Learn How to Make a Suggestion in English

Figure out How to Make a Suggestion in English At the point when you make a proposal, youre advancing an arrangement or a thought for someone else to consider. Individuals make proposals when theyre choosing what to do, offering guidance, or helping a guest. Figuring out how to make a proposal is a decent method to improve your English conversational abilities. In the event that you definitely realize how to read a clock, request headings, and hold a fundamental discussion, youre prepared to figure out how to make a recommendation! Evaluate this pretend exercise with a companion or schoolmate to rehearse. What Shall We Do? In this activity, two companions are attempting to choose what to accomplish for the end of the week. By making recommendations, Jean and Chris settle on a choice that theyre both content with. Check whether you can recognize where the proposal is. Jean: Hi Chris, okay prefer to accomplish something with me this end of the week? Chris: Sure. What will we do? Jean:Â I dont know. Do you have any thoughts? Chris:Â Why dont we see a film? Jean:Â Thats sounds great to me. Which film will we see? Chris:Â Lets see Action Man 4. Jean:Â Id rather not. I dont like rough movies. What about going to Mad Doctor Brown? I hear its a significant entertaining film. Chris:Â OK. Gives up observe that. When is it on? Jean:Â Its on at 8 p.m. at the Rex. Will we have some food before the film? Chris:Â Sure, that sounds extraordinary. Shouldn't something be said about setting off to that new Italian eatery Michettis? Jean:Â Great thought! Lets meet there at 6. Chris:Â OK. Sick see you at Michettis at 6. Bye. Jean:Â Bye. Chris: See you later! At the point when Jean says, Id rather not. I dont like vicious movies. What about going to Mad Doctor Brown? I hear its a significant amusing film, he is making a proposal. More Practice Once youve aced the exchange above, challenge yourself with some extra pretending works out. What proposals would you make if a companion said to you: Why dont you/we go out to see the films tonight?You/we could visit New York while youre/were there.Lets go to the trip specialists this evening to book our ticket.What about approaching your sibling for help?How about going to Hawaii for your vacation?I propose you/we think about all the components before we choose. Prior to replying, consider your reaction. What will you recommend? What related data would it be advisable for you to tell your companion? Consider the important subtleties, for example, time or area. Key Vocabulary On the off chance that youre being approached to settle on a choice, that proposal as a rule comes as an inquiry. For instance: Okay like to...?(What) will we go...? On the off chance that another person has settled on a choice and they need your assessment, it might be made as an announcement. For example:â Lets go...Why dont we go...How about going...What about going...

W4As Premier Kayak Essay Example | Topics and Well Written Essays - 500 words

W4As Premier Kayak - Essay Example Accordingly, the wasteful aspects in past booking and reservations framework required structuring another model which would address the revealed holes. The model was noted to give access to a precise calendar of booked clients who previously paid and the data is given to essential faculty at Premier Kayak to empower staff individuals, particularly visit guides, to offer the required support. The model along these lines forestalls overbooking and guarantees exactness in reserving a spot for planned visits just in characterized number of kayaks at a specific accessible date and time. The key advancements that Premier Kayak’s reservation framework which abstained from reserving the spot framework an excruciating procedure to clients remembered characterizing the accessible spaces for the kayaks for a specific day, time, and area to forestall overbooking. In like manner, just clients who affirmed reservations through installments made online would be affirmed for the kayak visits. Furthermore, these timetables have characterized visit guides who could get to the data and submit to the reservations made. In that capacity, the reservation framework, which is accessible and available to clients and workers, would abstain from overbooking or the requirement for rescheduling. This forestalled discounting clients because of inaccessible visit aides or absence of kayaks at favored booking dates. The new technique additionally forestalled battling with furious clients or the need to make discounts. By and large, the framework improved Premier Kayak’s picture as a solid and trustworthy association in their field of attempt. The assessment strategy that is prescribed to verify that the developments proceed true to form is through client input overviews (Foot, 2013). The study would assemble data appropriate to the customers’ fulfillment on administrations rendered by Premier Kayak. Moreover, the 360 degree appraisal is another assessment device that requests data from different

The Myth of Bermuda Triangle Essay Example | Topics and Well Written Essays - 750 words

The Myth of Bermuda Triangle - Essay Example As the paper traces, no US government document has distinguished the area of Bermuda Triangle or so far as that is concerned, the Board of Geographic Names; still the name is equal with the secret as various boats have vanished, as is acclaimed without giving any rationale behind their vanishing. Let’s center around the geological situating of the Bermuda Triangle, which is viewed as off the Southeastern shore of the United States in the Atlantic Ocean, with its vertices contacting Bermuda, Miami, Florida, and San Juan, Puerto Rico, generally grounded in 500,000 square miles (Obringer, 2012). The modifier ‘Devil’ was related with Bermuda on the grounds that once Bermuda was called, â€Å"the Isle of Devils.† It is on the grounds that the reefs encompassing the zone are very dubious to the cruising ships, bringing about the destruction of cruising ships. An article turns into a puzzle when the rationale behind extra-common occurring close to that item isn't cross-checked, and bits of gossip take a round trip, along these lines, causing individuals to have faith in the truth of such bits of gossip. The equivalent is the situation with the Bermuda Triangle where, it is expressed that ships as well as vanish while drifting over the baffling area, called Bermuda Triangle. All things considered, reports of sinking ships have not been verified by some administration body, for example, the U.S. Coast Guard, which discovers nothing specific in the quantity of boats meeting with mishaps in the area. It appears that the media have utilized the episodes of missing boats as a ploy or modest publicity to help their magazines’ deal. A more profound investigation of the past happenings persuades that creative mind was permitted to vacillate its wings noticeable all around unreservedly, as no genuine endeavor was made to end the promulgation. Boat mishaps encompassing the Bermuda district have been connected to outsider kidnappings or goliath o ctopus, however investigate on marine mishaps by Norman Hooke for Lloyd’s Maritime Information Services dismisses the presence of any such secret over the Bermuda Triangle. Any mishaps caused were identified with awful climate conditions as it were. Further research has likewise demonstrated that some significant losses had occurred, yet these happened far away from the expressed Bermuda Triangle (Obringer, 2012). The logical proof dependent on PC helped research of sea depths uncovering that tremendous methane gas blasts had been occurring under the ocean bed, explicitly over the Bermuda Triangle area appear to be all the more persuading, yet more proof is required to have confidence in the logical hypothesis of the unexpected emission of methane gas as a uber bubble, overwhelming boats as well as anticipating upward noticeable all around, additionally inundating planes (Cat, 2010). The logical base of the methane gas bubble is that when a boat comes in the contact of the me thane uber bubble, the boat gets without all lightness and goes sinking to the base of the sea. In the event that the boundary of the air pockets is sufficiently huge and it is adequate in thickness, the methane air pocket can likewise drive an airplane to plunge to the base of the ocean without making a framework alert? The potential clarifications that airplane overwhelmed in the methane bubble stops the motor, and-maybe arouses the methane around, causing moment loss of flight, as the plane plunges into the sea. The logical clarification of the secret encompassing Bermuda Triangle is by all accounts dicey without any solid reports of boats and planes nearly overwhelmed by such a bubble.â

