huddle.The reasoning behind this hypothesis is that as the huddle group grows in size, the amount of exposed surface area will be reduced per test tube. Although in practice not every test tube is exposed, theoretically, this is a way of comparing huddles.Also, in a huddle of many organisms, or test tubes, if there is a centre test tube which is not exposed, it will be warmer than those on the periphery of the huddle. This hy pothesis can be supported by data collected in the experiment by measuring the temperature of the centre of the huddle and the periphery of the huddle. The centre will be warmer because it has no surface area exposed to the outside.Huddling is a behavioural adaptation to the cold climate. Huddling (in the case of penguins) is when a group of penguins stand closely together, nestling, in an attempt to reduce heat loss collectively as a group. This idea is effective because as a group, the penguins have lesser surface area exposed to the cold per penguin. Thousands of penguins have been seen in the Antarctic nestling together. It is can be said that huddling together is the most vital adaptation of penguins to survive the breeding season, when the males are incubating the eggs and do not go out to find food, a source of energy.PLANNING BIndependent variable: the size of the huddleDependent variable: the amount of heat lost as a huddleControlled variables:- the type of test tubes- thic kness of the test tube glass- size of test tubes- the same test tubes were used- source of hot water- use of hot water, not any other substance- amount of hot water in each test tube- same thermometer- controlled environment thus the room temperature should be the same- the experiment was conducted away from windows, to minimise chance of sunlight adding heat to the huddle- amount of time allowed for each experimentApparatus:10 identical test tubes2 rubber bands2 thermometersA stopwatchA test tube rackHot water (from a tap)Materials to record dataMethod:In this experiment the temperatures of different huddles were measured. A test tube is used to represent one penguin.For means of comparison, an experiment was conducted where single test tube stood alone. Then we also used groups of 7 and 10 test tubes, to represent the increasing size of the huddle.Safety note: be mindful of the hot water.Measurements of the circumference of the huddle were also taken, to measure the surface area e xposed.The 1-test tube (solo penguin) experimentApparatus:1 test tube1 thermometerA stopwatchA test tube rackHot waterMaterials to record dataMethod1. We filled the test tube so that it has 22 mls of hot water. We did not use boiling water because the glass of the test tube may break.2. We placed the test tube in the rack, so that we were not holding it and transferring heat.3. We measured the initial starting temperature, and took measurements every minute for 6 minutes. The thermometer was held so that it was not touching the bottom of the test tube, to avoid measuring the temperature of the test tube rather than the water. The water temperature is wanted, because we are measuring the heat loss from the water, which would be the body of the organism. The test tube perhaps can be seen as the skin or fur of the organism. Also, glass retains heat.4. Repeat this experiment to obtain a more accurate overall result. We repeated this experiment 4 times. In consideration of time restraint s, there can be 2 of these experiments conducted simultaneously if there are 2 people involved.5. The circumference and length of the test tube was measured, so that a rough estimate of the surface area exposed can be measured.The 7-test tube huddle experimentApparatus:7 identical test tubes2 rubber bands2 thermometersA stopwatchHot waterMaterials to record dataMethod:1. We first bound the 7 test tubes together, to form a huddle. Identical test tubes are used so that a direct comparison can be made between the inside and the outside of the huddle with regard to heat loss. A test tube made of a thinner glass would lose heat more rapidly than a thick test tube.2. With 7 test tubes, a flower pattern was formed. The two rubber bands held the test tubes together. In this experiment, there was no props needed to keep the huddle standing, the huddle was self-standing. We also did not want to introduce a beaker to hold the huddle together, because this could act as insulation against heat l oss.3. Then we filled the test tubes with hot water from the tap, minimising the time taken. Each test tube was filled to approximately the same level. It would have taken too long to measure out 22 mls for each test tube the water in the first test tube would have lost a significant amount of heat by the time the 7th test tube was filled.4. As soon as all test tubes were filled, the initial temperature of the inner test tube and an outer test tube was taken (it does not matter which outer test tube is measured). Again, care was taken so that the water temperature was measured, not the test tube glass temperature.5. Measurements of temperature (of both the inner and an outer test tube) were taken every minute, for 6 minutes.6. This experiment was repeated 4 times.7. Again, with time restraints, 2 of these experiments can be conducted simultaneously, simply by doubling the apparatus needed.8. The circumference of the huddle and the length of a test tube was measured, so that later c alculations of the surface area could be worked out.The 10-test tube huddle experimentApparatus:10 identical test tubes2 rubber bands2 thermometersA stopwatchHot waterMaterials to record dataMethod:1. The 10 identical test tubes were bound together by the two rubber bands. Again, identical test tubes are used so that direct comparisons of between test tubes within the huddle can be made.2. In the experiment of the 10 test tubes, the formation illustrated below was formed.3. In this case, the test tubes were also self-standing, so no other apparatus was needed to prop the huddle.4. Steps 3 to 8 of the 7-test tube huddle experiment can be applied in the same way for this 10-test tube huddle experiment.To measure the circumference of a huddle1. To measure the circumference of a huddle, to place a string around the entire huddle and measure the string would be inaccurate. To gain a more accurate measurement, the string should trace the test tubes on the periphery, as shown below.2. The string is then marked, and measured against a ruler.RESULTSResults from the 1-test tube experiment (solo penguin)Temperature (à ¯Ã‚ ¿Ã‚ ½C) of the 1 Test Tube HuddleTime (mins)Trial 1Trial 2Trial 3Trial 4040.040.043.045.0139.039.042.043.0237.538.540.542.0336.038.039.540.0435.036.538.539.0534.7535.538.038.0634.034.537.037.0Results from the 7-test tube huddle experimentTemperature (à ¯Ã‚ ¿Ã‚ ½C) of the 7 Test Tube HuddleTrial 1Trial 2Trial 3Trial 4Time (mins)Inner Test TubeOuter Test TubeInner Test TubeOuter Test TubeInner Test TubeOuter Test TubeInner Test TubeOuter Test Tube043.042.042.042.044.044.048.046.0142.041.041.041.054.044.048.045.0243.041.042.540.544.543.048.045.0343.041.042.040.044.042.047.044.0442.040.542.039.043.041.046.043.0541.040.041.039.043.041.045.541.5640.539.040.538.542.040.045.041.0Results from the 10-test tube experimentTemperature (à ¯Ã‚ ¿Ã‚ ½C) of the 10 Test Tube HuddleTrial 1Trial 2Trial 3Trial 4Time (mins)Inner TTOuter TTInner TTOuter TTInner TTOuter TTIn ner TTOuter TT046.044.046.044.049.048.048.046.0145.543.045.044.049.047.048.045.0245.043.045.044.048.046.047.044.0345.042.044.042.047.545.546.543.0444.041.044.042.047.045.046.542.5543.040.544.041.546.044.046.041.5642.039.543.040.545.543.046.041.0Physical Measurements of the huddleTable showing the physical measurements of the huddle and the test tubes1-test tube7-test tube huddle10-test tube huddleCircumference (cm)6.924.531.6Length of test tube (cm)15.0DATA PROCESSING AND PRESENTATIONChange in temperature in the experimentsTable showing the change in temperature (Initial temperature Final temperature)Temperature (à ¯Ã‚ ¿Ã‚ ½C)Trial 1Trial 2Trial 3Trial 4Average1-test tube huddle6.05.56.08.06.3757 test-tube huddle INNER test tube2.51.52.03.02.2507 test tube huddle OUTER test tube3.03.54.05.03.87510 test-tube huddle INNER test tube4.03.03.52.03.12510 test tube huddle OUTER test tube4.53.55.05.04.500The variations in starting temperature in this case were ignored, as it was the i nitial temperature minus the final temperature calculated, thus the change was measured.It can be seen that the average change in the 1-test tube experiments were vastly different