Corporate Strategies to Hedge Commodity Price Risks Applying

Table of contents List of abbreviationsIII List of figuresIII List of tablesIII 1Introduction1 1. 1Problem and objective1 1. 2Structure of this paper1 2Background Information2 2. 1Definitions of fundamental terms2 2. 2Commodity price risk in different firms2 3Explanation of derivatives3 3. 1Options3 3. 2Futures4 3. 3Forwards6 3. 4Swaps6 4Hedging strategies with derivatives7 4. 1Hedging with options7 4. 2Hedging with futures7 4. 3Hedging with forwards8 4. 4Hedging with swaps8 5Pros and cons of hedging strategies with derivatives8 5. 1Pros and cons of options9 5. Pros and cons of futures9 5. 3Pros and cons of forwards10 5. 4Pros and cons of swaps10 6Practical example of corporate commodity price risk hedging10 6. 1Introduction on firm's practical hedging strategy10 6. 2Analysis on this strategy11 7Summary12 Appendix13 Appendix 1: Amounts outstanding of over-the-counter (OTC) derivatives by risk category and instrument——in billions of US dollar13 Appendix 2: Derivatives fi nancial instruments traded on organized exchanges by instrument and location——in billions of US dollar14 Bibliography15 Internet Source16 List of abbreviations CHClearing HouseIMInitial Margin MBMargin Balance MM NMaintenance Margin No OTCOver The Count VM YVariation Margin Yes List of figures Figure 1: Structure of this paper2 Figure 2: P of each option position4 Figure 3: Flow chart of marking-to-market process5 Figure 4: P of each future position6 Figure 5: Hedging model on fuel oil of Air China11 List of tables Table 1: Summary for 4 option positions4 Table 2: Summary for future positions6 Table 3: Summary for 4 derivatives9 1Introduction 1. 1Problem and objective The risk of commodity price is a ferocious topic in corporate operation.Corporate profit is equal to total revenue minus total cost. For firms, because of the high volatility on commodity price, their inputs and outputs relating to commodity are unpredictable. As a consequence corporate profit will be imm ensely volatile, which will possibly lead the firm to go bankruptcy if no any preventive actions are taken. For example, producers of commodities probably need to assume unexpected losses, when the price of outputs goes down or the price of necessary raw materials goes up. The situations are similar to wholesale buyers, retailers, exporters and even governments.Volatility of commodities price has great impacts on corporate daily operation. The objective of this term paper is to introduce derivative hedging strategies for corporate managers to reduce or even eliminate future unpredictability, mainly from the perspectives of the role commodity price risks play, what the typical derivative instruments are, where and how to apply these different derivatives in terms of hedging principles thereof, and both advantages and disadvantages when applying each derivative in real business transactions. 1. Structure of this paper Firstly, this term paper highlights problems existing in real world . Secondly, it introduces advanced derivatives theory that can be applied to solve these problems. Thirdly, specific details on the theory will be presented, including explanation, application, as well as pros and cons of each derivative instrument. Then, an example is analyzed to show how companies apply derivatives to hedge commodity risks practically. Last is a summary of this term paper. Following figure shows the body of this paper. 2Background Information 2. Definitions of fundamental terms In financial markets derivative is a contract or security whose value is derived from the value of other more basic underlying variables . One of its most important functions is hedging. In corporate operation, hedging is to secure the companies against potential loss caused by variable risks that arise in international market, such as the commodity price risks. In this paper, commodity means any tangible goods or raw materials that may be sold or traded in the markets, such as energy, gold , or agricultural products. 2. Commodity price risk in different firms Volatility of commodities price influences firms’ daily operation significantly. Producers of commodities, such as farms, oil producers, mining companies, face price risk on output. Wholesalers and retailers, face price risk during the time period from buying from suppliers and selling to customers. Exporters, face the same price risk as well as currency exchange risk. And governments face price and yield risks generating from tax revenues that depend on firms’ operational conditions. 3Explanation of derivativesDerivatives are traded in exchange-traded markets and over-the-counter markets. (See recent derivatives transaction status in appendix 1 and appendix 2. ) Notably, exchange-traded derivatives are default risk free and liquid. However over-the-counter traded derivatives are the opposite. 3. 1Options An option is the contract that gives the buyer the right but not obligation to buy (call option ) or sell (put option) an underlying asset at a predetermined price (exercise price) for certain quantity during a fixed period of time (maturity).The buyer of the option pays a particular amount of money (option premium) to the seller to buy a right whereby he can decide whether or not to exercise this option, simultaneously the seller has the obligation to perform if the buyer exercises the option. European options only can be exercised on expiration day, and American options can be exercised at any time before maturity. The buyer of the call option is named long call, while the seller of the call option is named short call. Similarly, the buyer of the put option is named long put, while the seller of the put option is named short put.In commodity market, underlying of commodity option is a commodity, such as oil, wheat, or gold. Commodity options are both exchanges-traded and OTC traded. Following figure shows P of each option. Following table is the summary for these 4 option po sitions. Table 1: Summary for 4 option positions Market price expectationMaximum profitMaximum lossBreakeven point Long callupunlimitedoption premiumexercise price + option premium Short calldown or stableoption premiumunlimitedexercise price + option premium Long putdownexercise price – option premiumoption premiumexercise price – option premium Short putup or stableoption remiumexercise price – option premiumexercise price – option premium Source: author’s own. 3. 2Futures A future is a contract between two parties to buy or sell a specified amount of asset at a specified time period in the future for a certain price. Normally there are two types of futures, commodity futures whose underlying are commodities and financial futures whose underlying are financial assets. They are highly standardized, regulated, and traded in exchange markets with highly liquid and default risk free property. Because of the marking-to-market process, at maturity the settling price is the spot price at expiration date with profit gaining or loss paying from a margin account, which indirectly makes the effective bargain price equal to the predetermined price in the future contract. Notably, to ensure high liquidity of futures, marking-to-market process plays a significant role. The following figure shows the marking-to-market process. Generally there are two alternative ways at maturity to settle futures, either by cash or by actual delivery of underlying, which is clearly defined by futures exchange.Following figure and table show the details of a future. Table 2: Summary for future positions ?Maximum profitMaximum lossBreakeven point Long positionunlimitedexercise pricespot price + cost of carry Short positionexercise priceunlimitedspot price + cost of carry Source: author’s own. 3. 