Unforgettable Moment Essay Example for Free

Unforgettable Moment Essay When I arrived at the area of the stadium I saw hundreds of peoples. A lot kinds of peoples. All of them have look very happy. At that time, with age as young as I, I feel so excited and enthusiasm. My whole body also able to taste it. The area of the stadium is full with stall, stall that sold everything that connected to football such as jersey, football merchandise, teams flag and many else. I also do not miss to get my favourite team jersey which is Selangor FC and also well-known as The Red Giants. After satisfied walking around the stadium compound. Me and my brother decide to enter the stadium. After my first food step in the stadium the feel of excited strike me again. If the outside of the stadium I can see hundreds of peoples, at the inside I can see thousands of peoples. The place is so crowded and noisy, when I talked to my brother he cannot hear what I am talking about even he is right next to me. After take a seat, I saw every corner of the stadium and the stadium is so huge . At that moment, I bet this must be the biggest stadium in the world. Before the match started all peoples in the stadium need to stand up and sing the national anthem, Negaraku . I sing it with enthusiasm. My adrenalin is rising at the moment. The national anthem ends with a thunderous applause by supporters who come, and again the feel of excited strike me again. Match on that day involving Selangor FC and Perak FC. During the match I did not stop cheering for my favourite team. I think I almost lost my voice on that day. After the 90 minute full game, whistle is blown and match that day ending in a draw. Although the match ending in a draw which do not affect my enjoyment of the day. After all, I back home with feeling very happy. When I arrived at home and I rewind what just happened to me will become my special moment in my life, and guest what, I am true ,the first experience to step foot in stadium watch my favourite team play has become my unforgettable, sweetest and special moment to me until now, and probably until forever.

Martin Luther Essay -- essays research papers

The year 1483 certainly was not the best of times and arguably not the worst of times but it was a notable time in that the birth of one Martin Luther did occur and the re-birth of Christendom was not far away. Eisleben, Germany is noted as the birthplace of young Martin Luther just ten days into November. Germany at that time was a place of emperors, princes, princelings, nobles, lords and knights. A place once called the Holy Roman Empire of the German Nation. A place that had no qualms with poverty or those who lived poverty’s reality, the peasants. One of the many odd things about young Martin’s Germany was the fact that the princes at that time were made up of archbishops and bishops who had been appointed by the pope (so much for separation of church and state). In 1483, Emperor Frederick III presided over what can be described as a violent and brutal Germany, a land that hosted torture and established a new class of people†¦the executioner. Debate over the death penalty was non-existent for even young Martin would grow up to support state executions as being divine punishment. Today’s electric chair seems humane compared to â€Å"the wheel†, â€Å"the stake†, or being boiled to death in oil or water, styles of execution that were a common place in young Martin’s time. Young Martin’s Germany was a lively and interesting place but everything except static. The fire of change was tiny but being kindled with embers from corrupt clerics, the destruction of the flat earth theory and the invention of the printing press were but a few. Change was emphatically in the wind. Hans and Margarethe Luther had four boys with Martin being the second, and one of two to survive the dreaded plague. Hans went from laboring in copper and silver mines to later owning several small foundries. Despite the promotion, the Luther’s were still not far from basic peasantry, but young Martin did enjoy some of the better things life had to offer such as an education. Though he couldn’t escape the infrequent brutal beatings at the hands of his parents, he did at times play like the other kids. Martin enrolled in the University of Erfurt in the spring of 1501 with a solid primary and secondary education behind him, and he intended on studying law. Like most institutions of higher learning at that time, Erfurt concentrated on philosophy and that meant â€Å"thinking and reasoning†; one would say you... ...Leo X called for a hearing in Rome but Martin argued it should be in Germany with German judges. His prince Frederick the Wise agreed and got the emperor to sign on. Ausborg would be host to the hearing though Rome preferred Martin be bound in chains, fetters and handcuffs and delivered there. Things went so bad at Ausborg, Martin ended stealing away at night to stagger back to Wittenberg, dazed and feeling alone. At Martins hearing, the Church stood strictly on its tradition and its assumed position of authority. Martin stood on scripture. While this was going on the people of Germany were watching and were stirred by the spirit of the debate. Martin stayed the course and things continued to heat up with the Roman Curia investigating and condemning him in 1520, and a year later excommunicating him. They summoned him to appear before Emperor Charles V at The Diet of Worms, and they expected him to recant his position. He didn’t. Upon his condemnation, his prince placed him in hiding at Wartburg castle where he would translate the New Testament from Greek to German and also go down in history as the progenitor of the Protestant Reform Movement. Christendom would forever be changed.