to those obtained in the other experiments. However this figure may be distorted by the result of Trial 4. If we look at the individual results from Trials 1 to 3, they are comparable with the results from the outer test tubes of the 10-test tube huddle. In this way, they do not look so atypical. The result obtained from Trial 4 must be an anomaly in the results.To more easily interpret the averages as shown in bold type in the table above, a bar chart can be drawn.From the chart, the distinct differences in heat loss can be seen, and two hypotheses are supported: the single test tube alone lost the most heat on average, and the inner test tubes lost less heat than the outer test tubes. However as shown by the overall taller columns for the 10-huddle, the increasing size of the huddle does not necessarily mean the lower the heat loss.The amount of heat lost by the single test tube (6.375à ¯Ã‚ ¿Ã‚ ½C) was almost 3 times as great as the amount lost by the test tube at the centre of the 7-huddle (2.250à ¯Ã‚ ¿Ã‚ ½C). The average amount of heat lost by an outer test tube of the 10-huddle was still significantly lower than that of the single test tube. Even if the anomaly of Trial 4 is taken out, the average is 5.833à ¯Ã‚ ¿Ã‚ ½C, which is still considerably lower than 6.375à ¯Ã‚ ¿Ã‚ ½C.The difference between the inner and outer test tubes of the 7 and 10-huddles is on average 1.5à ¯Ã‚ ¿Ã‚ ½C (the difference between the inner and outer test tube of the 7-huddle was 1.625à ¯Ã‚ ¿Ã‚ ½C, and the difference between the inner and outer test tube of the 10-huddle was 1.375à ¯Ã‚ ¿Ã‚ ½C). This clearly supports the hypothesis that the inner test tube loses less heat than an outer test tube because of the lack of surface area exposed to the external environment.The fact that the 10-huddles over all lost more heat in the same amount of time than the 7-huddles is surprising, because assuming the more test tubes in a huddle, the more heat there is to share between the test tubes. However, if we perhaps look at the theory that radiation is transferred from hot to cold (so that the colder are warmed by the hotter), the size of the 10-huddle may be hindering its ability to collectively retain heat. Perhaps the overall greater surface area can be seen as the cause of the overall greater heat loss in the 10-huddle than in the 7-huddle.Below is a table showing the exposed surface area in each of the huddles.Table comparing the surface area exposed in the different huddles in the experiment1-test tube7-test tube huddle10 test tube huddleOverall surface area exposed (circumference x length of the test tube) cm2103.5367.5474.0Surface area per test tube (theoretically) cm2103.552.547.4The graph below compares the differences in exposed surface area.A greater exposed surface area woul d mean that more heat is being lost at one time from a single source. Perhaps it can be concluded that despite the increased amount of heat contained in the huddle (more test tubes means more hot water thus more energy altogether), the increase in exposed surface area counterbalances this heat, and thus the huddle is losing more heat than it is retaining collectively. The heat from the inner test tubes would be passing out more heat to the outer test tubes, to maintain the same temperature.Perhaps in theory, the 10-huddle should lose less heat because of the lower surface area per test tube figure (the surface area exposed per test tube for the 7-huddle is 52.5 cm2; 10-huddle, 47.4 cm2). However the discussion in the paragraph above gives a reason why this figure is misleading if one is to use this to judge the efficiency of a huddle in retaining heat.In real life, it would be difficult to say that the greater the huddle, the greater the surface area, thus the greater the inefficien cy in heat retention. Penguins prove this there huddles of thousands of penguins seen in the Antarctic region during breeding season. If smaller groups are more efficient, then surely the penguins would break up into smaller huddles as a survival mechanism.CONCLUSIONThe results from this series of experiments supports two hypotheses: that a single test tube will lose more heat per test tube than a test tube in a huddle, and that in a huddle, the inner test tube will lose less heat than an outer test tube. The single test tube on average lost 6.375à ¯Ã‚ ¿Ã‚ ½C, whereas the other test tubes only lost 2.250-4.500à ¯Ã‚ ¿Ã‚ ½C. The differences between the inner and outer test tubes within the huddles was at least 1.375à ¯Ã‚ ¿Ã‚ ½C, as in the case of the 10-huddle. The difference between the inner and outer test tube of the 7-huddle was 1.625à ¯Ã‚ ¿Ã‚ ½C.The hypothesis that the greater the size of the huddle, the lower the heat loss per test tube is not supported by the data collecte d. The validity of heat loss per test tube comparison is maintained by the measuring of temperatures of the individual test tubes, not by measuring the overall temperature of the huddle. The data showed that the 10-huddle per test tube lost overall more heat than the 7-huddle, both in the cases of the inner (the inner 10-huddle test tube lost 0.875à ¯Ã‚ ¿Ã‚ ½C more heat than the inner 7-huddle test tube) and outer test tubes (the outer 10-huddle test tube lost 0.625à ¯Ã‚ ¿Ã‚ ½C more heat than the outer 7-huddle test tube).It can be concluded huddling has an effect on heat loss, in that a huddle will lose less heat than a single test tube (or organism, as applied in real life). However, according to the experiment, it seems that the greater the size of the huddle, the greater the heat loss, although it is not as great as the heat loss experienced by the single test tube. This is odd, because in real-life, experiences of penguins would tells us that the greater the size of the huddl e, the lower the loss of heat per penguin (test tube). It can also be concluded that huddling is most beneficial to the animal in the centre, as they experience less heat loss than an animal on the periphery of the huddle. Thus, huddling has a significant effect on heat loss.EVALUATIONEvaluation of method:A weakness in the method is that the volume of water for the 7-huddle and 10-huddle experiments differed every time it was performed. As mentioned in the Method, it would have been impractical to measure out exactly 22 mls for each test tube, because by the time the 7th or 10th test tube was filled, the first test tube would have lost a considerable amount of heat while standing. The volume of water for each experiment was measured, and between the 7-huddles, there was only a difference of 4 mls, and between the 10-huddles, there was a difference of 5 mls.We have to take note of the fact that glass absorbs and retains heat, and so the heat loss we are attempting to measure may not be completely accurate. However, if we draw parallels between the test tube and skin of the animal, this may be accurate because the animal would retain the heat in its fur/feathers, thus not all the heat would be lost to the external environment. The heat loss in the water can be paralleled with the core temperature of the animal.I did not take into account the area exposed at the top of the test tubes, or at the bottom of the test tube because these would have been too difficult to measure. The meniscus of the water would prove difficult to measure, as would the curve of the bottom of the test tube. Furthermore, heat lost from the top would not be through glass (there is on glass at the top of the test tube). The bottom of the test tube is also thicker than the sides. Thus, heat lost from both these gaps would not be the same as heat lost from the sides. In order to keep the experiment consistent, these were ignored as part of the calculation for surface area.Time restrictions mus t also be considered. Although the time the temperatures were measured over was fairly small (6 minutes), there were still palpable differences between the experiments, and the hypotheses could be supported with the data collected. The differences were not so small it was difficult to establish whether or not there was a pattern. However if the experiment was conducted over an even longer period of time (perhaps 10 minutes), the patterns may be even more distinct. Perhaps in the long run the 10-huddle may have performed better than the 7-huddle in heat loss.The temperature could also only be measured to 1 decimal place, but my partner and I decided to round up to the nearest half or whole number. This way, interpretation is clearer and reading the thermometer can be done with ease.