The whole towns sleeping The Red Room comparison Essay Example

The entire towns dozing The Red Room correlation Essay Toward the start of The entire towns dozing, you are acquainted with a serene, quiet, normal American town. It is just as nothing strange has ever truly occurred here. It was a warm summer night in Illinois nation. Though in The Red Room, the opening is set in an old terrible mansion with three odd negating hirelings. This story in a split second beginnings off unpleasant while in the entire towns resting, it doesnt. The elderly person sat gazing hard into the fire, her pale eyes all the way open. We will compose a custom paper test in general towns dozing The Red Room examination explicitly for you for just $16.38 $13.9/page Request now We will compose a custom article test overall towns resting The Red Room correlation explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer We will compose a custom article test overall towns resting The Red Room correlation explicitly for you FOR ONLY $16.38 $13.9/page Recruit Writer The entire towns resting is set in a normal town in 1950s USA. It is set for the most part outside with some indoor areas. The Red Room is set in a moist old mansion in nineteenth century England. There are no genuine similitudes in setting. The topic of the two stories is straight and essentially dread. The creators of the tales needed to alarm you either by death or phantoms however with a similar impact. The two stories are comparative in the way that they develop to a peak, and afterward end quickly. The principle character in the entire towns resting is called Lavinia. She appears to be brave, however this isn't generally the situation, as she can get startled. In any case, more often than not she would attempt to conceal her dread, or simply state something, which makes her look daring. Bosh! She was stating this when her simple companion was discussing the forlorn one, attempting to sound brave, yet I expect that she was most likely questionable, and she just didnt need to show it. In the Red room, the principle character is a 28-year-elderly person who is distrustful about numerous things. Eight-and-twenty years I have lived and never an apparition have I seen so far. His name is rarely given, and I feel this is simply to make the story additionally terrifying. On the off chance that his name is given, it turns out to be increasingly close to home and consequently well disposed, which isn't startling. This character doesnt have confidence in the unnatural, or numerous things like that. He accepts that in the event that he can contact it, it is genuine. He is likewise somewhat egotistical and dauntless much indistinguishable to Lavinia in the entire towns dozing. I don't care for either character much as they are both prideful and this is anything but an agreeable element. I feel that the two of them ought to be increasingly receptive. Yet, at that point the accounts would be less startling if the characters were in a flash frightening. I don't care for individuals who have this trademark, so I don't care for the characters. Nonetheless, I discover them both reasonable, which shows the abilities of the creators off well. HG Wells language is very good old. I.e., he says, eight-and-twenty, instead of twenty-eight as we would state these days. He utilizes striking depiction, which now and then turns out to be to such an extent as to influence you away based on what is really occurring in the principle story line. There are little likenesses and allegories in this story. He utilizes some immediate discourse at the absolute starting point and at the end, however scarcely during the primary story area in the center. It is more: I saw this, I contact this, etc. It is told in the principal individual and this is better so you can see precisely what he is seeing and thinking in a simpler and more clear manner. Beam Bradburys style is totally unique to HG Wells in the way that it is forward-thinking language and furthermore in the American style. There are a considerable amount of comparisons and similitudes, for example, Cool as mint frozen yogurt Furthermore, a considerable amount of exemplification, for example, fans murmured. heat was relaxing. There is a great deal of direct discourse which I for one lean toward as I think that its simpler to follow. This story is as an outsider looking in and I find that this one is better in third as should be obvious precisely what they are thinking instead of what one individual thinks they are thinking. HG Wells makes tension by having the candles victory a great deal in the Red Room. The anticipation isn't especially acceptable as you are unconscious of what will occur on the off chance that he gets entangled in the obscurity, however then this makes you wonder about what will happen all the more so. It starts when 1 flame honestly extinguishes. It closes when the man takes himself out. Beam Bradbury made tension by having a long segment when Lavinia feels that she is being followed. In this part, Lavinia is tallying which adds incredibly to the anticipation. You are stating to yourself, shes just got 12 to go, 11, 10 and you get submerged into the story. I feel that this tension segment was substantially more fruitful than that of the Red Room. In the Red Room, the consummation is excessively unexpected and there is presently creative mind. You are determined what had happened as opposed to thinking about what will occur. There is practically no creative mind here. It would have likely been exceptional to end off with the man blacking out and not have the clarification section. In the entire towns dozing in any case, the closure is greatly improved, exactly when you believe that everything is great and safe, I turns out that is isnt and you are left thinking about what will befall her. (Which is more likely than not passing!) I very much wanted the entire towns resting in view of its progressively current language; better characters that are simpler to identify with; the utilization of more likenesses, allegories and exemplification; more straightforward discourse; the additionally energizing tension segment; and the sudden turn toward the end. I fell that the entire picture of dread was all the more significantly accomplished in the entire towns resting in view of the way that the ladies all recognize what are they are to be terrified of. What's more, the way that it was set in a little, honest town to which you wouldnt think there would be in any way similar to this incident is likewise all the more energizing.