New Business Venture: Forms of Business

A New Business Venture Going into business is not as easy as a snap of a finger. If it were, more people would have one and be successful at it. However that is not the case. There are many steps you must take and the best way to do that is in creating a business plan. Ebert and Griffin state â€Å"Before investing time and money, the starting point for virtually every new entrepreneur is a business plan in which the entrepreneur thoroughly develops and describes her or his business strategy and demonstrates how it will be implemented† (p. 7). In the scenario, I am an inventor who has created an idea that will be suitable for the daily needs of consumers. There are many issues that can hinder my progress as an entrepreneur. The scenario states that I lack the financial and management skills it takes to begin and even own my own business. For example, I am financially unable to â€Å"fund† the costs that will be necessary to begin any investments needed to begin this pro ject. I’m oblivious to how I’m going to begin production of my idea.I’m also aware of similar inventions that could possibly heed the sale of my own, however, â€Å"Innovations are not always new products† as stated by Ebert and Griffin (p34). There are three forms of business: sole proprietorship, partnership, and corporation. There are many advantages and disadvantages in the different forms of business in relation to my business venture. To begin with, as sole proprietor, I wouldn’t work under anyone and could be my own boss.I could make up the rules and could develop what I wanted based on my own ideas. However, considering I do not have the funds, it would be extremely difficult knowing that I would be â€Å"personally liable (or responsible) for all debts of the business† (AIU Online, 2010). Subsequently, there are partnerships. Ebert and Griffin state that a â€Å"partnership is a sole proprietorship multiplied by the number of partn er-owners† (p41). That’s great if I am feeling uneasy about my skills and do not want to go into something alone.I can use the skills of my partners and I also am backed up financially because the money will not be coming only out my pocket. As well as my chances of getting financing will increase. Yet, my and any ideas have to be agreed upon which can cause problems amongst all partners. Last of all, there are corporations. â€Å"Corporations are businesses that have property rights and separate status from the owners and they are financially liable (or responsible) (AIU Online, 2010).This form of business is great in reference to the amount of liability you are responsible for. As an owner, I am accountable for only the amount of funds I invested. However the disadvantage of this type of business is how extremely pricey it would be to start up. Between the three different forms of business, I would choose to go with partnership. With a partnership, all partners can p itch in ideas for the invention and we could come to a well developed conclusion. Also someone may have talents that I do not possess.Someone may â€Å"contribute a well known name or special expertise† as Ebert and Griffin state (p41). Responsibilities will be many, and with co owners not only will they be delegated out but, it will give all the owners more time to do other tasks that may not be business related. Since you are in a partnership your chances of getting financing may become easier. Loan opportunities are important for your business start up to be successful (Ebert & Griffin, 2009). There are several investors, programs, and banking facilities that are available to you.In conclusion, with business opportunities being countless, and the funds to start those, few, partnership is the best approach for this scenario. In order to be successful in business today funds are not the only thing one needs to possess. Having ideas, a business sense, and time management are needed as well. Take the time to make a business plan is the first step anyone needs to make when deciding to go on a business venture. Then you will know what your total investment is, who you want to involve, where you will begin and how you will finance it all. It can mean the rise or fall of your business.

The Effects Of Asset Price Bubble Bursts Finance Essay - Free Essay Example

Sample details Pages: 10 Words: 3073 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Cause and effect essay Did you like this example? The outbreak of financial crises is now more than 2 years ago. Out of many factors responsible for the occurrence of the current financial crisis one important factor is the rise in the asset prices which is followed by a collapse and the widespread default. Bursting of the asset price bubble often leads to financial crisis. Don’t waste time! Our writers will create an original "The Effects Of Asset Price Bubble Bursts Finance Essay" essay for you Create order Some historic examples of crisis due to bubbles in asset price are the Dutch Tulipmania, the South Sea bubble in England, the Mississippi bubble in France and the Great Crash of 1929 in the United States. Examples of the crisis due to bubbles in real estate and stock prices can be seen in Japan in the late 1980s. Norway, Finland and Sweden had similar experiences in the 1980s and 1990s. In emerging economies financial crisis have occurred in countries like Argentina, Chile, Indonesia, Mexico, Malaysia, Thailand and South Korea. The focus and motivation behind this paper is to look at the bubbles in the asset prices and what leads to the creation of bubbles and further recession in the economy. Chapter 1 gives an introduction about the bubbles, stages and phenomenon involved in the asset price