Death Essays - Animation, Angry Kid, Filmmaking, Free Essays

Death Essays - Animation, Angry Kid, Filmmaking, Free Essays Death All it takes is five seconds, and it can change your whole perspective about the word "Death". Last May a good friend of mine died, after falling off a bicycle. I couldn't comprehend the fact that he was dead for a few hours after my father told me. It seemed to me that just a moment ago I was playing basketball with him. He was only twelve but I knew him since he was very young. Actually he was almost a best friend to me. After his accident he was rushed to the hospital with a coma. Then after two weeks all his organs eventually failed. I was so na?ve. During the time he was in the hospital, I always told myself that he was going to be all right and he was going to be out of there in no time. But I was wrong, and I learned that life wasn't like that and it didn't always happen that way. Having a near death experience myself, my thoughts about death also took a different turn. I never thought death would even come near me. Last year in May, my sister, dad, and I were driving down to California. And it was about seven o'clock in the morning and my sister was driving. Then she fell asleep and starting driving off the road. She swerved back on the road really hard, which made the car flip over four times. Then we were rushed to the hospital and stayed there for about an hour. My sister and I were all right but my dad was in critical condition. My dad ended up only loosing his pinky finger. Just being in that situation made my outlook on life and death different. I couldn't bear the fact that my dad would be gone forever. Being a Christian I was brought up to believe that people who believe in Jesus Christ would have a greater destiny in heaven. But in these two situations with death, I wasn't able to think about them being gone and in heaven. I only ! thought about them being gone period. Watching all the hurts and tears that people shed during my friends death made me think about how death can be such an impact on peoples lives. People do not take death lightly. Their emotions and thoughts take a big twist and a lot of questions go through their thoughts like "What if that were my son"? Or "What if that was me"? Also regrets start creeping into peoples minds especially the parents. I started to regret not spending enough time with him and not being a good enough friend with him before he was gone. And I'm sure the parents also had familiar regrets. And now that that person is gone, there will always be a piece of my thoughts missing. There are thoughts that I had that were so repetitive and thoughts that I had so often that involved my friend. And now I have to change those thoughts and adjust them into thoughts that I would have of him not being around and gone forever. Having a close friend die also will force anybody to make changes in their lif! e, in their thoughts and in there every day act of living. This experience with death also made me have a sentimental attitude towards people that I don't even know, that have died. For instance, when I watch the news and someone has died, I usually just feel sorry for a few minutes and forget about it. But now I can relate to the families and friends of the person that had past away. Just a few days ago a very important man in my church died from cancer. He was also my principle in grade school. They announced his death Sunday morning during the church service. I again got to watch many people weep and mourn over this great man of stature. I got to see some friends of mine cry that I had never seen cry before. Which is another example how death can totally flip anyone's emotions. In conclusion, death is never easy to deal with. And death is something that you cannot help. If anyone close

DNA Barcoding Invertebrate Lab Report #1 Example | Topics and Well Written Essays - 500 words

DNA Barcoding Invertebrate #1 - Lab Report Example Currently two such databases exists, the Barcode of life (BOLD) and The International Nucleotide Sequence Database Collaborative which is an intiative of the three main Nucleotide databases, GenBank, EMBL and DDBJ. The fouth and final stage is to carry out an analysis where specimens are identified with the closest matching reference record in the aforementioned databases. In this lab report, we sought to perform a barcode analysis using mayfly DNA sequences in the BOLD database. The barcode sequence is mainly a short DNA sequence which has a uniform location in the genome and is used to identify species. One of the commonly used sequence in DNA barcoding is the cytochrome oxidase subunit 1 (COI). This was the sequence we used this work. The barcoding process involves identifying a universal locus which has retained enough sequence conservation throughout evolution and can be sourced from many organisms. This sequence should also be diverse so as to be competent enough to differentiate a target species to the family level. Generally regions of the chloroplast (rbcL gene) and the mitochondria (COI) meet these requirements. Various studies have been undertaken by Herbert et al (2003a, 2004b) and established this COI sequence as the sequence of choice in DNA barcoding in insects and vertebrates. Inverterbrates such as mayfly are collected whole and may b e euthanized in a kill jar by placing them in a freezer. In the lab, primers are designed to target the conserved regions flanking the rbcL or the COI

A change in the price of a good causes a movement along the same Essay

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Critical Response Research Paper Example | Topics and Well Written Essays - 1250 words

Critical Response - Research Paper Example The two stories intricately crisscross each other and in a way assume a form and life of their own as they gradually unravel. Dunye’s film primarily comes out as a complex yet somewhat enticing insight into the American history, delving on the relevance of cultural icons and issues pertaining to cultural representation. However, the film sometimes confuses the audience going by the fact that it has a lot going on in it at the same time, thereby making the plot a little complicated with haphazardly placed setting of the events, their order and duration, and the exact relationship between them. Still, Dunye has been able to manipulate the link between the plot and the story to facilitate a sense of drama. To a great extent the story relies on stereotypical contrasts and comparisons like the differences between regular, curious and evolving character of the young black lesbian Cheryl and Tamara, her particularly stereotypical, hardliner and close minded friend. The one big weakne ss in the film is that it predominantly intends to intrigue through the ingenuity of the exploitation of documentary techniques. May be it is owing to this that some audience may find themselves disappointed by the disparity and lack of correlation between the form and the content. What the forms in the movie Watermelon Woman seem to offer, the content sadly falls short of it. One special thing about the larger theme of the movie is that it has definitely succeeded in emphasizing the emotional relevance and value of cinema. However, the coy romance engaged in by Cheryl, and the wacky shots that she is continually subjected to, to a large extent dilute the overall impact of the movie, making it conveniently ingratiating for an audience with regular expectations, without being able to score the incumbent and associated political comments. Though, the prime focus of the director seems to be to resuscitate a part of the African American history that conveniently got sidelined in the flo w of time, which is the Black sexual history, the film badly falls short of achieving this objective in a forceful way. However, Dunye has managed to succeed in securing varied salient objectives that attend the feature films associated with the like subjects and themes. In her own peculiar way Dunye has been able to write a history that earlier never existed. In that context, the film Watermelon Women is securely grounded in the historiographical facts and realities of the Black people and especially the black women of the last century. For instance, Cheryl’s quest for the ‘Watermelon Woman’, engages her in interesting and thought provoking interviews with many people who happened to be the fundamental part and parcel of the Black Club culture during the interwar days. While delving on the film in a serious and analytical manner, one simply cannot help identifying the personal stake that the director has in the movie. The Watermelon Woman throughout hovers aroun d an essential black lesbian identity. However, it does so by stimulating the viewers to correlate and identify the connections between the stories of a black American actress from the bygone era, who managed to accrue fame through a range

Analysis of Momentum in Indian Stock Markets

Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There Analysis of Momentum in Indian Stock Markets Analysis of Momentum in Indian Stock Markets LITERATURE REVIEW The first study on momentum based investment strategy was documented way back in 1967. Levi (1967) claims the success of trading strategy based on buying stock with current price significantly higher than the average of last 27 weeks generate significant positive abnormal returns. However Jensen Bennington (1970) argues that the trading rule based on relative strength proposed by Levi was the one out of sixty eight trading strategies he tested and while tested for out of the sample test period it did not outperformed the buy hold strategy and hence was attributable to selection bias. Test of contrarian investment strategies was stealing the show fund managers were found busy picking stocks based on relative strength in US market. Majority of mutual funds examined by Grinblatt Titman (1989) note the tendency of fund managers to buy the stocks that have seen price increase in last quarter. Apart from that Value Line rankings of mutual funds that were largely based on relative strength also enjoyed high predictive power. The success of mutual funds investing on the basis of relative strength and high predictive power of value line rankings (Copeland Myres (1982)) provide some evidence of success of investment strategies based on relative strength. The academic literature suggests contrarian returns generate abnormal returns whereas value line rankings and mutual funds generating abnormal returns based on relative strength strategy are in stark contrast of each other. A seminal study by Jegadeesh Titman (1993) solves the puzzle by providing an explanation based on different of investment horizons considered by mutual funds using momentum strategies and contrarian strategies advocated by academic literature in late eighties and early nineties. Jegadeesh and Titman (1993) using US market data from 1965-1989 found not only the evidence of long term success of contrarian investment strategy but also found that momentum strategies generate significant positive returns in medium run over 3-12-month holding periods. They documented the reversal of momentum after about nine months. Their study suggests that in short run for about 3-12 months holding period momentum strategy generate significantly positive returns while in long run for the holding period of 1-3 years contrarian strategy generates significantly positive returns. Conrad and Kaul (1993) also find evidence from US market that the contrarian strategy is profitable for short-term (weekly, monthly) and long-term (2-5 years, or longer) intervals, while the momentum strategy is profitable for medium-term (3-12-month). As mentioned earlier the results of Jegadeesh and Titman (1993) had thrown a new light on seminal study of De Bondt Thaler (1985, 1987) and found evidence of short term momentum precedes long term reversal. Although all the results provided strong evidence of market inefficiency, different studies documented different explanations for such returns. Fama French (1996) presents result based on multifactor CAPM using size and MV/BV ratio to explain various anomalies in asset prices including momentum as well as contrarian returns and claim that market efficiency is intact. However the study failed to explain the presence of short term momentum using the multifactor model and hence short term momentum anomaly remains unexplained. Several behavioural explanations were found and presented to jointly explain the short-run cross-sectional momentum in stock returns documented by Jegadeesh and Titman (1993) and the long-run cross-sectional reversal in stock returns documented by DeBondt and Thaler (1985). Daniel, Hirshleifer, and Subrahmanyam (1998) (DHS hereafter) assume that investors are overconfident about their private information and overreact to it. If these investors also have a self-attribution bias, then investors attribute success to their own skills more than they should and attribute failures to external noise more than they should. The consequence of this behaviour is that investors overconfidence increases following the arrival of confirming news. The increase in overconfidence furthers the initial overreaction and generates return momentum. The overreaction in prices will eventually be corrected in the long-run as investors observe future news and realize their errors. Hence, increased overconfidenc e results in short-run momentum and long-run reversal. As against the above cited behavioral explanation to short term momentum and long term reversal, some scholars argue that the returns from these strategies are just compensation for taking additional risk or may be the product of the data mining. Most noteworthy of all Conard and Kaul (1998) argue that the profitability of momentum strategies may be the result of data-mining and momentum portfolio shows positive returns in any post ranking period is true irrespective of the length of test period. Thus Conard and Kaul (1998) suggest that there is no case of long term reversal. This is diagonally opposite to what the behavioral models suggests where after short term momentum prices will reverse to more fundamental levels. In fact, the criticism of Conard and Kaul (1998) led to another study by Jegadeesh and Titman (2001) where they used out of the sample test by using data from 1991 to 1998 an overlapping test period compared to their 1993 study where they used data form 1965-89. Their study also eliminated small firms from the study to check whether the earlier momentum returns were actually dominated by small, high-risk and illiquid stock or otherwise. Though they focus on short term momentum in their study choosing two year holding period post formation but they also tested post holding period returns from the period of two to five years after formation. They present some very interesting results. The momentum profits of Jegadeesh and Titman (1993) continued in 2001 also with almost same magnitude for same holding period that actually has proved that the earlier momentum profits were not the result of data-mining. It also suggests that unlike small firm effect where after the published research on superior returns on small firms compared to their large counterparts, superior returns on small firms disappeared in subsequent studies using data from the periods after the small firm effect from earlier studies got published, that means market has learnt quickly and hence such superior returns disappeared however momentum returns were still present with the same magnitude in 2001 as they were in 1993 study suggest that momentum returns are not just the temporary anomaly but it may have to do with some systemic cognitive bias which sustains for a long time. It also proves that momentum profit is just not the result of some small, illiquid and risky stocks and most noteworthy the reversal found in their post holding period cumulative returns, which render support to the explanations of behavioral theorists and provides evidence against the Conard and Kaul hypothesis. As far as studies in Asian markets are concerned Chang (1995) found abnormal profits of contrarian strategies in the Japanese markets. Chui (2000) found significant positive abnormal returns with contrarian investment strategy in Japanese and Korean markets. Hameed Ting (2000) found evidence of market overreaction hypothesis (contrarian strategy) in Malaysia. Kang (2002) found significant short term positive returns with contrarian strategy in Chinese markets. On the other end, Hameed Kusandi (2002) found no evidence of contrarian profits in six Pacific Basin markets. While Rouwenhorst (1998) and Griffin Martin (2005) found existence of momentum in many non-US countries, the quantum of momentum returns in non-US countries was small, and in the case of Asia, insignificant. For example, Griffin (2005) estimates average monthly returns of 0.78%, 0.77% and 0.40% for the Americas (excluding the US), Europe and Asia respectively. End of the Beginning or Beginning of the End†¦ The big bull has fallen down, investors have lost their vision, and experts knowledge went futile with the downturn of the global economies. When the markets were on peak, the funds across the world have flooded in the global economies. Policy makers had lot of confidence on the market, that it will help the economy to grow at faster pace. The market excelled 21000 points which was more ahead then the growth of the economy of India. But that does not seem true for the world economies, as the crisis had hit badly in USA and other parts of world which insisted FIIs and other investors to withdraw their money and markets crashed, went to 7000 points, where investor lost everything and policies could not work to take them up to the level. What was the reason of the crash? What will be the result of the market? Is this the end of the beginning or beginning of the end? Indian market is the strong base of determining the financial system of the country. Majority of the financial decisions are dependent on the stock market other financial market. Indian stock market serves a link to banking and other financial policies which provides impetus to the industry. Indian stock markets heavily based on the sentiments of the clients (market players) also of the market makers. The crash or boom (in a period/ year) determines the structure of the Indian capital system. The boom in the market (year till 2008) has brought many changes in the performance of mutual funds, insurance (ULIPS), investment products which led the country into the inflow of the money supply in the market. Till 2007-08 the market was running at its best, touched the heights, but