3Forwards A forward contract is a customized and over-the-counter agreement to buy or sell an asset at a specified time in the future for a specified price, where a long position has the obligation to buy and a short position has the obligation to sell. Compared with futures, no marking-to-market process are required.Counterparties can negotiate with each about the parameters of the contract. As a result, a firm who wants to make forward contract needs to find the counterparty by itself. 3. 4Swaps A swap is a customized and over-the-counter agreement to exchange a series of specified assets periodically in the future. Normally the counterparties of a swap contract are a large institution such as a bank and a company. Basically, we can view a swap as a complicated forward. Except currency swaps, counterparties just need to pay the differences between the cash flow they should exchange. Because swaps are bespoken as a result they are less liquid.There are commodity swaps, interest rate swaps and currency swaps. Interest rate swaps is an agreement of two counterparties to change fixed interest and floating interest on predefined nominal pr incipal in the future periodically. Commodity swaps normally vary tremendously among different markets. In a currency swap, counterparties change same value of different currencies in inception and termination, where the exchange rate of the tow currencies depends on the negotiation of counterparties. 4Hedging strategies with derivatives This chapter will focus on the principles of hedging strategies on commodities. . 1Hedging with options If a trader wants to procure a commodity with high volatile price, he can buy a commodity call option to hedge the price risk of going up. Similarly, if a company wants to sell a commodity product, it can buy a long put to hedge the price risk of going down. In practice, because investors want to bet more precisely on the future price of the underlying, and hedgers with long positions want to save option premiums, a few combinations of options come out, such as a long call and a short put with identical parameters except the different strike price . 4. 2Hedging with futuresWhen the objective of a commodity trader wants to neutralize the price risk as far as possible, usually he will choose to take a position on a future on commodity. A hedger who already owns a commodity asset or doesn‘t own right now but will at some future time expecting to sell it in the future without assuming any price risk, he can apple future hedging strategy to enter into a short position to become a short. Likewise, a hedger who has to buy a certain commodity asset in the future and wants to lock in spot price immediately, he can apply a future to enter into a long position to become a long. . 3Hedging with forwards The principles of hedging strategy with forwards are similar with futures'. Whether to use futures or forwards depends on different requirements. Generally, financial assets investors who need high liquidity prefer to choose futures, while commodity investors such as producers who need high customization prefer to choose forwards. 4 . 4Hedging with swaps When investors want to hedge risks of interest rates, currencies, or commodities, they can use swaps. In gold swaps, counterparties change fixed lease rate with variable lease rate.In swaps on base metals, counterparties change fixed metal price with average price of near dated metal future. In oil swaps, counterparties change fixed West Taxes Intermediate (WTI is a benchmark in oil price) price with average price of near dated WTI future. 5Pros and cons of hedging strategies with derivatives The following integrated summary of these derivatives depending on pervious analysis makes systematic comparisons. (The options here are exchanged-traded European options) Table 3: Summary for 4 derivatives SUMMERY OF DERIVATIVES FOR GENERAL TYPES OptionsFuturesForwardsSwapsTypes of contractstandardizedstandardizedcustomizedcustomized Settlementscash and deliverymost cash and few deliverydeliverydepends on individuals Trading marketExchange tradedExchange tradedOTCOTC Liqu idityhighhighlowlow Marketing-to-marginnorequirednono Time of settlementmaturitydailymaturityperiodically Initial investmentoption premiuminitial margin nodepends Default risk assumed byClearing houseclearinghouseBoth partiesBoth parties ProsDefault risk free & liquiditycustomization & no initial investment Consinitial investment & inflexibledefault risk for both party & illiquidity Source: author’s own. . 1Pros and cons of options The pros of options are obvious. Firstly, they have no risk to assume more loss than premium but have possibility to get unlimited potential profit. Secondly exchanged-traded options are highly liquid and OTC traded options are flexible. However, the cons of options are also explicit, such as the difficulty to decide when to enter into a long position.Because buying an option needs to pay option premium, if the spot price cannot go above (for a long call) or go below (for a long put) the breakeven point the hedger will suffer a loss, and depends on statistics the possibility of a long position to lose is about 66%. 5. 2Pros and cons of futures It definitely makes sense for most companies whose majors are in businesses but not professional in forecasting the price of commodities price volatility, which can make them pay more attention on their core competences instead of fearing about volatile price.Nonetheless, taking neutralized strategies make hedgers give up the possibility of both profit and loss. Moreover, instead of hedging risks by companies, shareholders can hedge themselves according to their preferences. Additionally, if other competitors of the same industry don’t apply hedging strategies, in fact, it is the hedging company itself that assumes risks, because competitive pressures are the same for other all competitors but different for the hedging company its own. 5. 3Pros and cons of forwards Basic pros and cons have been listed in the table in front of this chapter.Generally, compared to futures, the most explicit pro is that forwards are highly customized and therefore the con is that they are hardly liquid. 5. 4Pros and cons of swaps Basic pros and cons have been listed in the table in front of this chapter. Gernally, compared to futures and forwards the most precise pros is that both counterparties could reap benefits from a swap, such as in a currency swap where a firm with a low rate may get a cheaper loan as other firms with high rates, and the counterparty may get a payment as compensation.However the corresponding cons is that counterparty may need to pay commision to intermediary, because it is difficult to find an appropriate counterparty by itself. 6Practical example of corporate commodity price risk hedging 6. 1Introduction on firm's practical hedging strategy Air China is an airline company, whose cost of fuel oil occupies 44. 75% of total revenue in 2008. To hedge the fuel oil price risk, Air China bought a call option with strike K1, meanwhile sold a put option with st rike K2, where K1