Health Resources and Policy Analysis Essay Example | Topics and Well Written Essays - 250 words - 2

Wellbeing Resources and Policy Analysis - Essay Example Among the issues confronted incorporate; absence of appropriate subsidizing, increment in instances of mental issue just as shame looked by casualties of emotional well-being issue (U.S Council of States Government, paras2-3). The third part centers around association frameworks and how they were financed by various substances. At last, the forward segment concentrated on strategy proposals on viable conveyance of emotional wellness administrations. For instance, it was suggested that people, families, substances, government and all partners ought to take part in planning and actualizing plans on psychological wellness (U.S Council of States Government, paras2-3). In above association, the U.S national government by means of a few divisions, for example, branch of Substance Abuse, Mental Health and Service Administration(SAMHSA) gave financing to the above parts (Sultz and Young pp.315-329). Whereby, the survivors of mental issue shouldn't get subsidizing legitimately yet rather through specific bodies (U.S Council of States Government, paras2-10). For example, in 2004 the division of Substance Abuse, Mental Health and Service Administration related to Medicaid and Medicare Center Services gave an all out financing worth $434millions in subsidizing psychological well-being framework. Moreover, the division of Medicaid contributed more subsidizing than some other offices (U.S Council of States Government, paras2-10). Sultz, Harry An, and Kristina M. Youthful. Human services USA: Understanding Its Organization and Delivery. Sudbury, MA: Jones and Bartlett, 2011.Web. 8 May 2013. U.S Council of States Government. Components of Effective Health and Social Service System: Mental Health Care Systems. Equity Center.Web.8 May 2013< http://www.reen

Commercial Real Estate Strategies

Commercial Real Estate Strategies The term commercial real estate is an umbrella for six different types of property: land, office space, industrial space, retail space, multi-family apartments (four or more units), and mixed-use properties. Each type has its own unique subtypes, and related strategies for making money. Its important to understand the differences between each type long before you tender an offer, because the type of commercial real estate directly informs the strategies you can use to make money. © Shutterstock.com | ssguyIn this article, we will explore, 1) strategies for making money with land, 2) strategies for making money with office space, 3) strategies for making money with industrial space, 4) strategies for making money with retail space, 5) strategies for making money with multi-family apartments, 6) strategies for making money with mixed-use properties, and 7) examples of successful commercial real estate strategies from real estate entrepreneurs.STRATEGIES FOR MAKING MONEY WITH LANDLand is generally categorized as greenfield â€" or undeveloped; infill â€" developed but vacant land; or brownfield land â€" land previously used for industrial purposes, and often environmentally damaged, but available for reuse.Risk/returnProfitable land ownership requires you to find a suitable and lucrative use for the land â€" such as development, granting of easements, or sale of air rights. Otherwise, you will be stuck paying taxes on the property without deriving income. Howeve r, with greenfield land, there is no tenant-related risk, as with other types of commercial property. Returns for land investments can be as high as 20%.Buying and holdingYou can buy and hold land in an area you forecast will soon be rezoned, and/or see an influx of profitable neighboring developments/businesses. You will be saddled with property taxes and possibly local assessments, so you will need to ensure you have enough cash to absorb those expenses until your land becomes ideal for development and/or selling.FlippingLand flipping is usually done in markets with rapidly rising property values. This can be very risky, especially if the market rapidly crashes. It’s important to have more than one exit strategy when flipping land. However, one can do this by buying land and selling it on a land contract or contract for sale, synonymous terms for a transaction in which you receive payments from the buyer and provide title when they have paid in full.Rezoning and sellingYou can w ait until land is rezoned and sell it. This is usually done, when an area or parcel of residential real estate is rezoned for commercial usage, rather than vice versa. It is also often done when land zoned for rural use is rezoned for residential or commercial use. You can also attempt to get the land rezoned yourself, which can be a very complicated process, involving city planning commissions and considerable bureaucracy. You should consider the land’s proximity to cities and city services, roads, and environmental viability, when considering pursuing rezoning.Development  Developing land is perhaps the most lucrative and most difficult way to make money with land. After buying the land you will entitle it (gain approval for specific development), plan the construction project, screen and select a construction firm, obtain the required building permits, begin construction, and complete the required inspections to ensure that the building is in compliance with state and local bui lding standards. You will want to do proper due diligence to ensure that you eliminate environmental, title-related, and other non-construction-related risks before you break ground. Once you are nearing completion of the construction, you will begin to market it, for either buyers or tenants.There are considerable risks with this approach, particularly during the construction phase, such as falling demand for the type of property you are building, your land being rezoned and other changing regulations, and poor construction work, among others. If you have not sold or rented the property by the time you have completed construction, you will bear the full brunt of property taxes and any special local assessments, without mitigating sales or rental income.Tips For Buying a Property or Rural Land STRATEGIES FOR MAKING MONEY WITH OFFICE PROPERTIESThe most common way to make money with office properties is to own and rent them. Office space is commonly divided into three categories: Cla ss A â€" high-quality construction and location; Class B â€" high-quality construction, not-so-great location; and Class C â€" less than high-quality construction, and less than desirable location. Further categories are Central Business District, or Suburban, which relate to office building location. Ideal investments are Class A in a Central Business District, but these are also usually the most expensive. You can find opportunities in all categories.  