the global crash in the market became a typhoon took away major players organizations into the quick sand of the recession. The insights from the market were not showing positive sign in anyways, so whether this was a new platform or just a time (economic) cycle. Prologue to decline†¦ Earth provides enough to satisfy mans need, but not greed. -M.K.Gandhi The market crash started with the fall of big financial organizations in the USA in the world like Lehman Brothers, AIG, Freddie and Fannie and many more. The failures were primarily due to exposure into Subprime loans Credit default swaps issued to insure these loans the issuers devolved resulted into bank failures steep reduction in the price of equities worldwide. The economic crisis led many world markets to suspend the trade due to fall in price. On October 8, 2008 Indonesian stock market halted trading, after a 10 % drop in one day. The crash of 2008 was around 21% which was little less than 1987 (Times of London). Beginning of October month was Black in the world market. The Dow Jones volumes were low and the industrial average fell over 1874 points which was worst weekly decline. The Icelandic stock market was into pitiable situation where the markets had been suspended for 3 days i.e. 9, 10 13 October. On October 24 many of the worlds stock market experienced the worst decline, with around 10% drop in the indices. Source: http://en.wikipedia.org/wiki/File:OMX_Iceland_15_SEP-OCT_2008.png The above graph shows the steep and the worst decline a market could ever witness. The Iceland stock market crashed up to unpredictable level. The trading had been suspended for 3 days because of the crash in the market. This situation was visible in all global stock markets, because of financial crisis in USA. Hence, the worst was yet to be experienced by the global markets market players. The Indian stock markets were also badly hit the confidence of people was shattered. The markets were not showing the positive sign in any of the context people had no clue about the next jump or next level of the market. Market experts were expecting the markets will be into recuperation at the earliest, but things were not going the way it had been desired. Source: Hindubusinessline.com Indian market which has shown strong performance till 2007, but from January it plummeted more than 3000 points on all the stock prices by October 2008, it had touched the 7000 (BSE) line. The continuous unpredictable scenarios in the stock market led many investors and institutional investors to withdraw their money because of negative performance of the markets. The above shown graph is depicting the dream turned into nightmare for global domestic investors. The Beehive capitalism†¦ Everything that goes up without base falls steeply with great force. The same situation has happened with the world economies. The supreme economy of the world has become the devil for the small economies, leading major big companies to file for the bankruptcy. The global meltdown is the result of Financial Hybrids Innovations, which has been actively traded all across the world markets. The investment bankers, banks, financial institutions were actively relied on these new and innovative models, which has yet to gain the acceptance across the world. The main accused element for collapse is â€Å"Credit crisis†, in which the US banks got the regulations to lend money to the people having no sufficient background to get the loans. These kind of loans were termed as NINJA loans (NO INCOME, NO JOBS, NO ASSETS), given in abundance by the US banks. Emerging economies like India, China and other big economies were initially considered to be the places which will remain unaffected from the distortion of crisis. But despite of the strong fundamentals Indian economy dipped into the crisis. The stock market had lost more than 50% of its value (source: economic times), which shattered the hopes of the Indians. There was continuous monitoring by the Central Bank (Reserve Bank of India) on the market trend. The tornado of crisis had destroyed most of the stock markets, banks and financial institutions after soaring to the new heights of investment. The below mentioned graph depicts the movement of BSE Sensex SP CNX Nifty Source: SEBI Bulletin November 2008. BSE Sensex closed at 9788 on October 31, 2008 as against 12680 on September 30, 2008, a fall of 3072 points (almost 24%).The month of October 2008 had been the most volatile month, where Sensex recorded a high of 13055.67 on October 1, 2008 low of 8509.56 on October 27. Nifty closed 2886 on October 31 against 3921 against 30 September 2008. By the end of a month Nifty registered the fall of 1035 points (almost 27%). The market had shown unpredictability of the base stability level, dissuading more and more investors to take exit from the market. The Financial crisis: A Sub-prime loan is a type of mortgage loan made to borrowers who have at least one of the following characteristics: (1) Low credit scores; (2) The inability to post the traditional 20 percent down-payment for a home; and/or (3) The inability to fully document their income. The subprime crisis is not the result of recent financial innovations and developments, but it is the outcome of lax capitalism policies which had been developed by the US government. In the fifties American government passed a legislation to delink the commercial banking investment banking. The legislation stated implied that a commercial bank cannot open an investment bank. In 70s European American economies faced slowdown, due to which these banks were finding difficult to invest their investible surplus. This time the East Asian economies were liberalizing their economies, due to which the capital from western economies started moving to these economies. After the huge influx of capital into these economies, Asian bubble gets burst, forcing the western economies to introduce new financial measures to invest into the markets. These circumstances and the need of new financial avenues led the US European economies to trade into the new financial products, by liberalizing the norms for Commercial Investment Banks. The liberalization in the regulations led to the introduction of the Mortgaged products (a prime cause of crisis). In the late 90s US mortgage lender began offering the mortgage products to would be â€Å"home buyers† who could not qualify for a mortgage loans. Millions of Americans Europeans, who previously could not afford to buy home, were obtaining these mortgages, due to which great Demand of home (boom) took place leading to shoot of real estate prices. The above diagram shows how the base of subprime crisis took place in the global markets. The downfall in the economies is considered to be as the Dominoes Effect. The lax screening of borrowers, large capital accumulation capitalized market structure created a bubble which could not be ceased from getting expand. The whole cycle got mitigated with the introduction of new instruments in the financial markets. The sub prime crisis is about the collapse of the unregulated, $3 trillion over-the-counter market for complex structured assets, some of which happen to contain sub prime residential mortgages. The semiannual global financial stability report by IMF said that declining US housing prices and rising delinquencies on the residential mortgage market could lead to losses of $565 billion. When combining these factors with other market factors, it puts potential losses at about $945 billion which is almost 25% of the $24trillion global credit market. Financial innovations were brought into the market to make the products work in the market. The Mortgage products started to conflagrate the US European markets, where such loans started becoming the pool of assets (Risky) and been traded in the market. Hence, due to this many other factors got the impetus ultimately resulted into the uncontrollable bubble of mortgage, which gets burst and deepened the world economies into the recession. The subprime crisis has affected the global economies resulting into the fall of big financial corporation like Lehman Brothers, Bear sterns, AIG, Freddie Fannie, and many more big organizations of whom one cannot think to get fail. The sizes of the organization (exposure) were in plethora that it was not possible for the US European government to revive these financial institutions. AIG, one of the largest insurance companies (Private) became government undertaking due to the impacts of financial crisis. SUB PRIME OVERVIEW: Source: The India Economic Review 2008. (Dec 08) The whole system works in three stages, Stage First consist of Borrowers lenders; Second stage consists of the creation of SpecialPurpose Vehicle (SPV) with the inclusion of legal intermediaries. The last (third) stage consists of investors those who had invested their money into the riskier assets including the investment banks. In stage first agent enters between borrowers and lenders, accepting the collateral and also factoring the future price rise. The agents accept the loans, who previously could not even qualify for the approval, now getting loans from the banks other lenders. The housing price bubble allowed many borrowers to get loans easily because of the high house prices. The loans were mortgaged on a larger scale by creating the pool of similar