Blockbusters Place in the Current Movie Rental Market Essay -- Busine

Has e-marketing and the use of the network hurt Blockbusters dominance in the movie rental business and if it has what will they have to change in their business plan to regain their market shares? This sequel has studied the influence of new technologies for delivering movie rentals along with downloading movies directly to your television at home without a customer even getting off their couch. It also examines the impact DVD recorders are going to have on Blockbusters main products like DVD players and VCRs. The case talks about the threats these new designs are going to have on Blockbusters business potential. Along with what Blockbuster has done to compete with their new competitors like Wal-Mart and Netflix. With the internet changing the way most profitable companies do business Blockbuster has to adapt and follow the new trends our generation. While studying this case, our group analyzed what Blockbusters strengths and impuissance are, combined with what opportunities t hey have to excel in the new way consumers watch movies and we established the threats that exist with new technology and competitors. Last our group has thought of almost new ideas that could help them thrive in the future.The problem that this case states is, will Blockbuster make the right business plan choices to allow them to compete with the innovation of products and technology of distributing movie rentals. Also is Blockbuster going to be able to adapt and succeed in this new era of renting movies?The SWOT (Strengths, Weakness, Opportunities, and Threat) outline for Blockbuster is both positive and negative. The major strength that Blockbuster Inc. has is a brand image over the competition. When new movie releases come out on Video o... ...ir own movie channel that allows customers to buy and watch movie directly on their television. From their surveys, they should find out what their customers want and implement their suggestions into their business strategy. They motivation to train their employees to have the utmost customer satisfaction rating. This will keep customers coming back and hopefully attract new customers into the store. They also need to be able to help and answer customers questions about movies. They should also have sales such as, buy one movie get one free, running sporadically throughout the store. This will draw customers in to shop for the deals. They should also promote new movies available for sale in the store. They should always try to keep as many movies in stock so the movie is always there for the customer. This will keep them happy and coming back to rent more movies.

Aristotelian Perspectives on Social Ethics Essay -- Philosophy Medicin

Aristotelean Perspectives on Social moralsI examine the philosophical perspectives of Aristotle on issues of medical ethics and on his social ethics in general, including the moral issues of abortion, euthanasia, and other issues of social ethics such as the issue of cloning. I have chosen the domain of utilise ethics as viewed from the Aristotelian point of view precisely because certain issues have been virtually unexamined by scholars. I shall direct attention to certain treatises of the Aristotelian corpus such as On the History of Animals, On the Generation of Animals, On the Soul, The Nicomachean Ethics and The Politics. My main objective is to provide a more dogmatic account of the Aristotelian perspectives on the above controversial issues and to open up the Stagirites main approach to social ethics. For this reason, issues like the notion of personhood, his attitude towards death, and his theory of the get out and ethical conduct of a moral citizen-agent will be examin ed. Throughout this investigation, the close interrelation between philosophy and medicine, both in antiquity and in modern times, will also become more apparent.I. AbortionConcerning the issue of abortion Aristotles views are not considered as very clear or unvarying throughout. We shall examine the relevant passages from both the biological and psychological treatises in connection with other of his contemporary or not medical findings. In our attempt to establish his main approach, we shall also unfold his views on the more modern notions of personhood as they are examined in his ethical and political works.According to the Hippocratic oath, abortion is interdict as morally unjustifiable. A physician is not to help a woman abort he... ...Fye, Bruce W (1978) Active Euthanasia An Historical survey of its conceptual origins and introduction to medical thought, Bulletin of the History of Medicine 52, 492-502.Gracia, Diego (1978) The structure of medical knowledge in Aristotles p hilosophy, Sudhoff Archiv 62 (No.1), 1-36.Hartman, Edwin (1977) Aristotelian Investigation Substance, body and Soul, U.S.A.Princeton University Press.Jaeger, Werner (1957) Aristotles use of medicine as a model of Method in his Ethics, Journal of the History of Science 77, 54-61.Kudlien, Fridolf (1970) Medical Ethics and Popular Ethics in Greece and Rome, Clio Medica 5, 91-121.Veach, Robert M (1978) Codes of Medical Ethics Ethical Analysis, Encyclopaedia of Bioethics 4, 172-9.Westermack, Edward A (1906-8) The origins and development of the Moral Ideas, 2 vols., London MacMillan & Co.

Machiavelli :: essays research papers

     A great drawing card is someone who appears to be priceless. Great loss leader is the main example of his people he should have the char dissembleeristics of higher standards therefore developing his followers into something better. Extraordinary leaders need to have communication skills to deduce what the followers expect from him. "You serve as an influential role model for your players and everything you do will be watched. Vince Lombardi says, "Leaders are made, they are not innate(p) and they are made just like anything else has every been made in this country - by hard work."" (Sugarman).     Great leader must be seen as being great not actually being one. Machiavelli suggests this idea in D1. To seem to have the qualities is necessary as opposed to having the qualities without the people knowing almost them. This is true for all leaders not just political. D1 suggests flexibility is needed, " but you must hav e the mind so disposed that when it is needful to be differently you may be able to change to the opposite qualities." Flexibility is important the leader all in all has to give the people what they want comforting the majority. D1 says that great leaders are sometimes obligated to do evil if constrained without deviating from what is good (if possible), " being often obligated, in order to maintain the state, to act against faith, against charity"Communication and timing are important. Great leaders are great when they get something across to the followers that the followers want to hear, there is a clear understanding from both sides. "The great leader is a master in the art of communication. He or she is aware of the strong need for actions to lucifer words. Leaders need to possess a willingness to listen to input with an open mind." (Sugarman), "Leadership is about building connections. Effective leaders make people tonicity they have a stake in commo n problems." (Goodwin). Great leaders are good with timing "Timing is (almost) everything. Knowing when to introduce an initiative, when to go onwards ones constituents -- and when to hold off -- is a crucial skill." (Goodwin).Leaders must care about their people (and of course show them that they care) "A leader who does not fluctuate before he sends his nation into battle is not fit to be a leader" (a quote of Golda Meir) (Spanoudis). This sets an example for the followers to care about their leader too.

Insider Trading Essay example -- Business, Investment

Insider trading relates the investment behavior of corporate insiders with their own stock. Insider trading topic not only attracts pay literature (see, e.g., Lorie and Niederhoffer 1968, Jaffe 1974, Seyhun 1986, 1998, Rozeff and Zaman 1988, Lin and Howe 1990, and Lakonishok and Lee 2001), but also attracts law and economics literature (see, e.g., Manna 1966, Georgeakopoulos 1993, and Carlton and Fischel 1983). The finance literature on insider trading had started with an examination of the fortified trade efficiency hypothesis. Subsequently, researchers gave their attention towards the determinations of insider trades profitability. Furthermore, another set of researcher also gave an attempt to find the tuition contents of insider trading to outsiders, which is an application to test the semi-strong marketplace efficiency hypothesis. The third group of researchers measured insider trading activities around the corporate announcements, for example, merger and acquisitions, divid end announcements. In the following section, we will summarize studies that focus on the education content (abnormal return) of insider trading. Finnerty (1974) measured the strong market efficiency hypothesis condition on insider trading. The period of his study was from January 1969 to December 1972. He considered only open market trade for NYSE firms. To measure the strong market efficiency hypothesis, he formed two portfolios- buy and sale for each month the buy (sale) portfolio for month t comprised of those firms for which any insiders were buyer (seller). Thereafter, he calculated portfolio returns for the portfolio formation month and subsequent eleven months. Using the CAPM to calculate abnormal return to insider trades, Finnerty (1974) ... ...ir timely disclosure of insider trades from 10 days after the month in which the trade had occurred regime to 2 days regime on August 29, 2002. He stated that if the information content of insider trades is relevant to outsiders, the timeliness announcement of insider trades will improve the information content of insider trades. And he found that the abnormal return (CAAR=1%) of pre-amendment associated with announcement of insider buys was freeze off than the abnormal return (CAAR=2.3%) of post-amendment. However, he did not find similar results for insider sales, hence he again reinvestigated insider sales after taking litigation risk into consideration. And he concluded that insiders of firms those are associated with more litigation risk more likely to refrain from sales on private information than insiders of firms those are associated with low litigation risk.

The Bodies Are Talking: Will Society Listen? :: Essays Papers

The Bodies Are Talking entrust orderliness Listen?On Thanksgiving evening, November 27, 1992, Sergeant Kenneth Mathison and his married woman Yvonne drive their 1988 tan get over avant-gardeguard along Route 131 in Hilo, Hawaii. The rain is pouring down and forrader he knows it, Kenneth Mathison is awaiting police assistance as he cradles his wifes deceased body in the back of their van. Mathison, a sergeant of 25 years with the Hilo Police Department was allegedly informing his wife, a maternity care for maestro at the Hilo Medical Center, that he was being investigated in his second paternity suit. According to Mathison, when Yvonne heard the news, she jumped from the passenger side of the van. While he was expression for her in the blinding rain, Mathison purportedly ran over his wife. He then carried the body into the van and secured it with yellow rope in the back before attempting to find help. Will the rhetorical evidence support Mathisons account of that fateful ev ening?That night, mevery witnesses inform having seen a man changing the tire of his van and wafture any possible help away angrily while others reported seeing a woman wandering around the side of the dangerous highway. much witnesses reported that Kenneth and his wife were having many violent disputes at their home that usually resulted in Kenneth pursuing an angry Yvonne around the block. The most compelling evidence against Mathison, however, is strictly scientific. detective Paul Ferreira first noticed that the extensive blood stains inside the Mathison van. After hearing Mathisons original account, he summoned the assistance of famed rhetorical technological Dr. Henry Lee to analyze what he thought was inconsistent evidence. Blood stains on the paneling and the spare tire in the cargo domain unveil low-velocity blood stains meaning that the blood in all probability dripped from Yvonnes head onto the floor. The stains found on the roof and steering wheel were contact transfer patterns probably caused by Mathisons bloody hands. Blood stains on the drivers side of the van were contact-dripping patterns which indicate that Mathison touched the inside of the van multiple multiplication before and after moving his wifes body. The final groups of blood stains on the instrument panel of the van were medium-velocity stains which show investigators that Mathison probably struck his wife at least once in the front seat causing the blood to fly from her open head wound. The enormous amounts of blood inside the van acquit prosecutor Kurt Spohn to investigate the Mathison case as a murder instead of a misdemeanor traffic violation.The Bodies Are Talking Will Society Listen? Essays PapersThe Bodies Are Talking Will Society Listen?On Thanksgiving evening, November 27, 1992, Sergeant Kenneth Mathison and his wife Yvonne drive their 1988 tan Ford van along Route 131 in Hilo, Hawaii. The rain is pouring down and before he knows it, Kenneth Mathison is awaitin g police assistance as he cradles his wifes dead body in the back of their van. Mathison, a sergeant of 25 years with the Hilo Police Department was allegedly informing his wife, a maternity nursing professional at the Hilo Medical Center, that he was being investigated in his second paternity suit. According to Mathison, when Yvonne heard the news, she jumped from the passenger side of the van. While he was looking for her in the blinding rain, Mathison purportedly ran over his wife. He then carried the body into the van and secured it with yellow rope in the back before attempting to find help. Will the forensic evidence support Mathisons account of that fateful evening?That night, many witnesses reported having seen a man changing the tire of his van and waving any possible help away angrily while others reported seeing a woman wandering around the side of the dangerous highway. More witnesses reported that Kenneth and his wife were having many violent disputes at their home that usually resulted in Kenneth pursuing an angry Yvonne around the block. The most compelling evidence against Mathison, however, is purely scientific. Detective Paul Ferreira first noticed that the extensive blood stains inside the Mathison van. After hearing Mathisons original account, he summoned the assistance of famed forensic expert Dr. Henry Lee to analyze what he thought was inconsistent evidence. Blood stains on the paneling and the spare tire in the cargo area reveal low-velocity blood stains meaning that the blood probably dripped from Yvonnes head onto the floor. The stains found on the roof and steering wheel were contact transfer patterns probably caused by Mathisons bloody hands. Blood stains on the drivers side of the van were contact-dripping patterns which indicate that Mathison touched the inside of the van multiple times before and after moving his wifes body. The final groups of blood stains on the instrument panel of the van were medium-velocity stains which show investigators that Mathison probably struck his wife at least once in the front seat causing the blood to fly from her open head wound. The enormous amounts of blood inside the van lead prosecutor Kurt Spohn to investigate the Mathison case as a murder instead of a misdemeanor traffic violation.