Risk/return  Office properties, like other forms of commercial real estate, confer the advantage of business tenants. Bad tenancy can harm a tenant’s business in some cases as much as you, so carefully screened clients can provide stable income. Tenant related risk comes from tenants moving, or going out of business. Other forms of office-related risk, include rezoning, vacancy, obsolescence, and risks associated with having multiple people on the property. However, the return can be as high as 7% to 10% of one’s investment.Own and operate  You can make money through the rental income derived from office properties. If you own an office building, you can also make money through common access maintenance (or CAM fees). These refer to the fees you charge tenants for maintaining areas to which they all have access. An office building may also feature amenities that can be opened to the public. For example, a commercial office building, with retail storefronts on the ground floor, may open these up to the public. You also will want to require tenants to sign long-term leases (three years or more) to ensure stable, predictable income. These leases should include clauses for annual rent increases.Buy and holdYou can buy and hold individual office space or office buildings you own for long-term appreciation. You can increase the chances of this by buying office property that is centrally located, and by making improvements that enhance energy efficiency, increase parking availability, and improve lighting, struct ural elements, and security. Make sure that you avoid making long-term alterations to the property that reduce your chances of finding new tenants, without stipulations in the lease that require the tenant to pay for removal costs.How to Buy Commercial Property Tips STRATEGIES FOR MAKING MONEY WITH INDUSTRIAL PROPERTIES  Industrial properties can be classified as heavy manufacturing, light assembly, flex warehouse, or bulk warehouse. Heavy manufacturing is usually customized with specific machinery for the tenant, while light assembly can be rearranged easily. Flex warehouse usually contains both office and industrial space, and bulk warehouse, usually the largest of the four, are generally used for product distribution across a regional area, and including loading areas for trucks.  Risk/return  Vacancy is a huge risk, especially with large and customized properties. Manufacturing or distribution related-accidents can require expensive repairs. And environmental damage caused by te nants can also be disastrous, requiring expensive remediation, and in some cases, prompting rezoning. However, industrial real estate lease terms are usually three to five years, and can last as long as ten years per lease period. You are likely to see stable returns of 7% to 15% if you manage your properties properly.  Own and operateThe good thing about industrial real estate management is that it is largely hands-off once you have (a) solid tenant(s). Industrial tenants come in ready to work, with a stake in ensuring that everything is, and remains in, working order. The urban industrial real estate market in the U.S. is shrinking as more areas become zoned for residential development, and more cities are developed. Investors should look for properties with feasible transportation infrastructure, such as clear roads or railroads that connect them with cities. You should also assess the height of the warehouse (which determines capacity and universe of prospective tenants), the st ate and type of loading dock, any additional land that comes with the property, and office space, in addition to location. Similar to office properties, you should require long-term leases with annual rent increase clauses.  Buy and hold  Buying and holding industrial property provides you with the highest return over the long-term. You should look to make improvements that facilitate transportation, such as loading docks, as well as those which make it easy to reconfigure your space for multiple types of manufacturers and distributors. You can also assess whether it makes sense to hire loading personnel whose services your tenants can hire for additional fees.4 Steps to Selling Industrial Property with Dan Doherty STRATEGIES FOR MAKING MONEY WITH RETAIL PROPERTIES  Retail properties include Strip Centers â€" small retail properties with or without an anchor tenant; Community Retail Centers â€" which range from 150,000 to 350,000 square feet, and usually have multiple anchor tenants ; and Power Centers â€" which range from 30,000 to 200,000 square feet and often have a big box retailor as an anchor tenant. There are also Regional Malls â€" which range from 400,000 to 2,000,000 square feet, and have multiple big box retailers as anchor tenants, and Out parcels, which are pieces of land attached to a large retail center, used by restaurants or banks.  Risk/returnRetail properties require considerable capital and time to obtain. One of the biggest risks is the inability to find tenants and/or existing tenants suffering a decline in profitability. It can take significant time to fill retail vacancies, especially in declining regional real estate markets. Further, online storefronts are eating into brick-and-mortar profits across the globe. But retail yields can range from 7% to 11%, which, given the significant capital expenditure required, can be a sizable profit in absolute dollars.  Own and operateWhen buying, look for spaces that are centrally located and where there is existing foot traffic. Your ideal retail property should also have plenty of available parking, and should be visible to pedestrians and passing cars, as you must be able to market the space. Location can make or break your investment. Screen your tenants carefully, paying attention to their profit and loss statements, income statements, and business plans.  Buy and hold  You have to be careful when making renovations that you are not reducing the chance of finding tenants. For example, installing a kitchen means that you will no longer receive offers from retail apparel firms. Take a look at existing anchor tenants to see what does not exist in your area. Make your renovations with this in mind, but avoid those that cannot be easily reversed.STRATEGIES FOR MAKING MONEY WITH MULTI-FAMILY APARTMENTSMulti-family apartments include garden apartments, which are typically three to four stories, and contain approximately 50 to 400 units; Mid-rise apartments, usually 5 to 9 stori es and between 30 and 110 units; and High-rise apartments, which are usually 10+ stories and contain at least 110 units.  