Right about now, you may be thinking about that brother-in-law who "made a killing" in options. Or maybe you're reminiscing about the Nevada vacation when your one lucky quarter magically drew out 700 more with the pull of a slot-machine lever. Why put your money in slow-and-steady investment vehicles that merely promise double-digit returns, when you could have near-instant riches? With compounding, you have to wait patiently for years for your riches to accumulate. What if you want it all now?
Granted, there's nothing exhilarating about predictability. Matching the performance of the S&P 500 won't make you the life of the party. But neither will the far more common tales about how you lost your savings on some speculative gamble -- nor a recounting of your subsequent adventures in bankruptcy court.
You don't need a card dealer, dour strangers, or Wayne Newton background muzak to gamble. Plenty of stock market gamblers do an admirable job of losing their money on seemingly legitimate pursuits. At The Motley Fool, we believe investors "gamble" every time they commit money to something they don't understand.
Suppose you overhear your best friend's dentist's nanny talking about a company called Huge Fruit at a cocktail party. "This thing is gonna go through the roof in the next few months," she says in a stage whisper. If you call your broker the first thing the next morning to place an order for 100 shares, you've just gambled.
Do you know what Huge Fruit does? Are you familiar with its competition (Heavy Melon)? What were its earnings last quarter? There are a lot of questions you should ask about a "hot" company before you throw your hard-earned cash at it. A little knowledge could help keep you from losing a lot of money.
Remember, every dollar that you speculate with and lose is a dollar that's not working to create long-term wealth for you. Speculation promises to give you everything you want right now, but rarely delivers. In contrast, patience all but guarantees those goals down the road.
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The Emperical Evidence
Whether technical analysis actually works is a matter of controversy. Methods vary greatly, and different technical analysts can sometimes make contradictory predictions from the same data. Many investors claim that they experience positive returns, but academic appraisals often find that it has little predictive power.
Modern studies may be more positive: of 95 modern studies, 56 concluded that technical analysis had positive results, although data-snooping bias and other problems make the analysis difficult.
Nonlinear prediction using neural networks occasionally produces statistically significant prediction results.
A Federal Reserve working paper regarding support and resistance levels in short-term foreign exchange rates
" offers strong evidence that the levels help to predict intraday trend interruptions,"
although the
"predictive power"
of those levels was
" found to vary across the exchange rates and firms examined".
Modern studies may be more positive: of 95 modern studies, 56 concluded that technical analysis had positive results, although data-snooping bias and other problems make the analysis difficult.
Nonlinear prediction using neural networks occasionally produces statistically significant prediction results.
A Federal Reserve working paper regarding support and resistance levels in short-term foreign exchange rates
What Is Random Walk Hypothesis?
Random walk hypothesis
The random walk hypothesis may be derived from the weak-form efficient markets hypothesis, which is based on the assumption that market participants take full account of any information contained in past price movements (but not necessarily other public information). In his book A Random Walk Down Wall Street, Princeton economist Burton Malkiel said that technical forecasting tools such as pattern analysis must ultimately be self-defeating.
In a 1999 response to Malkiel, Andrew Lo and Craig McKinlay collected empirical papers that questioned the hypothesis' applicability that suggested a non-random and possibly predictive component to stock price movement, though they were careful to point out that rejecting random walk does not necessarily invalidate EMH.
Technicians say the EMH and random walk theories both ignore the realities of markets, in that participants are not completely rational and that current price moves are not independent of previous moves.
Critics reply that one can find virtually any chart pattern after the fact, but that this does not prove that such patterns are predictable. Technicians maintain that both theories would also invalidate numerous other trading strategies such as index arbitrage, statistical arbitrage and many other trading systems.
Market Hypothesis
"Efficient market hypothesis"
"Economist Eugene Fama published the seminal paper on the EMH in the Journal of Finance in 1970, and said "In short, the evidence in support of the efficient markets model is extensive, and (somewhat uniquely in economics) contradictory evidence is sparse.""
EMH advocates say that if prices quickly reflect all relevant information, no method (including technical analysis) can "beat the market." Developments which influence prices occur randomly and are unknowable in advance. The vast majority of academic papers find that technical trading rules, after consideration for trading costs, are not profitable
Technicians say that EMH ignores the way markets work, in that many investors base their expectations on past earnings or track record, for example. Because future stock prices can be strongly influenced by investor expectations, technicians claim it only follows that past prices influence future prices.