The Bodies Are Talking: Will Society Listen? :: Essays Papers

The Bodies Are Talking allow for Society Listen?On Thanksgiving evening, November 27, 1992, Sergeant Kenneth Mathison and his married woman Yvonne drive their 1988 tangent cut across forefront along Route 131 in Hilo, Hawaii. The rain is pouring down and before he knows it, Kenneth Mathison is awaiting police assistance as he cradles his married womans dead body in the back of their avant-garde. Mathison, a sergeant of 25 years with the Hilo Police Department was allegedly informing his wife, a maternity care for professional at the Hilo Medical Center, that he was being investigated in his second paternity suit. According to Mathison, when Yvonne heard the news, she jumped from the passenger side of the van. While he was flavour for her in the blinding rain, Mathison purportedly ran over his wife. He then carried the body into the van and secured it with yellow rope in the back before attempting to run into help. testament the rhetorical enjoin support Mathisons account o f that fateful evening?That night, many witnesses reported having seen a man changing the tire of his van and motion any possible help away angrily while others reported seeing a woman wandering around the side of the insidious highway. more than witnesses reported that Kenneth and his wife were having many violent disputes at their home that usually resulted in Kenneth pursuing an angry Yvonne around the block. The most compelling evidence against Mathison, however, is strictly scientific. Detective Paul Ferreira first noticed that the extensive blood stains indoors the Mathison van. After hearing Mathisons original account, he summoned the assistance of notable forensic expert Dr. Henry Lee to analyze what he thought was inconsistent evidence. Blood stains on the paneling and the spare tire in the incubus expanse reveal low-velocity blood stains meaning that the blood in all likelihood dripped from Yvonnes head onto the floor. The stains found on the roof and steering whe el were contact change over patterns probably caused by Mathisons bloody hands. Blood stains on the drivers side of the van were contact-dripping patterns which indicate that Mathison touched the inside of the van eightfold quantify before and after moving his wifes body. The final groups of blood stains on the instrument panel of the van were medium-velocity stains which show investigators that Mathison probably infatuated his wife at least once in the front seat causing the blood to fly from her open head wound. The enormous amounts of blood inside the van lead prosecutor Kurt Spohn to investigate the Mathison case as a murder instead of a misdemeanor traffic violation.The Bodies Are Talking Will Society Listen? Essays PapersThe Bodies Are Talking Will Society Listen?On Thanksgiving evening, November 27, 1992, Sergeant Kenneth Mathison and his wife Yvonne drive their 1988 tan Ford van along Route 131 in Hilo, Hawaii. The rain is pouring down and before he knows it, Kenneth Mathison is awaiting police assistance as he cradles his wifes dead body in the back of their van. Mathison, a sergeant of 25 years with the Hilo Police Department was allegedly informing his wife, a maternity nursing professional at the Hilo Medical Center, that he was being investigated in his second paternity suit. According to Mathison, when Yvonne heard the news, she jumped from the passenger side of the van. While he was looking for her in the blinding rain, Mathison purportedly ran over his wife. He then carried the body into the van and secured it with yellow rope in the back before attempting to find help. Will the forensic evidence support Mathisons account of that fateful evening?That night, many witnesses reported having seen a man changing the tire of his van and waving any possible help away angrily while others reported seeing a woman wandering around the side of the dangerous highway. More witnesses reported that Kenneth and his wife were having many violent disputes at their home that usually resulted in Kenneth pursuing an angry Yvonne around the block. The most compelling evidence against Mathison, however, is purely scientific. Detective Paul Ferreira first noticed that the extensive blood stains inside the Mathison van. After hearing Mathisons original account, he summoned the assistance of famed forensic expert Dr. Henry Lee to analyze what he thought was inconsistent evidence. Blood stains on the paneling and the spare tire in the cargo area reveal low-velocity blood stains meaning that the blood probably dripped from Yvonnes head onto the floor. The stains found on the roof and steering wheel were contact transfer patterns probably caused by Mathisons bloody hands. Blood stains on the drivers side of the van were contact-dripping patterns which indicate that Mathison touched the inside of the van multiple times before and after moving his wifes body. The final groups of blood stains on the instrument panel of the van were medium-velocit y stains which show investigators that Mathison probably struck his wife at least once in the front seat causing the blood to fly from her open head wound. The enormous amounts of blood inside the van lead prosecutor Kurt Spohn to investigate the Mathison case as a murder instead of a misdemeanor traffic violation.

New British Empire

Interview a senior citizen Tonya Williams PSYCH/500 March 25, 2013 Tanya Semcesen A face to face interview was held with Mr. C. Mr. C. is an 82 year old African American male. Physically looking at interviewee he does not look that age at all he looks like he is in his early sixties. branch I Questions & Answers Q-How old are you? A-I am 82 years old. Q-When will you be 83? A-I will be 83 in mid-July Q-Are you married? A-I am a widow and have been for more or less 53 years. Q-Do you have children, grandchildren, and great grandchildren?A-Yes I do. I had three children, eight grandchildren, and nine great grandchildren. Q-Do you live only when? A-No I do not, my youngest son lives with me. Q-Tell me a little well-nigh your corroborateground? A-I was born in the south and raised in the north by an aunt. some(prenominal) of my parents died when they were fairly young. My mother at 56 and my father at 42. They were both ill the reason for their passings. I graduated high check at a ge 17. I am a retired restaurant worker for 21 years now. Q-What are no most unforgettable experiences that you have had?A-The most memorable experiences that I have had are a few good one and only(a)s. My marriage is one, the birth of my children and grandchildren, and buying my own home. Q-What are the most significant lifes events for you? A-The oddment of my wife the mother of my three children, the death of my oldest son, my parents, and the death of my domestic partner was another significant stressful event for me. Q-If you had the opportunity to change anything would you and what would that be? A-Of course I would change the passing of my family members besides that it would be the type of job that I choose and when.I would have choose one that gave me better pecuniary security and job happiness. Part II Senior Citizen Developmental History There is a saying that says once a child twice a man. There a galore(postnominal) stages in the development of the human lifespan. In put and late adulthood people t finis to look at things in quite a diverse prospective as they reflect back on the journey of life. This paper and reflective interview will aim the many developmental histories of a senior citizen. Mr. C. is an 82 year old African American who lives along with his adult son.Mr. C. is a widow whom had fathered three children one of which is deceased. Mr. C is the oldest of five children whom are all males. He was born in Virginia and raised in New York since he was age 13 with his aunt. He has been life-time in New York since then. He was educated in New Yorks city public school system where he graduated high school at the age of 17. Married at age 27 and widowed at age 30. Mr. C. s father died at age 42 do Mr. C 15 years of age and at the passing of his mother he was 36 years old his mother was 56.Mr. C. never remarried he real never got over the death of his wife and childrens mother. Mr. C. lost his oldest son when the son was 27 years old . Mr. C. was in a domestic partnership many years after the death of his wife. After multiple years in the domestic partnership yet again he was faced with another death, the death of her. Chronologically Mr. C is 82 and is an imperfect indicator of his functional age. Mr. C looks like he is in his sixties. People age biologically at different rates Mr. C. eems younger than he really is (Sutin, Wethington, et al. , 2010). Mr. C was so gracious to disclose his medical status with me. He is a survivor of prostate pubic louse, his cancer has been in remission on and off for 12 years. He suffers from congestive heart failure which he developed a few years ago. non an indication of heart distemper at all genetics and environment play a big role in the aging process and disease (Beck, 2010). During the duration of the interview when speaking about the deaths of his family members Mr. C. ecame a little emotional and seem to drift back into time a moment of reminiscence is what I think h e was insideng, trying to relive those moments in time. I asked him how he felt about their deaths. He responded by saying that he came to terms with it and that he was powerless over what had happened and that everyone has an ap time periodment with God and his faith is what sustains him to carry on every day. According to ((Sutin, Wethington, et al. , 2010) the events that individuals define as stressful and how they cope with these events change crosswise the lifespan (Aldwin, Sutton, et al. , 1996).Starting in late adolescence, the ability to reconstrue negative experiences as positive develops, save it is not until young adulthood that this experienced wisdom is translated into a beat for coping with future situations (Bluck & Gluck, 2004). The most surprisingly response in the interview process was the interviewees ability to remain powerless and come to terms about death. He spoke about what he wanted his son and daughter to do when the time came when he passed on in this l ife, He accepts death and knows that it is inescapable that it cannot be avoided no matter who you are.He keeps his faith in God to athletic supporter deal with the end of life situations. Religious affiliations and psychological aids are facilitatory in handling depression and may improve the quality of life of aging individuals (Butler, Fujii, et al. , 2011). The birth of his children and grandchildren played a major part in the interviewees life. While interviewing he always said family first. I gathered the impression that he is a very family orientated person. In the bedrooms, living room, and hallway of the interviewees apartment is pictures of all family members, recent and the throw backs that is what the younger generation calls old pictures.A different demeanor hovers over the interviewee when he shows me family pictures and speaks about his family. I sense it brings him back to his more youthful days, days where he was the ruler of full independence. I asked Mr. C. did he belong to any senior citizens centers and his reply was no and he make headway elaborated for me. He wanted to be some younger people not people his age that constantly reminded him of what reality was indeed about but to feel vivacious for if only a moment when youth was on his side.He stated that is why he love for his daughter to bring her youngest grandchild over. He loved the sound of the baby especially when he heard it cry it reminded him of youthfulness and independence. Aging is inevitable becoming wiser with age is not. Researchers, theorists, and clinicians have noted that older adults turn up their lives in one of two ways Either they draw on their strengths and live life to the fullest, or they magnify their weaknesses and restrict their lives to succumb to lifes inevitable end(Gilbin, 2011). From listening to stories about when Mr. C. as much younger and able to take full control of his independence that making the transition from young adult and middle adult to the latter beingness late adulthood was the hardest to come to terms with and except fully. Hot cocoa was made for me and coffee was made for him by no(prenominal) other but Mr. C. I offered but that was not an option he insisted upon doing so. He maneuvered around his home with no assistance from anyone and when I attempted to do so he refused. I see that he is like a person with a special need and you opt to do it or help they respond by simply saying they can do it.He spoke about being able to do chores around his home that he no longer could do, his failing eye sight and the need for a therapeutic bed, he has difficulty getting up from lying flat. No longer being able to reach items that are on his top shelf in the kitchen cabinets was a hindrance at one time Mr. C. uses ingenious items to help around his home with activities of daily living. Self-efficacy allows one to develop and carry out a plan of action, allowing for a sense of competency (Butler, Fujii, et al. , 2011).H is cognitive skills are on point and sharp and he held on to the conversation that he and I shared foe quite some time for a senior citizen his age. The second bring in of successful aging is maximizing high physical and cognitive functioning, with these two factors partnering to optimize overall functioning. Physical function is maintained with moderate exercise and a network of support from family and friends. Cognitive function can be sustained with mental exercises and active engagement through conversation (Butler, Fujii, et al. , 2011).The most valuable data that I received from this interviewis to make sure that I take care of myself health wise, choose a career that I get enjoyment from, and live life like it is golden. Do what I want to do like life is a bucket list. At the end when life is almost near the end you hold no regrets. . References Berk, L. E. (2010). Development through the lifespan (5th ed. ). Boston, MA Allyn Bacon. Butler, J. P. , Fujii, M. , Sasaki, H. (2011, January). Balanced aging, or successful aging?. Geriatrics Gerontology International. pp. 1-2. doi10. 1111/j. 1447-0594. 010. 00661. x. Giblin, J. C. (2011). Successful aging. Journal of Psychosocial Nursing Mental Health Services,49(3), 23-26. doi http//dx. doi. org/10. 3928/02793695-20110208-01 Rowe, J. W. , Kahn, R. L. (1997). Successful aging. The Gerontologist,37(4), 433-40. Retrieved from http//search. proquest. com/docview/210948228? accountid=35812 Sutin, A. R. , Costa, P. r. , Wethington, E. , Eaton, W. (2010). Turning points and lessons learned Stressful life events and personality trait development crosswise middle adulthood. Psychology And Aging,25(3), 524-533. doi10. 1037/a0018751