Philippine Revolution and Jose Rizal Essay

Paciano without a doubt was a great hero. He was just kinda outshined by his younger brother, jose. I’d say our national hero’s patriotism was highly influenced by him, he was an idol kuya in the eyes of Jose Rizal. Father Jose Burgos was a close friend of Paciano (whose death, together w/ Zamora and Gomez’s, according to rizal himself, had â€Å"opened his eyes† re the sad plight of our country back then), so we can clearly visualize the imprint of Paciano on Rizal’s nationalism. He (paciano) was the one who financed Rizal’s education in europe. We wouldnt have the great Jose Rizal if it hadnt been for the unsung heroism of Paciano.   Paciano joined and actively supported Propaganda Movement for social reforms, and supported the Movement’s newspaper, Diariong Tagalog. An avid supporter of the movement, he did tasks such as collecting funds to finance the said organization, and solicited money for the nationalist paper. As a Katipunero, he influenced people in Laguna with the revolutionary ideals. Despite the tortures he had in the hands of the Spaniards, he refused to implicate his younger brother who was kept in tight security in Fort Santiago. In January 1897, after his younger brother’s execution, Paciano joined General Emilio Aguinaldo inCavite. He was appointed brigadier general of the revolutionary forces, and was elected Secretary of Finance in the Departmental Government of Central Luzon.[1] During the Philippine-American War (1899–1913), he commanded the Filipino forces in Laguna. U.S. troops captured him in Laguna on 1900.[1] He was released soon after, and he settled in the town of Los Banos, Laguna. Not many Filipinos are aware that Paciano Rizal, the older and only brother of Josà © Rizal, was an active and passionate member of the Katipunan. As a katipunero, Paciano was no less heroic than his very famous brother. So little is known of Paciano. Yet, he is one of the unsung heroes of the Katipunan. Paciano was Rizal’s model for Pilosopong Tasio, one of the important and very interesting characters in his novel Noli me tangere. In his letter to Blumentritt dated 23 June 1888, Rizal wrote †I don’t know why I forgot to introduce you to my brother. You who wish to know good men will find in him the most noble of the Filipinos. My friend Taviel de Andrade said that he was the only man in the Philippines – the young Philosopher Tasio. When I think of him, though an Indio, more generous and noble than all the present-day Spaniards put together.† As the the elder son, Paciano helped the family in managing their farm and was like a. Not only did he help finance Rizal’s education in Europe, he did his best to save money to have his brother’s two novels printed, collected financial contributions for the Propaganda Movement, and solicited subscription for the Diariong Tagalog, a nationalist newspaper. He also supported the Katipunan by propagating its ideals in Laguna. When Josà © was jailed in Fort Santiago in 1896, Paciano was also arrested and tortured to force him to give testimony that would prove his brother guilty of sedition. After Rizal’s execution at Bagumbayan, Paciano went to Imus, Cavite to offer his services to Emilio Aguinaldo. He become the military commander of the revolutionary forces in Laguna and continued. He continued fighting as a katipunero in the Filipino-American War. In an interview for an article featured in the Philippine Centennial in the Francisco Rizal Lopez, one of Paciano’s grandsons, told of his grandfather’s days a a revolucionario. Lopez said that Paciano nearly died of the torture. â€Å"His whole body was swollen and bloody because of the torture he received. The authorities brought him to my grandmother Narcissa because they thought he was going to die. After a week, he recovered. But he was actually at death’s door.† â€Å"My aunt told us a story about my Lolo Paciano whe n he was a revolucionario. She told us that everyday, my Lolo and the other revolucionarios would count the money they had collected. One day, my aunt was so tired and her hands were malansa so she asked my grandfather, ‘Puede po bang makakuha ng cinco centimo diyan para makabili ng sabon dahil malagkit po at malansa ang kamay namin?’ (Could we get five cents to buy soap because our hands are sticky and putrid?) My Lolo got very angry and he said, ‘Huag ninyong galawin ang perang ‘yan!’ (Don’t ever touch that money. That’s for the revolution!)† Sometime in 1900, Paciano was captured by the Americans and ordered to swear allegiance to the American flag. According to his grandson, Paciano said, â€Å"I cannot swear to any other flag because my allegiance belongs to the Filipino flag. But I can assure you, since we have lost and I have surrendered, I am going to leave you in peace.† After the revolution, it was almost impossible for the Rizals to live in Calamba. They have been stripped of everything they owned and they felt persecuted, so they chose to live in Los Baà ±os, the town next to Calamba. Paciano Rizal’s home stands near the Los Baà ±os municipal hall, beside the fire station. There he lived the rest of his life until he died of tuberculosis on April 30, 1930. Francisco Lopez described Paciano’s physical appearance and character, â€Å"My Lolo was a very humble, a very simple man. He never talked to us about his sacrifices in the Revolution. We did not even know up to the time of his death that he was a general in Aguinaldo’s army.† Paciano was a very thrifty man but not with his nephews to whom he always gave money to buy â€Å"tsampoy†. Of the two known pictures of Paciano, one was taken by one of Mr. Lopez’s uncle and the other was a picture of him as lay in his coffin. Paciano had a daughter, Emiliana who is Francisco Lopez’ mother, but he was never married because he could not marry under the Dominican priest. Emiliana, married her first cousin, Antonio Lopez. He was Narcissa Rizal’s son. Paciano lived a peaceful life during the American occupation. and kept his promise that he would leave the Americans in peace. He must have intensely disliked the Americans from an anecdote that Lopez told: † There was a certain Governor-General Leonard Wood and my grandfather did not like him. He had a dog and he named the dog Wood. So every time he felt like cursing the Americans, he would curse the dog† Paciano Rizal was buried in Cementerio del Norte in Manila but his bones were transferred to his home in Los Baà ±os in 1985. were he was given complete military honors. Paciano Rizal, Josà ©Ã¢â‚¬â„¢s kuya, or older brother by a decade and protà ©gà © of Fr. Burgos, had witnessed the garroting of the three curates and been, along with his generation, radicalized by it. His retelling to the sensitive eleven-year-old in Calamba in turn left an indelible impression on the young man, about to leave for Intramuros to study at the Ateneo. Later on Rizal said of the martyrdom, â€Å"Without 1872 there would be now neither Plaridel nor Jaena nor Sancianco, nor the valiant and generous Filipino expatriates in Europe. Without 1872, Rizal would have been a Jesuit and instead of writing the Noli Me Tangere would have instead written something entirely different.