They also point to research in the field of behavioral finance, specifically that people are not the rational participants EMH makes them out to be. Technicians have long said that irrational human behavior influences stock prices, and that this behavior leads to predictable outcomes.
By considering the impact of emotions, cognitive errors, irrational preferences, and the dynamics of group behavior, behavioral finance offers succinct explanations of excess market volatility as well as the excess returns earned by stale information strategies.... cognitive errors may also explain the existence of market inefficiencies that spawn the systematic price movements that allow objective TA [technical analysis] methods to work.
"Author David Aronson says that the theory of behavioral finance blends with the practice of technical analysis."
EMH advocates reply that while individual market participants do not always act rationally (or have complete information), their aggregate decisions balance each other, resulting in a rational outcome (optimists who buy stock and bid the price higher are countered by pessimists who sell their stock, which keeps the price in equilibrium). Likewise, complete information is reflected in the price because all market participants bring their own individual, but incomplete, knowledge together in the market.
FORECASTING? Is it profitable?
An influential 1992 study by Brock et al. which appeared to find support for technical trading rules was tested for data snooping and other problems in 1999 - the sample covered by Brock et al. was robust to data snooping.
Subsequently, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that:
"for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs, that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."
Transaction costs are particularly applicable to "momentum strategies"; a comprehensive 1996 review of the data and studies concluded that even small transaction costs would lead to an inability to capture any excess from such strategies.
Subsequently, a comprehensive study of the question by Amsterdam economist Gerwin Griffioen concludes that:
"for the U.S., Japanese and most Western European stock market indices the recursive out-of-sample forecasting procedure does not show to be profitable, after implementing little transaction costs. Moreover, for sufficiently high transaction costs it is found, by estimating CAPMs, that technical trading shows no statistically significant risk-corrected out-of-sample forecasting power for almost all of the stock market indices."
Transaction costs are particularly applicable to "momentum strategies"; a comprehensive 1996 review of the data and studies concluded that even small transaction costs would lead to an inability to capture any excess from such strategies.
Technical Trading Strategies
Technical trading strategies were found to be effective in the Chinese marketplace by a recent study that states, "Finally, we find significant positive returns on buy trades generated by the contrarian version of the moving average crossover rule, the channel breakout rule, and the Bollinger band trading rule, after accounting for transaction costs of 0.50 percent." Nauzer J. Balsara, Gary Chen and Lin Zheng The Chinese Stock Market: An Examination of the Random Walk Model and Technical Trading Rules
Simplifying Your financial Life
It seems that every year the business of keeping one's finances in order grows more complex . but you can simplify your personal financial life if you rely on a well-tested managerial technique - delegate. You can do it by using various services and plans.
save and invest painlessly by subscribing to payroll-deduction plans and salary-withholding plans at your job. in both cases, a portion of your earnings is automatically invested for you each payday. your money tends to grow fast because you get some tax breaks and your employer often marches part of what you put in.
Take advantage of the automatic dividend-reinvestment plans offered to stockholders of more than 1,300 companies, many of them utilities. Instead of collecting a dividend check from the company each quarter, you get stock equal to the value of the dividend. you usually pay no commission or fee, and the whole transaction is handled for you automatically by the company.
save and invest painlessly by subscribing to payroll-deduction plans and salary-withholding plans at your job. in both cases, a portion of your earnings is automatically invested for you each payday. your money tends to grow fast because you get some tax breaks and your employer often marches part of what you put in.
Take advantage of the automatic dividend-reinvestment plans offered to stockholders of more than 1,300 companies, many of them utilities. Instead of collecting a dividend check from the company each quarter, you get stock equal to the value of the dividend. you usually pay no commission or fee, and the whole transaction is handled for you automatically by the company.
Price-based Indicators
These indicators are generally shown below or above the main price chart.
