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Freedom to Comment Essay When working in a group, one cannot help but find things to disagree on. I don’t believe that is a deliberate choice; I believe that is just the way things are, since each person is endowed with the faculty of reason. In one of my experiences in working with a group, I had to decide within myself whether I would exercise my freedom to comment or maintain my silence. I remember having to work in a group while in college, and we were tasked with finishing a paper and thereafter presenting it in class. While writing the paper we chanced upon materials that have been submitted to our professor by the previous year’s class. The said materials contained all relevant research and findings that we would need to make an excellent report. My group mates wanted to use the materials so we could save on time and effort. Moreover, using the materials we discovered would better our chances at landing better grades, which would be beneficial for all of us. I kept waiting for one of the members of the team to speak up and challenge the morality of the group’s plan. However, I heard nothing but agreement. In my heart I felt what we were about to do was wrong, but still I struggled with the fear that I would be an outcast if I talked against them. I definitely felt the pressure of the need to conform. However, I knew that I could not live with the fact of cheating, so I told them I did not feel comfortable with the plan. I said there is a grave danger of expulsion if we were caught cheating. My group mates thought I was being self-righteous at first, but the fear of expulsion and grave reprimand led them to accept my position.

Sin and Personal Growth in The Scarlet Letter Essay -- Nathaniel Hawth

The Scarlet Letter was written by Nathaniel Hawthorne and was first published in 1850. Hawthorne’s purpose for The Scarlet Letter was to show how anybody can sin, and that sin should be used as an example to learn from. Hawthorne also made clear that good can come from sin and that sin can help a person grow. Hester Prynne is the main character of the book. She is still young when she has her child, Pearl. She is a strong and determined, and uses her past sin, and the â€Å"A† as something to learn from rather than something to be ashamed of. After the shame of getting the â€Å"A,† she moved into the outskirts of town and became a seamstress. The way she was able to move on from her sin and continue her life, even after being scorned and humiliated, is proof of her strength. Years later, when her sin is almost completely forgotten her benevolence is shown in how she cares for the physical and spiritual needs of people in the community. Pearl is Hester and Reverend Dimmesdale’s illegitimate daughter. Although Pearl is described as beautiful, throughout the book, she is consistently described as â€Å"impish† and â€Å"elfish.† These strange descriptions, as well as her odd behavior, make her seem inhuman, and make the townspeople view Pearl as sin-embodied and the devil-child. Pearl is very smart, and even at a young age she becomes aware of the scarlet letter and recognizes that is has some kind of significance. The quote, â€Å"One day, as her mother stooped over the cradle, the infant’s eyes had been caught by the glimmering of the gold embroidery about the letter, and, putting up her little hand, she grasped at it, smiling, not doubtfully, but with a decided gleam, that gave her face the look of a much older child.†, shows how she draws attention ... ... view, Hawthorne writes, â€Å"On the wall hung a row of portraits, representing the forefathers of the Bellingham lineage, some with armor on their breast, and others with stately ruffs and robes of peace.† Hawthorne serves his purpose by combining his detailed characters, his informative writing style, and his ongoing themes throughout the book. Some of his predominant themes in the book are how sin can lead to personal growth and the battle between good and evil. Over the seven years of wearing the scarlet letter, Hester grew a lot, and after finding out about Chillingworth, Dimmesdale underwent a change as well. The way that sin can lead to personal growth is seen in their lives. The battle of good and evil is seen in the lives of Reverend Dimmesdale and Chillingworth. Evil needs good in order to survive. Soon after Dimmesdale’s death, Chillingworth died as well.