New school Essay

Adjusting to a revolutionary school is difficult for any atomic number 53, and those difficulties are magnified when a person is faced with an alien or inimical culture. In reading these two essays, the difficulties of the two writers fall into several categories. These categories are physical, emotional, educational, economic, and political and the family stresses that result from the new educational process that the child is subjected to. While on that point may be many more, these stand out as significant in helping or hindering in the assimilation process.The physical changes that one may undergo are most acutely seen in Zitkala-Sas essay. In her writing, she clearly outlines how she was not permitted to wear her traditional clothes or shoes, and that she nevertheless went to the extent of hiding to avoid having her hair cut. In her culture, having short hair was the sign of a coward, and she did not was the ignominy that having short hair would have meant. at once she was b ack on the reservation, she even writes that she threw away her shoes and was back in her moccasins.She desired to shed all the conventions of western life as soon as she could. The emotional tolls are much higher. Ning Yu writes that in order to understand English, he came up with comparatives in Chinese. While they were not as flattering, it was his way of coping emotionally with being forced to hate a culture he had never seen. When his adulterations of the speech were discovered, he lived with the stress of wondering if he would be sent to confine for saying unflattering things about Chairman Mao.The emotional toll withal played on his father, who watched his son struggle with a difficult language, and then taught him how to be fully literate in that self-same language. In Zitkala-Sas story, we see that she was terribly unhappy with what she was being subjected to. From hiding under a bed to crying in her mothers arms, she shows quite succinctly how the idea of being assimila ted into smock society was affecting her. Her mother, piece of music very upset that her daughter was upset, tries to console her by telling her to read the white mans papers (202). She shows herself to be a bit more pragmatic.She understands that for her daughter to be successful, she must be subjected to the inhumaneness of going to the white mans schools. The educational tolls are also high. Ning Yu and Zitkala-Sa were some(prenominal) initially resistant to the changes that were thrust upon them. By the end of their stories, they are both at some level embracing the language and the culture that they were being taught. By the end of Ning Yus essay, he was earning a living shoveling dung and exchange it, and was proud of the drudgery that he had performed when he was struggling to read Pride and Prejudice (181).In Zitkala-Sas essay, we find that she wanted to go to the same troupe as her cousin, even though that cousin was dressed in the clothes of the white man (202). Ther e existed within these two individuals a need for espousal within the new language system and society that was being thrust upon them, and the internal struggle that came with that wrought an enormous emotional toll. The economic stresses are also severe. This is most apparent in Ning-Yus essay, when he talks about the differences between black and red Chinese people.He was a black Chinese, and his professor was considered a loyal red Chinese. He lived in a poor slum area of his city, and his family had been split apart. His father, who had been a professor, was disgraced for consorting with the British, and was considered a pariah. Zitkala-Sa was not from a wealthy family, just now she was still considered a pariah in her own right because she was not a white child, and was being thrust into a white school with a completely different socieo-economic strata that she was not accustomed to.The political stresses were also severe. There was a complete and total expectation that thes e two were the new breed for their society and would lead them to a new era of success. This is most clearly seen in Ning-Yus essay. It is very clear that the whole motive for Ning-Yus education in English is to assimilate him into a new culture, and as a political maneuver by the regime of Chairman Mao. Finally, the family stresses are immense. Ning-Yus father was taken away from him for over a year and a half.At some level, Ning-Yus father may have been proud of his son, but at the same time, he knew that his son was being trained to be alienated from him. Zitkala-Sas family struggled with the assimilation of their child into a foreign culture while they watched their own culture slip away. There is no easy answer to these problems. The time that is taken away from these children can never be given back. It takes eld to see the damage, if any, that the forcing of language and culture has on a person of foreign birth.In both of these cases, there appears to be no consideration for the home lives or the individual nature of these children. Instead, they are treated like cattle and are forced into a cultural melange that they do not understand or want to understand. Viewed with the hindsight of history, we must see that children are people, and are also individuals, and should be treated as such. The ultimate goal in assimilating a language or culture should also be in maintaining a pride and a link to their rich cultural past.

Little Sister

SCENE 21 BELLA is walking down the hall. She has been crying. JORDAN spots her BELLA Do you set out any chips? JORDAN No. Bella, you okay? BELLA Fine. Dont quality at me. JORDAN No youre not. Whats wrong? BELLA I need some chips. An sparing size devil-bag box of chips. JORDAN Tracey Has she been bugging you, hurting your BELLA Not her. Katie. JORDAN Katie BELLA Sometime she can be incredibly mean. Everyone can be increadibly mean. JORDAN Tell me about it. Tracey just kicked the fender on my dads car. She scratched it. Im not kidding.BELLA If I had no one to go with and you had no one to go with JORDAN W here(predicate)? BELLA To grad. JORDAN Grads two years away. BELLA If neither of us had anyone to go with could we could we go together? JORDAN Sure. But thats way in the future, Bella. Youll probably be married by then, a good Italian girl like you BELLA You mean it? Youll really g o with me? I get so worried Ill miss it. I get so worried I cant sleep at night. You really mean it? JORDAN Bella Id like to go with you. compensate if youre qualifying out with someone Ill hold you to it. Ill force you to go with me.Its a date and Im it. O.K.? BELLA Deal. BACKGROUND There are main five characters in the script of Little Sister Tracey, Katie, Bella, Jay and Jordan. The author of this script is Joan Macleod. It happened in a Vancouver school. Katie just moves to here from Toronto. She hasnt adapted here yet. Tracey and Bella are friends and study in this school. Other two boys Jay and Jordan are good friends too. From the script, Jay likes the new girl Katie because she is classic and totally opposite from the girls here (He thinks) however, Tracey seems like Jay A triangle love.And Jordan is squeamish to everybody. The one of the scene in this script, Scene 21, it occurs the school hall. Bella is walking down the hall. She has been crying because Katie hurt Bellas weight problem. And Jordan who is a kind guy spots Bella. The relationship between Jor dan and Bella is not really close to each other. But both of them are nice and pure. In this scene, Jordan knows why Bella cries, and promises her to go the grad together, although, grad is still two years away. The end with the scene is Jordan makes Bella happy and smile.THE PROPS LIST Two chairs angiotensin converting enzyme bag with towels One Tennis racket CHARACTER ANALYSIS BELLA Bella is very nice to the new student Katie. She is a kind and simple girl. On knave 56 and 57, Bella said hello to Katie and tried to introduce her-self Im Bella. Youre new, eh? Moreover, Bella discussed those models weights on the fashion magazine with Katie on paginate 73, Scene 7, although Bella arouse the weight problem too. Girls washroom, Bella and Katie are poring over a fashion magazine.. Bella got good grade on her history project which is B.It besides mentioned on page 75, Scene 7, Bella What did you get on your history project? Tracey C minus. Bella I got a B. Katie? Bella thought she was fat and Tracey didnt agree. On page 66, Scene 4, when Tracey said that Katie agree with her about Paula Abduls fat, Bella shouted Fat God What do you two think when you look at me? However, Tracy didnt sagacity and answered We think youre big-boned. Bellas first goal was button to the Halloween dances as Madonna, and she achieved. My goal is the Halloween dance. Twenty-six pounds.Thats my first goal Tracey Im going to the Halloween dance as Madonna Page 57, Scene 1 Then, on page 79, Scene 9, Jordan, Bella and Tracey are in the washroom, passing around a bottleful of beer. Bella is dressed like Madonna. Bellas aunt lives in Toronto. It could be proved by Page 59, Scene 2, Tracy Wherere you from? Katie Toronto. Bella My aunt lives there. Ross Scarpacci. Shes my mums littlest sister What is more, Bella asked Tracy to go see Katie together when Katie was in hospital. On page 87, Scene 11, we should go see her.Ive never even been in hospital overnight, excerpt when I was born Bella got the card for everyone to sign and tried to make Katie feeling better in the hospital. On page 92, Scene 13, Tracey We just got here you look good. You look okay. Katie Fat. Bella Katie, you look beautiful Bella Everybody misses you On page 107, Scene 20, all girls are talking about their plan for spring break. Bella is going to Disneyland. Were going to Disneyland. Can you believe it? Ive wanted to go since I was two but not now. You want some chips?

The Characteristics and Nature of Organisations

THE CHARACTERISTICS AND NATURE OF ORGANISATIONS LEARNING OBJECTIVES on completion of this topic you will have Developed understanding of the nature and characteristics of organisations Identified generic organisational features An understanding of the different types of organisations An understanding of the role of the organisation as a goals-led, open system An appreciation of environmental impacts on organisations Developed understanding of the regale of organising Be able to distinguish between formal and informal organisation IntroductionOrganisations, or more simply, organised activities, are a central feature of both aspect of life. Indeed, it is extremely difficult if not impossible to conceive of any activity which does not involve the input of one or more organisations at some or other stage. Think for a moment most of us, for example, were born in hospitals, live in a family or other hearty unit, attend or have attended educational institutions, and have found, or see k, employment with an organisation. Small wonder, then, that the study of organisations has attracted so much attention over the historic periodEvery organisation differs in terms of nature, purpose, size, goals and objectives, membership and so on (the list is almost endless ). However, a number of core features and characteristics of organisational life burn down be identified. These form the focus for the discussions within this chapter. Organisations also form the context for all management activity in fact, it could be argued that one of the main reasons wherefore we need managers is the fact that we engage in so much organised activity. So an understanding of the nature, type and purpose of organisations is an essential prerequisite in establish to manage effectively and efficiently.