* Advance decline line - a popular indicator of market breadth
* Average Directional Index - a widely used indicator of trend strength
* Commodity Channel Index - identifies cyclical trends
* MACD - moving average convergence/divergence
* Relative Strength Index (RSI) - oscillator showing price strength
* Stochastic oscillator - close position within recent trading range
* Trix - an oscillator showing the slope of a triple-smoothed exponential moving average
* Momentum - the rate of price change
* Advance decline line - a popular indicator of market breadth
* Average Directional Index - a widely used indicator of trend strength
* Commodity Channel Index - identifies cyclical trends
* MACD - moving average convergence/divergence
* Relative Strength Index (RSI) - oscillator showing price strength
* Stochastic oscillator - close position within recent trading range
* Trix - an oscillator showing the slope of a triple-smoothed exponential moving average
* Momentum - the rate of price change
Types of Charts
* OHLC "Bar Charts" - Open-High-Low-Close charts, also known as bar charts, plot the span between the high and low prices of a trading period as a vertical line segment at the trading time, and the open and close prices with horizontal tick marks on the range line, usually a tick to the left for the open price and a tick to the right for the closing price.
* Candlestick chart - Of Japanese origin and similar to OHLC, candlesticks widen and fill the interval between the open and close prices to emphasize the open/close relationship. In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.
* Line chart - Connects the closing price values with line segments.
* Point and figure chart - a chart type employing numerical filters with only passing references to time, and which ignores time entirely in its construction.
* Candlestick chart - Of Japanese origin and similar to OHLC, candlesticks widen and fill the interval between the open and close prices to emphasize the open/close relationship. In the West, often black or red candle bodies represent a close lower than the open, while white, green or blue candles represent a close higher than the open price.
* Line chart - Connects the closing price values with line segments.
* Point and figure chart - a chart type employing numerical filters with only passing references to time, and which ignores time entirely in its construction.
Part-Time Jobs
How to handle a part-time jobs.
by: Ryan Reyes
April. 16, 2010 2 9:25 am
A new class of high earners is working less and enjoying it more.
The number of part-timers is fast expanding, and so is the list of employers welcoming them - and willing to pay them well.
To be a professional and a part-time worker was once a contradiction in terms. But no more. Today more than a million professional choose to work part-time. some do so voluntarily, others are motivated by economic forces; but whatever the reason, one out of every eight professionals has decided to forgo full-time employment.
Incentive variations in part-time work are becoming more common. some people put in a full 40 hours or more a week but for , say, only six months or less a year. For some married couples or for two women who want to partially re-enter the work lace, job sharing makes a comportable fit. what they do is divide one position's hours and responsibilities.
The part-time work that is easiest to get is in hard-to-find specialized skills. This include medicine , law, accounting, engineering, and especially, data processing. Professionals who have experience in this areas can find many jobs.
Of course, the fewer hours you put on the job, the less money you take out. At least half of all part-timers get some fringe benefits. you also should be able to show how you would keep up with responsibilities that normally require full-time hours, such as travel and staff meetings. Always stress the quality of your work above the money the company would save on your salary.
Tracking down a part-time job at another company will take considerably more time and effort. If you get an interview, be prepared to explain how you would handle specific problems that a job might present for someone working part-time and much better if you volunteer to go full-time when emergencies arise. And offer to work a scaled-down schedule on a trial basis for a few months.
by: Ryan Reyes
April. 16, 2010 2 9:25 am
A new class of high earners is working less and enjoying it more.
The number of part-timers is fast expanding, and so is the list of employers welcoming them - and willing to pay them well.
To be a professional and a part-time worker was once a contradiction in terms. But no more. Today more than a million professional choose to work part-time. some do so voluntarily, others are motivated by economic forces; but whatever the reason, one out of every eight professionals has decided to forgo full-time employment.
Incentive variations in part-time work are becoming more common. some people put in a full 40 hours or more a week but for , say, only six months or less a year. For some married couples or for two women who want to partially re-enter the work lace, job sharing makes a comportable fit. what they do is divide one position's hours and responsibilities.
The part-time work that is easiest to get is in hard-to-find specialized skills. This include medicine , law, accounting, engineering, and especially, data processing. Professionals who have experience in this areas can find many jobs.
Of course, the fewer hours you put on the job, the less money you take out. At least half of all part-timers get some fringe benefits. you also should be able to show how you would keep up with responsibilities that normally require full-time hours, such as travel and staff meetings. Always stress the quality of your work above the money the company would save on your salary.
Tracking down a part-time job at another company will take considerably more time and effort. If you get an interview, be prepared to explain how you would handle specific problems that a job might present for someone working part-time and much better if you volunteer to go full-time when emergencies arise. And offer to work a scaled-down schedule on a trial basis for a few months.