group of mortgage assets through Special Purpose Vehicle (SPV) given the risk involved on the pool of assets. In second stage, SPVs were created all the liabilities were transferred into bankruptcy remote securitization trust or SPV. Underwriters were used to issue market the MBS (mortgage backed securities). These securities were divided into different tranches, which were of similar securities. The rating agencies were to give rating to these tranches of securities. The ratings were given to the tranches based on the risk, priority of payment of the funds. Higher ratings were given to those tranches benefiting from the credit enhancements the MBS generates or credit insurance purchased from third party bond insurer. In third stage, Institutional or individual investors such as hedge funds or managers of Collateralized Debt Obligations (CDOs), purchase the securities and then re-securitize the MBS, along with other assets, into a CDO. The Commercial Papers (CP) generated in the initial years was all sold and there was demand for more. Consequently the SPVs started producing more CPs or MBS. The sale of the same only meant that the SPVs were flush with funds. These funds were to be invested somewhere so, the agents were pressed to bring in more borrowers. The lending norms were further diluted to accommodate lesser and lesser deserving borrowers in order to deploy the huge funds available. The consequent spiral that got generated only led to the continued dilution of the Capital Adequacy and Prudence norms. The system went burst once the housing prices turned negative turning the very foundation of subprime lending upside down. The turmoil of subprime has been expected of more than $ 3 trillion, which is too big for any country to even imagine of recuperating. The impact on Indian market was slow but had been proved acute on the stock market due to the constant humongous withdrawal of FIIs loss of confidence in the consumers (investors). Mortgage: Huge pack of cards†¦ The magnanimous crisis which all started with lax policies of US government, provided impetus for the Fed Reserve to implement new structures in the economy. The capitalist policy was looking very attractive to the market players, but the policy was hollow from the fundamentals. It all started with the Alan Greenspans reformative structures models in the financial markets, led to turmoil in the global economies. The US Fed Bank Clinton government in 1999 passed Gramm-Leach-Bliley Act (GLBA) which had abjured the old Glass-Steagall Act which had regulated the Investment Banks, Banks Insurance industries. The new legislation has unregulated the Wall Street Investment Banks and commercial banks. This deregulation has enlarged the gamut of activities in the financial activities of the commercial banks other financial institutions. The deregulation had been further reintroduced by legalizing gambling activities into financial sector, a prohibition that had been in place after 1907 financial crisis. The steps towards deregulation of the US markets had converted the US markets into a big casino. Securities Exchange Commission (SEC) in 2004 took a step towards the deregulation on the financial activities by removing the ceiling on risk that the largest American investment banks could take on Securitized loans. By this time, no one would have thought that the deregulation will result into large speculation create a bubble in the market. Lastly, the Securities and Exchange Commission took the last step toward deregulating financial markets when in the month of July 2007, weeks before the onset of the subprime crisis; it removed the â€Å"uptick† rule for short selling any security. The housing bubble was fed by extraordinarily low interest rates low lending standards (norms) for mortgages. The excessive monetary liquidity short term interest rates fell to 1%, which led to high borrowing of loans from the banks, resulted into the big bubble of mismanagement of financial activities. After the tech bubble burst in 2001 the recession, the Fed (Greenspan) aggressively lowered the Federal funds rate from 6.5 percent to 1 percent in 2004, the lowest since 1958. The lowered interest rates reduced lending standards made the banks to lend the money known as ‘ Predatory Lending to the borrowers who did not have capabilities to qualify for the loans, but with the mortgage lending, excessive loans were provided to these lenders as they (banks) were getting big bonuses for bearing risk on these loans. Non-traditional home loans were advanced to borrowers who had no documented incomes. Some loans were interest only loans with down payments of 5% or less . Some were Adjustable Rate loans (ARMs), with low interest rates for one or two years to be reset later at much higher rates. In 2006 around 25% of American mortgages were subprime and close to 20% were ARMs. Mortgage lenders and Home buyers presumed that home prices were not going to fall on a national basis. THE NEW ALCHEMY OF FINANCE The subprime crisis is the result of new financial products in the market the deregulation of the financial activities for the FIs. The main reason of such lending was the facility with which subprime lenders could sell their risky mortgages upstream to bigger players, investments banks for example, which undertook to buy them, pool them into mortgage bonds and re-channel them into new financial instruments through a process of aggressive securitization. The Structured Investment Vehicles (SIVs) which fall into the large class of derivative products came under various names such as Collateral Debt Obligations (CDOs). They had the characteristics of short term asset based commercial paper that were backed by the underlying income producing mortgage assets downstream and were graded according to a certain risk of default. More than 1 trillion half dollars of these asset backed financial products were sold in all over the world. Another new financial instrument that made matters much worse and led directly to the crisis: the Credit Default Swaps. Due to lack of government regulation, this product has become a weapon of mass destruction. In order to protect against the risk of default on the new asset-backed securities (ABS), some insurance companies but also some investment banks themselves began to issue bilateral â€Å"insurance† contracts against the newly created ABS. These were called Credit Default Swaps (CDS), which were supposed to protect the investment instruments against the default on asset based securities. The issuer of ABS could buy the protection against the default by paying a premium. This was a financial innovation, the so-called â€Å"insurance against default†, that opened the floodgates of money to be invested in the new financial instruments. Indeed, it allowed investors such as pension funds and other institutions which have a fiduciary obligation to buy only high-qualit y securities, to legally buy artificially highly rated (but risky) ABS securities, or to invest in hedge funds which specialized in leverage trading in derivative products. But the problem was that the issuance and use of such financial â€Å"insurance† contracts were not regulated by any government agency, because the word â€Å"insurance† was not used; instead, they were considered as simply a protection against the â€Å"default† of payment on a financial security. And thats where the gambling part enters the picture: only ten percent of CDS are genuine insurance contracts held by investors who really own asset-backed securities (these are covered CDS); 90 percent of them are rather held by speculators who trade CDS, while not owning any asset-backed securities to be protected (these are naked CDS). Economy as Casino: The gamut of gambling that US government Fed has created was even unimaginable, allowed big participation into these new investment instruments. Credit Default Swaps (CDS) can be bought and sold by speculators who are not directly involved in the mortgage business. Because of the 2000 Commodity Futures Modernization Act passed by Congress, no state has the power to regulate this new form of sophisticated gambling. The result is astounding: it is estimated that the notional value of credit default swaps outstanding today is about $ 62 trillion (four times the size of the US economy). This is an indication of popularity of the â€Å"naked† CDS innovation was as a way to bet on the collapse of the entire asset-backed securities construction. This was also a clear sign that, in a crisis, it would be all but financially impossible for the issuers of CDS to meet their obligations. In other words, disaster was just around the corner. This is an event that any regulatory agency should have seen coming. When housing prices hit the expected top of their cycle, in the 2005, and began falling, especially in 2006, the price for CDS s was still relatively low. So, some astute speculators undertook to buy CDSs and simultaneously began selling short the ABS that had been issued by investment banks, such as Lehman Brothers, in the correct expectation that mortgage-backed securities were bound to lose value with the expected rise in home foreclosures and mortgage defaults. This is how unimaginable spiral got created by the steps undertaken by Fed Reserve US government which ultimately result into the great burst ever faced in the history