Risk/return  The number of multi-family units can minimize vacancy-related losses. But multiple residential tenants bring their own problems, including late payments, and damage to the property by tenants, their kids, their pets, and the like. Further, consumer protections allow you less leeway in structuring lease terms and in landlord tenant disputes than with other forms of commercial property. But multi-family apartments can be tremendously lucrative, especially in an era during which more people are renting rather than buying homes. Typical returns are 10% percent of one’s investment. Further, considerable financing is available to real estate investors with the right qualifications â€" in some cases up to 90% of the purchase price. And this, combined with income streams from multiple tenants mitigates risk significantly.  Own and operate  One strategy to make money with apartments is buying an apartment that has been managed badly. Improvements, such as property renovations or employing a better property manager, can be implemented and rents raised accordingly. When operating an apartment with more than ten units, unless you hold no other employment, it is strongly recommended that you employ the services of a property manager or property management firm. Make sure you have comprehensive insurance policies in place to protect your property and limit your liability.  Buy and hold  If you have invested in a multi-family apartment for long-term appreciation, in addition to rental income, you will want to ensure that you make renovations to the unit kitchens, wiring, and bathrooms, as well as the building lighting, structural elements, roofing, and security. These play a significant factor in residential real estate appraisals. Condo conversions and rezoning can also have a positive impact on your property’s value.  Real Estate Invest ing In Multi-Family Apartments Dave Lindahl STRATEGIES FOR MAKING MONEY WITH SPECIAL PURPOSE/MIXED-USE PROPERTIES  There are many different types of special purpose/mixed-use properties, including but not limited to affordable housing, museums, amusement parks, storage facilities, churches, bowling alleys, theaters, concert halls, nursing homes, and community centers; and the strategies for making money with each vary by type.Risk/return  The risk here is generally a combination of tenant risk and risks related to the specific use of the property. For example, most car washes use chemicals extensively, leading to the risk of environmental damage. Storage facilities, by contrast, might yield a security risk if they are located in a high crime area. Zoning is also a consideration, especially if you are considering getting an existing property rezoned. The return varies with the type of property, especially considering that many types of mixed-unit properties involve government, not on ly through rezoning, but through subsidies.  General strategies  Making money with special purpose/mixed-use properties largely depends on the type of property that you purchase. However, when operating these properties, follow best practices for real estate investments: screen tenants thoroughly, maintain regular communication with them, make sure that you perform regular maintenance, and implement strategic renovations designed to increase the property’s underlying value. Forecasting the market for the business of prospective tenants is also critical.Strategies to get Started in Commercial real estate With No Money EXAMPLES OF SUCCESSFUL COMMERCIAL STRATEGIES FROM REAL ESTATE ENTREPRENEURS  Many billionaires have either made their fortune, or have a significant portion of their portfolio, in commercial real estate. More than 30% of the billionaires on the Fortune 400 list count real estate as a significant portion of their portfolio. Many of these billionaires, such as Wang Jian lin of China, are from Asian-Pacific countries, and have made their wealth by developing retail properties. Jianlin built his fortune over the past two decades through his acquisition of movie theaters, and development of retail locations, and office buildings. In the U.S., Donald Bren began building his fortune after World War II, by building residential, retail, and office properties on undeveloped land in Southern California, which have grown in value to be worth $12 billion today.Barbara Corcoran on Risk-Taking, Failure and How to Get Back Up

The Worlds Leading Economic Theorists Finance Essay - Free Essay Example

While the book is arguably aimed more at an academic audience, the material is clearly accessible to policymakers and regulators. Just this past month, in recognition of the one-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the NYU Stern School and the Pew Charitable Trusts put on a conference in Washington, D.C. During the entire day of proceedings, sitting toward the back was a senior staffer of the House Committee on Financial Services reading Balancing the Banks. When I asked him what he thought of the book, he commented on how insightful it was and that the book had given him pause to thought. The four chapters are organized as follows. In a brief chapter 1, the authors lay out their case for regulation of the banking sector and how things had gone wrong leading into this crisis. An important argument made by the authors is an extension of Dewatripont and Tiroles (1984) representation hypothesis to the case of all financial ins titutions, in particular, the shadow banking system. The theory basically argues that prudential regulation should replicate the corporate governance at nonfinancial firms in terms of mimicking the market discipline imposed by debtholders. Because of the government safety net and the implicit government guarantees, this discipline is eroded in the financial sector. Chapter 2, and by far the longest essay, is written by Tirole, and focuses both on what he considers to be the major causes of the crisis and, given these causes, how the financial system should be reformed. The chapter describes a whos who of possible suspects for what caused the financial crisis. The most interesting part of this discussion is less Tiroles naming of these suspects and, instead, Tiroles take on why they are suspects. For the reader interested in the global financial architecture, the chapter provides a unique look into the mind of one of the worlds leading thinkers in this area. Tiroles follow-on