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CASH-EQUIVALENT INVESTMENTS

admin — Sun, 14 Feb 2010 00:02:58 +0000

For years, people like my friend Jim and his father sank their money into cash-equivalent investments, also known as liquid assets, because of how easily they could be traded in for cash. (If you need a visual aid, just think of how easily liquids pour from one container to another.) What would you guess they made on these ultrasafe investments that they could so easily jump back out of? You guessed it: not much.
The return you receive on your cash-equivalent investment depends entirely on the existing interest rate. If interest rates are low (a good thing if you’re trying to borrow money), you’re not going to make as much. In any case, you’re not going to see a great return with these investments. They are essentially where you park either money you’re planning to use in the near future, or your emergency reserve. What kinds of investments are appropriate for this emergency reserve category?

BOND RATINGS

admin — Sat, 13 Feb 2010 00:00:58 +0000

If all bonds were created equal, choosing among them would entail little more than comparing yields. But in truth they are far from equal, which is why they are rated on their credit quality by major rating services like Moody’s and Standard & Poor’s.
Bond ratings are based on the likelihood that the bond’s issuer will default, failing to repay its obligation to investors. The highest-quality bonds receive a rating of AAA from Standard & Poor’s (Aaa from Moody’s). At the other end of the spectrum, bonds rated DDD or lower by S&P are already in default. As you might guess, lower-quality bonds generally offer higher returns as an incentive for investors to purchase them in spite of their higher level of risk.
Bonds rated BBB or higher by Standard & Poor’s (Baa or higher by Moody’s) are considered “investment grade”—that is, appropriate for consideration of purchase by prudent investors. Bonds with ratings below this threshold are considered noninvestmentgrade or “junk.” Junk bonds offer higher yields but are considered to be highly speculative investments due to the company’s risk of default.

WHY DO INTEREST RATES AND BOND PRICES MOVE IN OPPOSITE DIRECTIONS?

admin — Tue, 09 Feb 2010 23:59:55 +0000

Actually, this inverse relationship makes perfect sense. When current interest rates go down, bond buyers will pay more for an existing bond that yields 6% than they will for a new bond that yields only 5%. And on the flip side, if interest rates go up, a buyer will pay less for an old bond that is carrying a lower yield than the bonds that are now being released. Here’s an example of how bond prices reflect the going yields. In June 2003 the yield on a five-year Treasury note with a face value of $1,000 was about 2.5%. But if you went out to buy a bond released several years ago yielding about 5%, you’d have to pay $1,100. Because current rates went down, the price of an older bond with a higher yield went up.
This effect is most pronounced for long-term bonds. When interest rates rise, the price of a 5% bond that won’t mature for twenty years (in other words, a bond that will continue to yield 5% every year for twenty years) will fall more than a 5% bond that will mature in five years. And when interest rates fall, the price of a long-term bond will increase more than the price of a short-term bond.

BONDS

admin — Fri, 29 Jan 2010 23:58:04 +0000

During the last bull market, a newspaper editor I know became increasingly frustrated with his father, who stubbornly refused to add a single stock to his portfolio, which was 100% invested in bonds. At seventy-two, he simply wasn’t interested in doing a thing that might jeopardize his retirement savings. To him, bonds, bonds, and more bonds were the answer.
So what’s a bond?
Simply put, bonds are like IOUs. When you buy a bond, you’re essentially loaning money to the government or to a corporation. In return, you get regular income in the form of interest payments (thus the term fixed income) as well as the promise that your entire investment will be returned when the bond matures. In theory, if you buy a $10,000 bond that pays a 5% yield and matures in March 2009, you will receive annual income of $500 until March 2009, at which time the original $10,000 investment will be returned.
Notice that I said “in theory.” As a category, bonds fall somewhere between cash-equivalent investments (such as CDs or money market mutual funds) and stocks on the risk/reward continuum. In general, you get higher yields from bonds than from cash investments, but you don’t have the same potential for growth that comes with stocks. Depending on the bond you purchase (with U.S. government bonds on the safe end of the spectrum and riskier, higher- yield corporate bonds on the other), you also assume more risk with bonds than you do with cash investments. This includes the risk of default as well as the risk that rising interest rates will erode the bond’s value. Nonetheless, bonds are generally less volatile than stocks—provided they are high-quality issues that you hold until maturity. But if you deviate from this reliable strategy and start to trade bonds—or sell them prior to maturity—you are assuming a higher level of risk.