Educational System Essay

The rearingal system of rules has always been a topic to discuss. Whether for or against the argument, the educational system seems to be at the bottom of the nations priorities. Mainly the questions asked is where funding can come from, the participation needed, and the choices between educational systems. Since education is how a society must filter and expand in its knowledge and economy, the educational system for such should be at its forefront. Nevertheless, the educational system argument is one that seems to be overlooked and unnoticed. That is of line of credit until now.In the opposition, some would argue that the education system does not pose a problem, suggesting that funding does not need to come from government and that we should spend more than funds into law enforcement and military protection. They would argue that education for these individuals, such as military and police academies, does not come from our education fund. The opposition would discard the cre ative thinker of participation needed from p atomic number 18nts and loved ones and the emotional need for one to grow in an educational institute. This includes all camps and safety patrol that ensures childrens education beyond the strainroom and the safety of children who do commute on tooshie.The opposing side would argue that there is no difference between educational systems and that all standards are the kindred. on that point is no difference between graduating from prestigious schools like Whitney or Woodcreek high, and graduating from a continuation school like Adelante high. Of course this would flip no usurp that persons ability to find jobs and employment opportunities, or the fact that year after year our country finds employees from other countries to do our jobs since we are not educated fair to middling to perform ourselves. Not at all.Based off a study done by PBS, the total expenditures for education were about 7.5 percent of the Gross national Product (G DP) in 1994-95. That means less than ten percent our our GDP was spent on educating our future members of society and ensuring economic strength. Expenditures for schooling is not the same from state to state. to each one state spends a separate amount of money on education, all term being below ten percent of the GDP. There are more fundraisers and expenditures spent on law enforcement and entertainment than education across the states all together. The government should impose a mandatory minimum exigency of ten percent of the GDP earned by states to go to education. Schools would serve food for children that is not mediocre, while possibly providing students with school supplies instead of mandating students to bring class sets of tissues, spare sets of binder paper, and pens and pencils (a requirement of many classes i attended while in grade school). This would also mean new textbooks for students and education beyond the classroom such as camps or field trips.Participation is necessary for education. An educational statistic study was researched by Education.com, stating that mothers who did not finish high school struggle with interlingual rendition and comprehension today. Only forty-one percent of parents read to their children everyday. charm participation is not mandatory, it does help in a childs growth. Students are ineffectual to attend camps without volunteers like parents and volunteer instructors and staff. Field trips cannot happen without proper volunteering as well. Who remembers safety patrol? This program was composed of students and parent volunteers alike. Without them, students who commute on foot would not be safe from oncoming traffic that is unaware of their presence. Not just parent, but family participation is crucial to a childs growth.The educational system has its own funding problems as well. There are multiple schooling systems to choose from and some have more funding than others. Private schools have a fee that is need ed for tuition, so overall funding is fed by the students. Charter schools work the same way. Public schooling is completely mutualist upon the state and federal government. There should be mandatory educational laws that should only differentiate based on location (like learning how to swim if next to an ocean). Each state has its own standards and the government has its own standard that needs to be met in the curriculum taught. The standard differences make some schools more prestigious while others are left behind. Would you rather have your child graduate from a community college or from a state university? Requirements for education should be the same throughout the country, not split up upon state or even county.With all these things depending on factors that some are unable to control, the battle for education is never won. While some may wonder where funding can come from, participation, and the choices between educational systems, there are some who look at the bigger pic ture. The education system today can be saved through societies efforts. We should use the education we have received to teach our offspring more than we were able to know. melodic phrase as a country will not only benefit us, but will benefit the nation as a whole. The children of today are the future of today.

Guns germs and steel Essay

Jared diamond and his theory on how and the Europeans were so successful in their conquest of the incans. This was make possible due to the location of Europe. With the inventions of guns, and steel, along with being exposed to many germs before the incans. This gave the conquestidors many advantages over the inca. Once the Spanish conquered the Incas they had weapons that were unseen and unheard of to the natal. This was terrorise to the Inca community beca mapping they were una ware of the damage these weapons could cause and the power the Spanish had. The Spanish had been at war with the Mores for approximately 700 years. This gave them experience in fighting and in addition allowed them to reach the weaponry necessary for war. The Islamic were cognise to be the first to invent the the gun, but the Chinese invented the gunpowder. These separately were not useful, as the Chinese did not use gunpowder as a weapon. This was when the Spanish decided to combine the two and create what was known as the Harquebus. It was superior to any other gun known at the time. The Spanish had plenty of experience when they arrived to invade the Incas, was was not in the altogether to them. This gave them a possible advantage in weapons and fighting tactics.Since the Spanish had been at war for so long, they found the need to create more weapons, at which time the sword was invented. This was capable stabbing and slashing with great facility. The abut of attempting to find the entire sword took several hundreds of years. It was known as a family business, in which each persons desire was to create a better sword than those by their ancestors. It was discovered that Iron infused with carbon was the entire combination to creating a proper sword. The more carbon the harder the sword, but there must be a distinct combination of sufficient flexibility and strength to the sword. The tuck was seen to be that perfect sword, it was long sharp and strong. It not only became po pular for war but also amongst gentlemen, this was the time at which it became common to wear your sword towards the side of your waist. These people were known to have descendants that were knights during the medieval times. There was a long process in Europe in attempting to create that perfect fighting weaponwhich allowed to kill many in a short amount of time. Once the Rapier was introduced it gave Spain more power in weaponry, which allowed conquistadors to have an enormous advantage. During this time of exploration, slaves were brought to the Americas from Africa and Europe. These were transported in ships, at which time it was discovered that some had diseases which were easily transmitted amongst themselves.This became an epidemic that was brought to the new lands, and affected the indigenous people. Europe had previously gone through this disease, which was contracted by domestic animals. This caused many deaths, but those who survived became immune to these diseases. Once the epidemic arrived to the Americas, the indigenous became utterly ill. They unlike the Spanish, were not immune to these diseases because of their lack of domestic animals. Approximately 95% of the Inca population died. This completely destroyed their community, and allowed for the Spanish to conquer the lands easily and accommodate their gold. The Incas numbers decreased almost immediately, which caused them to have a lack of power as well as army. This was an advantage to the Spanish which they used at their favor, taking over completely of the Incas. In conclusion the Europeans were able to conquer the incas easily because of geography and where they were located. They aquired guns first and the germs were around more because of the animals they lived with and how they had many years to perfect their weapons and the steel was aquired first too.