long list of reforms and motivation for these reforms allows one to compare Tiroles view of financial regulation to that of other academics, such as NYU Sterns work (Viral V. Acharya and Matthew Richardson 2009), Markus Brunnermeier et al. (2009), and the Squam Lake Group (2010) among others, and the actual enacted legislation both in the United States and abroad. The third chapter by Rochet takes a more targeted look at prudential bank regulation with a particular emphasis on the Basel Accords. This is a must read for anyone interested in the Basel accords and why these accords were inadequate for our financial system. In fact, I view this chapter somewhat as an indictment of the entire Basel approach to prudential bank regulation. While Rochet does not go as far as to argue for scrapping them, his suggested reforms are consistent with a complete overhaul of the system currently in place. As described below, he would most likely not be supportive of Basel III. The final chapter b y both Dewatripont and Rochet follows on from the criticisms provided in the prior chapter on the Basel Accords. In particular, the chapter takes a banking crisis as given and then discusses how distressed banks should be treated in this crisis. The authors discuss a special bankruptcy regime for financial institutions and some of the challenges that arise within an international setting. As discussed below, a key theme of this chapter is a more systemwide approach to measuring and managing risks of financial institutions. My review will cover three areas. First, I will try and put into perspective the major conclusions of the authors on financial sector regulation. Second, I will provide a few critical remarks on the chapters. Third, and perhaps equally important, it should be noted that the authors wrote these essays prior to the enactment of major financial regulation such as the Dodd-Frank Act and the new Basel III accords. It seems worthwhile therefore to see whether some of the authors ideas ended up being part of these historic legislations. Financial Sector Regulation A consistent theme throughout the three main essays is that the purpose of prudential regulation is twofold: (1) protect depositors, holders of insurance policies, or investors in pension or similar funds from default, and, in the case of bailouts, taxpayers [micro-prudential regulation], and (2) contain and manage systemic risk [macro-prudential regulation]. All of the chapters argue that macro-prudential regulation was lacking in the current architecture of global finance. In other words, the financial system, through the procyclical nature of both its accounting and capital requirements, and the regulatory apparatus of the Basel Accords, was focused too much on individual institution risk and not systemwide risk. In other words, regulators need to focus not just on the own losses of a financial institution, but also on the cost that their failure would impose on the system. It is hard to argue with this point. On page 116, chapter 4 best lays out the viewpoint of the authors: as the recent crisis has shown, indicators for future distress cannot be condensed into one single summary capital ratio, even if it very complex. Instead, we believe that regulatory intervention should be triggered by a number of relatively simple (and publicly verifiable) indicators, including measures of liquidity risk, exposures to macroeconomic shocks, and bilateral exposure to other banks or financial institutions. Following this point, all the authors in their respective essays extoll the benefits of a solvency regime for dealing with banks. This regime needs to have certain properties. First, the regulator must be powerful enough to be able to take prompt corrective action, in other words, to deal with troubled institutions prior to default.Chapter 4 in particular discusses the ability of the FDIC to take such action in dealing with its banks and argues that this is a good model. Second, the regulator must have legal power to not only act in the case of a failure of any financial institution, but a regime needs to be set up to deal specifically with banking crises, that is, multiple failures. Third, and arguably an intractable problem, all the respective essays note that there needs to be international coordination on bankruptcy when dealing with multinational financial institutions. Another common theme across the essays, especially those of chapters 2 and 3, is the question of how to deal with liquidity. As Tirole points out, prudential regulation of liquidity can be viewed in a very similar way to that of prudential regulation of capital, that is, micro-based by protecting taxpayers, and macro-based by managing systemic risk. The authors are not particularly specific on what they would like to see, other than support for government intervention via liquidity channels and the need to consider the liquidity positions of financial institutions . Given their support for well-articulated simple rules, one might surmise that the authors would view the Basel III liquidity requirements (which in theory will eventually kick in later this decade) as good first steps. Another consistent theme in some of the chapters is the principle underlying the authors representation hypothesis. The basic idea is that, in regulating financial firms, regulators should take on the normal corporate governance role that one would see creditors perform for nonfinancial firms. One of the main differences between financial and nonfinancial firms is the access to the government safety net. In theory, the regulation hypothesis would solve this problem. In chapter 1 of the book, the authors describe how this hypothesis could have been used to deal with firms that either rely on wholesale funding, or that are too interconnected or generally too-big-to-fail. I believe that one could more broadly describe the representation hypothesis as the authors approach to regulating the shadow banking sector. That said, it is surprising that the book provides little discussion of shadow banking, in particular, money market funds, repo financing, securities lending, or even investment banking.Somewhat similar to the regulation that has emerged, such as the Dodd-Frank Act and Basel III, the authors primary focus is on the banking sector. I think this is a missed opportunity. In the next section, I describe three other areas I wish the book had covered in more detail. Missed Opportunity No book on the financial crisis will please every reader. This book is no different, and I thought it might be worthwhile to mention three areas where, given the authors