† Rizal dedicated his second novel El Filibusterismo (really a continuation of the Noli) to the memory of the three martyrs. Last year saw the commemoration cum celebration of the younger Rizal’s 150th birth anniversary, but not much has been said (at least, not much that I am aware of) about Paciano’s invaluable role in shaping the path his younger brother took, always there to lend a hand, a quiet, rock-solid presence Pepe could rely on. Paciano arranged, along with an uncle, for Pepe to embark for Europe in 1882, whose heady Enlightenment zeitgeist further sharpened Rizal’s critique of Spanish colonial rule. For at least five years Paciano sent him a monthly stipend, and once the Propaganda Movement had gotten off the ground helped raise funds for it. In 1896 he was imprisoned and tortured, to force him to implicate Josà © in the revolution that had begun that August but the stouthearted Paciano would not break. He was released and once Josà © was executed, Paciano volunteered for Aguinaldo’s army, and was made a general, his field of operations being Central Luzon. The revolution against the Spanish metamorphosing into the 1899 war against the U.S., General Rizal continued to fight, but was captured in 1900. Thereafter, despite offers of a government position as well as entreaties from prominent Laguna politicians to run for public office, Paciano, already married, chose the quiet life of a gentleman farmer, and died in 1930 at his home in Los Baà ±os, not far from Calamba, at the age of 79. Paciano’s love for and devotion to his younger brother meant a life behind the scenes, dramatic certainly in many instances but rarely in the limelight, never in the scene-stealing manner of Josà ©. Kuya Paciano’s life made the latter’s transformation into the icon every Filipino knows possible. He would have distanced himself from the label but in my book Paciano Mercado Rizal y Alonso is every bit the hero. Paciano Rizal, whose contribution to the Philippine revolution has been overshadowed by the greatness of his younger brother, Jose Rizal. When Jose Rizal decided to leave the Philippines for advance studies, Paciano, without the knowledge of their parents, asked Antonio Rivera, an uncle, to help in facilitating the travel of Jose Rizal abroad. Paciano himself engaged in the propaganda movement. When Marcelo H. del Pilar founded the Diariong Tagalog, a nationalist vernacular paper, in 1882, Paciano eagerly assisted those behind the paper. He helped the paper by soliciting subscription in his province (Laguna) and in the neighbouring towns of Batangas. During this time Paciano kept Jose Rizal informed about events happening in the country. Aside from attending to the needs of the Rizal family, Paciano regualarly corresponded with Jose in Europe regarding such local problems as land troubles, crop failure, increased land rentals, the decrease in the price of sugar and even the worsening agrarian disputes in Calamba. Paciano’s land dispute with the friars resulted in his exile to Mindoro for one year in 1890. During Jose Rizal’s away abroad, Paciano met and fell in love with Severina Decena, a beautiful lass from Los BaÅ„os, Laguna. They had two children–a boy, who died during infancy, and a girl they named Emiliana. When Jose Rizal was arrested in 1896 Paciano was also arrested and detained. This was to insure the incrimination of Jose Rizal. The older Rizal was tortured and asked to sign a statement linking his younger brother to the Katipunan and to the Philippine Revolution, which had broken out in August of that year. After three days of fruitless interrogation Paciano was released. Before the end of 1896 the Philippine Revolution spread like wildfire to the province south of Manila. Laguna joined the fight for liberty. The emergence of Paciano Rizal as a revolutionary leader was something that could not but draw attention. The Spanish forces gained momentum in the pursuit of the revolutionists, for which reason General Paciano followed General Aguinaldo to Bulacan. The general and his men transferred their camp to Biyak-na-Bato. In December of 1897 the famous truce of Biyak-na-Bato was signed, ending the 1896 Philippine Revolution. In pursuance to the provisions of the agreement, General Aguinaldo and several ranking officers of the revolution surrendered their arms and exiled themselves to Hong Kong. The revolutionary leader left in the country were instructed to comply with the other provisions of the treaty, like the surrender of arms and ammunitions. In this connection General Aquinaldo’s generals were sent to various provinces to arrange for the surrender of the remaining revolutionists who were now scattered. General Artemio Ricarte was sent to Cavite, Gen. Jose Natrividad to Bulacan, Nueva Ecija and Pampanga, General Miguel Malvar to Batangas, and Gen. Paciano Rizal to Laguna. Complying with orders, General Paciano Rizal, on 14-15 January 1898, surrendered the following to Spain’s General Ricardo Monet for the province of Laguna: 1 Mauser, 3 Remingtons, 46 muskets, 42 blunderbuss, 3 lantakas, 21 saber and 26 bolos. The truce failed, however, resulting in General Aguinaldo’s return to the Philippines. The United States and Spain declared war on each other. Flipinos who had returned to their place under the Spanish government and those who had settled down in their farms activated their fight against the Spanish government and became part of the forces of General Aquinaldo. Among the revolutionary generals who responded was General Paciano Rizal. He again led the fighting in Laguna as the military commander of the area.   Battles were fought openly in Spanish-held towns. In the fastness of Laguna, General Paciano Rizal actively led the onslaught against the Spanish troops.On 31 August, two weeks after the surrender of Manila to the Americans, the Spanish civil official of Laguna Province and a group of Spanish soldiers surrendered to General Paciano Rizal in Santa Cruz, the provincial capital.   On 12 June 1898, the revolutionary leaders proclainmed to the whole world the birth of the Philippine Republic, the first republic in Asia.   The following year the Filipino- American War broke out. Well-trained and well-armed American soldiers prevailed over the ill-quipped Filipino revolutionists. The fight was one-sided.   The loss of many battles was attributed to the revolutionists’ life of hunger and sickness. General Paciano Rizal was affli cted with malaria and he had become weak, he was captured in Laguna by the Americans. The year was 1900. After the war Paciano led a passive private life and retired to his farm in Los BaÅ„os, Laguna. He passed away on 13 April 1930, at the age of 79.   