High School Dropouts Reflection Essay

I believe the dropout rate is so high because, as stated in the article â€Å"High School Dropouts: Costly to American Economy†, â€Å"the teachers [don’t] care, the students [don’t] care.† I believe that lack of interest on both the student’s and the teacher’s part impacts whether a student might drop out. I also believe that factors like, problems at home, bullying at school, etc., also plays an enormous role on the results stated in the articles. Knowing that one of the main reasons of having a job includes, earning money, it leads me to assume that those who drop out do not want to earn less, or be among the 12% of jobless individuals that do not have a high school diploma. Furthermore, I believe that it is evident that a high number or drop outs implies that there are important factors behind what causes an individual to decide to drop out of high school. Looking at the statistics that dropouts cost taxpayers $8 billion annually, and $300 billion dollars in earnings are lost every year due to the decrease in pay of those who do not have a high school diploma, has led me to believe that our state/federal government should eliminate the option of dropping out of high school. It makes no sense that they have not done so, seeing that they have the right, and it is within their power and right to do so. Also, after seeing the statistic that the incarceration rates were 63 times higher among high school drop outs within the ages of 16 and 24, and in an effort to solve two problems: the number of kids that drop out of high school and kids who are behind bars, I believe there should be a greater effort to achieve mass awareness about the negative effects of dropping out of high school early, the same magnitude as the programs and advertisements on breast cancer, and the effects of smoking cigarettes. This plan, although costly, would in turn decrease the amount of high school dropouts, people behind bars, and jobless individuals in this nation. Presidential Election Reflection I believe that out of the five factors listed in the article, the debates are the most important. I believe the debates are important because it allows you to look at each candidate side by side and hear not only their plan on how they plan on turning the economy around, creating jobs, and leading this country on a path that will allow us to decrease this nation’s debt but also to see each candidate’s tactics on using the opposing opponent words or ideas to bash/ or blatantly state why they are wrong. I also believe it is important because you get to actually hear their own words and beliefs, unrehearsed, without a teleprompter, and without being warped in the game of telephone by social media and propaganda. I think that the presidential debates are more important than the electoral map, because the electoral map for the most part generally stays the same and predictable. The ads and messages used to attack the other candidate, or twist the words of another candidate in my opinion are effective, but very childish, immature, and not anything I would imagine a â€Å"president† taking a part of. Propaganda is a very effective way of spreading a message, and getting everyone’s attention, so it’s also important, although not in the same way as the debates are. In my opinion, money is the second most important part of the presidential race. The amount of money a party raises, shows how much they are supported. In the article, it states that â€Å"the Republican Party presidential committees had about $186 million on hand, compared with about $124 million for Mr. Obama and the Democrats.† This shows how both each candidate is supported. I actually have watched one of the debates, as an extra credit assignment for U.S History, and I thought that the debate was interesting, and I liked how the debate was set up.

Impediments to Logistics Performance

MASTER IN BUSINESS ADMINISTRATION INTERNATIONAL TRADE AND LOGISTICS 2011 Unit Title : International Trade Policy & Practice Unit number : MTL 504 Assignment number : 2 Submission date : 16th October 2011 Student declaration I certify that the attached assignment is my own work. Material drawn from other sources has been acknowledged according to unit-specific requirements for referencing. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦. †¦Ã¢â‚¬ ¦Ã¢â‚¬ ¦16th October 2011 †¦. Name/Signature of studentDate Introduction: This report critically examines impediments in 5 key areas taken into consideration in assessing the logistics performance of Sri Lanka and methods of overcoming the same as mentioned in the recent survey in determining the Logistics Performance Index (LPI) of various countries worldwide. Executive Summary The LPI is a comprehensive index created to help countries identify the challenges and opportunities they face in trade logistics performance. The World Bank conducts the LPI survey every two years. The key document for this is the the second edition of Connecting to Compete:Trade Logistics in the Global Economy,which was first published in November 2007. The Logistics Performance Index was based on a survey of operators on the ground worldwide – global freight forwarders and express carriers – who provided feedback on the logistics â€Å"friendliness† of the countries in which they operate and those with which they trade. Sri Lanka’s Logistics Performance Index is 2. 29 and ranked 137. In spite of prevailed security condition in the first ecade of this millennium Sri Lanka was able to lay a good foundation for implementing trade facilitation measure over the years. Typology of Sri Lanka according to Impediments to Logistics Performance Table Trade Related Infrastructure The Pathfinder Foundation says that Sri Lanka’s LPI ranking also reflects logistics-related problems with road and rail infrastructure, including congested road access to the P ort of Colombo and poor trucking and rail services; costs of both trucking and rail exceed those of Bangladesh and India. The railway sector accounts for only about one percent of freight movements in Sri Lanka, and is characterized by a large cost structure. In addition, the report says that the logistics sector has been slow to provide value added services for transshipment through the Colombo port. The Pathfinder Foundation says that the government can encourage this by providing free zones and customs procedures that enable the efficient provision of services. Failure to do this can make Colombo vulnerable to losing market share to Indian ports that are being upgraded; particularly as pure transshipment cargo is foot-loose Sri Lanka needs to advance its export competitiveness by developing its logistics, and plugging into Asian supply chains is of vital importance. Especially with the significant opportunities that lie with Sri Lanka’s close proximity to the South Indian markets of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu, Sri Lanka needs to become open to such international supply ch ains. Even if she can’t actually attract the companies to set up large plants here on the island, the country can be a part of a model, where some components could be manufactured here and shipped across to bigger plants in other countries for the assembly of finished products – that would be the paradigm shift. Overcoming the impediments the area of trade related infrastructure will play a pivotal role in the increase of the LPI ranking of Sri Lanka. This can be catogorized as physical infrastructure requirements and business processes. The following areas should be considered in priority for this purpose ; 1. Trading through Electronic Documents 2. Introduce online payment of Customs Levy 3. Development of Road/Rail/Canal transport 4. Upgrade Handling Equipments in the Port and increase handling capacity 5. Development of areas within close vicinity to the airport and sea port Quality and Supply of Logistics Services As Logistics is the backbone of trading of goods the quality of trade will depend upon the quality of logistics services available in an economy. There are many factors which affect this. These can be broadly categorised into three areas as people , Process and systems and Physical Infrastructure. Although this can be also inter related with other areas of determinants of the LPI this is an encompassing factor covering all the areas as Quality is a philosophy which embodies all the functions of the determinants of the LPI. In order to set and maintain standards and guidelines in the area all industry related organizations should be monitored by one body which will see to the fact that all these groupings are governed in a way that it will maintain the highest quality standards amongst its members and all stakeholders in the industry are involved in one of these organizations to ensure compliance. These Organizations are as follows ; * SLAFFA (Sri Lanka Freight forwarders Association) * SLACA ( Sri Lanka Air line cargo Association) * SLLPA (Sri Lanka Logistics Providers Association) * CASA (Ceylon Association of Ship Agents) * ACT (Assiciation of Container Transporters) There should be strong recommendations for companies involved in Logistics services to be a member of their respective grouping and also have a minimum number of professionally trained staff from these bodies. This will also facilitate the quality service provision through these skilled employees in this sector. Another important area is to recognize top performing logistics providers by way of introduction of an awards scheme to motivate the companies involved in the industry and to take the industry standards into new heights which in turn will benefit the customers in the long run. There can be benefits obtained also by Interlinking domestic freight forwarders ystems with International Freight forwarders or their agents to provide better info flow to the customers in order to track their shipments through the entire supply chain. Core Customs Modernization This can be identified as the main area of consideration for improvement in affecting the LPI ranking. As mentioned at the beginning of this report the last LPI survey was at the peak of the Sri Lankan war against terrorism. This meant stringent security measures in the country and strict surveillance on all goods that entered the cou ntry. According to the LPI, Sri Lanka’s performance is particularly weak in clearance by border control agencies (particularly customs), logistical competence and ability to track and trace consignments. There has been slow progress in implementing customs reform. Sri Lanka has made less progress than other countries in South Asia, such as Bangladesh and India. There is a strong case for attaching high priority to customs reform, including full use of the ASYCUDA system and development of a computerized system of risk management. Lack of progress in this area place our exporters in a disadvantageous position from competing in time-sensitive markets, thereby undermining the growth and employment prospects of the country. There are many areas to be considered in the process of customs modernization in Sri Lanka which includes the following ; * Round the clock & 365 days work. * Change attitude to understand that the customs is not only regulator but also trade facilitator. * Online cargo clearing. * Abolish age old regulations. * Introduce pre – arrival clearance. * Release goods against guarantees. Post – clearance audit method. * Re introduction of Green Channel – Customs decided implementing green channel for 10% out of identified 75 top importers (Sunday times 04th Sept 2011) * Restrict custom’s activities to main areas such as Border Control /Tariff functions & Inspection. * WTO Guide Lines should be adopted * Take positive steps to eliminate corruption * Introduce an effective review and appeal procedure Methods such as Green Channel and Risk Management should be introduced in order to reduce the clearance time wasted as a result of 100% examination at present. Today all 28,000 TEUs in a month are examined of which 18,000 TEU's are examined at Rank Container Terminal alone. But it was noted that while authorities intend on using an automated system, the industry pointed out that while there are a number of dynamics involved in the assessment of the products a manual check would prove to be a better procedure though. † – Sunday times Integration of Border Management Sri Lanka’s rank in â€Å"Trading Across the Border† is 65 out of 183 which is above the South Asian average but below OECD Average. Regional Facilitation and Transit Drawbacks in Connection with the Logistics Performance of Sri Lanka Sri Lankan shipping officials have questioned the validity of a recent World Bank ranking on logistics that placed the island even below landlocked Uganda, despite Colombo's position as a container transshipment hub. The criticism came at a videoconference discussion connecting audiences in Bangladesh, India, Pakistan, Nepal, Sri Lanka, and Washington on trade logistics in the global economy to discuss the findings of the study. Rohan Masakorala, former chairman of the Sri Lanka Shippers' Council, raised doubts about the study and LPI index and questioned whether the research had got it wrong. â€Å"The study's credibility is at stake and [such] findings can seriously damage the country. † It was mentioned that Sri Lankan businesses were concerned about misleading representation in such studies as it could affect foreign investment which the island needed to develop the economy. The World Bank study called the Logistics Performance Index (LPI) 2007 ranked Sri Lanka at 92 out of 150 countries with a low overall score of 2. 0 out of five, even below India, Pakistan and Bangladesh. Singapore was ranked No 1 while Uganda scored 2. 49, more than Sri Lanka, whose Colombo port is south Asia's hub for container transshipment. The LPI consists of both perception and objective measures and evaluates performance along the logistics supply chain within a country, the World Bank said. An USAID study last year had placed the island ahead of other south Asian states like India, Pakistan and Bangladesh. An alternative suggestion to be included in the survey was to ask buyers of Sri Lankan exports what their impression is – who buy apparel from different Asian countries The Sri Lankan shippers' council and freight forwarders association were also not consulted in the survey. The following news article from The Daily News with Prominent Shipping Personality Mr Rohan Masakorala also gives many insights into this ; â€Å" Sri Lanka has been ranked 137th in the World Bank released Logistic Performance Index (LPI) for 2009. The country secured the 92nd place according to LPI 2007. The LPI has not given a true picture of the country’s capability and the list and the criteria, and Sri Lanka has been pushed from 92 to 137, it is unfair as the country has an efficient air and ocean shipping sector, Sri Lanka Shippers’ Council former Chairman and Asian Shippers’ Council Secretary General Rohan Masakorala told Daily News Business. The index was arrived at by considering the strengths in rail, road, ocean shipping and air systems in a country. The World Bank team is looking at the overall picture. However, the Shippers’ Council or the freight forwarders have not been consulted for these LPI interviews this time as well. â€Å"They are doing a fundamental mistake by placing sea, air, road, rail and inland waterways in one basket, ignoring the strengths of different countries and territories,† he said. Courtesy – Daily News Another suggestion given in the abovementioned article is that â€Å"The LPI gives a wrong signal to investors and buyers. It could have been agreed upon if the World Bank had a chart separating sea, air, and road and rail rankings and then combining the four against the overall performance with other criteria such as customs practices. Then at least one would see each country’s SWOT (strength, weakness, opportunities and threat). It is not proper to compare a landlocked country and a maritime nation. This is one reason to be critical of the position of Sri Lankas Ranking in the LPI. Furthermore the LPI is one among many comparative rankings globally. Converting the LPI to a ranking out of 100 places Sri Lanka would rank at 88 (137/155). We could compare this with other related rankings as follows Ranking Type| Organization| Ranking| Comparative ranking out of 100| Logistics Performance Index 2009| The World Bank| 137 out of 155| 88| Doing Business 2011| The World Bank| 102 out of 188| 56| Best Container Ports in the world| Containerization International Magazine Year Book 2009| 27 out of all World Ports| Within the top 2%| | | | | | | | Conclusion By analyzing the logistics related performance of Sri Lanka through various trade statistics it can be identified that Sri Lanka as a whole had a comparatively bad year due to the prevailing situation in the country at the time. Reference List 1. Connecting to Compete – Trade Logistics in the Global Economy 2010. The World Bank Publications 2. Export growth: The challenge of poor logistics – Article of e research by the Pathfinder Foundation, Daily News 21st June 2011 3. Doing Business 2011 – Comparing Business Regulation in 183 Economies, a Co Publication of The World Bank and International Financial Corporation. 4. Sri Lanka Ports Authority official website 5. Sunday Times 4th September 2011, Business Section – â€Å"Customs to Open Green Channel for 75 Companies† 6. Daily News 9th February 2011, Performance Index gives wrong signal to investors – Rohan Masakorala 7. Daily News 4th August 2011, ACFA wants Green Channel examination reintroduction 8.