Role of Computer in Daily Life

pecuniary Crises and coast liquid Creation Allen N. Berger and Christa H. S. Bouwman October 2008 Financial crises and brink runniness population argon genuinely much connected. We probe this connexion from twain perspectives. First, we examine the essence liquifiedity conception of margeing concerns forwardshand, during, and by and by tailfin major fiscal crises in the U. S. from 1984Q1 to 2008Q1. We unc solely oer numerous rice beering patterns, much(prenominal) as a significant build-up or drop-off of insane fluidness understructure forrader each crisis, where ab rule is defined relative to a time class and seasonal factors. hopeing and merchandise-related crises differ in that chamfering crises were preceded by anomalous positive runniness intromission, go marketplace-related crises were gener onlyy preceded by deviant negative fluidity unveiling. margin fluidness worldly concern has two decreased and reassign magnitude during cris es, in completely probability both exacerbating and ameliorating the personal answers of crises. Off-balance stable gear guarantees such as add commitments travel to a greater extent than on-balance opinion poll assets such as mortgages and military get wind alter during tilling crises.Second, we examine the effect of pre-crisis coin bound great ratios on the competitive military positions and favor sufficientness of individual banks during and aft(prenominal) each crisis. The evidence suggests that juicy jacket served thumping banks wholesome most banking crises they meliorated their fluidity knowledgeability market sh atomic number 18 and advantageousness during these crises and were able to piddle on to their improved bring aboutance later onwardswards. In addition, lifts- swell listed banks enjoyed importantly mellower affected demarcation returns than low- majuscule listed banks during banking crises.These benefits did not hold or held to a less er degree around marketrelated crises and in normal quantify. In contrast, gritty great(p) ratios seem to boast helped pocket-sized banks improve their smoothity basis market sh ar during banking crises, market-related crises, and normal times a want, and the gains in market sh be were buzz offed by and bywards. Their positivity improved during ii crises and subsequent to virtu everyy either crisis. equal results were observed during normal times for minuscular banks. University of s emergeheastward Carolina, Wharton Financial Institutions Center, and CentER Tilburg University.Contact details Moore shallow of Business, University of South Carolina, 1705 College Street, Columbia, SC 29208. Tel 803-576-8440. Fax 803-777-6876. E-mail emailprotected sc. edu. Case Western Reserve University, and Wharton Financial Institutions Center. Contact details Weatherhead School of Management, Case Western Reserve University, 10900 Euclid Avenue, 362 PBL, Cleveland, OH 44106. Te l. 216-368-3688. Fax 216-368-6249. E-mail christa. emailprotected edu. Keywords Financial Crises, Liquidity Creation, and Banking. JEL Classifi twation G28, and G21.The authors thank Asani Sarkar, tail DeYoung, Peter Ritchken, Greg Udell, and participants at presentations at the Summer Research Conference 2008 in Finance at the ISB in Hyderabad, the International Mo plunderary Fund, the University of Kansas Southwind Finance Conference, and Erasmus University for partful comments. Financial Crises and Bank Liquidity Creation 1. Introduction everywhere the one-time(prenominal) dope century, the U. S. has experienced a number of fiscal crises. At the heart of these crises atomic number 18 often issues surrounding runniness provision by the banking sector and financial markets (e. . , Acharya, Shin, and Yorulmazer 2007). For example, in the live subprime lend crisis, fluidness seems to get hold of dried up as banks seem less willing to lend to individuals, firms, anot her(prenominal) banks, and capital market participants, and loan securitization appears to be significantly depressed. This fashion of banks is summarized by the Economist Although bankers be always stingier in a downturn, lots of banks said they had also cut back lending because of a slide in their current or expected capital and liquid. 1 The practical importance of liquidness during crises is scarcetressed by financial intermediation theory, which expresss that the human race of liquid is an important reason why banks exist. 2 Early contri thoions vie that banks create runniness by financing relatively illiquid assets such as business loans with relatively liquid liabilities such as proceeding deposits (e. g. , Bryant 1980, Diamond and Dybvig 1983). More recent contributions suggest that banks also create liquid off the balance bed rag through loan commitments and similar claims to liquid funds (e. g. Holmstrom and Tirole 1998, Kashyap, Rajan, and Stein 2002). 3 The mankind of fluidity makes banks fragile and susceptible to runs (e. g. , Diamond and Dybvig 1983, Chari and Jagannathan 1988), and such runs can lead to crises via contagion effects. Bank runniness psychiatric hospital can also suck tangible effects, in particular if a financial crisis ruptures the creation of liquid state (e. g. , dellAriccia, Detragiache, and Rajan 2008). 4 Exploring the relationship surrounded by financial crises and bank liquidness creation can consequently prod all everywhere authorisationly interesting scotch insights and may have important constitution impli regorgeions.The stopping points of this musical composition are twofold. The setoff is to examine the aggregate fluidity creation of 1 The acknowledgement crisis Financial engine failure The Economist, February 7, 2008. According to the theory, another central role of banks in the economy is to transform reference book risk (e. g. , Diamond 1984, Ramakrishnan and Thakor 1984, Boyd and Prescott 1986). Recently, Coval and Thakor (2005) theorize that banks may also arise in response to the conduct of anomalous agents in financial markets. 3James (1981) and Boot, Thakor, and Udell (1991) endogenize the loan commitment contract due to informational frictions. The loan commitment contract is afterwardsward used in Holmstrom and Tirole (1998) and Kashyap, Rajan, and Stein (2002) to show how banks can translate liquidness to borrowers. 4 Acharya and Pedersen (2005) show that fluidity risk also affects the expected returns on strains. 2 1 banks around five financial crises in the U. S. over the past quarter century. 5 The crises include two banking crises (the ac honorable mention make noise of the early mid-nineties and the subprime lending crisis of 2007 ? and leash crises that can be viewed as primarily market-related (the 1987 stock market crash, the Russian debt crisis positively charged the long-term Capital Management meltdown in 1998, and the bursting of the dot. com spew out asset the September 11 terrorist flack of the early 2000s). This examination is intended to shed light on whether on that point are any connections surrounded by financial crises and aggregate runniness creation, and whether these vary ground on the nature of the crisis (i. e. , banking versus market-related crisis). A good nderstanding of the carriage of bank liquidity creation around financial crises is also important to shed light on whether banks create likewise itsy-bitsy or too much liquidity, and whether bank port exacerbates or amelio ordains the effects of crises. We document the a posteriori regularities related to these issues, so as to raise additional interesting questions for further empirical and theoretical examinations. The second goal is to study the effect of pre-crisis righteousness capital ratios on the competitive positions and favorableness of individual banks around each crisis.Since bank capital affects liquid ity creation (e. g. , Diamond and Rajan 2000, 2001, Berger and Bouwman forthcoming), it is in all probability that banks with unalike capital ratios behave differently during crises in follow of their liquidity creation responses. Specifically, we ask are high-capital banks able to gain market share in hurt of liquidity creation at the expense of low-capital banks during a crisis, and does such enhanced market share translate into higher lucrativeness? If so, are the high-capital banks able to sustain their improved competitive positions after the financial crisis is over?The recent acquisitions of Countrywide, Bear Stearns, and Washington Mutual provide interesting case studies in this regard. All three firms ran low on capital and had to be bailed out by banks with stronger capital positions. Bank of America (Countrywides acquirer) and J. P. Morgan Chase (acquirer of Bear-Stearns and Washington Mutuals banking operations) had capital ratios high enough to enable them to buy their rivals at a runty member of what they were worth a year beforehand, thereby gaining a potential competitive advantage. 6 The recent experience of IndyMac Bank provides 5Studies on the behavior of banks around financial crises have typically contracted on mercantile and real soil lending (e. g. , Berger and Udell 1994, Hancock, Laing, and Wilcox 1995, DellAriccia, Igan, and Laeven 2008). We focus on the more comprehensive notion of bank liquidity creation. 6 On Sunday, March 16, 2008, J. P. Morgan Chase agreed to pay $2 a share to buy all of Bear Stearns, less than unrivaledtenth of the firms share price on Friday and a diminutive fraction of the $170 share price a year before. On March 24, 2008, it plusd its bid to $10, and immaculate the transaction on May 30, 2008.On January 11, Bank of America announced it would pay $4 billion for Countrywide, after Countrywides market capitalization had plummeted 85% during the preceding 12 months. The transaction was completed on July 1, 2008. later on a $16. 4 billion ten-day bank 2 another interesting example. The FDIC seized IndyMac Bank after it suffered substantive losses and depositors had started to run on the bank. The FDIC intends to cuckold the bank, preferably as a single entity but if that does not work, the bank will be sell off in pieces.Given the way the regulatory cheering process for bank acquisitions works, it is likely that the acquirer(s) will have a strong capital base. 7 A financial crisis is a natural event to examine how capital affects the competitive positions of banks. During normal times, capital has some effects on the bank, some of which counteract each other, making it difficult to learn much. For example, capital helps the bank cope more effectively with risk,8 but it also reduces the value of the deposit insurance put preference (Merton 1977). During a crisis, risks become elevated and the risk-absorption capacity of capital becomes par essence.Banks with high capita l, which are better buffered against the shocks of the crisis, may thus gain a potential advantage. To examine the behavior of bank liquidity creation around financial crises, we think the measuring stick of liquidity created by the banking sector utilize Berger and Bouwmans (forthcoming) preferred liquidity creation measure. This measure takes into account the fact that banks create liquidity both on and off the balance tabloid and is constructed utilise a three-step mathematical operation. In the runner step, all bank assets, liabilities, equity, and off-balance sheet activities are classified as liquid, semi-liquid, or illiquid.This is done found on the ease, cost, and time for customers to obtain liquid funds from the bank, and the ease, cost, and time for banks to jail of their obligations in order to make full these liquidity demands. This classification process uses information on both harvest category and maturity for all activities other than loans due to data li mitations, loans are classified base solely on category (cat). Thus, residential mortgages are classified as more liquid than business loans regardless of maturity because it is generally easier to securitize and get by such mortgages than business loans.In the second step, w octettes are depute to these activities. The weights are undifferentiated with the theory in that maximum liquidity is created when illiquid assets (e. g. , business loans) are transformed into liquid liabilities (e. g. , transactions deposits) and maximum liquidity is annuled when liquid assets (e. g. , treasuries) are transformed into illiquid liabilities walk, Washington Mutual was situated into the receivership of the FDIC on September 25, 2008. J. P. Morgan Chase purchased the banking business for $1. 9 billion and re-opened the bank the next day.On September 26, 2008, the prop guild and its remaining subsidiary filed for bankruptcy. Washington Mutual, the sixth- largishst bank in the U. S. before its collapse, is the largest bank failure in the U. S. financial history. 7 After peaking at $50. 11 on May 8, 2006, IndyMacs shares lost 87% of their value in 2007 and another 95% in 2008. Its share price closed at $0. 28 on July 11, 2008, the day before it was seized by the FDIC. 8 There are numerous written document that cope that capital enhances the risk-absorption capacity of banks (e. g. , Bhattacharya and Thakor 1993, Repullo 2004, Von Thadden 2004). (e. g. , subordinated debt) or equity. In the third step, a cat copious liquidity creation measure is constructed, where fat refers to the inclusion of off-balance sheet activities. Although Berger and Bouwman construct four different liquidity creation measures, they indicate that cat fat is the preferred measure. They argue that to assess the follow of liquidity creation, the ability to securitize or sell a particular loan category is more important than the maturity of those loans, and the inclusion of off-balance sheet a ctivities is fine. We check the cat fat liquidity creation measure to quarterly data on virtually all U. S. moneymaking(prenominal) and assent card banks from 1984Q1 to 2008Q1. Our measurement of aggregate liquidity creation by banks allows us to examine the behavior of liquidity created prior to, during, and after each crisis. The popular press has provided anecdotal accounts of liquidity drying up during some financial crises as well as excessive liquidity provision at other times that led to assent expansion ruffles (e. g. , the subprime lending crisis).We attempt to give empirical content to these notions of too little and too much liquidity created by banks. Liquidity creation has quadrupled in real terms over the try on period and appears to have seasonal components (as documented at a lower place). Since no theories exist that explain the intertemporal behavior of liquidity creation, we take an essentially empirical snuggle to the problem and focus on how far liquidi ty creation lies to a higher place or below a time trend and seasonal factors. 10 That is, we focus on abnormal liquidity creation.The use of this measure rests on the supposition that some normal summation of liquidity creation exists, acknowledging that at any point in time, liquidity creation may be too much or too little in horse terms. Our main results regarding the behavior of liquidity creation around financial crises are as follows. First, prior to financial crises, there seems to have been a significant build-up or drop-off of abnormal liquidity creation. Second, banking and market-related crises differ in two respects.The banking crises (the credit crunch of 1990-1992 and the current subprime lending crisis) were preceded by abnormal positive liquidity creation by banks, whereas the market-related crises were generally preceded by abnormal negative liquidity creation. In addition, the banking crises themselves seemed to change the trajectory of aggregate liquidity creat ion, while the market-related crises did not appear to do so. Third, 9 Their alternative measures include cat nonfat, mat fat, and mat nonfat. The nonfat measures stave off offbalance sheet activities, and the mat measures distinguish loans by maturity quite an than by product category. 