Pedro Patero’s account of his negotiations peace between Spain and the Filipinos revolutionaries, â€Å"El Pacto de Biak na Bato† , Paciano relates: â€Å"What do you want? That we make peace with Spain? That we be the bearer and acceptor of peace, when they have shot my brother, Pepe, banished my parents and relatives, falsely accused us to the last of my family, confiscating our lands and hurling a thousand horrors on our faces? Ah, Don Pedro, dig a deep well. Fill it from the top to bottom with all the bolos and lances that you wish. Then, command me to throw myself into it and I Paciano Rizal, will do just that, but do not ask me for peace because that, Don Pedro, is impossible- absurd!† Paciano exploits reveal getting the Spaniards to surrender in Calamba, by using firecrackers to show the Filipinos were heavily armed. After 3 days the Spaniards surrendered. In his letter to the PIR seen at the National Library Paciano requested for the status of the Americans if they were allies or enemies. Their suspicious actuation in the area proved right, August 13, 1898, Filipinos was tricked by the Americans, they fought another battle. 1900, weakened by malaria, Paciano was captured by the Americans and is said to have refused to swear allegiance to the flag of the USA. While Apolinario Mabini the paralytic was exiled to Guam because he refused allegiance to America. May unanswered questions left, but nothing is definite as of now, except that Paciano Rizal proves like other heroes of the Revolution of 1896 and 1898, should be rescued from obscurity and given the rightful place in our history Characteristics Of A Hero Courage For a hero, courage is as important as a shell is to a tortoise. Without courage, a hero is just as vulnerable as any other man walking down the street. Courage here stands to signify that firmness of the spirit and ‘mettle’ of the soul to stare at danger and trouble right in the eye. Courage here stands to signify the valor it takes to overcome adversities and adversaries. It’s like a soldier rushing into battle knowing well that death awaits him. In all reality, this is what courage is all about! Sacrifice A hero does not become a hero by simply beating up a thousand goons and riding into the sunset victoriously with his lady love. If this was all it took to become a hero, every other Romeo beating up rivals and stealing away his love in the still of the night can be branded a hero. It really is more than that! Sacrifice is what helps a mere mortal make that journey from a mediocre life to one filled with greatness. Sacrifice, by definition, can be described as the giving up of something highly valued for a purpose of greater importance. Thus, in order to achieve greatness and the status of a hero, it is extremely essential for an individual to sacrifice. Determination A hero cannot be considered one, if he possesses a will as bendable as a tube of rubber. A hero truly becomes just that when he exercises his will or determination to come out on top at any cost. Determination can be best described as a hero’s resolve or firmness of purpose to achieve what his heart desires most. It’s all about staying focused and not resting until the task on hand is executed. In life it may not be easy to achieve any given thing, but it is with determination that a man can ultimately achieve what he desires most and turn himself into a champion. Conviction Conviction here does not refer to a person’s skill at convincing another, but it rather refers to a person’s firm belief in any particular thing. It can refer to an unshakeable way of looking at life and all its variables. In a way, the convictions that a man holds can go a long way in determining if he has what it takes to become a hero. In fact, no man can truly become a hero, if he does not possess conviction that is impenetrable as well as unbending. Dedication Do you think that a person can make a man out of himself without being dedicated to any particular thing in life? Obviously not! This is because in life in order to enjoy a permanent taste of success it is extremely important to exercise dedication. If you desire to master an instrument, you have got to be dedicated to master it and shouldn’t really rest until you do. True dedication shouldn’t be forced; it in fact is the direct result of true desire. It is this dedication that can help distinguish a man as a hero.

NLP

Neuro-Linguistic Programming (NLP) is a way of organizing and understanding the structure of subjective experience and is concerned with the ways in which people process information but not necessarily with the specific content of that information. Information is processed primarily in three modes: visual, auditory, and kinesthetic. The sensory modalities used in a given task and their sequence are critical to the performance of that task. Persons who are extremely skilled at a task will have radically different processing sequences than those who perform poorly on that same task. Understanding the structure by which the skilled person processes information, through the observation of eye scanning patterns and linguistic patterns, allows programs (similar to computer programs) to be codified, which can be taught to other persons (Andreas, 1996). Developed in 1975 by Richard Bandler, a mathematician, and John Grinder, a linguist, NLP has been clinically demonstrated as a powerful technology for engendering change. From their studies Bandler and Grinder developed skills of modeling that allow one person to identify in a specific fashion the structural elements of another's behavior and to teach that structure to yet a third person (Andreas, 1996). Gregory Bateson postulated four logical levels of learning. The first level is the level of content, and this is the level at which most people spend their lives. Here one learns how to tie one's shoes, cook a meal, drive a car, and so on. Some people become acquainted with second-level learning: the learning of context, or learning how to learn. People who operate at the second logical level of learning may rapidly learn any new content-specific area, because they are capable of moving through the learning process in an efficient, effective manner. In rare cases, persons may rise to the third logical level of learning, the learning of how to learn context. In this case one is operating at a level of contextual pattern recognition; one is able to easily identify and operate on the structure of any experience. It is at this level that Bandler and Grinder operate when they are modeling (or teaching modeling to) some one. Bateson reserved his fourth class of learning for those accomplished persons like yogis and Zen masters. One NLP technique is anchoring which is used to describe a process by which memory and its responses become associated with some stimulus. This happens when the anchor leads by reflex to the anchored response occurring. The stimulus can be neutral or out of conscious awareness. The response may be either negative or positive. Anchors are similar to classical conditioning (Ready, 2004). The process of disrupting a pattern of thought from one that leads to an unwanted behavior to one that leads to a desired behavior is known