Conservation of mass during a chemical change Lab Report

Conservation of mass during a chemical change - Lab Report Example This is a precipitation reaction and we expect to find a white solid formed as the reaction progresses. The two compounds are products in the Solvay process that is used in the large scale manufacture of sodium carbonate. In our second set up, sodium carbonate is reacted with hydrochloric acid. From our elementary chemistry the products we expect are sodium chloride and carbon IV oxide. Carbon IV oxide will be seen as bubbles emanating from the progressing reaction. Therefore as the carbon IV oxide is lost and this will affect the results as the mass of the products will be less than that of the reactants. In the first set up 5ml of 1M sodium carbonate was put in a clean test tube and in a different test tube 5ml of 1M calcium chloride was put. The masses of both test tubes with contents were recorded. Then the contents of the two test tubes were mixed. All observations were recorded. After the reaction was completed the contents were weighed again and the mass recorded. In the second set up, 5ml of 1M sodium carbonate was put in a test tube and 5ml of hydrochloric acid put in another. The test tubes were placed in a beaker and the mass of the arrangement taken. The two were then mixed and all observations recorded as the reaction was progressing. The mass of the set up was taken again after the reaction was over and recorded. The change in mass was 0.137 grams which is negligible. We did not expect the mass to change as using the law of mass conservation as projected by Antoine Lavoisier in 1789, the mass of the reactants should be equal to the mass of the products. There is no compound lost during the reaction and the little change in mass could be due to errors in measurement or the production of heat during the reaction. The change in mass recorded was 2.597 grams which is significant. Change in mass was expected as there was bubbling taking place as the reaction progressed which

Interview Assignment Example | Topics and Well Written Essays - 500 words - 2

Interview - Assignment Example The first question focused on how the manager would deal with dishonest workers in the organization. Malcolm responded by saying, â€Å"Many people apply assumptions whilst dealing with such cases. This is wrong. I would focus on the reasons behind the behavior, and deal with the case based on past experiences; then take action on the employees.† Secondly, I asked Malcolm what he would do if his boss did something unethical and he was aware of it. He answered by saying he would first assess their perception on ethics and being in power. It is at this point that he would advise them according to the ethical policy. The third question focused on the wits of the manager. I asked Malcolm how he would handle contradictory values that exist in the employee handbook that is the basis of operation of the organization. He responded, â€Å"That question is extremely tricky. However, as the manager, it is my role to put the organization in place. I will focus on the past experiences in the work place then decide the best measure based on the precedents.† From the interview, it is evident that Malcolm is not only a reasonable employee, but also an individual that adheres to the ethics of his profession. As argued by Becker, the most prevalent ethical dilemmas in the work place revolve around conflicts of interest, utilization of the organization’s resources and human resource (26). From the interview, it is evident that Malcolm faced these challenges and was able to handle them in an ethical manner. Malcolm believes that ethical issues are handled effectively in his work place as they follow strict protocol in dealing with these issues. The rules apply to all members regardless of their affiliation and status in the organization, which explains why in the interview, Malcolm attests to questioning his supervisor if they did contrary to the ethical guidelines. Becker continues to argue that the

Business Operations of Ford Motor Company Essay - 1

Business Operations of Ford Motor Company - Essay Example According to the research findings, it can, therefore, be said that today, Ford Motor Company is the second largest vehicle manufacturer in America and ranks fifth in the world. The company initially introduced Ford Fiesta in the American market during the 1970s. However, this new product failed to grab a large percentage of the automobile market. Although Ford Fiesta did not sell in the American market, the product grabbed a place in the market of Europe and its sales volume has been good for more than four decades now. The Fiesta car is changing the preference of buyers in fairly quicker rate. Particularly, in Britain, Fiesta car model has the largest market compared to other car models. Based on the results of recent researches that customers are more willing to buy low CO2 automatic and low-cost vehicle, Ford has used Fiesta strategy to accommodate these preferences. The Fiesta’s gearbox is different from traditional torque converters. It is a dual-clutch transmitter and t his enables it to drain less power, thus having a decent fuel economy. The Ford Fiesta car has a kinematic design. Ford Company uses this design to ensure minimal noise, harshness, vibration, and smooth ride. This product also has many features like 6-Speed Powershift Automatic Transmission (SPAT), Ti-VCT Engine (Twin Independent Variable Camshaft Timing), ESP (Electronic Stability Programme that has TSC (Traction Control System), fuel efficiency, easy fuel, seductive center console, and Bluetooth that has voice control. The company represents this new brand with a better warranty and services. The buyers of Ford Fiesta are given a 3-year warranty that is only valid when the vehicle is in the appropriate condition prescribed in the owners’ manual that is authorized by Ford Service Center.

Interview Assignment Example | Topics and Well Written Essays - 500 words - 1

Interview - Assignment Example Improved communication has facilitated business and the economy. There is a slight difference between the communication systems between the USA and Brazil. The main difference arises in the language used in the two countries; Brazil communications systems utilize Portuguese while communications systems in USA use English. The two nations also differ due to the access to technology and the resources at the disposal of the nation. The technology in the United States is advanced compared to Brazil. The cost of communication equipment also differs across the two nations; access to information is cheaper in USA compared to Brazil (Hallin & Daniel 301). Developed communications in USA make communication reliable and fast this is an advantage compared to slower connections speeds in Brazil. Well developed communication system USA is cheaper compared to costs in Brazil, the high cost reduces the number of people with access to communication. Control over communication in USA enables the government to curb internet crimes which affect Brazil. Developed communication infrastructure in USA has facilitated trade and social communication. Increased communication between businesses has improved information flow thus economic growth. The advantages of the communications systems in Brazil are the unique culture and focus on the local community. Increased interaction between the countries is facilitating cultural transfer through tourism (Hallin & Daniel 307). Rodrigo and I have been communicating trough social media which has been facilitated by improved communication systems in the two countries. We have communicated a lot about the nature of our countries and the facilities available. Although the US has advanced communication technologies, Brazil has a rich culture which can be exported to other nations through

Kay Success Factors (KSFs) Article Example | Topics and Well Written Essays - 250 words