bubble. In Chapter 2 we discuss about how bubbles are created in asset prices due to uncertainty about the asset payoffs i.e. uncertainty in the real sector and anticipation of the credit expansion which is the uncertainty in the financial sector through a formal model. In chapter 3 we focus on the methodology of detecting a bubble and the effects of the bubble burst in the economic and financial sector. In chapter 4, the possible actions that are required to be taken by the policy makers and how crisis could be prevented is discussed and thereafter the paper is concluded with some remarks and discussion. STAGES AND PHENOMENON An economic bubble is referred to as a situation where assets or products are traded at a value which is higher than their fundamental value. There are many kinds of bubbles that have been observed in the past like stock market bubble, real estate bubble and dotcom bubble and there have been many explanations suggesting uncertainty, speculation, bounded rationality, credit expansion as the cause of these bubbles. The bubbles in asset prices have three distinct phases: The first phase is the conscious decision by the Central bank to increase the amount of lending in the economy as a step towards financial liberalization. This credit expansion leads to the rise in the asset prices such as real estate and stocks. The second phase is when the bubble of rising asset prices bursts and stock and real estate markets collapse over a long period of time. The third phase is characterized by the default of many firms and other agents that have borrowed to buy assets at inflated prices. These defaults can lead to banking crisis since banks are overexposed to the equity and real estate markets Then foreign exchange crisis occur because of the dilemma faced by the government to lower interest rates to ease banking crises or raise interest rates to protect the currency. Finally, the real sector of the economy is affected with significant fall in the output and recession which lasts for long. Japanese bubble in 1980s and 1990s reflects this phenomenon. Asset prices rose steadily in most of the period of 1980s due to the financial liberalization in order to support the US dollar. The stock exchange reached its peak during 1989. In order to fight inflation, the bank of Japan tightened the monetary policy which led to sharp fall in the interest rates in 1990s. Stock prices and real estate rises also followed the similar trend. The third phase was the defaults and retrenchment in the financial system that also adversely affected the real economy. In Norway similar event occurred where lending increased by 40% in 1985 and 1986 and then oil price collapse helped to burst the asset price bubble and caused severe banking crisis and eventually recession. Amongst emerging economies Mexico was also affected by similar problem. In the early 1990s banks were privatized and financial liberalization occurred. Bank credit to private non financial enterprises increased from 10% of GDP to 40% of GDP in 1994 and stock markets also rose significantly. With the Colosio assassination and the uprising in Chiapas triggered the bubble burst and as a result the prices of assets and stocks went down and banking and foreign exchange crises occurred. In the above three examples there is the same basic progression of three stages but they also exhibit differences. The most important nature of the events is the bursting of the bubble and in many cases a change in the real economic activity triggers the bubble burst. BUBBLES IN ASSET PRICES Asset prices are related to the amount of credit and how uncertainty about asset payoffs can lead to bubbles in an intermediated financial system. Investors borrow in order to invest in risky assets and they avoid losses in the low payoff states by defaulting on the loan. This risk shifting causes the assets to be priced above their fundamental value and bubble is created. The credit expansion has an originating effect on the asset prices as it encourages the investor to fund the risky investment. But along with credit expansion the uncertainty and the anticipation of future credit expansion can also increase the current asset price. Risk can originate both in the real as well as in the financial sectors. Both the concepts of rising asset prices are discussed below in the form of models. ASSET PRICING WITH UNCERTAINTY GENERATED BY THE REAL SECTOR This model analyses the effect of uncertainty in the price of the risky assets that leads to the creation of bubble. The source of uncertainty is the randomness of the real asset returns. There are two time periods, t= 1,2 and a single consumtion good at each date There are two assets: a safe asset (variable supply) and a risky asset (fixed supply). The safe asset, Xs has a fixed return r to the investor i.e. the rate of return is rXs units of the consumption in 2. The risky asset, Xri has a return RXri in 2, where R is a random variable with a continuous positive density h(R) on the support [0, Rmax] with a mean RÃÆ'Å’Ã ¢Ã¢â€š ¬Ã‚ ¦. The return on safe asset is determined by the marginal product of capital in the economy. The equilibrium or the market clearing condition for capital goods is: r=f (Xs) The risky asset also has a non pecuniary cost of investing, c(x), the purpose of which is to restrict the individual portfolios so that in equilibrium borrowers make positive expected profits. Now there are risk neutral investors who borrow from banks to invest in the safe and risky assets. There are also risk neutral banks who lend to the investors under restricted simple debt contracts as they cannot condition the terms of the loan on the size of the loan or on asset return. Now