as swishing. Another process is reframing in which an element of communication is presented so as to shift an individual’s perception of the meanings associated with words. Reframing is defined as a process where an element of communication is presented to shift the individual’s perception of meanings or frames. A six-step reframe distinguishes between an underlying intention and consequent behavior to achieve intentions by different and successful behavior. Ecology is concerned with the relationship between a client and their environments. It also is concerned how a proposed goal or change might relate to their relationships and their environment (Ready, 2004). NLP offers many methods for getting rid of addictions. An effective technique is called the â€Å"swish† pattern. Using this method, a person’s unconscious will automatically use negative, addiction producing mental pictures, to create relaxing mental pictures. Addictions can be cured in NLP because it is a form of ‘near waking state' hypnosis. In NLP we can ‘adjust' our internal sensory representations making them more powerful. NLP also helps us to model good behavior. Anchoring is a powerful method of fighting addictions. In this especially one takes the long, deep breath and to touch the tongue to the roof of the mouth at the same time. This sets up a connection between the sensorised mental icon and the physical act of touching the roof of your mouth with the tongue as well as taking that deep breath (Lankton, 2004). In NLP it is recognized that human beings all code time in different ways. Each person has his own mental timelines. The past is represented in some right-handers represent at some point way towards their left. It is possible to use NLP techniques to manipulate internal sensory representations. Negative internal sensory representations like addictions. Addictions can also be removed by being moved further back into the past along the timeline. This helps change the present and future mindset of the client in relation to the original internal sensory representation. This results in past traumas being reduced. Addictions can be treated by providing the customer with a response option that is more powerful, accessible and immediate than the drug itself. Another method is the compulsion blow-out which solves cravings. Another method is the guilt resolution process which is used for clean up of motivations and secondary gain (Lankton, 2004). One of the most successful methods is the six step reframe which works by using assistance from the unconscious mind. The process has been criticized for fragmenting the personality (Sterman, 2004). This approach reaches down to access a level of experience that is helpful to redirect conscious and unconscious energies in a central direction. If a positive experience is structured it will compete successfully against a problem state. The competing experiences must have value and indicate towards a better positive future. The brain consists of a maze of circuits. Positive and negative affect are mutually dependant on each other. In order for a positive affect to have maximum effect, it must be developed for dealing with a problem. A crucial program is the process of anchoring. Participants are taught to anchor states that are without content. During the process of creating and anchoring the state all types of contextual information is reduced. In recent years science has given us insight on the problems of addiction and substance abuse. These researches have discovered a close relationship between drug addictions, behavioral addictions, compulsions and more normal patterns of reward and motivation. Drug and behavioral addictions are problems related to craving. The mechanism of craving is mediated by neurons in the midbrain that produce dopamine on to be placed on a trance. NLP is a great technique to fight addictions and behavior. There are many examples of NLP helping out people suffering from substance abuse and addictions. References: Andreas, Steve (1996). NLP: The New Technology of Achievement. US: Harper Paperbacks. Ready, Romilla (2004). Neuro-Linguistic Programming for Dummies. US: For Dummies . Lankton, Stephen R. (2004). Practical Magic:: A Translation of Basic Neuro-Linguistic Programming Into Clinical Psychotherapy . US: Crown House Publishing. Sterman, Chelly M., Ed. (2004). Neuro-Linguistic Programming in Alcoholism Treatment. US: Haworth Press.                                                                           

North American History Essay

In the words of Abraham Lincoln and Stephen A. Douglas, two great rivals in American History, were not only their honor and image, but the principles and ideals that would lead the legislation of a country in the frustrated process of amalgamation and integration. As Abraham Lincoln proposed in his Republican State Convention of 1858 speech, there were two American clashing ideologies in debate, ideologies that could not coexist forever within a â€Å"House Divided†. Moreover, he emphasizes his beliefs when he states: â€Å"Either the opponents of slavery will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in the course of ultimate extinction, or its advocates will push it forward till it shall become alike lawful in all the States, old as well as new, North as well as South† (Lincoln) By his immediate rhetorical question of â€Å"Have we no tendency to the latter condition?† (Lincoln) it is obvious that he, as a republican and abolitionist, is against the prevailing of the institution of slavery, something that is put into doubt by the accusations made to him by his opponent who adheres himself to prove the lack of congruence in Lincoln’s speeches. This accusation can be tangible to a point, for the speeches were more emphatic towards certain ideas in the north, than in the south and vice versa, but the main principles of Lincoln’s ideas tend to show his point of view as aligned with that of the Abolitionists, in quite a particular way. Taking into account certain confusing ambivalence in Lincoln’s speech, although he proposed equality when he invited Americans to â€Å"†¦unite as one people throughout this land until we shall once more stand up declaring that all men are created equal.† (Douglas, quoting Lincoln), he also encouraged certain division and differentiated whites from blacks when he said â€Å"†¦I am not nor ever have been in favor of bringing about in any way, the social and political equality of the white and black races†¦Ã¢â‚¬  (Douglas, quoting Lincoln), referring to certain ways of life and the position to be held by African Americans in his opinion. A difference in these quotations is evident, but it is taken as a cautious step towards safekeeping his political career, and expressing a certain opinion that supported the abolition of slavery, but not intend to radically change the position of hegemony of the white men. A great conflict can come out of this ideology, b ut it was a great step forward in the emancipation of the black people. Although Abraham Lincoln’s idea of the condition of humans as slaves is left idle for a moment, the fact that he takes it to be an evil that must be stopped is clear when â€Å"†¦we think it is a moral, a social and a political wrong.