Kay Success Factors (KSFs) - Article Example In terms of social force, Canada is seeing a demographic shift toward living in bigger cities according to the Statistics Canada Census Metropolitan Areas (CMA), 2011 and 2006 censuses (1). This will give Wash-it a better understanding at targeting and segmentation of both the market the consumer base. Canadians are also shifting towards a â€Å"Green Culture† which allows more use of renewable energy and saving resources such as water, these changes align with the Wash-it product ideas and aims. 10 Another force that affects the Wash-it product is the Economic forces. According to The Current State of Canadian Family Finances of Vanier Institute (2) the Canadian economy is in a recovery stage and seeing an increase in gross income as well as an increase of disposable income for households. Using the previous information, Wash-it can reflect its pricing range based on these numbers. 10 The third force that effect Wash-it is the Technological forces. Wash-it is based on a mix of existing technologies. These technologies need to be improved and upgraded in Washit to stay up to date with the fast paced industry of technology. It’s also worth mentioning that more and more people are getting online, this also adds to the effects on the consumer’s base. 10 In order for the product line to be successful it must engage certain Key Success Factors (KSFs) in order to be able to adequately penetrate the market and have the potential ability to turn a profit for the firm. The first of these is the level to which the supply and delivery mechanisms of the given product can help to place the firm at a competitive advantage as compared to its competitors. Without a well planned and highly efficient supply mechanism, the firm’s offering is dead before it can even hope to gain market share. 11 A secondary logistical KSF is the fact that suppliers of the device will need to be lined up and

Capturing the knowledge of individuals Assignment

Capturing the knowledge of individuals - Assignment Example This one challenge is the one that makes the modern expert systems to be unable to operate like humans do. Although these systems are not entirely perfect for delivering decisions like human beings, they do have a number of useful elements that make it worth investing in them. These knowledge systems can be used to help the organization on knowledge management. According to Malhotra (2000) one of the biggest advantages in the form of knowledge with these systems is that, unlike human experts, they don’t leave the firm and they don’t die. Knowledge and expertise held by these systems can stay in the organization forever as long as it is protected from physical damage. They therefore provide the firm with consistence knowledge over time and are able to make sure that this knowledge is always available. It is prudent for any firm to invest in this system because even if they cannot replace the experts completely, they are very useful in knowledge management. Expert systems are knowledge systems which helps the organization to not only store information but to also utilize it. They make it possible for the organization to store useful expert knowledge which can then be used by other experts and aids in decision making. The main importance of expert systems is that when correctly used, they gather the information from the experts of the organization and store this information in the form of knowledge. These systems don’t just gather information and data but rather.

Observation Checklist Essay Example for Free

Observation Checklist Essay Philosophy on Education is the belief that the passion to learn, the commitment to succeed, and the motivation to try, is the passage through the core values that a teacher instills to a student, as learning becomes a way of guidance that encourages pupils to improve. It is an educators duty to provide an environment that exhibits a multitude of ways for children to engage in the process of learning. When I was a young child, I always wanted to show people the things I have learned through my family, friends, manuals, and teachers. Then, I entered the field of teaching, where I was able to present to an audience of children, various techniques in reading, writing, and arithmetic under the auspices of the head teacher. Let alone, I wanted to help those whom where much more challenge than others. This interest has catapulted me towards the beginning of my career in education. The journey through my past experiences as a teacher assistant foreshadowed my teaching styles. Under the auspices of the certified staff, I was given the opportunity to work in a population that requires an extra bit of patience. In formulating my approach to each class lesson, there was a need to implement hands-on learning as the basis for each work session. An adulating engagement with the student, while promoting encouragement, and confidence in taking tasks has its role in part with the learning process. Once the student becomes self sufficient, then the teaching has effectively accomplish its role. Furthermore, the importance of a teacher making assessments on a students capabilities is vital to facilitating education. In the successful grasping of an academic material and its content, being able to have rapport with the students to gain better understanding of their capabilities should intertwine directly with each learning style. Fostering a positive teaching environment requires that the student receives an invitation to participate in a friendly atmosphere. As a proclamation, there should be willingness for each student to express themselves with an utmost pride towards their work and success. In conclusion, my goal as a teacher is to provide to in each and every student with the necessary skills and knowledge so they could succeed on their own. I want to leave a memory of myself as teacher who was not afraid to roll up the sleeves to help another student in any way and influenced others to do the right thing. My colleagues recall me a teacher who regularly participates and who was active to contribute assistance to the school community.

What Extent Did the Existence of the Third Reich Depend on the One Person Adolf Hitler Essay Example for Free

What Extent Did the Existence of the Third Reich Depend on the One Person Adolf Hitler Essay After the First World War, in 1919 Hitler joined the gor strasser)National Socialist German Workers Party (NASPD) as a regular member and with the help of his personal qualities and great speaking skills he was then made its leader in 1921. In 1924 after his release from prison and his written work Mein Kampf his significance within the German politics rose as he attacked the conditions of the Treaty of Versailles and promised a Lebensraum for all the Germans. The Nazi party had anti-Semitic ideas, blaming the state of the country at the time on the Jews, with Hitler orating those thoughts to the public who wanted to have someone to blame for all the problems in Germany. Hitler had such a charisma that people believed whatever he said (Emil Klein, Nazi supporter, 1920s, BBC interview) so he soon became very popular with the population. He also appealed to the majority of the population as he considered racially pure Germans special and the people believed that and connected with him. In 1933 he was appointed the Chancellor of Germany and his ideas were accepted and supported all over the country. Later in 1934, after the death of the German president Paul von Hindenburg of that time, he became the absolute dictator of the Reich. After the First World War, with the approaching world crisis, Germany needed a strong leader to make a radical change. To aid the country, Hitler persuaded rich people to invest into a new kind of Germany, into a military regime with plans to conquer Europe. People’s belief in Hitler soon grew as there was less unemployment after he came to power just as he promised (Adolf Hitler, Appeal to the German People (January 31, 1933), p. 3) and he became the countrys central figure for the people. Hitler had a lot of power and was worshiped by Germany. He gathered thousands for his speeches, everyone wanted to see him and he was very welcomed everywhere in his Reich. He was involved in most decisions including the military ones, even though they were quite often questioned on whether the chances of success were all or nothing. Hitler was a very ambitious leader, and this is what put him in control of the Third Reich he shared the vision with those around him and then had others come up with ways of implementing them. He was infamous for being vague in detail. A good example of this is his meeting with the generals to discuss the future plans of action (Martin Bormanns Minutes of a Meeting at Hitlers Headquarters, (July 16, 1941)). Throughout the five hours of the meeting, there were no clear instructions that came from Hitler, he just outlined the aims and ideas and kept talking about them. From there it can be concluded that despite being the central figure, it wasn’t all completely up to him in the end. The Fuhrer made most of the decisions, especially the biggest ones, by himself and spent days alone waiting for the solution to come to him. However, although Hitler authorised the killings of the Holocaust, it was up to the others how this was to happen. He had trusted men around him, the generals that took over some of the responsibilities. Some of the people who made it all possible for the Third Reich’s existence were: Hermann Goring, who established the Geheime Staatspolizei ; Heinrich Himmler, who was head of the SS and Hitlers right hand, the person responsible for the Holocaust; Otto Eichmann, who is often portrayed as the mastermind, he did the administrative side of things he organised the transport for Jews to the concentration camps; and Paul Joseph Goebbels, who was the Reich’s Minister of Propaganda and was very close to Hitler all along. Those were the people close to Adolf Hitler, whom he in turn organised to do whatever he dictated. Propaganda of Hitler, with Joseph Goebbels in charge, was one of the most important factors that built the whole Third Reich around him. Films, which had political hints in them for the audience were created; films about Adolf Hitler were made like Triumph of the Will, creating the myth about The Munich Putsch, a photo shoot of Hitler in his charismatic poses and other forms of propaganda were in use. It helped the people connect with the leader, gave them hope and certainty for a good future. The popular ideas in the country were also a sort of propaganda. Hitler wanted to have all ethnic Germans together under his rule. It didn’t make people think about the ruthless and cold-hearted actions that were to follow, like the purification of the nation: something that Hitler alluded to in some of his speeches. Also organisations like the Hitler Youth were created to make future soldiers of Germany and to get the new ideas into the children, as that was easier to do with children than with adults. It was important to have the people believe in Hitler, that’s what made him the powerful leader he was for the country. He said that people at war didnt die, that they lived on in the hearts of the whole Germany. People then trusted him and followed him. Having looked at a few most important facts and some evidence, it can be concluded that the existence of the Thirdnce of 3disions entirely by himself. menting it. Reich was totally dependent on one person. Its established that the political, social and economic situations in the country were just perfect for someone with the right ideology, ambitions, and ruthlessness to become its leader. Finally, having the right set of skills, he was able to gather around a dedicated group of followers as ruthless as himself. He persuaded rich imperialists to invest into a bankrupt state with the view to conquer Europe and promises of even more riches for the rich and his propaganda promised ordinary people that they would become the greatest nation in the world.