SPACE FOR RENT

admin — Thu, 21 Jan 2010 23:55:54 +0000

I have met quite a few people who seem to think that chickens are vegetables. When someone says he or she is a vegetarian, these people reply with something like, “Yes, but you do eat chicken, don’t you?” I feel reasonably confident that most of today’s poultry producers know their stock well enough to realize that chickens aren’t vegetables. But they seem unable to grasp the fact that they are animals, and as such have profound territorial needs.
At the Hainsworth Farm in Mt. Morris, New York, naturalist Roy Bedichek found four and even five hens squeezed into cages 12 inches by 12 inches.’1 Under these conditions, the birds are unable to lift a single wing. In fact, they are squeezed together so tightly that they have a great deal of difficulty even turning around in place. This is not seen by the factory managers as a bad thing, though. With their bodies in forced contact at all times on all sides with other chickens, they absorb heat from their fellow inmates, so this cuts down on heating costs.
The Hainsworth farm is an extreme example. But the industry norm isn’t much better. A surprisingly large percentage of the eggs eaten in Los Angeles come from the 345 acre “Egg City” in Moorpark, California.” Here, some 2,200,000 eggs are laid daily by 3 million hens. The hens are housed five to each 16-by-iS cage.”
To get a chicken’s eye view of these conditions, picture yourself standing in a crowded elevator. The elevator is so crowded, in fact, that your body is in contact on all sides with other bodies. Even to turn around in place would be difficult. And one more thing to keep in mind—this is your life. It is not just a temporary bother, until you get to your floor. This is permanent. Your only release will be at the hands of the executioner.
By the way, in your picture of the elevator, you may have imagined the other people trapped with you as doing the very best they can to hold still, and not make things difficult for you. But what if all the others do not have the ability to understand what is happening? What if they react to the terror of it all with raw instinct, without even a trace of a civilized veneer? What if, like you, they have powerflul territorial needs, and the utter frustration of the situation has driven them literally insane, prone to erupt into violehce with or without provocation?
Now imagine ffirther that the floor of the elevator is slanted sharply, so gravity tends to push you all in one direction. The ceiling is so short that you and the others can only stand upright towards one side, and the floor is made of a wire mesh that is terribly uncomfortable to everyone’s feet. And to complete this approximation of the living conditions in today’s factory farms, what if some of the others trapped with you in the elevator have, in their madness, become cannibalistic?
These are the conditions which the industry tells us is a “chicken heaven.” This is the actual living situation of the chickens whose flesh and eggs Americans eat.

THE PANIC BUTTON

admin — Sun, 17 Jan 2010 23:54:00 +0000

Despite being treated consistently as machinery in today’s chicken factories, the chickens still stubbornly refuse to settle down and devote themselves singlemindedly to producing as many eggs as possible and growing as fat as they can, in the shortest possible length of time. Instead, they insist on thinking of themselves as animals, with drives and needs.
But today’s chickens are allowed no expression of their natural urges. They cannot walk around, scratch the ground, build a nest, or even stretch their wings. Every instinct is frustrated. The bizarre lighting manipulations allow these light-sensitive creatures no vestige of a natural sleep cycle. They cannot establish a pecking order, or any sense of social identity. They cannot keep out of each other’s way, and weaker birds have no escape from the stronger ones, already maddened by the grotesque conditions in which they live.
The result is that these passionate creatures live in a state of perpetual panic. They fly into an uproar at the slightest disturbance, and show every sign of having been driven completely out of their minds. One naturalist noted:
“The battery chickens I have observed seem to lose their minds about the lime they would normally be weaned by their mothers and off in the weeds thasing grasshoppers on their own account. Yes, literally, the battery becomes a gallinaceous madhouse.”
Another reporter states:
“The birds in the laying house are hysterical. . . Birds squawk, cackle and cluck as they scramble over one another for a peck at
the automatically controlled grain trough or a drink of water. This is how the hens spend their short life of ceaseless production. stampedes. With no apparent caus a wave of hysteria sweeps over the whole battery; wild, unnatural chirps, jumbled screams, and a fluttering as if every feather on every chicken had become possessed and frantic.
In their panic, the birds will sometimes pile on top of each other and some will smother to death. Poultry producers are not by and large what you would call sentimental types, but since smothered birds represent a “waste of feed” this is the type of thing that will definitely spur them into action. Not to be outsmarted, they have found the piling problem can be decreased by crowding the chickens so tightly into wire cages they can hardly move. This way, when they panic, they can’t pile on top of each other as readily.
The cages produce a few problems of their own, however, that make the calling of them “chicken heavens” even more deceitful: the caged hens still try to behave as if they were designed by Nature to live on the earth, instead of in wire cages. For instance, their toenails continue to grow. With no solid ground to wear the nails down, they become very long, and can get permanently entangled in the wire. The ex-president of a national poultry organization wrote in the Poultry Tribune about the many times when, on removing a batch of hens from a cage:
we have discovered chickens literally grown fast to the cage. It seems the thickens’ toes got caught in the wire mesh in some
manner and would not loosen. So, in time, the flesh of the toes grew completely around the wire. “
Needless to say, those birds who get stuck in the back of the cage, where they cannot reach food or water, starve to death.
Once again, howevei the minds that created this whole situation have come up with an ingenious solution to prevent such a distressing “waste of feed.” The idea is simply to cut off the toes of the little chicks when they are a day or two of age.