The Biggest Social Change
A Simple Hints.
The continuing rise of women. Women at work for pay represent a tremendous new bloc of consumers and decision-makers. They a reach source of talent, and they will sharpen our productivity, our competitiveness in global markets and our leadership capabilities.
Now, a lady President, Managers, Senators, Congresswoman, e.t.c.
Do you think that this scenario is now happening in this world today?
The continuing rise of women. Women at work for pay represent a tremendous new bloc of consumers and decision-makers. They a reach source of talent, and they will sharpen our productivity, our competitiveness in global markets and our leadership capabilities.
Now, a lady President, Managers, Senators, Congresswoman, e.t.c.
Do you think that this scenario is now happening in this world today?
Invest In Real Property
By: Ryan
April. 13, 2010
Posted in: Real Property
Once you decide to invest in real property, you probably will be eager to buy something quickly and put your money to work. Many new real estate investors underestimate the complexity of the field and overestimate how much they know about it.
Immerse yourself in a study of real estate as you would any new business venture. talk with other investors and brokers; that will help you pinpoint the neighborhoods with the best investment potential. Seek out areas that have begun to gain favor among young householders as an alternative to more expensive established neighborhoods.
Look for good transportation, shopping and schools and a strong, diversified employment base.
Then you can narrow your search to specific properties. your best ally is likely to be a broker who is knowledgeable about your chosen area. check his or her reputation with local banker and attorneys. discuss with the broker your debt limit and investment standards.
Other sources of sale properties are newspaper real estate sections. if you find a property that approaches your standards, investigate it thoroughly. Look for a modern furnace. Be alert for sign of trouble. You can confirm the stated age of a building by looking inside the toilet tank; most are stamped with their date of manufacture. Or look for a city building inspector's sticker.
Before investing in a rental house or apartment building, always ask yourself.
Does it make financial sense for you?
Can you really afford the initial cash outlay?
April. 13, 2010
Posted in: Real Property
Once you decide to invest in real property, you probably will be eager to buy something quickly and put your money to work. Many new real estate investors underestimate the complexity of the field and overestimate how much they know about it.
Immerse yourself in a study of real estate as you would any new business venture. talk with other investors and brokers; that will help you pinpoint the neighborhoods with the best investment potential. Seek out areas that have begun to gain favor among young householders as an alternative to more expensive established neighborhoods.
Look for good transportation, shopping and schools and a strong, diversified employment base.
Then you can narrow your search to specific properties. your best ally is likely to be a broker who is knowledgeable about your chosen area. check his or her reputation with local banker and attorneys. discuss with the broker your debt limit and investment standards.
Other sources of sale properties are newspaper real estate sections. if you find a property that approaches your standards, investigate it thoroughly. Look for a modern furnace. Be alert for sign of trouble. You can confirm the stated age of a building by looking inside the toilet tank; most are stamped with their date of manufacture. Or look for a city building inspector's sticker.
Before investing in a rental house or apartment building, always ask yourself.
Does it make financial sense for you?
Can you really afford the initial cash outlay?
Careful Shopping for Car Insurance
Your Auto Policies
By: Ryan Reyes
Date: April. 10, 2010 @ 9:30 A.M.
Categories: Insurance Policy
Tags: Insurance, Salesmen, Attorney, Uninsured motorist, Medical Policy
Yes it is, car insurance is more important than ever. Insurance salesmen naturally try to sell their standard, fully loaded policy. It contains six basic types of coverage.
Listed are:
1. Bodily Injury
2. Property damage
3. Uninsured motorist
4. Medical payments
5. Collision
6. Comprehensive
Don't skimp on bodily injury liability and property damage liability coverage. If you or anybody driving your car with your permission is in an accident in which someone is killed or injured, bodily injury liability coverage pays you for an attorney to depend against lawsuits by victims of an accident.
It also pays other court cost and any judgments against you. Property damage liability covers property that you do not own. If you have substantial assets that could be seized in a court to pay off a judgment that exceeds your auto coverage, you should consider an additional umbrella policy.
In some states, you are required to buy uninsured-motorist coverage. It pays you for injuries caused by a hit-and-run driver or someone who cannot pay a judgment. Yet if it is not required and if you have adequate health and disability insurance where you work, you may not need uninsured-motorist coverage, nor medical payments coverage.