investors can borrow as much as they want at the going rate of interest. For the safe assets, any rate of return on the asset not equal to the contracted rate of interest would be inconsistent with the assumptions of the competition in the corporate sector and so in equilibrium the return on the safe asset is equal to the contracted rate of interest on loans. The investor who has borrowed from the bank to invest in risky asset does not bear the full cost of borrowing if the investment turns out badly. This convexity generates a preference for risk. We now analyze the behavior of the investor. Assumptions: All investors are treated symmetrically and will be charged same rate of interest r. Banks supply loanable fund B inelastically and the rate of interest adjusts to clear the market. The optimization problem faced by the representative investor is to decide how much to borrow and its allocation between the two types of asset. The total amount borrowed is: B=Xs+PXri where P is the price of the risky asset. The repayment to the Bank will be: r (Xs+PXri). The liquidation value of the portfolio is rXs+RXri. Therefore, the payoff to the investor at date 2 is RXri-rPXri So investors problem is: maxwhere Xri 0 (1) where R* = rP is the critical value of the return to the risky asset at which the investor defaults. The optimal amount of safe asset is indeterminate and so it drops out from the investor decision problem. The market clearing condition for the risky asset is: Xri=1 The market clearing condition for the loan market is Xs+PXri=B where Xri=1 The equilibrium is described by the variables (r, P, Xs, Xri) where portfolios (Xs, Xri) solves the decision problem given the parameters (r, P) and the above two market clearing conditions are satisfied. There exists a unique equilibrium if RÃÆ'Å’Ã ¢Ã¢â€š ¬Ã‚ ¦ ÃÆ'†¹Ãƒâ€ Ã¢â‚¬â„¢ c (1) and the bank supply amount of credit B inelastically at rate of interest r which adjusts to equate the funds demanded with funds supplied. A borrower will default when the realized rate of return will be less than the rate of interest i.e. Rlt;rP. This difference in contracted and the realized rates of return is borne by the banks. The importance of this model is that it explains the risk shifting problem and the fact that risky asset is in fixed supply. Borrowers are attracted towards risky asset because they fall back on their loans in case of losses. When the asset return is high they receive the surplus and banks get their fixed return. So this implies that borrowers will bid up the price of the asset above its fundamental value which is the classic definition of a bubble. But the question is what the fundamental value is? The fundamental value can be defines as a value that an individual investor would be filling to pay for one unit of risky asset if there were no risk shifting, other things being equal. In this case the investor will choose the portfolio as follows: Max (Xs, Xri) 0 subject to Xs + PXri B Using first order conditions and Xri=1, the fundamental price is P*= 1/r [R-c'(1)] The equilibrium price with risk shifting is: P= [ We can see that PÃÆ'†¹Ãƒâ€ Ã¢â‚¬â„¢P*, that is there is an asset price bubble as long as the probability of default is positive. The risk shifting behavior is important for the creation of a bubble. It also points out a fact that the degree of riskiness of an asset determines the size of a bubble. Increase in the riskiness of an asset will increase the size of a bubble and also the probability of default. ASSET PRICING WITH UNCERTAINTY GENERATED BY FINANCIAL SECTOR Financial liberalization leads to an expansion of credit which increases the price of the assets and hence feeds the bubble in asset prices. These higher prices are further supported by further increase in the credit and asset prices. Neither the amount of financial liberalization and credit expansion is foreseen nor does the Central bank have full control on the amount of credit. Also there may be other economic changes like changes in policy, administration external environment that can alter the extent and amount of credit expansion. The model discussed below reflects how the uncertainty in the extent of credit expansion can increase the magnitude of the bubble. There are 3 time periods, t=0,1,2 and single consumption good at each date Assumptions: B is the amount of credit available for lending and is partially controlled by the central bank. Central bank can influence the amount of credit available in the economy by altering either reserve requirements or quantity of assets available to be used as reserves. This creates uncertainty among the investors and they rationally anticipate an expansion in B. At date 0, the level of B1 is treated by agents as a random variable with a positive, continuous density k (B) on the support [0, B1max]. The price of the risky asset at date 1, P1 (B1) and is also a random variable. The safe asset pays rt x at date t + 1 if x is invested at date t = 0, 1. The owner of the risky asset receives a payoff of Rx at date 2. There is short term borrowing at dates 0 and 1. Entrepreneurs initially own the asset in fixed supply. At date 0 they sell it to the investors who own them till date 1 and then these new investors sell the risky assets at date 1 to final group of investors who own them till date 2. Investors in the risky asset incur the investment cost c(x) at each date t = 0; 1. Now the risky asset has a certain return RÃÆ'Å’Ã ¢Ã¢â€š ¬Ã‚ ¦. It is risky because it is a long-lived asset and is subjected to the fluctuations at date 1. Now the uncertainty comes entirely from the credit expansion B1. Now the equilibrium price of the risky asset at date 1 when there is no uncertainty involved