† (Lincoln) is stated, but the fact that it should be dealt with â€Å"†¦as with any other wrong, in so far as we can prevent its growing any larger, and so deal with it that in the run of time there may be some promise of an end to it.† (Lincoln) also makes clear that although intervention in the south is not within his policy, it is his intention to stop its growth and contain it within its boundaries until, as stated in another occasion, it would perish. In our opinion, Lincoln’s plan is very difficult thing to attain, for how could one oppress an institution such as slavery, and promote openly pro north policies, supposedly leaving the south to their ideals until the times and abolitionist movement created such a situation where the institution would collapse by itself? This is what Judge Douglas questions the most, making Lincoln seem as incoherent. To a point he was, but the great tension created between both ideologies had separated the country to a point in which Lincoln had to have great care. The Missouri compromise dividing free and slave states in the latitude parallel 36à ¯Ã‚ ¿Ã‚ ½30†² and the later Kansas Nebraska act only temporally detained the and smoothed the tension that existed in the fight for power and representation between North and South, abolitionists and slave supporters. The Dred Scott versus Stanford case only augmented the tension, making the questions of its constitutionality and rightfulness be debated across the nation. While Douglas’s position tends to favor a patched agreement between south and north, one of â€Å"mutual non intervention† (Douglas) that could lead to further separation as we think, Lincoln’s policy, ambiguous as it might be in certain respects, was very clear in one thing: the separation that up to now had existed dividing the country in two could not continue much further. For him, apart of his abolitionist principles, above all was the union of the Federation, he could not permit each part of the nation to take its own course, something that would change the fate of the United States forever. A pivotal period would come out of his later governance that would lean the countries future northwards, until again unity would rise much later. This intention would not be clear since the beginning of Lincoln’s political career, despite his clear ideals regarding slavery. This is obvious in the difference in his â€Å"House Divided† speech, and his Sixth Joint Debate with Douglas, at Quincy. Even in the different speeches mentioned in the second paper, where the words of this leader can be confusing, there is certain continuity in his thought. The Dred Scott case is very important in both of his situations. In the first one he addresses it as if the slave policies were â€Å"tending† (Lincoln) the nation towards them, in the second one he is reassuring the possibilities this interpretation of the constitution of the United States by the Supreme Court opens, such as â€Å"†¦slavery would be established in all the States as well as in the Territories.† (Lincoln) Within these lines, the point of view of Abraham Lincoln and Stephen A. Douglas is made clear. While the first clearly wants to avoid the spreading of slavery, for the moment being, and eventually eradicate it, Douglas, claiming to have a â€Å"care-not† (Lincoln) policy as stated by Lincoln, endorsed the popular sovereignty doctrine. It is Douglas who previously had proposed the Kansas-Nebraska Act, giving power of decision on the free or slave state issue to the inhabitants of the area, not based on the moral and ethical consequences of this, for he was not concerned with these but more so in â€Å"expansion of settlement and commerce† (Divine, Robert, et al. 271). Both politicians have a diverging speech and line of thought, for Abraham Lincoln concentrates more on repudiating the idea of slavery itself, while Douglas is not focuses on this, but rather on another scheme: one which was more pleasing to draw support from both sides, one that was in the middle of supporting and fighting slavery, one which proved a failure as the book just cited comments, for the two currents of thought, the one supporting and the other rejecting slavery are very difficult to unite as a whole. It can be said that all these ideological questions surge between attacks and allegations against each other. The first â€Å"House Divided† speech is more of a uplifting, but challenging and persuasive speech in which Lincoln confronts the problems of the nation, the second speech, or debate between Lincoln and Douglas is more of a defensive and offensive one in which one politician is going to enhance his reputation, beneficial for a further political career and the other is going to worsen it. This is obvious for most of the speech is consumed in correcting fallacies said by the other or accusations of perjuries. Between lines is when the true nature of the politicians though reveals itself with clarity. â€Å"It is precisely no other than the putting of that most unphilosophical proposition, that two bodies can occupy the same space at the same time.† (Lincoln) is the quotation that convinces the readers of the Lincoln-Douglas debate of America’s strain, the point of view of slavery cannot coexist with abolitionism, not even Douglas’s view of giving the choice to the inhabitants of the place is viable. Of course Lincoln has to be careful with such a topic, and he is, sounding flexible when he states that â€Å"Judge Douglas understands the Constitution according to the Dred Scott decision, and he is bound to support it as he understands it. I understand it another way, and therefore I am bound to support it in the way in which I understand it.† (Lincoln), yet firm in his convictions. In conclusion, it can be said that the rivalry of these men and ideals they stand for are representative of a nation, a nation that is divided by many issues, of which slavery is a crucial one in understanding the different semi spheres that were being created within what was supposed to be a federation. Although the role of it as such had not yet been clearly defined, it was up for Abraham Lincoln, after he was elected leader, to define with these speeches and hints were making more evident. The American Civil War was just a step away, and Lincoln, Douglas and the slave owners could not agree on the topic that could free a large proportion of the population, the African slaves. Based on what we see, it is clear that what was to come would shape America into what it is now, a united, slave free nation. Yet these are the roots of what is taken for granted today. This antagonism fueled some of the fiercest and defining battles fought in U.S. continental grounds. Bibliography * Divine, Robert A., Breen, T.H., Fredrickson, George M., Williams, R. Hal, Gross, Ariela J., Brands, H.W. and Roberts, Randy † America: Past and Present† United States, Pearson Longman, 2005. * Lincoln, Abraham â€Å"House Divided Address† Republican State Convention, Springfield, Illinois, June 17th, 1858. * Lincoln, Abraham and Douglas, Stephen A. â€Å"Sixth Joint Debate† Lincoln-Douglas Debates, Quincy, Illinois, October 13th, 1858.