expertise in the field of banking, I believe they missed an opportunity to inform the reader. The first is with respect to Tiroles description of how and why the financial crisis occurred. While the chapter starts with a principles-based approach, at the end of day, the chapter provi des a litany of causes but does not really choose leading candidates. The reader could have benefitted from Tiroles knowledge on the subject.While it is clear that Tirole, and the other authors, are in the camp that poorly designed regulation and insufficient implementation of regulation is the primary cause, chapter 2 does not pinpoint the market failure. It seems a necessary requirement for designing an appropriate regulatory architecture is to focus on the market failure.Therefore, it may not be a surprise that chapter 2 lays out a whole series of reforms without creating an overlay of principles that future regulation should address. In particular, chapter 1 of the book provided a historical perspective that I think could have been quite informative on how to proceed with regulatory reform. The advantage of beginning with a more pinpoint analysis of the crisis is that, once you understand how markets have failed, the nature of the solution becomes a lot clearer. Therefore, no t unlike the Dodd-Frank Act itself, the solutions offered in chapter 2 are a bit more heavy handed scrutiny rather than a principled regulatory response. I should say that, in defense of the book itself, however, chapters 3 and 4 are more along these lines and the suggested reforms center around macro-prudential regulation and the management of systemic risk. Having been involved in such a process through the publication of the NYU Stern books on the financial crisis, Restoring Financial Stability: How to Repair a Failed System (Acharya and Richardson 2009) and Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance (Acharya et al. 2010), I do think the authors miss an opportunity here to make a statement on the financial crisis. It seemed clear to us that, while there were a lot of symptoms of ills in the financial markets and a lot of proximate causes of the sort described in chapter 2the housing bubble, the rise in subprime lending, compensation i ncentives in financial firms, a huge expansion in securitization, a big expansion of creditwhat turned a collapsing housing bubble into a devastating crisis in the financial system was the huge concentration of systemic risktail riskin the banking and shadow banking system. The second missed opportunity is that the authors do not take a lead in discussing how capital and liquidity requirements should be set, other than that these requirements should be countercyclical. While the authors provide a good analysis of what was wrong with the current system, and that this system needs to expand beyond capital requirements, it must have been clear to the authors that any new financial architecture would argue for new capital and liquidity rules. The authors have been some of the leading economic researchers in this area. There is a raging debate about both the level of and the cross-sectional variation of capital requirements. For example, Douglas Gale (2010) argues that the case for hi gher capital levels is not so clear-cut (see also Skander Van dan Heuvel 2008). Given the authors earlier work, one would imagine that the authors have a different take on this subject. The book provided the authors a perfect opportunity to address this debate head-on. From a practical point of view, capital requirements are arguably one of the more important tools used by regulators and are at the heart of the Basel Accords and the international financial regulatory regime. Lastly, while the topic of mispriced government guarantees and moral hazard is discussed in the book, I found it surprising that the topic got so little coverage. There is little analysis of what it means for our ability to regulate the financial sector when many financial institutions can finance their activities at below-market rates, which we know can lead to excessive risk. These distortions occurred not only at banks with access to FDIC insurance, but also with respect to the government sponsored (and ba cked) enterprises Fannie Mae and Freddie Mac and the too-big-to-fail large, complex financial institutions. And it remains a big issue. To this point, there is a study done by the Federal Reserve Bank of Richmond that found about 45 percent of all financial liabilities in 1999 fell under the U.S. safety net. They did the study a decade later and it was close to 60 percent. (See Nadezhda Malysheva and John R. Walter 2010). I do not really know what the authors view is. Do the authors believe moral hazard was a secondary issue, or, like the Dodd-Frank Act, do they believe a special bankruptcy regime can take care of the problem? Again, given the authors work on this issue, especially on the pricing of deposit insurance and market incentives, it would have been nice to provide greater elocution on the government guarantee problem. Of course, these comments are less criticisms of the authors analysis and more a wish list on my part. One interesting feature of the authors work is that their book was written prior to the enactment of significant financial regulation. The book therefore provides a somewhat unique opportunity to compare what leading economists thought was the best regulation ex ante against the actual financial regulation that got implemented, specifically the rules written into the Dodd-Frank Act and Basel III. We turn to this comparison in the next section. The Dodd-Frank Act and Basel III At one level, at least one of the authors, Tirole, should be quite happy with Dodd-Frank. The creation of (1) a consumer finance protection agency, (2) greater transparency of exposures across the system and more standardization of financial products (especially in the derivatives area), (3) the possibility at least of countercyclical capital requirements, (4) recognition of the problem of liquidity and therefore potential future regulation of liquidity, (5) some oversight albeit limited on compensation, (6) regulation of credit rating agencies, and (7) s kin in the game in securitization markets, cover major parts of Tiroles suggested financial reforms and all of these appear within the Dodd-Frank Act. Moreover, the Dodd-Frank Act clearly emphasizes macro-prudential regulation for the first time as an important component of the financial regulatory system. The Act creates a supporting research organization within Treasury, the Office of Financial Research, to measure and provide tools for