JP Morgan and Bear Stearns Essay

Background In the last three decades, the US banking system has changed its investment procedures and its risk management due to changes in government regulation. Furthermore, external shocks, such as the inflationary period during the 70s and the recession in the 80s, led Banking institutions to alternative ways of investment in order to remain profitable. The average annual inflation rate from 1900 to 1970 was approximately 2.5%. From 1970, however, the average rate hit about 6%, topping out at 13.3% by 1979. This period is also known for â€Å"stagflation†, a phenomenon in which inflation and unemployment steadily increased. A loose monetary policy led to very low interest rates. Corporations were borrowing large amounts to finance leverage buyouts (LBOs), which led to higher and high interest burden. One of the main instruments used was financial derivatives, which gave Banks additional profit. Moreover, this instruments represented off balance sheet activities, thus helping bank cap ital. Nonetheless, these instruments were risky and could led to enormous losses. In the late 70’s and early 80’s saw the rise of a number of financial products such as derivatives, high yield an structured products, which provided lucrative returns for investment banks. Also in the late 1970s, the facilitation of corporate mergers was being hailed as the last gold mine by investment bankers who assumed that Glass-Steagall would someday collapse. At this time we could see the first efforts to loosen Glass-Steagall restrictions and some brokerage firms begin encroaching on banking territory by offering money-market accounts that pay interest, allow check-writing, and offer credit or debit cards. Moreover, in 1974 NOW (Negotiable Order of Withdrawal) accounts were created by a small bank in Massachusetts, offering negotiable orders of withdrawal to permit payments on near-checking accounts at banks. In 1980, they were permitted for all institutions, with rate ceilings eliminate d in 1986. Bear Sterns and crisis As an investment bank, Bear Stearns & Co. had three main operating businesses. The first one was Capital Markets, which included brokerage services, market-making and proprietary trading in both equities and fixed income. Moreover, this Capital Markets business also included investment banking services such as securities issuance and advice on mergers and  acquisitions. Its fixed income business represented the highest contribution to its revenue. The second operating business was Global Clearing Services which included the company’s well-regarded prime brokerage business. Bear Stearns provided trade execution and securities clearing, custody, lending and financing to hedge funds and broker-dealers as a prime broker. The third operating business was Wealth Management which included Bear’s Private Client Services group, which served high-net worth individuals, and Bear Stearns Asset Management, which managed hedge funds and other investment vehicles. Bear Stearns & Co. was an investment bank, a financial intermediary that performed a variety of services. As an investment bank it specialized in large and complex financial transactions. Its primary regulator was the Securities and Exchange Commission and did not have access to the Federal Reserve discount window, which allows eligible institutions to borrow money from the central bank, usually on a short-term basis, to meet temporary shortages of liquidity caused by internal or external disruptions unlike commercial banks. The main difference between a commercial bank and an investment bank such as Bear Stearns was that while commercial banking involved both taking deposits and making loans that remained on the lender’s balance sheet, investment banking involved the underwriting of debt and equity securities, buying them from the issuer typically with a syndicate of other firms and then selling them on to investors. Many years ago it was difficult to say whether a bank engaged in commercial activities or investment activities, however, the Congress prohibited investment banking and commercial banking in the same firm in 1993. But in 1999 these laws were modified and some commercial and investment banks consolidated although Bear Stearns as well as other banks such as Goldman Sachs and Lehman Brothers chose not to enter the commercial banking business so as a result they did not have access to the Federal Reserve discount window. FED Chairman Christopher Cox said that Bear Stearns was adequately capitalized â€Å"at all times† but facing skeptical lawmakers, Cox acknowledged that the firm had massive liquidity problems and that â€Å"capital is not synonymous with liquidity.† He said the SEC is working with the five biggest Wall Street firms to make sure they increase their liquidity pools and  redouble their focus on risk practices. On March 13, he indicated that liquidity at Bea r Stearns fell from $12.4 billion to $2 billion because of â€Å"the complete evaporation of confidence† in the company. Considering Mr. Cox’s statements, we ask ourselves if all well-capitalized financial institutions are vulnerable to crisis periods. In order to arrive to a conclusion in this matter we have considered a well-capitalized as a firm with a healthy liquidity status. From our point of view, we consider that some financial institutions, such as big investment banks, are so important to the global economy that should they fall, the repercussions would be too fatal and governments would be forced to intervene and rescue them in order to keep the economy from collapsing. This is the reason why the term â€Å"to big to fail† arose. In spite of this, as Nassim Nicholas Taleb said, we could face a â€Å"black swan case†, which refers to an event, positive or negative, that is deemed improbable yet causes massive consequences. Bear’s activities were financed with a mix of long term debt, equity, and financing collateralized with securities from Bear’s inventory. Besides this, Bear’s trading business required the investment bank to constantly hold an inventory of securities; these securities were used as collateral for short term borrowing agreements known as repurchase agreements (repos). If we compare Bear with other financial institutions like, for example, Leman Brothers, Merrill or Morgan Stanley we can easily see that those companies had much more weight in liquidity than Bear Stearns. It was below those three in repo financing and repo lending too. Specifically, Merrill Lynch had total liquidity of 181.9 while Bearn Stearns had 35.3 and total liquidity as percentage of repo financing was 77% in Merrill and 345 in Bearn Stearns. Bear Stearns nearly collapsed not once but twice before the cash-strapped brokerage firm was rescued. The leverage suffered by Bear Stearns at that time increased the risk of becoming bankrupt. This was because, with a big leverage, losses are larger and can consume the firm’s entire equity to the point where the book value of the company is zero or even negative. In the worst case scenario, Bearn Stearns, being counterpart for many repo agreements and other financial instruments could result in default on their payments, which is why it ended up being rescued. By knowing this facts we can tell that the firm’s value would indeed be negatively affected by a potential bankruptcy. Valuation To give a price to pay for Bear Stearns’ ongoing businesses we have to use a valuation method. Being unable to perform an adequate due diligence we are not going to be able to know the actual risk of many of the assets, and therefore unable to use the real value. For this reason, the valuation method we are going to use is the Book Value per Share, which by definition indicates the remaining value of a company for its shareholders, should it dissolve, which is quite similar to the process Bear Stearns is going through. To find the book value, we have to take the total shareholder equity and subtract from it all preferred equity. In order to do so, we have to take a look at the balance sheet, provided in the Exhibit 2, where we can find the unaudited balance sheet for the Q1 2008. There we can see that Total Stockholders’ Equity in that period was $11,896 million. From that equity we have to subtract the preferred stock, which is $352 million. 11544 Doing so we obtain a value of $11,544 million, which divided by the number of total shares outstanding should give us the book value per share of the company. Looking at the balance sheet, we can see that it gives the outstanding shares. We have 500,000,000 shares authorized as of November 30, 2007 and 2006; 184,805,847 shares issued as of November 30, 2007 and 2006. We can see it better this way: Nov. 30, 2007 Nov. 30, 2006 Authorized 500,000,000 500,000,000 Issued 184,805,847 184,805,847 This makes a total of 1,369,611,694 shares. But the company also has Treasury stock, it has repurchased some of the shares it had previously issued. It says that the treasury stock is composed of common stock: 71,807,227 and 67,396,876 shares as of November 30, 2007 and 2006, respectively. This means that the company has bought, in total, 139,204,103 shares. Subtracting the  value to the issued and authorized shares, we have the total number of outstanding shares. So, to find the Book Value per share, we divide the $11,544 million of equity by the 1,230,407,591 shares, turning to be $9.38 per share, very close to the price JP Morgan ended up paying. However, I would say this value is too high, due to the great amount of uncertainty regarding the exposition of Bear Stearns to the MBS market and the great illiquidity risk it is facing.

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