One page analysis of news article provided Essay

One page analysis of news article provided - Essay Example While the Catholic Church claims that such incidents are reflective of society at large and not merely the Catholic Church, opponents argue that when Pope Benedict XVI was still functioning as a Cardinal he made frequent actions to impede the prosecution of the accused clergy members, including preventing the prosecution in the Wisconsin incidents, as well as transferring an accused sex offender in Munich to another church in 1980. While I was familiar with these scandals through the news media, the article brought my attention to the severity of the problem. The article states that, â€Å"One victim, Alessandro Vantini, told the AP last year that priests sodomized him so relentlessly he came to feel ‘as if I were dead.’† In addition, the high number of children the article indicates (200 and 67) is astonishing. The article does a solid job of presenting both sides of the controversy as the church indicates that a formal complaint was never issued and that they didn’t have a means to contact the molested children to interview them about the incidents. However, in totality it seems that there is some misconduct that has occurred and that it might be best if an outside entity was able to step in and investigate. I also seems imperative that the Papacy take immediate measures to prevent similar occurrences in the

Gambling Casinos Research Paper Example | Topics and Well Written Essays - 1000 words

Gambling Casinos - Research Paper Example The city attracted more and more people looking for work, and jobs were plentiful. It became a place where divorce could be obtained very quickly, which added to the lure of the economy. It also became a major tourist attraction of people interested in watching the construction progress of a massive dam. It was a way for the city to raise tax revenue. The first casino/resort to be built was the El Rancho in 1941, which started a booming industry that replaced mining and farming as the number one industry by 1950. Looking at Las Vegas today, it is still a thriving economic marvel. Residents are lured by the No State Income Taxes, increasingly newer homes, great climate year round, easy access to highways and good roads, great public schools, and state-of-the-art hospitals. The allure of a good job market, hiking and water sports, and just the prospect of a better life bring approximately 5,000 new people a month. It also loses 1,000 people a month, however, these numbers are based on vacationers. The growth of the city has been from legalized gambling and casinos. Gambling, wagering and betting bring in millions of dollars to Las Vegas and it’s one of the major reasons people migrate there. Other major Casinos are in New Jersey, Mississippi, and Pennsylvania. New Jersey was the second state to legalize casino gambling in 1978. This move helped to revitalize the resort area known as Atlantic City, and it was a success. Gambling has always been a subjective issue in the United States. Supporters argue that it increases revenues to the state and local economies in addition to promoting jobs and recreational benefits. History shows that the economic benefits greatly outweigh the detrimental side of casino gambling People who are opposed to casino gambling cite higher crime rates, gambling addiction and moral issues. Other less mentioned arguments are erosion of work ethics and traffic congestion. Some of these points can be measured in dollars lost in the for m of more police, increased legal and prison costs, the cost of social services for compulsive gambling, lost job production, and costs for traffic control. However, the damage that is done to persons and families cannot be measured. According to Terry Rephann with the Allegany College of Maryland casino gaming is more popular among older and more affluent people. Using Minnesota as an example, gamblers are drawn mostly from within the state to the Indian Casinos. The Indian Gaming Regulatory Act of 1988 made if possible for the Native American Tribes to negotiate Class III gaming compacts within their own states. They are allowed to operate full-scale casinos. Thus, in the last decade it has become a viable means of stimulating the economy, lowering unemployment and increasing tax revenues to local and state governments. Among other benefits, it has allowed Native Americans to greatly improve the quality of their lives. It has improved their schools, housing, jobs and income. Casin os attract tourism, increase business to other businesses in the area as well as lift the tax burden on the residents of the community. In economically depressed areas, casinos are seen as a sure way to draw tourists and create new jobs. Native Americans also have misgivings about the social ills that come with gambling. Chris Pearson, who is a member of the Mashantucket Pequot tribe says, â€Å"Native Americans are very spiritual people, and we don’

Internal Controls Assignment Example | Topics and Well Written Essays - 750 words

Internal Controls - Assignment Example The Sarbanes-Oxley Act of 2002 was passed generally for the purpose of restoring investor trust and confidence. The demand of the government, investors and the American public sought a standard and guarantee on the accuracy of financial reports. So, Section 404 of the mentioned law was strictly devoted in requiring management to assess and report on the effectiveness of internal control over financial reporting or ICFR. Bergen (2005) reported that â€Å"the concerns through making executive more responsible for company accounting statements, redefining the relationships between corporations and their auditors, and restructuring the internal audit systems of public corporations.† Section 404 of Sarbanes-Oxley Act of 2002 has also been experiencing issues regarding its implementation. The legislation of the law â€Å"has been subject to furious debate amongst corporations, auditors, regulators and others.† The internal control policy has cause extremely high costs especia lly for smaller companies and early results left the benefits unclear. A number of academic and professional researches have grown to support the lack of transparency in accounting and corporate governance is growing larger. The researches show the significant cost attached to the internal controls. One â€Å"concludes that corporations with Internal Control Deficiencies (ICDs) as defined by section 404 – companies which are naturally more susceptible to accounting irregularities – pay the price through higher cost of capital and lower stock price returns.† Ockree and Martin (2009) investigated on the internal and external impacts of the financial reporting requirements in internal control. Stock price was one of the external reactions their study had put focused on. In their study, stock prices were tracked for the three years following the announcement. They compared the data to a broader market measure of comparable companies. The results were surprising thou gh a bit expected; the average return for the study group during that period was only 1.68%, while the broader market had a 17.28% return. There was a higher rick in that period of relative growth. Ockree and Martin also studied the insiders who traded stock during 2007 to be able to measure the risk in that particular sector. Two years after the announcement, it was found that there were three times inside buyers than seller compared to the broader market. Further, the size of the insider’s sales was over eight times larger compared to the buys. With the effect of internal controls to the company’s stock price, we can say internal controls do have inherent limitations and the risk can’t easily be foreseen or eliminated. On the other hand, there is a risk of weakening internal controls if we modify the existing system. Internal controls can result to various limitations to the organization functionality and economy. Its limits can affect the effectiveness of int ernal controls and may result to system omission human factors, resource constraints, or lack of system flexibility. For example, internal control processes in an organization may not reflect changed operating conditions, specific agency activities or potential new risks. It can cause collusion of staff members to be able to achieve their own personal gains. And in