The Power Of Voice English Literature Essay

The Power Of Voice English Literature Essay The book Their Eyes Were Watching God follows the story of Janie Crawford. It is a story not only of the main characters search for individuality, but her search for a voice of her own, and an escape from patriarchal figures of her time. Because she lives in male dominated society, her voice is often shunned and not accepted, yet she finds way of somehow evade the thinking of such a society and somehow make her voice be heard. Voice is a tool, rhetorical and literary, and is in itself very powerful. It was the time to hear things and talk. These sitters had been tongueless, earless, eyeless conveniences all day long. Mules and other brutes had occupied their skinsà ¢Ã¢â€š ¬Ã‚ ¦..They became lords of sounds and lesser things. They passed nations through their mouths. They sat in judgment. (Neale Hurston 29-30) Hurston employs the folkloric symbol of the mule to reveal the ways in which the African-American people can be dehumanized and silenced by society. People are compared to animals, mules, which are considered the brutes of all animals. The workers, had always been tongue less, never had a chance to speak their own mind, and therefore they had no voice and wont if they continue to be treated the way they are. Hurston, as an informing narrative consciousness, uses interiority in Their Eyes to characterize those who are silent and lack their own voices, as well as to add dimension to those with voices. (Racine 283) Racine expresses how Hurston decided to write about how some people did possess a voice, while others were deprived from it, and were not allowed to express who they truly were. This is proven, as in the story, Janies grandmother was born during slavery, black people or African Americans, did not possess any voice at all, her grandmother always wanted to make a great speech, but no one would listen, and even though she made Janie marry too young, she had always wanted Janie to be able to speak and have people listen. Yet it is not so easy, as when the town of Eatonville asks Janie to make a speech, Joe, her husband says that because she is a woman she doesnt know anything about making speeches and doesnt allow her to speak silencing her voice. By doing so, all her admirations and hopes are crumbled down by the stubbornness of one man. The years took all the fight out of Janies face. For a while she thought it was gone from her soul. No matter what Jody did, she said nothing. She had learned how to talk some and leave some. She was a rut in the road. Plenty of life beneath the surface but it was kept beaten down by the wheels. (Neale Hurston 108). This is another example of voice, as Janie is unable to communicate and feels isolated, she sees herself as the rut in the road.. All the life she had aspired for had been taken from her and hidden, she could not see it, nor experience it. Her marriage worsens and worsens, and she speaks less and less every time. Another phrase that represents the ideals of having a voice is shown on chapter 8 of the book, She thought back and forth about what had happened in the making of a voice out of a man. (Neale Hurston 119). Joe thinks he has become a big voice, and therefore he thinks that makes him important, but he concentrates so much on that voice that he forgets others have voices as well, and therefore he loses everything he has, including his heart and humanity. Joe was a man, a man in which Janie had found a husband, but his voice became crumbled and blasphemy, and the voice that had one characterized him was the one that took from him all that was good. We have all felt repressed at some stage during our lives, as if we are not able to speak or to be listened, but in the end, we find who we are and the voice we have and share with others. We all find that one moment in which we achieve victory over oppression and in the book Janie finally finds it at the end, with her voice being free and able to represent who she is. Our voice makes us and what we do with it will impact what we might become in the future. Works Cited Page Neale Hurston, Zora.  Their Eyes Were Watching God. J.B. Lippincott, 1937. Print. Racine, Maria J. . African American Review. Trans. Array1994. 283. Print.

Opportunities for International Investors Essay -- Essays Papers

Opportunities for International Investors ATTITUDES TOWARDS FOREIGN INVESTMENT Because the Foreign Investments Law and supplementary rules establish the principle of equal treatment for domestic and foreign investors, foreign investors enjoy the same rights and duties as Argentine investors. However, the government no longer grants special incentives. Argentina welcomes foreign investments, and its laws governing foreign investment are among the most liberal in the world. In general, Argentina encourages investments through a free-market policy and low income tax rates rather than through subsidies. The basic attitude towards foreign capital is very positive; all previously existing requirements concerning prior government approval of foreign investments have been eliminated. Argentina has traditionally been very hospitable to foreigners. The Argentine government is making active efforts to attract foreign investments. Foreign investments obviously have also played a very important role in the privatization process, referred to below. Domestic capital resources are not sufficient for economic development; the government therefore encourages the inflow of foreign investment. Because Argentina formerly followed a protectionist economic policy to promote inward development, economic activity was excessively regulated. Under a new strategy to encourage foreign trade, rules that obstructed foreign trade have been modified or eliminated. Further, permission is no longer required to import goods, the import tariff structure has been simplified and tariffs have been reduced. Taxes on exports have been almost eliminated. All restrictions and procedures that in the past slowed down the entry of capital and technology from abroad have been abolished. Changes in foreign investment regulations have eliminated obstacles to the inflow of capital into Argentina. RESTRICTIONS ON INTERNATIONAL INVESTMENTS. All restrictions on foreign investments have been lifted and foreign investment does not require any prior approval from the Argentine authorities. Although some remain in sensitive areas such as defense, telecommunications, and oil and gas. Profits may be freely transferred. STATE ASSISTANCE AND GRANTS Special incentives for certain activities and tax reimbursements on exports, among others, are granted under identical conditions to nationa... ... and its eight hypermarkets. Royal Ahold also has a large operation; the Dutch retailer is joint owner of 235 Disco supermarkets. Any improvement for Wal-Mart in Argentina rests on its ability to increase its size substantially and on the economy improving; the outlook for the latter is still suspect. The economy performed worse than expected last year and the outlook for this year, according to the International Monetary Fund, is for 2.5% gross domestic product growth. Interest rates have fluctuated wildly, but the prime lending rate was still in the upper teens at press time.The government has attempted to institute reforms that will stimulate the economy and restore growth. Bibliography Howell, Llewellyn D. and Chad*censored*, Brad, "Models of Political Risk for Foreign Investment and Trade," Columbia Journal of World Business, Fall 1994a. Levy, John B. and Yoon, Eunsang, "Methods of Country Risk Assessment for International Market - Entry Decision," Institute for the Study of Business Markets (ISBM), Report 11-1996. CNN- News Net Work/ business & Finance McGraw-Hill; International Business. e7th; p.191 www. Businessmonitor.co.uk World Bank / Argentina Opportunities for International Investors Essay -- Essays Papers Opportunities for International Investors ATTITUDES TOWARDS FOREIGN INVESTMENT Because the Foreign Investments Law and supplementary rules establish the principle of equal treatment for domestic and foreign investors, foreign investors enjoy the same rights and duties as Argentine investors. However, the government no longer grants special incentives. Argentina welcomes foreign investments, and its laws governing foreign investment are among the most liberal in the world. In general, Argentina encourages investments through a free-market policy and low income tax rates rather than through subsidies. The basic attitude towards foreign capital is very positive; all previously existing requirements concerning prior government approval of foreign investments have been eliminated. Argentina has traditionally been very hospitable to foreigners. The Argentine government is making active efforts to attract foreign investments. Foreign investments obviously have also played a very important role in the privatization process, referred to below. Domestic capital resources are not sufficient for economic development; the government therefore encourages the inflow of foreign investment. Because Argentina formerly followed a protectionist economic policy to promote inward development, economic activity was excessively regulated. Under a new strategy to encourage foreign trade, rules that obstructed foreign trade have been modified or eliminated. Further, permission is no longer required to import goods, the import tariff structure has been simplified and tariffs have been reduced. Taxes on exports have been almost eliminated. All restrictions and procedures that in the past slowed down the entry of capital and technology from abroad have been abolished. Changes in foreign investment regulations have eliminated obstacles to the inflow of capital into Argentina. RESTRICTIONS ON INTERNATIONAL INVESTMENTS. All restrictions on foreign investments have been lifted and foreign investment does not require any prior approval from the Argentine authorities. Although some remain in sensitive areas such as defense, telecommunications, and oil and gas. Profits may be freely transferred. STATE ASSISTANCE AND GRANTS Special incentives for certain activities and tax reimbursements on exports, among others, are granted under identical conditions to nationa... ... and its eight hypermarkets. Royal Ahold also has a large operation; the Dutch retailer is joint owner of 235 Disco supermarkets. Any improvement for Wal-Mart in Argentina rests on its ability to increase its size substantially and on the economy improving; the outlook for the latter is still suspect. The economy performed worse than expected last year and the outlook for this year, according to the International Monetary Fund, is for 2.5% gross domestic product growth. Interest rates have fluctuated wildly, but the prime lending rate was still in the upper teens at press time.The government has attempted to institute reforms that will stimulate the economy and restore growth. Bibliography Howell, Llewellyn D. and Chad*censored*, Brad, "Models of Political Risk for Foreign Investment and Trade," Columbia Journal of World Business, Fall 1994a. Levy, John B. and Yoon, Eunsang, "Methods of Country Risk Assessment for International Market - Entry Decision," Institute for the Study of Business Markets (ISBM), Report 11-1996. CNN- News Net Work/ business & Finance McGraw-Hill; International Business. e7th; p.191 www. Businessmonitor.co.uk World Bank / Argentina

Donatello :: Biography

Donatello was born in Florence, Italy in1386. The full name of Donatello is Donato di Niccolo di Belto Bardi (â€Å"Donatello† par 1, 2, 3). His dad was a wool comber (â€Å"Donatello† par 1, 2). There was not much information found on his mom. He had a first job and that in the workshop of Lerenzo Ghilberti, a gothic sculptor, between 1404 and 1407(â€Å"Donatello† par 1, 2, 3). After that job he worked at a Florence Cathedral in 1407. At the Cathedral he decorated tombs and pulpits and made portrait busts and monuments (â€Å"Donatello† par 1, 2). An inspiration for his work was by ancient visual examples (â€Å"Donatello† par 1). He achieved his full intensity in the beginning of the 15th century (â€Å"Donatello† par 1, 2, and 3). In the later part of his life he studied Roman Ruins and became a Humanist (Blood par 1). In Donatello’s lifetime he had many accomplishments weather it was sculpting or just huge achievements. Donatello sent a while on his famous sculptor, Saint George, which was sculpted from 1416 to about 1420(ward par 2, 3, 4). 1428 was when the town put up a ancient Roman Pillar in the market place and that they asked him to make a statue because they believed he was the best sculptor(Morley 13,18). One of the monuments he created was Padua and he created that between 1443 and 1453. A well know sculptor of his was the statue Zuccone which people say showed the effective use of realism(Ward par 2,3,4). Donatello created many bronze sculptures. A huge achievement was his gilt bronze Herod’s feast. Another gilt bronze he made was St. Louis of Toulouse sculpture. One huge milestone was he made the first freestanding bronze naked bronze sculpture (Lewine par 2, 4). He designed twin bronze pulpit for San Lorenzo. The most important bronze sculpture was David was his first free-standing nude statue of the renaissance (â€Å"Donatello† par 2, 4). A huge famous sculpture he did was Gattamelata. That statue was supposed to represent a no ruler (â€Å"Donatello â€Å"par 2, 4). His statue called St. George was so good that even Michelangelo complemented it (Hale 109). John Pope Henessy, a great author, he noted that he was one of the greatest sculptors that ever lived. Following his sculptor called St. Gorge, he made St.Gorge and the dragon. St George was his first attempt at portraying a three dimensional scene on a flat surface (â€Å"Donatello† par 5, 7).