Anistoriton: History, Archaeology, ArtHistory

admin — Sat, 16 Jan 2010 18:48:37 +0000

Anistoriton is an electronic journal published only on the Internet. It is a free and independent magazine of History, Archaeology and Artflistory edited by D. I. Loizos and an Editorial Committee. Anistoriton is the Greekword for “ignorant in history”. The journal is an attempt to bridge the gap between professional historians and archaeologists and their specialized research, on the one hand, and the general public, the true history and archaeology lovers, on the other. Contributions of undergraduate and graduate students (papers, analysis etc) as well as other non-specialists are also welcome and encouraged. Anistoriton publishes essays on any topic related to History, Archaeology and ArtHistory of any era and any part of the world provided it is of interest to the general educated public and undergraduate students. Also, it includes student Viewpoints, Archaeology News and History News, Internet Meesages from the major electronic Mailing Lists related to History and Archaeology, Primary Sources, and the sections In Situ and An Object of Art. It also contains a special page with announcements of Conferences worldwide. Anistoriton welcomes submissions of electronic manuscripts for any of its sections especially by trained Historians, Archaeologists and ArtHistorians who would like to reach a broader public. Other Scholars, Researchers, or Students are also invited to submit their manuscripts for the section entitled “Viewpoints.”

American Antiquity: A Journal of the Society for American Archaeology

admin — Sat, 19 Dec 2009 18:46:56 +0000

American Antiquity is a principal journal of the Society for American Archaeology (SAA). This web page provides tables of contents—and complete article abstracts in both English and Spanish— for all issues beginning in 1995, as well as e-mail links for the journal’s editorial staff. Topics of recent articles include the Solutrean Settlement of North America, Archaeology and Native North American Oral Traditions, The Recovery and First Analysis of an Early Holocene Human Skeleton from Kennewick (Washington), and Rural Communities in the Black Warrior Valley (Alabama). Additional articles address Women and Children at the Old Baton Rouge Penitentiary, Paleoindian Colonization of the Colonization of the Americas, Paleoindian Colonization of the Colonization of the Americas, Prehistorical Ceramics and People in Southeast Missouri, and Cannibalism, Warfare, and Drought in the Mesa Verde Region during the Twelfth Century A.D. For would-be contributors, the web site also includes the journal’s style guide and information on the journal’s editorial policy. For those interested in casting a wider net, this web site also offers links to the Journal of Latin American Antiquity and associated newsletters and bulletins of the SAA, among them the Newsletter of Archeology and Public Education and various other little publications, all of them available in online hypertext editions.

Worldwide e-mail Directory of Anthropologists

admin — Sat, 21 Nov 2009 18:45:11 +0000

The Worldwide Email Directory of Anthropologists (WEDA) is a searchable database of address and research information about anthropologists from around the world. This is a completely volunteer project, established to encourage and aid scholarly communication. Here, anthropology is taken in its widest sense, to include physical, earth, and social scientists, as well as their colleagues in the humanities. Students and scholars, applied anthropologists, professionals and a vocationalists are all to be found here: at last count, 2,020 institutions and 4,919 individuals. There are four different ways to search:
by using all or part of a person’s name, by title of an institution or business, by geographic location, and by research specialty. Click on the appropriate button, and you can add your own e-mail address and profile details to the database. This site attracts more than 3,000 visitors a month and is rapidly becoming one of the most popular anthropology resources on the Internet. As a bonus, it also offers very useful links to other anthropology-related search tools on the Web. The Worldwide e-mail Directory of Anthropologists is available in English, French and Spanish versions, and is hosted by the State University of New York at Buffalo Department of Anthropology.