globally. GRAMM-LEACH- BILLEY ACT 1999 The Gramm Leach Billey Act 1999 (GLBA) passed by US government in the year 1999 with a view of security data integrity in the market. The GLBA repealed the part Glass Steagall act of 1933, which had opened the market among the banking companies, securities companies insurance companies. The GSA had prohibited any one institution from acting as any combination of an investment bank, a commercial bank and or an insurance company. But the GLBA allowed commercial banks, investment banks, securities firms, insurance companies to consolidate. The act was announced in the 1993 finalized in 1994, allowing many big corporations to merge to enhance their range of activities take the benefit of the deregulation. The law was passed to legalize these mergers on a permanent basis. The law has not fully deregulated the previous act, but they had relaxed the norms and allowed the FIs to have non financial assets. GLBA was amended with some part of the Bank Holding Company act of 1956. The crucial aspect of the GLBA stated that no merger can go ahead until the financial holding institutions, or affiliates receives a â€Å"less than satisfactory (SIC) rating at its most recent CRA exam†. GLBA compliance was mandatory; whether a financial institution discloses non public information or not, there must be a policy in place to protect the information from prospective threats in security data integrity. The law was segregated into three main aspects: FINANCIAL PRIVACY RULE: This rule requires FIs to provide each consumer with a privacy notice at the time the consumer relationship is established and annually afterwards. The notice must explain the information collected about the consumer, where that information is shared, how that information is used and how that information about the consumer is protected. The consumer must be notified give consent about any change at any point of time. Each time the privacy notice is reestablished the consumer has the right to opt it again. SAFEGUARDS RULE: The safeguards rule requires FIs to develop a written information security plan that describes how the company is prepared for, and plans to continue to protect clients non public personal information. This plan must include the following; Denoting at least one employee to manage the safeguards. Constructing a thorough on each department handling the non public information. Develop, monitor test a program to secure the information. Change the safeguards as needed. The Safeguards Rule forces financial institutions to take a closer look at how they manage private data and to do a risk analysis on their current processes. PRETEXTING PROTECTION: The GLBA encourages the organizations covered by GLBA to implement safeguards against pre texting. Pre texting means when someone tries to access the personal nonpublic information without proper authority approval. Thus the institutions having covered under the GLBA, needs to have control safeguard the information of their client, to prevent the details from any misuse. CRITICISM AND DEFENSE: There

A Migrant’s Diary

Dear Diary, Hello, my name is Lucas and I am a migrant. I am the oldest of eight children and we live on a small farm in the Hills of Kenya. Tomorrow I will have to leave my Family to move to the capital city Nairobi. Here I work on our small patch of land with my Mother and Father, the only problem is that everything is getting worse. There are so many in my Family that we haven't got enough food to feed everyone. That is why I must go. I will try to find work to earn some money and then send it too my Family to help them. We rely on the Weather to be able to grow crops but this is normally not very successful. The weather here is very bad for our crops because mostly there are either Droughts or Floods. The condition of the soil is very poor and our crops die very quickly. Because we live on high land it is hard to grow crops because of all the slopes. I am very excited to go because I will hopefully be able to help my Family but also a bit worried because maybe I will not even find a Job. I have heard that Nairobi has quite a lot of jobs on offer so I hope I will find one. Very many people live out here in the Countryside but not very many people live in the city. More and more Migrants like me are moving to the City. I hope the People in Nairobi will be nice to me and not make me feel down. I do not like to leave my Family but I have to, so that they will be able to survive. I must go now to get ready for Tomorrows leave. Goodbye Lucas Dear Diary, I have just arrived in Nairobi and I am very impressed at what it looks like. The Journey here was very long, Tiring and bumpy and I am glad I have got some fresh air to breathe now. I am now waiting for my cousin to meet me here. Most buildings here are very small and are made of Iron. It looks quite clean here but there are a lot of piles of rubbish outside the Houses. The people here wear much better quality clothes and they look a lot richer than I do. The city is built on very low Land and so it is very easy to build houses. There are some higher buildings but I cannot see any Skyscrapers of any kind. There is a lot more Traffic here than were I used to live. The people here look much more busy and I cannot see any Farms. I think they work in Offices, Hospitals, Schools and shops. I have a lot of hope that I will get a Job even if it is only small but I need to save my Family. The City looks much bigger than the Countryside. There seem to be a lot of People crowded in one little space. I hope that my cousin will come soon because I am starting too feel very nervous. Oh, there she comes, I will write to you later. Goodbye. Lucas Dear Diary, I am now in my cousin's house and I am not very pleased. I thought that I would live in a really nice house, because my uncle told me that she was doing really well but it doesn't seem like it. The House is very clean but very small. She calls it a shanty house and there is lots of rubbish outside and a river of sewage is running outside. There is no Electricity or clean Water and I can't believe anybody could live like this. The Walls are made from mud and the Roof from Iron. It is very hot in the day and very cold at night. There are a lot more Jobs here, which is what I was looking for, but the ground here is not ideal for farming either. I have written a letter to my Family describing what it is like and that I am searching for a Job. Every day I go out and look for a Job, but it is very hard as I am a Migrant. The Offices, Schools, Hospitals and Shops are a lot cleaner than the Shanty Houses. Well I will write more Later. Goodbye. Lucas Dear Diary, I have now been looking for a Job for 4 weeks and I became very desperate. My Family have been asking what's going on and I told them that I couldn't find anything, but my cousin was helping me. It is very hard to find a Job because all I know about is farming and there are no Farms in the City. But yesterday a man came up to me and asked if I would like to work for his cleaning Company. I was so pleased that I said yes without Thinking First. I am so happy that I have found a Jog. I only get paid very poorly but it is still better than working on the Farm. I will get my first amount of money next week and that Money will go straight to My Family. I have already sent them a Letter. I work as a cleaner on the streets of Kibera and have to pick up the Rubbish that is left in front of all the Houses. It is not very nice to do but I need to bring some money to the Family. I hope that they will be Pleased with the Amount I send. Being a Cleaner is very hard work and I work 11 Hours a day. All the rubbish outside the Houses makes me feel a bit sick but apart from that I'm O.K. I will write more later. Goodbye. Lucas Dear Diary, I have know been working for 3 Month and have been sending Money to my Family every Week. My sister said that she is very impressed and wants to come to work here as well. I wrote a Letter to her that said something like this. Dear Sister, I am very pleased to hear that you would like to come and live with me and help me. I must tell you though that the City isn't as great as you think. The shanty houses are very clean inside but very Dirty outside. As I have previously told you I am a Cleaner and I have to pick up all the Rubbish people leave outside. You might need to get the same Jog as me but if you are Lucky you will get a Different one. Working here is great but very Hard. I hope you will come so that we can send even more money to the Family and maybe sometime I could pay them a Visit when you are working. If you tell me when you will arrive then I can come and Pick you up at the Bus Station. I hope the whole Family is well. Please write back as soon as Possible, to tell me all Information. There are a lot more Shops here and better health care. Please come to visit because I am starting too fell very Lonely. Even though I live with my Cousin I'm still Lonely because I never see her as she is working at Night and I am working at Day. The City is very nice and Different so Please Come to Visit. Goodbye, Your Brother Lucas. I am so happy because she wants to come and Visit me. I am really starting too fell Lonely and It would be great if she came, so I am holding Fingers crossed. I am sorry but I will have to go to work now.