Financial Analysis of Bank of America

Financial Statement Analysis of Bank of America Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of Bank of America1 1. 1Balance sheet1 1. 2Income statement2 1. 3Regulatory capital ratios2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1Bank of America3 1. 5. 2JP Morgan Chase3 1. 5. 3Citi Group3 1. 6Netting Financial Instruments3 1. 6. 1Bank of America4 1. 6. 2Comparable banks4 1. 6. 3Analysis of the impact4 2Fair Value Accounting for Financial Instruments4 2. Fair value accounting4 Table 6 Summary of the Fair Value Income5 2. 2Opinions about fair value accounting5 3Interest Rate Risk and Net Interest Earnings6 3. 1Net interest margin6 3. 2Interest rate risk7 4Credit Risk and Losses7 4. 1Main loss reserve adequacy ratios8 4. 2Policy to designate past due loans as non-performing8 4. 3Adequacy of the bank’s allowance for loan losses8 4. 4Disclosure policies relating to loans8 5Appendix9 * Part 1 Financial Statements of Bank of America . 1. 1 Balance sheetBank of America’s balance sheet has total assets of $2,129,046 million in 2011, which is less than last year’s $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41. 92% of the total assets. The next largest asset was Available-For-Sale securities making up 12. 97% of total assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U. S. offices both interest bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was long-term debt at 19. % of total liabilities. In millions| 2011| % of total assets| 2010| % of total assets| % chg from 2010-2011| Total asset| 2,029,046 | 100. 00%| 2,264,909 | 100. 00%| -10. 41%| Loans and leases| 892,417 | 43. 98%| 898,555 | 39. 67%| -0. 68%| Available-for-sale| 276,151 | 13. 61%| 337,627 | 14. 91%| -18. 21%| Total liabilities| 1,898,945 | 93. 59%| 2,036,661 | 89. 92%| -6. 76%| Total deposits| 1,033,041 | 50. 91%| 1,010,430 | 44. 61%| 2. 24%| Deposits in U. S. offices| 957,042 | 47. 17%| 930,913 | 41. 10%| 2. 81%| Long-term debt| 372,265 | 18. 35%| 448,431 | 19. 80%| -16. 98%| Leverage ratio| 14. 0 | ? | 8. 92 | ? | 63. 58%| Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chase’s total deposits 54. 6% and long-term debt 22. 77% of total lia bilities, while Citi has deposits 51. 11% and long-term debt of 19. 09%. According to the deposits in U. S. offices, BOA focus more in U. S market and Citi focus more on market outside U. S. In millions| Bank of America| % of total assets| JP Morgan Chase| % of total assets| Citi Group| % of total assets| Total asset| 2,129,046 | 100. 00%| 2,265,792 | 100. 00%| 1,873,878 | 100. 00%| Loans and leases| 892,417 | 41. 92%| 696,111 | 30. 72%| 617,127 | 32. 93%| Available-for-sale| 276,151 | 12. 97%| 364,793 | 16. 10%| 293,413 | 15. 66%| ? | ? | ? | ? | ? | ? | ? |In millions| Bank of America| % of total liabilities| JP Morgan Chase| % of total liabilities| Citi Group| % of total liabilities| Total liabilities| 1,898,945 | 100. 00%| 2,082,219 | 100. 00%| 1,694,305 | 100. 00%| Total deposits| 1,033,041 | 54. 40%| 1,127,806 | 54. 16%| 865,936 | 51. 11%| Long-term debt| 372,265 | 19. 60%| 256,775 | 22. 77%| 3,235,050 | 190. 94%| Leverage ratio| 8. 25 | ? | 11. 34 | ? | 9. 44 | ? | | | | | | | | In millions| Bank of America| % of total deposits| JP Morgan Chase| % of total deposits| Citi Group| % of total deposits| Deposits in U. S. offices| 957,042 | 92. 64%| 851,534 | 75. 0%| 343,288 | 39. 64%| Table 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the event of a bank run, Bank of America will be in trouble due to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including cash and cash equivalents of $120,102 million, time deposits and other short-term investments of $26,004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it will still only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of America’s income statement is net income of $1,446 million, which increased compared to a net loss of 2,238 in 2010. Interest income was $66 ,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the net interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, decreased by 16. 8% from 2010. This is partly due to the big loss of mortgage banking income, decreasing from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line while having net interest income decrease slightly. Regulatory capital ratios 2011| Bank of America| JP Morgan Chase| Citi Group| To be well capitalized| Leverage ratio| 7. 53%| 6. 80%| 7. 19%| 5%| Tier 1 risk-based capital ratio| 12. 40%| 12. 30%| 13. 55%| 6%| Total risk-based| 16. 75%| 15. 40%| 16. 99%| 10%| Table 3 Regulatory Capital Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all three regulatory ratios–Tier 1 capital, risk-based capital and leverage.Ba nk of America slightly increased all of its ratios from 2010 to 2011. Its tier 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly important; however there are some issues with them. The ratios are backwards looking, so there could be a large amount of change since in the numbers. There are also lots of adjustments made by the company to the different numbers that make up the ratio that might not even make sense such as ignoring AFS losses. The current risk weighting is also ve ry simplistic currently and might not reflect the actual risk of the assets.One important thing to note is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be implemented by January 1, 2015. According to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of potential financial meltdowns, it should hold more and better quality capital, carry more liquid ssets, and limit leverage. ( , ) Investment portfolio The net unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognized in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed other than temporarily (OTT) i mpaired, so that amortized cost is the carrying value. Amortized cost is a highly limited valuation basis for risky securities. There was very little mention of reclassification in Bank of America’s 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning equity securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). Only credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 is $360 million, and portion of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in earnings on AFS debt securities in 2011, compared to $970 million on AFS debt and mark etable equity securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesn’t divide these amounts into credit-related portion and non-credit related portion. Based on the other two banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after adoption. Citi Group Citigroup also adopted the same rules above in first quarter of 2009. As a result of the FSP, Company’s Consolidated Statement of Income reflects the full impairment on debt securiti es that the Company intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis.As a result of the adoption of the FSP, Citigroup’s income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was decreased by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss component of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Netting Financial Instruments | Â  | Bank of America| JP Morgan Chase| Citi Group| IFRS(Before netting)| Total assets| 2,130,796| 3,976,317| 2,749,470| | Total debt| 1,900,695| 3,792,742| 2,564,671| | Total equity| 230,101| 183,575| 184,799| | Leverage ratio| 8. 26| 20. 66| 13. 88| GAAP(After netting)| Total assets| 2,129,046| 2,265,792| 1,873,878| | Total debt| 1,898,945| 2,082,219| 1,694,305| | Total equity| 230,101| 183,573| 179,573| | Leverage ratio| 8. 25| 11. 34| 9. 44| Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4—Derivatives, Bank of America had legally enforceable master netting agreement that would reduce both derivative assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash collateral was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldn’t affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross derivative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was insignificant compared to Bank of America’s total asset base (2,129,046 million, about 0. 08%). Th erefore, the leverage ratio would only increase slightly due to this change, from 8. 25 under GAAP to 8. 26 under IFRS. Comparable banks J. P. Morgan Chase’s gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chase’s total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a much higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Group’s netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against derivative liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of t he netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the presentation of netting financial instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a distinguished difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive picture of banks’ derivative instruments; however, it would overstate risk to some extent. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant metrics than the gross amounts. Naturally, this comes about from looking to the way that derivatives are traded under an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the replacement by a single net am ount. Secondly, another metric to measure derivative portfolios is volatility which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change before solvency is affected. Finally, as the third most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. Collateral amounts further reduce the risks and have to be taken into consideration for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting From table 5 and the three computation tables in Appendix, we can see that under Full Fair Value method, Bank of America’s net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi w ould experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions| Bank of America| JP Morgan Chase| Citi Group| Adjustments for assets and liabilities at HC on balance sheet| 6,127 | 1,140 | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| -4,819 | 633 | 2,190 | Total adjustment| 1,308 | 1,773 | 14,190 | Net income as per financial statements| 1,446 | 18,976 | 11,215 | Full fair value income with information available| 2,754 | 20,749 | 25,405 | * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as it had a significant unrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, su ch difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any specific events affecting the operations of the issuer, underlying assets that collateralize the debt security, other industry and macroeconomic conditions, and management’s intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses included in accumulated OCI. In 2011, the fair value of net ALM contracts decreased $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair value accounting Fair Value Accounting has many advantages and disadvantages as listed below. FVA advantages include the following: FVA depicts a clearer picture of the company’s financi al situation, as it provides an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers’ ability to manipulate the reported net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For Level 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the selective realization of cumulative unrealized gains and losses on positions, an activity referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typi cally is persistent for as long as firms hold positions, but becomes transitory when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include: The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A solution for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price may change back to the normal level. Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Manager s need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the drop in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and there’s no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair value for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any signif icant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk exposure and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, especially during financial crisis.Fair value accounting would further contribute to the deterioration in the value of a company’s financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under today’s economy. FVA provides better insight of the financial statements, in ddition to limiting the potential for manipulation. However, in my opinion, under today’s economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to: (1).There’s a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78% to 4. 18%. (2). Noninterest income declined from the previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warrant ies costs and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of America's income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in modeled prepayment expectations, and increased hedge ineffectiveness. (4). Bank of America’s declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such downward trend in net interest margin can be observed in other banks as well. The following table presents total interest-earning assets rate and total interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks experienced a decline in interest-earning assets rate over three years: 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year; 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8%; 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks’ declining net interest margin were higher deposit balances with lower loan yields. | Bank of America| JP Morgan Chase| Citi Group| | 2011| 2010| 2009| 2011| 2010| 2009| 2011| 2010| 2009| Total interest-earning assets rate| 3. 65%| 4. 02%| 4. 31%| 3. 51%| 3. 83%| 4. 04%| 4. 27%| 4. 55%| 4. 78%| Total interest-bearing liabilities| 1. 39%| 1. 39%| 1. 77%| 0. 86%| 0. 84%| 1. 02%| 1. 63%| 1. 61%| 1. 3%| Table 6 Net Interest Margin of Three Banks Interest rate risk BOA’s net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel shift in interest rate. 1% downward change in interest rate results in a bigger decrease in net interest income in 2011 than in 2010. However , according Chase’s 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward shift| 2011| 2010| BOA| ($2,122)| ($998)| JP Morgan Chase| NM| NM| Citi Group| NM| NM| Table 7 The Impact of 1% downward shift on Net Interest Income BOA’s net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upward parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase and smaller impact for Citi. 1% upward shift| 2011| 2010| Bank of America| $1,505 | $601 | JP Morgan Chase| $2,326 | $1,483 | Citi Group| $97 | ($105)| Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the bank’s allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Held-to maturity debt securities| 35,265 | 35,442 | 427 | 427 | 177 | – | 177 | Loans| 870,520 | 843,392 | 876,739 | 861,695 | (27,128)| (15,044)| (12,084)| Total assets| 905,785 | 878,834 | 877,166 | 862,122 | (26,951)| (15,044)| (11,907)| Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 1,033,041 | 1,033,248 | 1,010,430 | 1,010,460 | 207 | 30 | 177 | Long-term debt| 372,265 | 343,211 | 448,431 | 441,672 | (29,0 54)| (6,759)| (22,295)| Total liabilities| 1,405,306 | 1,376,459 | 1,458,861 | 1,452,132 | (28,847)| (6,729)| (22,118)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | 1,896 | (8,315)| 10,211 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? ? | 6,127 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? | Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | (4,270)| Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (549)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,308 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 1,446 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 2,754 | JP Morgan ChaseIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Loans| 696,100 | 695,800 | 660,700 | 663,500 | (300)| 2,800 | (3,100)| Other| 66,300 | 66,800 | 64,900 | 65,000 | 500 | 100 | 400 | Total assets| 762,400 | 762,600 | 725,600 | 728,500 | 200 | 2,900 | (2,700)| Liabilities:| ? | ? | ? | ? | ? | ? | ? |Deposits| 1,127,800 | 1,128,300 | 930,400 | 931,500 | 500 | 1,100 | (600)| Accounts payable and other liabilities| 167,000 | 166,900 | 138,200 | 138,200 | (100)| – | (100)| Beneficial interests issued by consolidated VIEs| 66,000 | 66,200 | 77,600 | 77,900 | 200 | 300 | (100)| Long-term debt and junior subordinated deferrable interest debentures| 256,800 | 254,200 | 270,700 | 271,900 | (2,600)| 1,200 | (3,800)| Total liabilities| 1,617,600 | 1,615,600 | 1,416,900 | 1,419,500 | (2,000)| 2,600 | (4,600)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? ? | ? | 2,200 | 300 | 1,900 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? | ? | 1,140 | Adjustment s for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 1,067 | Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (279)| Cash flow hedge| ? | ? | ? | ? | ? | ? | (155)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,773 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 18,976 | Full fair value income with information available| ? ? | ? | ? | ? | ? | 20,749 | Citi Group In $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet? | Assets:| ? | ? | ? | ? | ? | ? | ? | Investment| 293,400 | 292,400 | 318,200 | 319,000 | (1,000)| 800 | (1,800)| Loans| 614,600 | 603,900 | 605,500 | 584,300 | (10,700)| (21,200)| 10,500 | Total assets| 908,000 | 896,300 | 923,700 | 903,300 | (11,700)| (20,400)| 8,700 | Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 865,900 | 865,800 | 845,000 | 843,200 | (100)| (1,800)| 1,700 | Long-term debt| 323,500 | 313,800 | 381,200 | 384,500 | (9,700)| 3,300 | (13,000)| Total liabilities| 1,189,400 | 1,179,600 | 1,226,200 | 1,227,700 | (9,800)| 1,500 | (11,300)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | (1,900)| (21,900)| 20,000 | Aftertax adjustments before AFS securities and CFH derivatives| ? ? | ? | ? | ? | ? | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 2,360 | Cash flow hedge| ? | ? | ? | ? | ? | ? | (170)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 14,190 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 11,215 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 25,405 | Financial Analysis of Bank of America Financial Statement Analysis of Bank of America Group 1 Chen, Yelin Dong, Xiaoxu Gransbach, Jennifer Shuai, Wang Weiss, Charles 1Financial Statements of Bank of America1 1. 1Balance sheet1 1. 2Income statement2 1. 3Regulatory capital ratios2 1. 4Investment portfolio2 1. 5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3 1. 5. 1Bank of America3 1. 5. 2JP Morgan Chase3 1. 5. 3Citi Group3 1. 6Netting Financial Instruments3 1. 6. 1Bank of America4 1. 6. 2Comparable banks4 1. 6. 3Analysis of the impact4 2Fair Value Accounting for Financial Instruments4 2. Fair value accounting4 Table 6 Summary of the Fair Value Income5 2. 2Opinions about fair value accounting5 3Interest Rate Risk and Net Interest Earnings6 3. 1Net interest margin6 3. 2Interest rate risk7 4Credit Risk and Losses7 4. 1Main loss reserve adequacy ratios8 4. 2Policy to designate past due loans as non-performing8 4. 3Adequacy of the bank’s allowance for loan losses8 4. 4Disclosure policies relating to loans8 5Appendix9 * Part 1 Financial Statements of Bank of America . 1. 1 Balance sheetBank of America’s balance sheet has total assets of $2,129,046 million in 2011, which is less than last year’s $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41. 92% of the total assets. The next largest asset was Available-For-Sale securities making up 12. 97% of total assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U. S. offices both interest bearing and noninterest bearing, at 50. 4% of total liabilities. The next largest liability was long-term debt at 19. % of total liabilities. In millions| 2011| % of total assets| 2010| % of total assets| % chg from 2010-2011| Total asset| 2,029,046 | 100. 00%| 2,264,909 | 100. 00%| -10. 41%| Loans and leases| 892,417 | 43. 98%| 898,555 | 39. 67%| -0. 68%| Available-for-sale| 276,151 | 13. 61%| 337,627 | 14. 91%| -18. 21%| Total liabilities| 1,898,945 | 93. 59%| 2,036,661 | 89. 92%| -6. 76%| Total deposits| 1,033,041 | 50. 91%| 1,010,430 | 44. 61%| 2. 24%| Deposits in U. S. offices| 957,042 | 47. 17%| 930,913 | 41. 10%| 2. 81%| Long-term debt| 372,265 | 18. 35%| 448,431 | 19. 80%| -16. 98%| Leverage ratio| 14. 0 | ? | 8. 92 | ? | 63. 58%| Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878( ) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chase’s total deposits 54. 6% and long-term debt 22. 77% of total lia bilities, while Citi has deposits 51. 11% and long-term debt of 19. 09%. According to the deposits in U. S. offices, BOA focus more in U. S market and Citi focus more on market outside U. S. In millions| Bank of America| % of total assets| JP Morgan Chase| % of total assets| Citi Group| % of total assets| Total asset| 2,129,046 | 100. 00%| 2,265,792 | 100. 00%| 1,873,878 | 100. 00%| Loans and leases| 892,417 | 41. 92%| 696,111 | 30. 72%| 617,127 | 32. 93%| Available-for-sale| 276,151 | 12. 97%| 364,793 | 16. 10%| 293,413 | 15. 66%| ? | ? | ? | ? | ? | ? | ? |In millions| Bank of America| % of total liabilities| JP Morgan Chase| % of total liabilities| Citi Group| % of total liabilities| Total liabilities| 1,898,945 | 100. 00%| 2,082,219 | 100. 00%| 1,694,305 | 100. 00%| Total deposits| 1,033,041 | 54. 40%| 1,127,806 | 54. 16%| 865,936 | 51. 11%| Long-term debt| 372,265 | 19. 60%| 256,775 | 22. 77%| 3,235,050 | 190. 94%| Leverage ratio| 8. 25 | ? | 11. 34 | ? | 9. 44 | ? | | | | | | | | In millions| Bank of America| % of total deposits| JP Morgan Chase| % of total deposits| Citi Group| % of total deposits| Deposits in U. S. offices| 957,042 | 92. 64%| 851,534 | 75. 0%| 343,288 | 39. 64%| Table 2 Selected Financial Data from Balance Sheets of Three Banks in 2011 In the event of a bank run, Bank of America will be in trouble due to its high leverage, similar to many banks. Bank of America has deposits of $1,033,041 million, among which liquid assets only have $314,425 million, including cash and cash equivalents of $120,102 million, time deposits and other short-term investments of $26,004 million and trading assets of $169,319 million. Even with the ability to liquidate those non-cash assets, it will still only be able to honor slightly more than 30% of its depositors.Income statement The primary line item on Bank of America’s income statement is net income of $1,446 million, which increased compared to a net loss of 2,238 in 2010. Interest income was $66 ,236 million, down from $75,497 million in 2010. Total interest expense was $21,620 million, which makes the net interest income become $44,616 million, down 13. 4% from the previous year. Lastly, total noninterest income was $48,838 million, decreased by 16. 8% from 2010. This is partly due to the big loss of mortgage banking income, decreasing from $2,734 million in 2010 to $(8,830) million in 2011.Chase and Citi had similar trends, both slightly increasing their bottom line while having net interest income decrease slightly. Regulatory capital ratios 2011| Bank of America| JP Morgan Chase| Citi Group| To be well capitalized| Leverage ratio| 7. 53%| 6. 80%| 7. 19%| 5%| Tier 1 risk-based capital ratio| 12. 40%| 12. 30%| 13. 55%| 6%| Total risk-based| 16. 75%| 15. 40%| 16. 99%| 10%| Table 3 Regulatory Capital Ratios of Three Banks in 2011 In 2011, Bank of America was considered well capitalized for all three regulatory ratios–Tier 1 capital, risk-based capital and leverage.Ba nk of America slightly increased all of its ratios from 2010 to 2011. Its tier 1 capital ratio was 12. 