Both may largely duplicate protection already supplied by your regular medical policy.
By: Ryan Reyes
Date: April. 10, 2010 @ 9:30 A.M.
Categories: Insurance Policy
Tags: Insurance, Salesmen, Attorney, Uninsured motorist, Medical Policy
Yes it is, car insurance is more important than ever. Insurance salesmen naturally try to sell their standard, fully loaded policy. It contains six basic types of coverage.
Listed are:
1. Bodily Injury
2. Property damage
3. Uninsured motorist
4. Medical payments
5. Collision
6. Comprehensive
Don't skimp on bodily injury liability and property damage liability coverage. If you or anybody driving your car with your permission is in an accident in which someone is killed or injured, bodily injury liability coverage pays you for an attorney to depend against lawsuits by victims of an accident.
It also pays other court cost and any judgments against you. Property damage liability covers property that you do not own. If you have substantial assets that could be seized in a court to pay off a judgment that exceeds your auto coverage, you should consider an additional umbrella policy.
In some states, you are required to buy uninsured-motorist coverage. It pays you for injuries caused by a hit-and-run driver or someone who cannot pay a judgment. Yet if it is not required and if you have adequate health and disability insurance where you work, you may not need uninsured-motorist coverage, nor medical payments coverage.
Both may largely duplicate protection already supplied by your regular medical policy.
Your Biggest Investment
Giving Your house Its Semi-annual Physical
By: Ryan Reyes
Date: April 9, 2010 @ 11:00 A.M.
Categories: Housing Maintenance
Tags: Painting, Repair, Houses, Inspections
"A house is a home, shelter, building or structure that is a dwelling or place for habitation by human beings."
Every spring and autumn is the time to save money, and protect what is probably your biggest investment, by giving your house its semi-annual top-to-bottom physical examination. No matter how invulnerable your home may look, hazard to its health lurk almost everywhere. So it pays to head off problems in the early stages by practicing preventive maintenance. If you take care of your house, it will take care of you. In sum, you will get more for it when you sell it.
The best way to handle maintenance chores is to put them on a schedule. For newer houses and those in mild climates, an annual inspection tour should suffice. but if your house is more than 10 years old or has to weather ice and snow, you are wise to make quarterly checkups.
You also can save both time and money by repairing your house in stages rather than all at once. The south side usually needs painting every three to six years. The other side require it only every eight to ten years.
Playing the Riskiest Game
By: Ryan Reyes
Date: April 8, 2010 @ 8:01 A.M
Categories: Commodities
Tags: Risk, Amateur traders, Investment
For those who yearn for the fastest, toughest, highest-risk financial game of all, there are commodities. As many as 90% of all amateur traders lose money and drop out within a
year, and the only consistent winners are the brokers who charge you commisions.
Still, if you crave excitement and have a cast-iron stomach, commodities trading can offer impressive gains for that tiny portion of your investable funds that you are willing to put
completely at risk-your mad money. But unless you are an expert, never put more than a nickel or dime out of every investment dollar into commodities.
Small investors who speculate in commodities make two major mistakes. Many of them operate on the basis of tips; they are often wrong, and the amateurs cannot hope to match the professional traders for access to update, accurate information about markets. Small investors also tend to be undercapitalized.
To stay in this game, you should have a dollars in reserve, ready to commit, for every dollar you put up.
Date: April 8, 2010 @ 8:01 A.M
Categories: Commodities
Tags: Risk, Amateur traders, Investment
For those who yearn for the fastest, toughest, highest-risk financial game of all, there are commodities. As many as 90% of all amateur traders lose money and drop out within a
year, and the only consistent winners are the brokers who charge you commisions.
Still, if you crave excitement and have a cast-iron stomach, commodities trading can offer impressive gains for that tiny portion of your investable funds that you are willing to put
completely at risk-your mad money. But unless you are an expert, never put more than a nickel or dime out of every investment dollar into commodities.
Small investors who speculate in commodities make two major mistakes. Many of them operate on the basis of tips; they are often wrong, and the amateurs cannot hope to match the professional traders for access to update, accurate information about markets. Small investors also tend to be undercapitalized.
To stay in this game, you should have a dollars in reserve, ready to commit, for every dollar you put up.