0 As alternative approaches, we use the sawbuck bill sum of liquidity creation per capita and liquidity creation dissever by gross domestic product and obtain similar results (see ingredient 4. 2). 4 liquidity creation has both decreased during crises (e. g. , the 1990-1992 credit crunch) and increased during crises (e. g. , the 1998 Russian debt crisis / LTCM bailout). Thus, liquidity creation likely both exacerbated and ameliorated the effects of crises. Fourth, off-balance sheet illiquid guarantees (primarily loan commitments) getd more than semi-liquid assets (primarily mortgages) and illiquid assets (primarily business loans) during banking crises.Fifth, the current subprime lending c risis was preceded by an unusually high positive abnormal amount of aggregate liquidity creation, possibly caused by lax lending standards that led banks to extend increasing amounts of credit and off-balance sheet guarantees. This suggests a possible dark side of bank liquidity creation. small-arm financial discretion may be needed to induce banks to create liquidity (e. g. , Diamond and Rajan 2000, 2001), our analysis raises the intriguing speculation that the causality may also be reversed in the sense that too much liquidity creation may lead to financial fragility.We then turn to the second goal of the paper examining whether banks pre-crisis capital ratios affect their competitive positions and profitability around financial crises. To examine the effect on a banks competitive position, we regress the change in its market share of liquidity creation heedful as the comely market share of aggregate liquidity creation during the crisis (or over the eight billet after the crisis) minus the average market share over the eight canton before the crisis, convey as a proportion of the banks average pre-crisis market share on its average pre-crisis capital ratio and a set of control variables. 1 Since the analyses in the first half of the paper reveal a great deal of heterogeneity in crises, we run these regressions on a per-crisis basis, rather than pooling the data across crises. The control variables include bank size, bank risk, bank holding caller membership, topical anaesthetic market competition,12 and proxies for the economic circumstances in the local markets in which the bank operates. Moreover, we examine large and small banks as two separate groups since the results in Berger and Bouwman (forthcoming) indicate that the effect of capital on liquidity creation differs across large and small banks. 13 11Defining market share this way is a departure from anterior research (e. g. , Laeven and Levine 2007), in which market share relates to the banks weighted-average local market share of nub deposits. 12 trance our focus is on the change in banks competitive positions heedful in terms of their aggregate liquidity creation market shares, we control for local market competition measured as the bank-level Herfindahl index based on local market deposit market shares. 13 Berger and Bouwman use three size categories large, medium, and small banks. We combine the large and medium bank categories into one large bank category. 5One potential concern is that differences in bank capital ratios may simply reflect differences in bank risk. Banks that hold higher capital ratios because their investment portfolios are riskier may not improve their competitive positions around financial crises. Our empirical design takes this into account. The inclusion of bank risk as a control variable is critical and ensures that the measured effect of capital on a banks market share is net of the effect of risk. We find evidence that high-capital large banks improved their market share of liquidity creation during the two banking crises, but not during the market-related crises.After the credit crunch of the early 1990s, high-capital large banks held on to their improved competitive positions. Since the current subprime lending crisis was not over at the end of the ideal period, we cannot yet tell whether highcapital large banks will also hold on to their improved competitive positions after this crisis. In contrast to the large banks, high-capital small banks seemed to enhance their competitive positions during all crises and held on to their improved competitive positions after the crises as well.Next, we focus on the effect of pre-crisis bank capital on the profitability of the bank around each crisis. We run regressions that are similar to the ones suck upd above with the change in return on equity ( roe) as the interdependent variable. We find that high-capital large banks improved their ROE in those cases in which t hey enhanced their liquidity creation market share the two banking crises and were able to hold on to their improved profitability after the credit crunch. profitability after the market-related crises. They also increased theirIn contrast, for high-capital small banks, profitability improved during two crises, and subsequent to virtually every crisis. As an additional analysis, we examine whether the improved competitive positions and profitability of high-capital banks translated into better stock return performance. To perform this analysis, we focus on listed banks and bank holding companies (BHCs). If multiple banks are part of the same listed BHC, their financial statements are added together to create pro-forma financial statements of the BHC.The results confirm the earlier change in performance findings of large banks listed banks with high capital ratios enjoyed significantly larger abnormal returns than banks with low capital ratios during banking crises, but not during market-related crises. Our results are based on a five-factor asset pricing model that includes the three Fama-French (1993) factors, momentum, and a proxy for the slope of the yield curve. 6 We also check whether high capital provided similar advantages outside crisis periods, i. e. , during normal times.We find that large banks with high capital ratios did not enjoy either market share or profitability gains over the other large banks, whereas for small banks, results are similar to the smallbank findings hold forthed above. Moreover, outside banking crises, high capital was not associated with high stock returns. Combined, the results suggest that high capital ratios serve large banks well, particularly around banking crises. In contrast, high capital ratios appear to help small banks around banking crises, marketrelated crises, and normal times alike. The remainder of this paper is form as follows.Section 2 discusses the related literature. Section 3 explains the liquidity cre ation measures and our attempt based on data of U. S. banks from 1984Q1 to 2008Q1. Section 4 describes the behavior of aggregate bank liquidity creation around five financial crises and draws some general conclusions. Section 5 discusses the tests of the effects of precrisis capital ratios on banks competitive positions and profitability around financial crises and normal times. This section also examines the stock returns of high- and low-capital listed banking arrangements during each crisis and during normal times. Section 6 concludes. 2. Related literature This paper is related to two literatures. The first is the literature on financial crises. 14 One strand in this literature has focused on financial crises and fragility. about papers have testd contagion. Contributions in this area suggest that a small liquidity shock in one area may have a contagious effect throughout the economy (e. g. , Allen and Gale 1998, 2000). Other papers have focused on the determinants of finan cial crises and the policy implications (e. g. Bordo, Eichengreen, Klingebiel, and Martinez-Peria 2001, Demirguc-Kunt, Detragiache, and Gupta 2006, Lorenzoni 2008, Claessens, Klingebiel, and Laeven forthcoming). A second strand examines the effect of financial crises on the real sector (e. g. , Friedman and Schwarz 1963, Bernanke 1983, Bernanke and Gertler 1989, DellAriccia, Detragiache, and Rajan 2008, Shin forthcoming). These papers find that financial crises increase the cost of financing and reduce credit, which adversely affects corporate investment and may lead to reduced 14Allen and Gale (2007) provide a detailed overview of the causes and consequences of financial crises. 7 goth and recessions. That is, financial crises have independent real effects (see DellAriccia, Detragiache, and Rajan 2008). In contrast to these papers, we examine how the amount of liquidity created by the banking sector behaved around financial crises in the U. S. , and explore systematic patterns in the data. The second literature to which this paper is related focuses on the strategic use of leverage in product-market competition for non-financial firms (e. g. , Brander and Lewis 1986, Campello 2006, Lyandres 2006).This literature suggests that financial leverage can affect competitive dynamics. While this literature has not focused on banks, we analyze the effects of crises on the competitive positioning and profitability of banks based on their pre-crisis capital ratios. Our hypothesis is that in the case of banks, the competitive implications of capital are likely to be most pronounced during a crisis when a banks capitalization has a major square up on its ability to survive the crisis, particularly in light of regulatory discretion in closing banks or otherwise resolving problem institutions.Liquidity creation may be a rail line through which this competitive advantage is gained or lost. 15 3. Description of the liquidity creation measure and sample We head the dollar amount of liquidity created by the banking sector using Berger and Bouwmans (forthcoming) preferred cat fat liquidity creation measure. In this section, we explain briefly what this acronym stands for and how we construct this measure. 16 We then describe our sample. All financial values are expressed in real 2007Q4 dollars using the implicit gross domestic product price deflator. 3. 1. Liquidity creation measureTo construct a measure of liquidity creation, we follow Berger and Bouwmans three-step procedure (see Table 1). Below, we briefly discuss these three steps. In Step 1, we classify all bank activities (assets, liabilities, equity, and off-balance sheet activities) as liquid, semi-liquid, or illiquid. For assets, we do this based on the ease, cost, and time for banks to dispose of their obligations in order to meet these liquidity demands. For liabilities and equity, we do this 15 Allen and Gale (2004) analyze how competition affects financial stability. We reverse the causali ty and examine the effect of financial crises on competition. 6 For a more detailed discussion, see Berger and Bouwman (forthcoming). 8 based on the ease, cost, and time for customers to obtain liquid funds from the bank. We follow a similar approach for off-balance sheet activities, classifying them based on functionally similar on-balance sheet activities. For all activities other than loans, this classification process uses information on both product category and maturity. Due to data restrictions, we classify loans entirely by category (cat). 17 In Step 2, we assign weights to all the bank activities classified in Step 1.The weights are consistent with liquidity creation theory, which argues that banks create liquidity on the balance sheet when they transform illiquid assets into liquid liabilities. We therefore apply positive weights to illiquid assets and liquid liabilities. Following similar logic, we apply negative weights to liquid assets and illiquid liabilities and equit y, since banks destroy liquidity when they use illiquid liabilities to finance liquid assets. We use weights of ? and -? , because only half of the come amount of liquidity created is attributable to the source or use of funds alone.For example, when $1 of liquid liabilities is used to finance $1 in illiquid assets, liquidity creation equals ? * $1 + ? * $1 = $1. In this case, maximum liquidity is created. However, when $1 of liquid liabilities is used to finance $1 in liquid assets, liquidity creation equals ? * $1 + -? * $1 = $0. In this case, no liquidity is created as the bank holds items of approximately the same liquidity as those it gives to the nonbank public. Maximum liquidity is destroyed when $1 of illiquid liabilities or equity is used to finance $1 of liquid assets. In this case, liquidity creation equals -? $1 + -? * $1 = -$1. An intermediate weight of 0 is applied to semi-liquid assets and liabilities. Weights for off-balance sheet activities are assigned using the s ame principles. In Step 3, we combine the activities as classified in Step 1 and as weighted in Step 2 to construct Berger and Bouwmans preferred cat fat liquidity creation measure. This measure classifies loans by category (cat), while all activities other than loans are classified using information on product category and maturity, and includes off-balance sheet activities (fat).Berger and Bouwman construct four liquidity creation measures by alternatively classifying loans by category or maturity, and by alternatively including or excluding off-balance sheet activities. However, they argue that cat fat is the preferred measure since for liquidity creation, banks ability to securitize or sell loans is more important than loan maturity, and banks do create liquidity both on the balance sheet and off the balance sheet. 17 Alternatively, we could classify loans by maturity (mat).However, Berger and Bouwman argue that it is preferable to classify them by category since for loans, the ability to securitize or sell is more important than their maturity. 9 To obtain the dollar amount of liquidity creation at a particular bank, we multiply the weights of ? , -? , or 0, respectively, times the dollar amounts of the corresponding bank activities and add the weighted dollar amounts. 3. 2. Sample description We include virtually all commercial and credit card banks in the U. S. in our study. 18 For each bank, we obtain quarterly look to Report data from 1984Q1 to 2008Q1.We keep a bank if it 1) has commercial real estate or commercial and industrial loans outstanding 2) has deposits 3) has an equity capital ratio of at least 1% 4) has gross total assets or GTA (total assets plus fee for loan and lease losses and the allocated transfer risk reserve) exceeding $25 one thousand thousand. We end up with data on 18,134 distinct banks, yielding 907,159 bank-quarter observations over our sample period. For each bank, we calculate the dollar amount of liquidity creation using the process described in Section 3. 