4% while 6% is considered well capitalized, its risk based capital ratio was 16. 75% while 10% is considered well capitalized, and its leverage ratio was 7. 53% while 5% is considered well capitalized. ( Table 4, Table 3) Chase and Citi had very similar ratios to Bank of America. Chase was slightly below Bank of America and Citi for all three ratios but still well above the floor to be well capitalized.Citi had a slightly lower leverage ratio and slightly higher tier 1 capital and risk based capital ratios. Regulatory ratios are fairly important; however there are some issues with them. The ratios are backwards looking, so there could be a large amount of change since in the numbers. There are also lots of adjustments made by the company to the different numbers that make up the ratio that might not even make sense such as ignoring AFS losses. The current risk weighting is also ve ry simplistic currently and might not reflect the actual risk of the assets.One important thing to note is that the newly released Basel III norms by Basel Committee on Banking Supervision (BCBS) would require a higher regulatory capital ratio on banks. It is recommended that Basel III be implemented by January 1, 2015. According to the new rules, the mandatory Tier 1 common capital ratio would be 7%. Banks should maintain conservation buffer of 2. 5% and reserves amounting to 8. 5% of assets. Therefore, in order for Bank of America to meet the future requirements and be well capitalized in face of potential financial meltdowns, it should hold more and better quality capital, carry more liquid ssets, and limit leverage. ( , ) Investment portfolio The net unrealized gains on HTM securities of $177 million = $181 million + ($4) million that have not been recognized in OCI as of the end of 2011 are attributable to HTM securities that have not been deemed other than temporarily (OTT) i mpaired, so that amortized cost is the carrying value. Amortized cost is a highly limited valuation basis for risky securities. There was very little mention of reclassification in Bank of America’s 10-K. There was a mention of a reclassification of $26. billion primarily due to noninterest earning equity securities being moved from trading account assets to other assets, but no mention of anything else. Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI Bank of America According to FSP FAS 115-2 and FAS 124-2, banks are allowed to report non-credit related OTTI in Other Comprehensive Income (OCI). Only credit-related OTTI is recognized in net income. The Total OTTI losses (unrealized and realized) for 2011 is $360 million, and portion of other-than-temporary impairment losses recognized in other comprehensive income is about $61 millions.The net amount is $299 million which is recognized in earnings on AFS debt securities in 2011, compared to $970 million on AFS debt and mark etable equity securities in 2010. When we compute the regulatory Tier One Capital, the unrealized losses on AFS investments are (added back) excluded. Thus, the $61 million is added back to calculate the Tier One Capital. With adding back, Tier 1 risk-based capital ratio is 12. 40% as shown on 2011 Y9C. In absence of adding back, the ratio is (159,231,999-61,000)/ 1,284,466,933=12. 39%. JP Morgan Chase For JP Morgan Chase, the10K shows Total other-than-temporary impairment losses for are 27, 94, nd 946 million for year 2011, 2010 and 2009 respectively. ( ) However, it doesn’t divide these amounts into credit-related portion and non-credit related portion. Based on the other two banks examples, we can infer that the Tier One Capital for JP Morgan Chase will go up after adoption. Citi Group Citigroup also adopted the same rules above in first quarter of 2009. As a result of the FSP, Company’s Consolidated Statement of Income reflects the full impairment on debt securiti es that the Company intends to sell or would more-likely-than-not be required to sell before the expected recovery of the amortized cost basis.As a result of the adoption of the FSP, Citigroup’s income in the first quarter of 2009 was higher by $631 million on a pretax basis ($391 million on an after-tax basis) and AOCI was decreased by a corresponding amount. However, 2011 10K does not gives details about regarding the credit loss component of OTTI in 2011. When we compute the regulatory Tier One Capital for Citigroup, the unrealized losses from non-credit loss component on debt securities are (added back) excluded, which leads to an increase in Tier One Capital.Netting Financial Instruments | Â  | Bank of America| JP Morgan Chase| Citi Group| IFRS(Before netting)| Total assets| 2,130,796| 3,976,317| 2,749,470| | Total debt| 1,900,695| 3,792,742| 2,564,671| | Total equity| 230,101| 183,575| 184,799| | Leverage ratio| 8. 26| 20. 66| 13. 88| GAAP(After netting)| Total assets| 2,129,046| 2,265,792| 1,873,878| | Total debt| 1,898,945| 2,082,219| 1,694,305| | Total equity| 230,101| 183,573| 179,573| | Leverage ratio| 8. 25| 11. 34| 9. 44| Table 4 Netting Adjustments for Three Banks in 2011 Bank of AmericaAccording to Note 4—Derivatives, Bank of America had legally enforceable master netting agreement that would reduce both derivative assets and derivative liabilities by the same amount of 1,749. 9 million, respectively. Moreover, cash collateral was applied to net off derivative assets by 58. 9 million and derivative liabilities by 51. 9 million, respectively. However, the reduction caused by cash collateral wouldn’t affect total assets and total liabilities. If Band of America were to adopt IFRS, it would report higher gross derivative assets and liabilities by an increase of 1,749. million. However, the adjustment (1,749. 9 million) was insignificant compared to Bank of America’s total asset base (2,129,046 million, about 0. 08%). Th erefore, the leverage ratio would only increase slightly due to this change, from 8. 25 under GAAP to 8. 26 under IFRS. Comparable banks J. P. Morgan Chase’s gross derivative assets were offset by 1,710,525 million netting adjustments and gross derivative liabilities by 1,710,523. Such adjustments almost made up of 75% of Chase’s total asset base which is 2,265,792 million.Therefore, if to adopt IFRS, Chase would record a much higher assets and liabilities up to 3,976,317 million and 3,792,742 million, respectively. Leverage ratio, accordingly, would rise from 11. 34 to 20. 66, with an almost doubled increase. Citi Group’s netting adjustments of 875,592 million against derivative assets made up 46. 7% of total assets, and 870,366 million against derivative liabilities made up 33. 9% of total liabilities. When adopting IFRS, Citi would report a higher assets and liabilities, with its leveraging ratio growing from 9. 44 to 13. 88 due to the significant amount of t he netting adjustments. Analysis of the impactFrom the above table, we can see that Bank of America was merely affected by the presentation of netting financial instruments, while the other two banks were greatly affected in terms of leverage ratio. The main reason to such a distinguished difference is that Bank of America had the smallest investment in derivative instruments, compared to Chase and Citi. The gross approach would definitely give a more comprehensive picture of banks’ derivative instruments; however, it would overstate risk to some extent. Market risk of the derivative positions can be better evaluated using the gross presentation which is more detailed.Firstly, net figures are by far more relevant metrics than the gross amounts. Naturally, this comes about from looking to the way that derivatives are traded under an enforceable master netting agreement. The master netting agreement allows for the aggregation of all trades and the replacement by a single net am ount. Secondly, another metric to measure derivative portfolios is volatility which is driven by the risk of open market positions and the potential changes in net asset values and not the size of gross derivatives amounts.Therefore, gross balance sheet amounts are not particularly useful indicators of how much net derivative asset values would have to change before solvency is affected. Finally, as the third most important metric when evaluating the risks, collateral together with cash settlement procedures results in a liquidity profile that is more aligned with net presentation. Collateral amounts further reduce the risks and have to be taken into consideration for reporting derivatives Fair Value Accounting for Financial InstrumentsFair value accounting From table 5 and the three computation tables in Appendix, we can see that under Full Fair Value method, Bank of America’s net income would grow from 1,446 million to 2,750 million, an increase of 90. 2%. Similarly, Citi w ould experience an increase of 128. 2% in net income from 11,067 million to 25,257 million. However, full fair value method had insignificant impact on Chase, with a total adjustment of 1,773 million compared to its pre-adjustment net income of 18,976 million.In millions| Bank of America| JP Morgan Chase| Citi Group| Adjustments for assets and liabilities at HC on balance sheet| 6,127 | 1,140 | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| -4,819 | 633 | 2,190 | Total adjustment| 1,308 | 1,773 | 14,190 | Net income as per financial statements| 1,446 | 18,976 | 11,215 | Full fair value income with information available| 2,754 | 20,749 | 25,405 | * Table 5 Summary of the Fair Value IncomeAnother thing to note is that BOA stands out as it had a significant unrealized loss of 4,819 million on AFS, while its comparable banks, Chase and Citi, had a positive gain of 633 million and 2,190 million, respectively. Based on our analysis, su ch difference was driven by the following factors. (1). According to its disclosure, Bank of America recognized $299 million of other-than-temporary impairment (OTTI) losses in earnings on AFS debt securities in 2011 compared to $970 million on AFS debt and marketable equity securities in 2010, which contributes greatly in such a large amount of unrealized loss on AFS.The recognition of OTTI losses on AFS debt and marketable equity securities is based on a variety of factors, including the length of time and extent to which the market value has been less than amortized cost, the financial condition of the issuer of the security including credit ratings and any specific events affecting the operations of the issuer, underlying assets that collateralize the debt security, other industry and macroeconomic conditions, and management’s intent and ability to hold the security to recovery. (2).According to its disclosure, Bank of America presents debt securities purchased for longer term investment purposes which are as part of asset and liability management (ALM) and other strategic activities, as available-for-sale (AFS) securities, and report these securities at fair value with net unrealized gains and losses included in accumulated OCI. In 2011, the fair value of net ALM contracts decreased $7. 9 billion to a gain of $4. 7 billion, compared to $12. 6 billion in 2010. The decrease was primarily attributable to changes in the value of U. S. dollar-denominated pay-fixed interest rate swaps of $9. billion, foreign exchange contracts of $1. 8 billion and foreign exchange basis swaps of $1. 4 billion. The decrease was partially offset by a gain from the changes in the value of U. S. dollar-denominated receive-fixed interest rate swaps of $6. 