The Four Problems with Reengineering Practiced

admin — Wed, 14 Oct 2009 08:05:18 +0000

1. The cost reduction thrust. BPR arose in the early l990s, fueled by a recession and the beginnings of the restructuring of western economies. Cost cutting was the focus of most businesses, and BPR fit in well with that goal. Downsizing, rightsizing, smartsizing, streamlining, working out, and n ‘engineering became euphemisms for cutting costs—typically headcount.
As one CEO asked of the BPR manager in a bank, “How many heads are we gonna get?” Another was heard describing a project: “When we found redundancies everywhere, I had to bite the bullet and lay off a hunch of people.” (The reference to biting the bullet is interesting. During (lie American Civil War, soldiers facing amputation were given a bullet to 1,1k to help distract them from the excruciating pain. But here we have the amputator, rather than amputee biting the bullet.) One company was so I obsessed by reengineering that to save money they turned off the light at the end of the tunnel
As the new economy gathers steam, companies in most sectors need to locus on growth and value—added objectives, rather than just cost cutting.Cost control will be important forever and in some sectors key to competitive success. But even in the most cost-sensitive businesses such as retailing, companies need to shift their paradigms—marketing electronically, for example, delivering goods rather than building actual structures. BPR is inadcquate and in some cases diversionary from such out-of-the-box thinking. Whether reengineering is well intentioned or not, there is a danger of companies entering into some new corporate anorexia, to use the phrase made popular by management consultant Gary Hamel, where in pursuit of cost control they permanently downsize their market share, revenues, profits, long-term competitiveness, and viability.
2. BPR focuses on business processes. A business is more than a set of processes, so process improvement is an inadequate response to the challenges of the new economy. BPR projects typically miss opportunities to go beyond the streamlining of work to the transformation of business objectives and effectiveness. The starting point for transformation should not be the business process but the business model—the high-level abstraction of how the business can respond to and create markets, of what the business is and could be. The new economy demands that companies change their business model, and the new techno1o’ enables it.
The best impact of BPR itself occurs if it is done within the context of a higher-level model of the business. Says Dave Cox, ClO at Northern Telecom: “We found that we needed to get beyond the lower-level process modeling being done by many companies today. We found that when we did BPR we lacked the larger context of the business model. Having spent some time developing that model, our horizons have been widened and reengineering projects have far greater scope and creativity. Companies need to bring business modeling into prime time.”
Furthermore, reengineering typically focuses on and results in creating relatively structured business processes. However, in the new economy much of the effort of the new enterprise is knowledge work based on teams, changing human networks, new types of jobs, serendipitous communications, ad hoc collaboration, and brainstorming for innovation.
Ron Ponder, ClO of AT&T, is responsible for the work of more than 25,000 information systems professionals. His message to all of them is to focus on the customer. “Reengineering doesn’t cut it. Every company needs to make processes better, faster, and more economical—but this is really just continually fine-tuning your operating structure,” says Ponder. “But you can’t use reengineering to transform a business. You reengineer inside of a business, addressing operational needs of the business. But our transformation is coming from the outside in. It is market-driven, not process-driven.”
3. The human imperative. In many situations, BPR projects have misunderstood the human imperative. Projects with a goal of massive cost cutting have often been resisted by workers; newly reengineered business processes are conducted by demotivated workers. Couple this with what Paul Strassman calls “the violence of reengineering” and you have a formula for fear. Finding the dark side of reengineering is simple. Here are just a few of the pronouncements by reengineering leaders. “On this journey… we shoot the dissenters.”22 “What you do with the existing structure is nuke it!”23 “[Re]engineering must be initiated … by someone who has enough status to break legs.”24
Furthermore, many reengineering efforts falsely assume that some senior czar or steering committee can, in a top-down way, comprehend business processes as well as opportunities for change and sell this vision down to the organization. Such approaches are contrary to modem thinking and practice about creating learning organizations, shared vision, and team leadership.
Reengineering theorists to date have also missed the broader implications of the IT-enabled transformation of business on virtually every other aspect of human work and social life. Huge issues need to be tackled— from quality of work life, retraining, and lifelong learning for the new economy, the changing nature of work and the end of the career as we know it, the danger of a haves and have-nots society all the way to fundamental changes in the nature of the workings of government, the democratic process, and democracy itself.
4. Old paradigm views of technology. Many reengineering proponents assume information technoloi is critical to new processes. However, other than Paradigm Shut, none have really explained how the old paradigm in technolo’ is ill-equipped for the new enterprise. As a result, many
l)tT1ies have thrown old paradigm technology at new paradigm reengineer ing problems. To bring about organizations that are high performance, integrated, networked, open, and client-service companies need the new technology that is high performance, integrated, networked, open, and client-server. The old model of computing_low performance (traditional mainframe or minicomputer), unintegrated (based on islands of computing), host-based (rather than networked), proprietary (nonembracing stan- (lards), command and control (unlike client-server) computing—is the antithesis of the new enterprise.