measuring systemic risk. Using this data, The Dodd-Frank Act assigns new responsibilities to a new body, the Financial Stability Oversight Council (FSOC), to identify systemically important financial institutions (SIFIs). FSOC, along with the relevant agencies, are then given the power to provide enhanced regulation of these SIFIs, such as levels of capital and liquidity necessary to withstand major shocks to asset markets. In addition, the Act also gives authority for prompt corrective action of SIFIs through the orderly liquidation authority w hich is to be run and modeled by the FDIC. All three authors should be quite pleased with the new focus on macro-prudential regulation. As Tirole writes on page 62, we note that a banks failure does not have the same consequences during a period of crisis as it does during an otherwise calm period. . .such a failure has a greater chance of having a systemic impact if other banks are simultaneously affected by a macroeconomic shock and therefore may become undercapitalized . . . this all suggests that capital requirements should be higher the more the banks failure is likely to coincide with (or be driven by) macroeconomic shocks and other banks failure. At another level though, Tirole, Dewatripont, and Rochet might be less impressed with how the Dodd-Frank Act actually manages systemic risk. The devil is in the details, and there are plenty of things in the Dodd-Frank Act that would not coincide with the authors thinking on macro-prudential regulation. Rather than provide a lo ng list of issues, I will mention just a few important ones: As much as the Act argues for macro-prudential regulation, the Act is focused on the orderly liquidation of an individual institution and not the system as a whole. As all three authors would argue, there is nothing unique per se about a bankruptcy procedure for a firm; what is special is its effect on the rest of the financial sector. All three authors stress the point that, in terms of managing systemic risk, bailouts are inevitable in a crisis. The architecture of the financial system should be built around this point. I therefore believe that the authors might actually argue that parts of Dodd-Frank have actually increased systemic risk. Specifically, the Act restricts the Feds ability to deal with nonbanks in terms of its lender of last resort capabilities unless a system-wide crisis has emerged. Therefore, when the financial system is weak, temporary liquidity problems at a particular firm could trigger a full-blow n crisis. Not surprisingly, given their research, the authors are particularly aware of the role incentives play in financial markets. Thus, I believe the authors would conclude that the Act has incentives all wrong, and arguably increases both moral hazard and systemic risk in the financial system. According to Dodd-Frank, if the system fails, and money cannot be recovered from creditors, the surviving SIFIs must make up the difference ex post. In a crisis, the prudent firms pay for the sins of others. This creates a free rider problem, a race to the bottom and greater ex ante risk taking. Moreover, when surviving SIFIs are struggling to stay afloat, they must provide capital. This is clearly pro-cyclical, further igniting the crisis. With respect to Basel III, there are certainly important changes to Basel II that are consistent with the content of this book, most notably the addition of a liquidity requirement for financial firms, a simple leverage ratio as a supplementary me asure to risk-based capital, and higher capital requirements overall for SIFIs. That said, the authors most likely would take a dim view of Basel III. In particular, Basel III continues the risk-weights that are tied to credit ratings both within and across asset classes, as well as the internal ratings approach that Rochet forcefully argues against in chapter 3. Remarkably, the Basel approach is still focused on the risk of individual banks as opposed to systemwide risks. The authors view that what is needed is a battery of simple and easily calculated indicators, such as exposures of banks to various macroeconomic risks, has not held the day. Instead, Basel III continues the focus of the previous Basel accords on risk-weighted capital measures of individual firms as the main indicator. Finally, as mentioned above, one of the main principles underlying the authors approach to financial regulation is based on their concept of the representation hypothesis. In the absence of marke t discipline, the regulator should take on the corporate governance role of debtholders. A corollary to this hypothesis is that if two financial institutions, call them bank A and shadow bank B, perform similar functions, A and B should be regulated as such. While the Dodd-Frank Act does allow for some regulation of shadow banks (if they are SIFIs), generally speaking, both Basel III and Dodd-Frank fall into the familiar trap of regulating by form rather than function. And by solely addressing the failures of banking institutions, regulators are excluding the systemically important shadow banking system that serves similar functions, such as clearing houses and money market funds. Excluding these groups of institutions makes the system vulnerable, prohibits access to emergency funding, and creates an unlevel playing field. Current regulation therefore violates the principle of the representation hypothesis put forth by the authors. Acharya, Viral V., Thomas F. Cooley, Matthew Ric hardson, and Ingo Walter, ed. 2010. Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance. Hoboken, N.J.: Wiley. Acharya, Viral V., and Matthew Richardson, ed. 2009. Restoring Financial Stability: How to Repair a Failed System. Hoboken, N.J.: Wiley. Brunnermeier, Markus, Andrew Crockett, Charles Goodhart, Martin Hellwig, Avinash D. Persaud, and Hyun Shin. 2009. The Fundamental Principles of Financial Regulation. Geneva: International Center for Monetary and Banking Studies; London: Centre for Economic Policy Research. Dewatripont, Mathias, and Jean Tirole. 1984. The Prudential Regulation of Banks. Cambridge, Mass. and London: MIT Press. Gale, Douglas. 2010. Capital Regulation and Risk Sharing. International Journal of Central Banking, 6(4): 187-204. Malysheva, Nadezhda, and John R. Walter. 2010. How Large Has the Federal Financial Safety Net Become? Economic Quarterly, 96(3): 273-90. Squam Lake Group. 2010. Squam Lake Report: Fixing the Financial System. Princeton and Oxford: Princeton University Press. Van den Heuvel, Skander. 2008. The Welfare Cost of Bank Capital Requirements. Journal of Monetary Economics, 55(2): 298-320.