1.The amount of liquidity creation and all other financial values are put into real 2007Q4 dollars using the implicit GDP price deflator. When we explore aggregate bank liquidity creation around financial crises, we focus on the real dollar amount of liquidity creation by the banking sector. To obtain this, we aggregate the liquidity created by all banks in each quarter and end up with a sample that contains 97 inflation-adjusted, quarterly liquidity creation amounts. In contrast, when we examine how capital affects the competitive positions of banks, we focus on the amount of liquidity created by individual banks around each crisis.Given documented differences between large and small banks in terms of portfolio composition (e. g. , Kashyap, Rajan, and Stein 2002, Berger, Miller, Petersen, Rajan, and Stein 2005) and the effect of capital on liquidity creation (Berger and Bouwman forthcoming), we split the sample into large banks (between 330 and 4 77 observations, depending on the crisis) and small banks (between 5556 and 6343 observations, depending on the crisis), and run all change in market share and profitability regressions separately for these two sets of banks.Large banks have gross total assets (GTA) exceeding $1 billion at the end of the quarter before a crisis 18 Berger and Bouwman (forthcoming) include only commercial banks. We also include credit card banks to avoid an artificial $0. 19 trillion drop in bank liquidity creation in the fourth quarter of 2006 when Citibank N. A. moved its credit-card lines to Citibank South Dakota N. A. , a credit card bank. 10 and small banks have GTA up to $1 billion at the end of that quarter. 19,20 4.The behavior of aggregate bank liquidity creation around financial crises This section focuses on the first goal of the paper examining the aggregate liquidity creation of banks across five financial crises in the U. S. over the past quarter century. The crises include the 1987 sto ck market crash, the credit crunch of the early 1990s, the Russian debt crisis plus Long-Term Capital Management (LTCM) bailout of 1998, the bursting of the dot. com bubble and the Sept. 11 terrorist attacks of the early 2000s, and the current subprime lending crisis. We first provide heavyset statistics and explain our empirical approach.We then discuss alternative measures of abnormal liquidity creation. Next, we describe the behavior of bank liquidity creation before, during, and after each crisis. Finally, we draw some general conclusions from these results. 4. 1. Summary statistics and empirical approach propose 1 grace A shows the dollar amount of liquidity created by the banking sector, calculated using the cat fat liquidity creation measure over our sample period. As shown, liquidity creation has increased self-coloredly over time it has more than quadrupled from $1. 369 trillion in 1984Q1 to $5. 06 trillion in 2008Q1 (in real 2007Q4 dollars). We want to examine whether liquidity creation by the banking sector is high, low, or at a normal level around financial crises. Since no theories exist that explain the intertemporal behavior of liquidity creation or generate numerical estimates of normal liquidity creation, we need a reasonable empirical approach. At first blush, it may seem that we could simply calculate the average amount of bank liquidity creation over the entire sample period and view amounts above this sample average as high and amounts below the average as low. However, inning 1 jury A clearly shows that this approach would cause us to classify the entire second half of the sample period (1996Q1 2008Q1) as high and the entire first half of the sample period (1984Q1 1995Q4) as low. We therefore do not 19 As famous before, we combine Berger and Bouwmans large and medium bank categories into one large bank category. Recall that all financial values are expressed in real 2007Q4 dollars. 20 GTA equals total assets plus the allowance f or loan and lease losses and the allocated transfer risk reserve.Total assets on Call Reports deduct these two reserves, which are held to cover potential credit losses. We add these reserves back to measure the full value of the loans financed and the liquidity created by the bank on the asset side. 11 use this approach. The approach we take is aimed at calculating the abnormal amount of liquidity created by the banking sector based on a time trend. It focuses on whether liquidity creation lies above or below this time trend, and also deseasonalizes the data to ensure that we do not base our conclusions on mere seasonal effects.We detrend and deseasonalize the data by regressing the dollar amount of liquidity creation on a time index and three quarterly dummies. The residuals from this regression measure the abnormal dollar amount of liquidity creation in a particular quarter. That is, they measure how far (deseasonalized) liquidity creation lies above or below the trend line. If abnormal liquidity creation is greater than (smaller than) $0, the dollar amount of liquidity created by the banking sector lies above (below) the time trend.If abnormal liquidity creation is high (low) relative to the time trend and seasonal factors, we will transform this as liquidity creation be too high (too low). Figure 1 Panel B shows abnormal liquidity creation over time. The amount of liquidity created by the banking sector was high (yet declining) in the mid-1980s, low in the mid-1990s, and high (and mostly rising) in the most recent years. 4. 2. Alternative measures of abnormal liquidity creation We considered some(prenominal) alternative approaches to measuring abnormal liquidity creation. One surmisal is to scale the dollar amount of liquidity creation by total population.The idea behind this approach is that a normal amount of liquidity creation may exist in per capita terms. The average amount of liquidity creation per capita over our sample period could potentiall y serve as the normal amount and deviations from this average would be viewed as abnormal. To calculate per capita liquidity creation we obtain annual U. S. population estimates from the U. S. Census Bureau. Figure 2 Panel A shows per capita liquidity creation over time. The hand over reveals that per capita liquidity creation more than tripled from $5. 8K in 1984Q1 to $18. 8K in 2008Q1.Interestingly, the picture looks very similar to the one shown in Panel A, perhaps because the annual U. S. population growth rate is low. For reasons similar to those in our earlier analysis, we calculate abnormal per capita liquidity creation by detrending and deseasonalizing the data like we did in the previous section. Figure 2 Panel B shows abnormal per capita liquidity creation over time. 12 Another possibility is to scale the dollar amount of liquidity creation by GDP. Since liquidity creation by banks may causally affect GDP, this approach seems less appropriate.Nonetheless, we show the resu lts for completeness. Figure 2 Panel C shows the dollar amount of liquidity creation single out by GDP. The picture reveals that bank liquidity creation has increased from 19. 9% of GDP in 1984Q1 to 40. 4% of GDP in 2008Q1. While liquidity creation more than quadrupled over the sample period, GDP doubled. Importantly, the picture looks similar to the one shown in Panel A. Again, for reasons similar to those in our earlier analysis, we detrend and deseasonalize the data to obtain abnormal liquidity creation divided by GDP.Figure 2 Panel D shows abnormal liquidity creation divided by GDP over time. Since these alternative approaches yield results that are similar to those shown in Section 4. 1, we focus our discussions on the abnormal amount of liquidity creation (rather than the abnormal amount of per capita liquidity creation or the abnormal amount of liquidity creation divided by GDP) around financial crises. 4. 3. Abnormal bank liquidity creation before, during, and after five f inancial crises We now examine how abnormal bank liquidity creation behaved efore, during, and after five financial crises. In all cases, the pre-crisis and post-crisis periods are defined to be eight lodge long. 21 The one exception is that we do not examine abnormal bank liquidity creation after the current subprime lending crisis, since this crisis was still ongoing at the end of the sample period. Figure 3 Panels A E show the graphs of the abnormal amount of liquidity creation for the five crises. This subsection is a investigative effort and largely descriptive. In Section 4. , we will combine the evidence gathered here and interpret it to draw some general conclusions. Financial crisis 1 Stock market crash (1987Q4) On Monday, October 19, 1987, the stock market crashed, with the S&P500 index falling about 20%. During the years before the crash, the level of the stock market had increased dramatically, causing some 21 As a result of our choice of biennial pre-crisis and post -crisis periods, the post-Russian debt crisis period overlaps with the bursting of the dot. com bubble, and the pre-dot. com bubble period overlaps with the Russian debt crisis.For these two crises, we redo our analyses using six-quarter pre-crisis and post-crisis periods and obtain results that are qualitatively similar to the ones documented here. 13 concern that the market had become overvalued. 22 A few age before the crash, two events occurred that may have helped precipitate the crash 1) legislation was enacted to eliminate certain tax revenue benefits associated with financing mergers and 2) information was released that the trade deficit was above expectations. Both events seemed to have added to the selling pressure and a record trading volume on Oct. 9, in part caused by program trading, overwhelmed legion(predicate) systems. Figure 3 Panel A shows abnormal bank liquidity creation before, during, and after the stock market crash. Although this financial crisis seems to have originated in the stock market rather than the banking system, it is clear from the graph that abnormal liquidity creation by banks was high ($0. 5 trillion above the time trend) two years before the crisis. It had already dropped substantially before the crisis and continued to drop until well after the crisis, but was still above the time trend even a year after the crisis.Financial crisis 2 Credit crunch (1990Q1 1992Q4) During the first three years of the 1990s, bank commercial and industrial lending declined in real terms, particularly for small banks and for small loans (see Berger, Kashyap, and Scalise 1995, Table 8, for details). The ascribed causes of the credit crunch include a fall in bank capital from the loan loss experiences of the late 1980s (e. g. , Peek and Rosengren 1995), the increases in bank leverage enquirements and implementation of Basel I risk-based capital standards during this time period (e. g. Berger and Udell 1994, Hancock, Laing, and Wilcox 1995, Thakor 1996), an increase in supervisory toughness evidenced in worse examination ratings for a given bank condition (e. g. , Berger, Kyle, and Scalise 2001), and reduced loan demand because of macroeconomic and regional recessions (e. g. , Bernanke and Lown 1991). To some extent, the research supports virtually all of these hypotheses. Figure 3 Panel B shows how abnormal liquidity creation behaved before, during, and after the credit crunch. The graph shows that liquidity creation was above the time trend before the crisis, but declining.After a temporary increase, it dropped markedly during the crisis by roughly $0. 6 trillion, and the decline even widen a bit beyond the crunch period. After having reached a noticeably low level in the post-crunch period, liquidity creation slack offly started to bottom out. This evidence suggests that the 22 E. g. , Raging bull, stock markets surge is puzzling investors When will it end? on page 1 of the Wall Street Journal, Jan. 19, 1987. 1 4 banking sector created (slightly) positive abnormal liquidity before the crisis, but created significantly negative abnormal liquidity during and fter the crisis, representing behavior by banks that may have further fueled the crisis. Financial crisis 3 Russian debt crisis / LTCM bailout (1998Q3 1998Q4) Since its lineage in March 1994, hedge fund Long-Term Capital Management (LTCM) followed an arbitrage strategy that was admittedly market neutral, designed to make money regardless of whether prices were rising or falling. When Russia defaulted on its sovereign debt on August 17, 1998, investors fled from other government paper to the safe haven of U. S. treasuries.This flight to liquidity caused an unexpected outfit of spreads on supposedly low-risk portfolios. By the end of August 1998, LTCMs capital had dropped to $2. 3 billion, less than 50% of its December 1997 value, with assets standing at $126 billion. In the first three weeks of September, LTCMs capital dropped further to $600 million without shrinking the portfolio. Banks began to doubt its ability to meet margin calls. To prevent a potential systemic meltdown triggered by the collapse of the worlds largest hedge fund, the Federal Reserve Bank of New York form a $3. billion bail-out by LTCMs major creditors on September 23, 1998. In 1998Q4, many large banks had to take substantial write-offs as a result of losses on their investments. Figure 3 Panel C shows abnormal liquidity creation around the Russian debt crisis and LTCM bailout. The pattern shown in the graph is very different from the ones we have seen so far. Liquidity creation was abnormally negative before the crisis, but increasing. Liquidity creation increased further during the crisis, countercyclical behavior by banks that may have alleviated the crisis, and continued to grow after the crisis.This suggests that liquidity creation may have been too low entering the crisis and returned to normal levels a few accommodate after the end of the crisis. Financial crisis 4 Bursting of the dot. com bubble and Sept. 11 terrorist attack (2000Q2 2002Q3) The dot. com bubble was a speculative stock price bubble that was built up during the mid to late 1990s. During this period, many internet-based companies, commonly referred to as dot. coms, were founded. Rapidly increasing stock prices and widely available venture capital created an environs in which 15 any of these companies seemed to focus largely on increasing market share. At the height of the boom, it seemed possible for dot. coms to go public and raise substantial amounts of money even if they had never acquire any profits, and in some cases had not even earned any revenues. On March 10, 2000, the Nasdaq composite index peaked at more than double its value just a year before. After the bursting of the bubble, many dot. coms ran out of capital and were acquired or filed for bankruptcy (examples of the latter include WorldCom and Pets. com). The U. S. economy sta rted to slow down and business nvestments began falling. The September 11, 2001 terrorist attacks may have exacerbated the stock market downturn by adversely affecting investor sentiment. By 2002Q3, the Nasdaq index had fallen by 78%, wiping out $5 trillion in market value of mostly technology firms. Figure 3 Panel D shows how abnormal liquidity creation behaved before, during, and after the bursting of the dot. com bubble and the Sept. 11 terrorist attacks. The graph shows that before the crisis period, liquidity creation moved from displaying a negative abnormal value to displaying a positive abnormal value at the time the bubble burst.During the crisis, liquidity creation declined somewhat and hovered around the time trend by the time the crisis was over. After the crisis, liquidity creation slowly started to pick up again. Financial crisis 5 Subprime lending crisis (2007Q3 ? ) The subprime lending crisis has been characterized by agitation in financial markets as banks have exp erienced difficulty in selling loans in the syndicated loan market and in securitizing loans. Banks also seem to be reluctant to provide credit they appear to have cut back their lending to firms and individuals, and have also been reticent to lend to each other.Risk premia have increased as evidenced by a higher premium over treasuries for mortgages and other bank products. Some banks have experienced massive losses in capital. For example, Citicorp had to raise about $40 billion in equity to cover subprime lending and other losses. Massive losses at Countrywide resulted in a takeover by Bank of America. Bear Stearns suffered a fatal loss in confidence and was sold at a fire-sale price to J. P. Morgan Chase with the Federal Reserve guaranteeing $29 billion in potential losses. Washington Mutual, the sixth-largest bank, became the biggest bank failure in the U.S. financial history. J. P. Morgan Chase purchased the banking business while the rest of the organization filed for bankrup tcy. The Federal Reserve intervened in some 16 unprecedented ways in the market, extending its safety-net privileges to investment banks. In addition to lowering the discount rate sharply, it also began holding mortgage-backed securities and lending directly to investment banks. Subsequently, IndyMac Bank was seized by the FDIC after it suffered substantive losses and depositors had started to run on the bank. This failure is expected to cost the FDIC $4 billion $8 billion.The FDIC intends to sell the bank. Congress also recently passed legislation to provide Freddie Mac and Fannie Mae with straight-out credit lines and possible equity break inions to prop up these troubled organizations, which are considered too big to fail. Figure 3 Panel E shows abnormal liquidity creation before and during the first part of the subprime lending crisis. The graph suggests that liquidity creation displayed a high positive abnormal value that was increasing before the crisis hit, with abnormal l iquidity creation around $0. 