Ethical Health Care Issues Essay

Healthcare ethics involves making well researched and considerate decisions about medical treatments, while taking into consideration a patient’s beliefs and wishes regarding all aspects of their health. The healthcare industry, above any other, has a high regard for the issues surrounding the welfare of their patients. This power over a patient’s wellbeing creates a mandatory need for all healthcare organizations to develop an ethics committee. The committee’s goal is to establish a written code of ethics that details the policies and procedures that determine proper conduct for all employees. There are many ethical issues that may arise in regards to a patient’s healthcare. Treating patients with certain religious beliefs pose important ethical issues in the field of healthcare. This paper will describe an ethical health care issue concerning refusal of care, such as a blood transfusion. It will cover the four ethical principles as they apply to healthcare providers and patients’ rights. It is important that health care workers have a rudimentary understanding of Jehovah’s Witnesses philosophy about blood transfusion so that as professionals we can be proactive in their management. Ethical Health Care Issue In all areas of practice, physicians come into contact with Jehovah’s Witnesses and their refusal to accept blood transfusion, even when it means saving their lives. The Jehovah’s Witness faith creates some challenges for physicians caring for its members. The ethical principles of autonomy versus beneficence come into conflict when a physician believes a transfusion is in the best interest of the patient, but the patient refuses. Legal precedence provides a backdrop. In addition, Panico, Jenq, & Brewster (2011) article states, there was a case involving a woman who had consented for examination of a fibroid tumor under anesthesia, but withheld consent for removal of the  tumor. While sedated, she underwent resection of the tumor that led to complications. She sued and the judge ruled in her favor, establishing the notion that every human being should have the right to decide what is done with his or her own body. Moreover, this premise gave any individual the right t o refuse treatment if he or she understands the risks; a Jehovah’s Witness has the right to refuse a blood transfusion. This ruling set a precedent for informed consent. In 1990, the Canadian case of Malette v Shulman described an emergency department physician who gave a blood transfusion to an unconscious patient who was in hypovolemic shock. Per report, the patient had a signed wallet card that identified her as a Jehovah’s Witness, although it was undated and unwitnessed. The wallet card, is considered a legal document which, stated that she did not want to receive a blood transfusion under any circumstances (Lantos, Matlock, & Wendler, 2011). Furthermore, when the patient’s daughter arrived and asked that the transfusion be stopped, the physician did not comply. The physician argued that there was no way of knowing if the patient had changed her mind in the minutes before the car accident and thus he was duty bound to save her life (Lantos, Matlock, & Wendler, 2011). The court found the physician guilty of battery. Although it is easy to draw on emotion to argue against the ruling in this case, the verdict has not been overturned. This case illustrates the current teaching to today’s physicians, who are taught to respect patient’s autonomy and preferences for their own bodies (Lantos, Matlock, & Wendler, 2011). Jehovah’s Witness have been known to refuse transfusions with packed red blood cells to treat their life-threatening diseases. Medical professionals must consider patient has autonomy of thought, intention, and action when making decisions regarding health care procedures. To comply with patient’s wishes medical professionals could offer fresh frozen plasma and platelets as an alternative. Furthermore, Jehovah’s Witnesses number over one million in the United States and at least six million worldwide. Witnesses believe in strict and literal interpretation of the Bible, which leads them to reject some aspects of modern medical care (Doyle, 2002). Medical professionals have discussed in open forums ethical decisions they are required to make while taking care of a dying patient who refused to accept a blood transfusion. Data suggests they struggled to relate to someone who would take some blood products, but  not others, and who are willing to risk death over a red blood cell transfusion. Refusal of blood transfusions became common practice only after a 1945 church decision (Mann, Votto, & Kambe, 1992). Indeed, Jehovah’s Witnesses interpret these sections of the Bible differently and if a member accepts blood into their veins, they are shunned and forfeit their membership in the faith community and eternal life. The society had enforced shunning and social isolation by Witnesses’ own family members, relatives, and friends, ultimately leading to expulsion from the religion (Doyle, 2002). Similarly, research suggest that the health care provider must consider four main areas when evaluating justice and the four areas are fair distribution of scarce resources, competing needs, rights and obligations, and potential conflicts with established legislation (Gillon, 1994). In considering the many ethical dilemmas associated with Jehovah’s Witnesses and their refusal to accept blood transfusion have medical professionals focusing on the ways in which treatments or interventions violates accepted norms of conduct of social science research. Physicians must be aware of the growing diversity of values and beliefs among Jehovah’s Witnesses. Some of the most intractable ethical problems arise from conflicts among principles and the necessity of trading one off against the other. The balancing of such principles in concrete situations is the ultimate ethical act (House, 1993, p. 168). Evaluation involves at least four levels of social-political interaction- with government and other agency policy makers who commission evaluation. Evaluation has to operate in this multilayered context of different interests, providing information to inform decisions while remaining independent of the policies and programs themselves (House, 1993, p. 170). More importantly, the weight of ethical judgment is thus put on experimental research to justify meeting ethical standards (Panico, Jenq, & Brewster, 2011). Resource allocation is a major issue that physicians are confronted with when dealing with Jehovah’s Witness allocation. Beneficence requires that the procedure be provided with the intent of doing good for the patient involved. As described above if a patient refuses a blood transfusion and opt for an alternative procedure that costs more it can prove problematic (Panico, Jenq, & Brewster, 2011). When society thinks of the greater good, this argument poses a challenge to the principles of patient autonomy that we also value. In a society in which medical resources  are costly, benefits will always need to be weighed against the potential cost to both the patient and society thus creating ethical challenges. Finally, the care of a Jehovah’s Witness with life threatening illnesses requires a multidisciplinary and planned approach. These patients suffer with certain diseases and are often anemic and must be prepared to deal with this issue in both outpatient settings and during an acute crisis. Clinicians must view each patient as an individual who may have varying thoughts about transfusions of the multiple different blood products that are available. Therefore, medical practices today need to continue to open early lines of communication with these patients. Providing adequate information and educating the patient about realities and obtaining informed consent before subjecting a patient to any test, procedure, or surgery is very essential. It is vital to the optimal care of a Jehovah’s Witness patient. It is necessary that dialysis unit nurses and social workers have conversations with patients about their beliefs on blood products. Discussing a patient’s wishes, understanding their basis for these decisions, and discussing risks, benefits, and alternatives that can be used in both emergent and non-emergent situations is crucial to preparing for more urgent situations, when these conversations often are not possible. Conclusions To many Jehovah’s Witnesses, the consequences of accepting a blood transfusion can be worse than death itself. Not every Jehovah’s Witness patient abides by the same beliefs regarding the acceptance of blood products. These patients can be managed through careful planning and open lines of communication between physicians and patients. Understanding the premise behind the beliefs of patients who are Jehovah’s Witnesses is critical to beginning conversations and truly understanding the patient. Ultimately, when a patient establishes what they will accept, as clinicians, ethically we must optimize the care we provide within their wishes about blood products. Frequent and open dialogue is essential for enhancing care for a Jehovah’s Witness. As an alternative to violating a patient’s autonomy some physicians and some hospitals are more comfortable with bloodless procedures and patients can be referred to these centers if necessary for specialty care. Overall, health care professionals should be able to provide  ethical health care to patients who are Jehovah’s Witnesses at any hospital or community office, but must continue to be educated and aware of their beliefs and respect their wishes and the impact these may have on organizing and providing their care. If these considerations are neglected one can surely expect ethical breaches or dilemmas as inevitable. References Doyle D. Blood transfusions and the Jehovah’s Witness patient. Am J Ther. 2002;9(5):417–424. Gillon, R. (1994). Informed consent: an ethical obligation or legal compulsion. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2840885/ House, R. (1993). Ethics in evaluation. Retrieved from http://www.uk.sagepub.com/gray3e/study/chapter12/Book%20chapters/Ethics_in_Evaluation.pdf:168-170. Lantos J, Matlock A, Wendler D. Clinician integrity and limits to patient autonomy. JAMA.2011;305(5):495–499. (Lantos, Matlock, & Wendler, 2011). Mann M, Votto J, Kambe J, McNamee M. Management of the severely anemic patient who refuses transfusion: lessons learned during the care of the Jehovah’s Witness. Ann Intern Med. 1992;117(12):1042–1048. Panico, M. L., Jenq, G. Y., & Brewster, U. C. (2011). When a patient refuses life-saving care. American Journal of Kidney Diseases, 58(4), 647-653.