6 billion. Opinions about fair value accounting Fair Value Accounting has many advantages and disadvantages as listed below. FVA advantages include the following: FVA depicts a clearer picture of the company’s financi al situation, as it provides an accurate asset and liability valuation as the prices are reflected in the market price.Fair value accounting limits managers’ ability to manipulate the reported net income, as the gains and losses are reported in the period they occur, not when they are realized as the result of a transaction. For Level 1 & 2, the price for financial instruments, are available in a liquid market. While under amortized accounting method, firms can manage their income through the selective realization of cumulative unrealized gains and losses on positions, an activity referred to as gains trading.FVA provides investors with more accurate, timely, and comparable financial information versus other alternative accounting approaches, even during extreme market conditions. Gains & losses resulting from changes in fair value estimates indicate economic events that companies and investors may find worthy of additional disclosures. Under amortized accounting, income typi cally is persistent for as long as firms hold positions, but becomes transitory when positions mature or are disposed of and firms replace them with new positions at current market terms.Disadvantages of FVA include: The price for certain assets and liabilities may fluctuate often, resulting in higher volatility than other accounting methods. When the market is volatile, the price for financial instruments may change a lot, so companies may recognize gains/losses. This volatility of earnings would make it more difficult for users to predict future performance and make regulatory capital ratio vary dramatically across periods. A solution for this disadvantage is regulatory capital should be delinked from fair value and reported by using historic cost information.After the market stabilizes, the price may change back to the normal level. Not every asset or liability can be easily fair valued. For financial instruments in level 3, there is no fair value in the liquidity market. Manager s need model to estimate the value of financial instruments in level 3. Using fair value accounting may have adverse effect on a down market. Companies may sell some financial instruments whose value decreased because of the drop in the current market price. They may not realize the drop without the fair value accounting.The market may stabilize over time, and the price for the financial instruments will return to their normal level. Another issue with fair value accounting is that when the market for instruments freezes up and there’s no liquidity in the market, financial instruments would have to be valued by using mark-to-model which in many situations are not reliable and transparent to investors. A solution to this is that regulators provide more specific guidance on how to determine fair value for financial statements.Disclosure requirements would include disclosure of fair value of all financial instruments along with method adopted to determine fair values, any signif icant assumptions used in their estimation, some indications of the sensitivity of the estimated fair value to these assumptions, and discussion of risk exposure and issues associated with the estimation of fair value. In addition, fair value accounting has very significant feedback effects, especially during financial crisis.Fair value accounting would further contribute to the deterioration in the value of a company’s financial instruments or assets and make it more difficult for companies to recover from the crisis. Recommendation here is that in special situations, regulators would allow companies that face severe crisis to adopt other accounting methods temporarily and minimize the loss of these companies. In summary, fair value has both advantages and disadvantages under today’s economy. FVA provides better insight of the financial statements, in ddition to limiting the potential for manipulation. However, in my opinion, under today’s economy situation, it is hard to fully implement the fair value accounting. Every disadvantage has proposed solutions to resolve the issues identified. Overall, FVA is recommended for use. Interest Rate Risk and Net Interest Earnings Net interest margin The net interest yield on a FTE basis was 2. 48 percent for 2011 compared to 2. 78 percent for 2010. Net interest income on a FTE basis decreased $7. 1 billion in 2011 to $45. 6 billion. The decline was primarily due to: (1).There’s a noticeable decrease in the yield on consumer loans from 6. 04% in 2010 to 5. 37% in 2011, which reduces net interest income by about 4,244 million (633,507 million * 0. 57%). * Debt securities and residential mortgage mainly contributed to the decline. The yield rate for debt securities decreased from 3. 66% to 2. 85%, and the residential mortgage from 4. 78% to 4. 18%. (2). Noninterest income declined from the previous year due to lower mortgage banking income, reflecting$11. 6 billion in representations and warrant ies costs and decline of $3. billion income from trading account profits. Noninterest income being the major source of Bank of America's income drastically impacts the profitability of the company. (3). In 2011 Bank of America had a decreased investment security yields, including the acceleration of purchase premium amortization from an increase in modeled prepayment expectations, and increased hedge ineffectiveness. (4). Bank of America’s declining net interest margin was partially offset by ongoing reductions in its debt footprint and lower rates paid on deposits.The total U. S interest-bearing deposits had an average yield of 0. 36%, compared to 0. 55% in 2008. Such downward trend in net interest margin can be observed in other banks as well. The following table presents total interest-earning assets rate and total interest-bearing liabilities for all three banks over 2009 to 2011. As shown, all banks experienced a decline in interest-earning assets rate over three years: 1) BOA from 4. 31% in 2009 to 3. 65% in 2011, with an average decrease of 8% every year; 2) Chase from 4. 04% to 3. 1%, with an average decrease of 6. 8%; 3) Citi from 4. 78% to 4. 27%, with an average decrease of 5. 5%. The main reasons for the other two banks’ declining net interest margin were higher deposit balances with lower loan yields. | Bank of America| JP Morgan Chase| Citi Group| | 2011| 2010| 2009| 2011| 2010| 2009| 2011| 2010| 2009| Total interest-earning assets rate| 3. 65%| 4. 02%| 4. 31%| 3. 51%| 3. 83%| 4. 04%| 4. 27%| 4. 55%| 4. 78%| Total interest-bearing liabilities| 1. 39%| 1. 39%| 1. 77%| 0. 86%| 0. 84%| 1. 02%| 1. 63%| 1. 61%| 1. 3%| Table 6 Net Interest Margin of Three Banks Interest rate risk BOA’s net interest income decreased by $2,122 million in 2011 and $998 million in 2010 from a 1% downward parallel shift in interest rate. 1% downward change in interest rate results in a bigger decrease in net interest income in 2011 than in 2010. However , according Chase’s 10K, downward 100bps parallel shocks result in a Federal Funds target rate of zero and negative three- and six-month treasury rates. The earnings-at-risk results of such a low-probability scenario are not meaningful.For Citi, a 100 bps decrease in interest rates would imply negative rates for the yield curve, so not meaningful either. 1% downward shift| 2011| 2010| BOA| ($2,122)| ($998)| JP Morgan Chase| NM| NM| Citi Group| NM| NM| Table 7 The Impact of 1% downward shift on Net Interest Income BOA’s net interest income would increase by $1,505 million in 2011 and $601 million in 2010 from a 1% upward parallel shift in interest rate. The same as downward change, 1% upward change in interest rate also would result in a bigger increase in the net interest income in 2011 than in 2010.Compared with BOA, 1% upward shift in interest rate has a bigger impact for Chase and smaller impact for Citi. 1% upward shift| 2011| 2010| Bank of America| $1,505 | $601 | JP Morgan Chase| $2,326 | $1,483 | Citi Group| $97 | ($105)| Table 8 The Impact of 1% Upward Shift on Net Interest Income Credit Risk and Losses Main loss reserve adequacy ratios Policy to designate past due loans as non-performing Adequacy of the bank’s allowance for loan losses Disclosure policies relating to loans Appendix BOAIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Held-to maturity debt securities| 35,265 | 35,442 | 427 | 427 | 177 | – | 177 | Loans| 870,520 | 843,392 | 876,739 | 861,695 | (27,128)| (15,044)| (12,084)| Total assets| 905,785 | 878,834 | 877,166 | 862,122 | (26,951)| (15,044)| (11,907)| Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 1,033,041 | 1,033,248 | 1,010,430 | 1,010,460 | 207 | 30 | 177 | Long-term debt| 372,265 | 343,211 | 448,431 | 441,672 | (29,0 54)| (6,759)| (22,295)| Total liabilities| 1,405,306 | 1,376,459 | 1,458,861 | 1,452,132 | (28,847)| (6,729)| (22,118)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | 1,896 | (8,315)| 10,211 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? ? | 6,127 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI? | Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | (4,270)| Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (549)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,308 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 1,446 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 2,754 | JP Morgan ChaseIn $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet| Assets:| ? | ? | ? | ? | ? | ? | ? | Loans| 696,100 | 695,800 | 660,700 | 663,500 | (300)| 2,800 | (3,100)| Other| 66,300 | 66,800 | 64,900 | 65,000 | 500 | 100 | 400 | Total assets| 762,400 | 762,600 | 725,600 | 728,500 | 200 | 2,900 | (2,700)| Liabilities:| ? | ? | ? | ? | ? | ? | ? |Deposits| 1,127,800 | 1,128,300 | 930,400 | 931,500 | 500 | 1,100 | (600)| Accounts payable and other liabilities| 167,000 | 166,900 | 138,200 | 138,200 | (100)| – | (100)| Beneficial interests issued by consolidated VIEs| 66,000 | 66,200 | 77,600 | 77,900 | 200 | 300 | (100)| Long-term debt and junior subordinated deferrable interest debentures| 256,800 | 254,200 | 270,700 | 271,900 | (2,600)| 1,200 | (3,800)| Total liabilities| 1,617,600 | 1,615,600 | 1,416,900 | 1,419,500 | (2,000)| 2,600 | (4,600)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? ? | ? | 2,200 | 300 | 1,900 | Aftertax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | ? | ? | 1,140 | Adjustment s for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 1,067 | Aftertax adjustment for CFH derivatives| ? | ? | ? | ? | ? | ? | (279)| Cash flow hedge| ? | ? | ? | ? | ? | ? | (155)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 1,773 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 18,976 | Full fair value income with information available| ? ? | ? | ? | ? | ? | 20,749 | Citi Group In $ millions| 2011| 2011| 2010| 2010| 2011| 2010| 2011| ? | Carrying Value| Fair Value| Carrying Value| Fair Value| CURG| CURG| URG| Adjustments for assets and liabilities at HC on balance sheet? | Assets:| ? | ? | ? | ? | ? | ? | ? | Investment| 293,400 | 292,400 | 318,200 | 319,000 | (1,000)| 800 | (1,800)| Loans| 614,600 | 603,900 | 605,500 | 584,300 | (10,700)| (21,200)| 10,500 | Total assets| 908,000 | 896,300 | 923,700 | 903,300 | (11,700)| (20,400)| 8,700 | Liabilities:| ? ? | ? | ? | ? | ? | ? | Deposits| 865,900 | 865,800 | 845,000 | 843,200 | (100)| (1,800)| 1,700 | Long-term debt| 323,500 | 313,800 | 381,200 | 384,500 | (9,700)| 3,300 | (13,000)| Total liabilities| 1,189,400 | 1,179,600 | 1,226,200 | 1,227,700 | (9,800)| 1,500 | (11,300)| Pretax adjustments before AFS securities and CFH derivatives| ? | ? | ? | ? | (1,900)| (21,900)| 20,000 | Aftertax adjustments before AFS securities and CFH derivatives| ? ? | ? | ? | ? | ? | 12,000 | Adjustments for assets and liabilities at FV on balance sheet with gains and losses in OCI| Aftertax adjustment for AFS securities| ? | ? | ? | ? | ? | ? | 2,360 | Cash flow hedge| ? | ? | ? | ? | ? | ? | (170)| Total adjustment to net income| ? | ? | ? | ? | ? | ? | 14,190 | Net income as per financial statements| ? | ? | ? | ? | ? | ? | 11,215 | Full fair value income with information available| ? | ? | ? | ? | ? | ? | 25,405 |