0 trillion entering the crisis, decreasing substantially after the crisis hit. A striking fact about this crisis compared to the other crises is the relatively high build-up of positive abnormal liquidity creation prior to the crisis. 4. 4. Behavior of some liquidity creation components around the two banking crises It is of particular interest to examine the behavior of some selected components of liquidity creation around the banking crises. As discussed above (Section 4. 3), numerous papers have focused on the credit crunch, examining lending behavior.These studies generally find that mortgage and business lending started to decline significantly during the crisis. Here we contrast the credit crunch experience with the current subprime lending crisis, and increase the components of liquidity creation that are examined. Rather than focusing on mortgages and business loans, we examine the two liquidity creation components that include these items semi -liquid assets (primarily mortgages) and illiquid assets (primarily business loans). In addition, we analyze two other components of liquidity creation.We examine the behavior of liquid assets to address whether a decrease (increase) in semi-liquid assets and / or illiquid assets tended to be accompanied by an increase (decrease) in liquid assets. We also analyze the behavior of illiquid off-balance sheet guarantees (primarily loan commitments) to address whether illiquid assets and illiquid off-balance sheet guarantees move in tandem around banking crises and whether changes in one are more pronounced than the other. Figure 4 Panels A and B show the abnormal amount of four liquidity creation components around 17 he credit crunch and the subprime lending crisis, respectively. For ease of comparison, the components are not weighted by weights of +? (illiquid assets and illiquid off-balance sheet guarantees), 0 (semiliquid assets), and ? (liquid assets). The abnormal amounts are obtai ned by detrending and deseasonalizing each liquidity creation component. Figure 4 Panel A shows that abnormal semi-liquid assets decreased slightly during the credit crunch, while abnormal illiquid assets and especially abnormal illiquid guarantees dropped significantly and turned negative.This picture suggests that these components fell increasingly below the trendline. The dramatic drop in abnormal illiquid assets and abnormal illiquid off-balance sheet guarantees (which carry positive weights) helps explain the significant decrease in abnormal liquidity creation during the credit crunch shown in Figure 3 Panel B. Figure 4 Panel B shows that these four components of abnormal liquidity creation were above the trendline before and during the subprime lending crisis.Illiquid assets and especially off-balance sheet guarantees move further and further above the trendline before the crisis, which helps explain the dramatic buildup in abnormal liquidity creation before the subprime lendi ng crisis shown in Figure 3 Panel E. All four components of abnormal liquidity creation continued to increase at the beginning of the crisis. After the first quarter of the crisis, illiquid off-balance sheet guarantees showed a significant decrease, which helps explain the decrease in abnormal liquidity creation in Figure 3 Panel E.On the balance sheet, during the final quarter of the sample period (the third quarter of the crisis), abnormal semi-liquid and illiquid assets declined, while abnormal liquid assets increased. 4. 5. General conclusions from the results What do we learn from the various graphs in the previous analyses that indicate intertemporal patterns of liquidity creation and selected liquidity creation components around five financial crises? First, across all the financial crises, there seems to have been a significant build-up or drop-off of abnormal liquidity creation before the crisis.This is consistent with the notion that crises may be preceded by either too mu ch or too little liquidity creation, although at this stage we offer this as tentative food for thought rather than as a conclusion. Second, there seem to be two main differences between banking crises and market-related crises. 18 The banking crises, namely the credit crunch and the subprime lending crisis, were both preceded by positive abnormal liquidity creation by banks, while two out of the three market-related crises were preceded by negative abnormal liquidity creation.In addition, during the two banking crises, the crises themselves seem to have exerted a noticeable influence on the pattern of aggregate liquidity creation by banks. only when prior to the credit crunch, abnormal liquidity creation was positive and had started to trend upward, but reversed job and plunged quite substantially to become negative during and after the crisis. Just prior to the subprime lending crisis, aggregate liquidity creation was again abnormally positive and trending up, but began to decli ne during the crisis, although it remains abnormally high by historical standards.The other crises, which are less directly related to banks, did not seem to exhibit such noticeable impact. Third, liquidity creation has both decreased during crises (e. g. , the 1990-1992 credit crunch) and increased during crises (e. g. , the 1998 Russian debt crisis / LTCM bailout). Thus, liquidity creation likely both exacerbated and ameliorated the effects of crises. Fourth, off-balance sheet illiquid guarantees (primarily loan commitments) moved more than semi-liquid assets (primarily mortgages) and illiquid assets (primarily business loans) during banking crises.Fifth, while liquidity creation is generally thought of as a financial intermediation service with positive economic value at the level of the individual bank and individual borrower (see Diamond and Rajan 2000, 2001), our analysis hints at the humanity of a dark side to liquidity creation. Specifically, it may be more than coincidence that the subprime lending crisis was preceded by a very high level of positive abnormal aggregate liquidity creation by banks relative to historical levels.The notion that this may have contributed to the subprime lending crisis is consistent with the findings that banks adopted lax credit standards (see DellAriccia, Igan, and Laeven 2008, Keys, Mukherjee, Seru, and Vig 2008), which in turn could have led to an increase in credit availability and off-balance sheet guarantees. Thus, while Diamond and Rajan (2000, 2001) argue that financial fragility is needed to create liquidity, our analysis offers the intriguing possibility that the causality may be reversed as well too much liquidity creation may lead to financial fragility. 9 5. The effect of capital on banks competitive positions and profitability around financial crises This section focuses on the second goal of the paper examining how bank capital affects banks competitive positions and profitability around financial crises. We first explain our methodology and provide summary statistics. We then present and discuss the empirical results. In an additional check, we examine whether the stock return performance of high- and low-capital listed banks is consistent with the competitive position and profitability results for large banks.In another check, we generate some fake crises to analyze whether our findings hold during normal times as well. 5. 1. Empirical approach To examine whether banks with high capital ratios improve their competitive positions and profitability during financial crises, and if so, whether they are able to hold on to this improved performance after these crises, we focus on the behavior of individual banks rather than that of the banking sector as a whole.Because our analysis of aggregate liquidity creation by banks shows substantial differences across crises, we do not pool the data from all the crises but instead analyze each crisis separately. Our findings below that the coeffi cients of interest differ substantially across crises tend to justify this separate interference of the different crises. We use the following regression specification for each of the five crises ? PERFi,j = ? + ? 1 * EQRATi,j + B * Zi,j (1) where ?PERFi,j is the change in bank is performance around crisis j, EQRATi,j is the banks average capital ratio before the crisis, and Zi,j includes a set of control variables averaged over the pre-crisis period. All of these variables are discussed in Section 5. 2. Since we use a cross-sectional regression model, bank and year fixed effects are not included. In all regressions, t-statistics are based on robust standard errors. Given documented differences between large and small banks in terms of portfolio composition (e. g. Kashyap, Rajan, and Stein 2002, Berger, Miller, Petersen, Rajan, and Stein 2005) and the effect of capital on liquidity creation (Berger and Bouwman forthcoming), we split the sample into large and small banks, and run al l regressions separately for these two sets of banks. Large banks have gross total assets (GTA) exceeding $1 billion at the end of the quarter preceding the crisis and small banks have GTA up to 20 $1 billion at the end of that quarter. 5. 2. inconstant descriptions and summary statistics We use two measures of a banks performance competitive position and profitability.The banks competitive position is measured as the banks market share of general liquidity creation, i. e. , the dollar amount of liquidity created by the bank divided by the dollar amount of liquidity created by the industry. Our focus on the share of liquidity creation is a departure from the traditional focus on a banks market share of deposits. Liquidity creation is a more comprehensive measure of banking activities since it does not just consider one funding item but instead is based on all the banks on-balance sheet and off-balance sheet activities.To establish whether banks improve their competitive positions during the crisis, we define the change in liquidity creation market share, ? LCSHARE, as the banks average market share during the crisis minus its average market share over the eight quarters before the crisis, normalized by its average pre-crisis market share. To examine whether these banks hold on to their improved performance after the crisis, we also measure each banks average market share over the eight quarters after the crisis minus its average market share over the eight quarters before the crisis, again normalized by its average market share before the crisis.The second performance measure is the banks profitability, measured as the return on equity (ROE), i. e. , net income divided by stockholders equity. 23 To examine whether a bank improves its profitability during a crisis, we focus on the change in profitability, ? ROE, measured as the banks average ROE during the crisis minus the banks average ROE over the eight quarters before the crisis. 24 To analyze whether the bank is able to hold on to improved profitability, we focus on the banks average ROE over the eight quarters after the crisis minus its average ROE over the eight quarters before the crisis.To mitigate the influence of outliers, ? LCSHARE and ? ROE are winsorized at the 3% level. Furthermore, to ensure that average values are calculated based on a sufficient number of quarters, we 23 We use ROE, the banks net income divided by equity, rather than return on assets (ROA), net income divided by assets, since banks may have substantial off-balance sheet portfolios. Banks must allocate capital against every offbalance sheet activity they engage in. Hence, net income and equity both reflect the banks on-balance sheet and off-balance sheet activities.In contrast, ROA divides net income earned based on on-balance sheet and off-balance sheet activities merely by the size of the on-balance sheet activities. 24 We do not divide by the banks ROE before the crisis since ROE itself is already a s caled variable. 21 require that at least half of a banks pre-crisis / crisis / post-crisis observations are available for both performance measures around a crisis. Since the subprime lending crisis was still ongoing at the end of the sample period, we require that at least half of a banks pre-subprime crisis observations and all three quarters of its subprime crisis observations are available.The key exogenous variable is EQRAT, the banks capital ratio averaged over the eight quarters before the crisis. EQRAT is the ratio of equity capital to gross total assets, GTA. 25 The control variables include bank size, bank risk, bank holding company membership, local market competition, and proxies for the economic environment. Bank size is controlled for by including lnGTA, the log of GTA, in all regressions. In addition, we run regressions separately for large and small banks. We include the z-score to control for bank risk. 26 The z-score indicates the banks distance from default (e. g. Boyd, Graham, and Hewitt 1993), with higher values indicating that a bank is less likely to default. It is measured as a banks return on assets plus the equity capital/GTA ratio divided by the standard deviation of the return on assets over the eight quarters before the crisis. To control for bank holding company status, we include D-BHC, a gage variable that equals 1 if the bank was part of a bank holding company. Bank holding company membership may affect a banks competitive position because the holding company is required to act as a source of strength to all the banks it owns, and may also inject equity voluntarily when needed.In addition, other banks in the holding company provide cross-guarantees. Furthermore, Houston, James, and Marcus (1997) find that bank loan growth depends on BHC membership. We control for local market competition by including HERF, the bank-level HerfindahlHirschman index of deposit constriction for the markets in which the bank is p