is: P1= Let P1 (B1) denote the equilibrium value of the risky assets price at date 1 when the credit level is B1, then P1 (B1) is continuous and increases in B1. Then representative investors problem at date 0 is: Max X0R0 where, P0: price of the risky asset at date 0. (X0S, X0R): portfolio chosen at date 0. r0: borrowing rate at date 0 B*1: value of B1 at which the investor is on the verge of default at date 1: P1 (B*1) = r0P0 Equilibrium is defined by the variables (r0, P0, B*1, X0S, X0R), where the portfolio (X0S, X0R) solves the investors decision problem given (r0, P0, B*1), and the following market clearing conditions are satisfied: X0R = 1 X0S + P0X0R = B0 r0 = f0(X0S) There exists a unique equilibrium if E [P1 (B*1)] ÃÆ'†¹Ãƒâ€ Ã¢â‚¬â„¢c (1), equilibrium price will be P0= ( Here the uncertainty about B1 took place of the uncertainty about R. When there is financial liberalization the uncertainty arising from government and central bank policies on credit expansion can dwarf the uncertainty and the agency problems with real payoffs on asset. It is the interaction between financial uncertainty and agency problem in the intermediation that leads to asset bubbles and subsequent severe financial crises. EFFECTS OF ASSET PRICE BUBBLE BURST Asset price crashes or bursts have often been associated with declines in the economic activity, financial instability and sometimes large budgetary costs from the recapitalization of the banking systems. The asset price bust has effects on both macroeconomic and financial activities. While every asset price bust is different and depends on circumstantial factors such as the underlying shocks, the analysis shows that asset price busts and concurrent macroeconomic developments in the postwar period in industrial countries share common patterns that provide a relevant point of reference for assessing the current busts. These patterns are identified using event analysis-that is, on the basis of their timing, which does not imply causality.1 The procedure used to identify booms and busts in asset prices and turning points in these prices for the postwar period is based on the method developed in business cycle analysis and involves two steps: Determination of asset price cycles- turning points in the level of broad equity price indices define the cycles in those prices. Typically Bull and Bear markets are the asset market equivalents of expansion and recessions. Identification of booms and busts- based on the full set of bull and bear market, booms (busts) were identified as those episodes with large price increases (decreases). Busts begin one quarter after the peak and end with the trough quarter. Booms begin with the peak and end with the subsequent peak and they are identified on the basis of price increases over the full cycle. Equity price turning points were identified using quarterly real equity price indices for 19 industrial countries. The regular equity price indices were deflated using consumer price indices. The primary data source for these prices was the IMFs International Financial Statistics. The analyses suggest main points: Equity price busts on average occurred about once every 13 years, lasted for about 2.5 years and involved price declines of about 45 percent (though the busts in the mid-1970s averaged about 60 percent) and only about one-fourth of equity price booms were followed by busts.2 Asset price busts leads to output losses reflecting declines in the growth rates of private consumption, investment in machinery and equipment and investment in construction and housing prices. On average, the output level three years after an equity price bursts was about 4 percent below the level that would have prevailed with the average growth rate during the 3 years up to the bust. There are significant price spillovers across asset classes. In an equity price bust, housing prices tended to decline in tandem with equity prices, while in a housing price bust equity prices fell more quickly and by a larger amount than housing prices. Asset price busts are also linked with reductions in the growth rates of private credit and broad money. The magnitude of the asset price fall during a bust depends in part on the size of the run-up in prices prior to the bust. Similarly, the extent of the slowdown in investment growth during a bust depends in part on the earlier pace of investment. Market-based systems tended to suffer larger output losses than bank-based systems during equity price busts. This is consistent with the high exposure of banks to real estate lending, and the importance of equities in household assets in market-based systems. Asset price booms are generally associated with a large increase in corporate investment and borrowing, driven by strong domestic demand, strong expected rates of return, and strong cash flow. Once the uncertainty regarding the expected profitably becomes clear or that corporate financial health is in danger, this process is reversed, as firms try to adjust by retrenching their balance sheets and reducing investment. The impact of the recent equity price bust on corporate balance sheets has so far been somewhat smaller than in the episodes of the late 1980s and early 1990s-in part because valuations have remained above historical levels, sharply lower interest rates have helped shore up corporate liquidity, and the boom was concentrated in the information technology (IT) sector, where low leverage helped mitigate spillovers to the banking sector. However, corporate leverage remains relatively high, and may continue to be a drag on recovery for some time, particularly in Europe where investment is largely financed through bank borrowing rather than equity.