Fibonacci
"Leonardo Fibonacci was born around AD 1170 to Guglielmo Fibonacci, a wealthy Italian merchant. Guglielmo directed a trading post (by some accounts he was the consultant for Pisa) in Bugia, a port east of Algiers in the Almohad dynasty's sultanate in North Africa (now Bejaia, Algeria). "
Leonardo Pisano Bogollo, (c. 1170 – c. 1250) also known as Leonardo of Pisa, Leonardo Pisano, Leonardo Bonacci, Leonardo Fibonacci, or, most commonly, simply Fibonacci, was an Italian mathematician, considered by some "the most talented western mathematician of the Middle Ages."
Fibonacci is best known to the modern world for:
* The spreading of the Hindu-Arabic numeral system in Europe, primarily through the publication in the early 13th century of his Book of Calculation, the Liber Abaci.
* A number sequence named after him known as the Fibonacci numbers, which he did not discover but used as an example in the Liber Abaci.
Fibonacci
Nationality: Italian
Fields: Mathematician
Known for:
Fibonacci number
Fibonacci prime
Brahmagupta–Fibonacci identity
Fibonacci polynomials
Fibonacci pseudoprime
Fibonacci word
Reciprocal Fibonacci constant
Introduction of digital notation to Europe
Pisano period
Practical number
"In hyperinflation episodes, real quantity of money sharply fell and remained at low levels for a long time."
"Trends of Money"
Long-term trends -Nominal money quantity has always grown, apart from few pathological events. Real money quantity has grown most of the time.
Business cycle behaviour - Nominal money quantity is usually pro-cyclical, sometimes leading real GDP peaks.
"
"High growth rates in nominal money quantity, if clearly exeeding nominal GDP rates, can exert inflationary pressures."
Impact On Other Variables of Money"
If economic agents base their expectations about future inflation on the money quantity, one would expect the present inflation rate boosted by money quantity growth. But this is dependent on how present prices are influenced by mere expectations.
In many empirical instances, a certain increase of money quantity have turned out to be conducive to growth in real GDP.
Many short run acceleration or deceleration of the money quantity remain without any noticeable effects on other variables.
"High growth rates in nominal money quantity, if clearly exeeding nominal GDP rates, can exert inflationary pressures."
If economic agents base their expectations about future inflation on the money quantity, one would expect the present inflation rate boosted by money quantity growth. But this is dependent on how present prices are influenced by mere expectations.
In many empirical instances, a certain increase of money quantity have turned out to be conducive to growth in real GDP.
Many short run acceleration or deceleration of the money quantity remain without any noticeable effects on other variables.
"Determinants of Money"
"International money quantity, i.e. the national quantities of money converted in one common currency at the prevailing nominal exchange rates, is completely out of control."
Narrowly-defined money is heavily influenced by central banks. Instead, depositors, banks, financial and public institutions play a crucial role for broad money aggregates.
With respect to the general economic climate, a booming economy usually exhibits a high growth of money quantity. By contrast, in hyperinflation, real money is drastically squeezed.
"Composition of Money "
"The narrowest definition of money, the monetary base comprehends only cash outside banks plus bank reserves, the latter including both cash reserves held by banks and banks' deposits at the central bank."
Money quantity is the nominal value of particularly "liquid" financial instruments in an economy. "Liquidity" means that an asset is easy to sell in any moment with small or no losses in respect to nominal price
There exist a few definitions of money quantity, some broader than others, i.e. including a wider range of financial instruments.
For the following definitions, a series of simplification has been taken to keep things easy. Moreover, there exist significant international differences in definitions, especially for broader money definitions (M2 and M3).
Larger than the monetary base, M1 comprehends cash and current accounts in banks.
M2 is M1 plus the savings account.
M3 is M2 plus other liquid liabilities of monetary financial institutions.
Thus, although a largely accepted image of money doesn't associate it to interest-bearing, some definitions do comprehend interest-bearing assets.
A crucial distinction is between nominal and real quantity of money, the latter being equal to the former divided by price level. In this way, real money dynamics becomes dependent on inflation.
This is particularly important, since inflation, in its turn, is dependent on nominal and real quantity of money, too.
"The narrowest definition of money, the monetary base comprehends only cash outside banks plus bank reserves, the latter including both cash reserves held by banks and banks' deposits at the central bank."
There exist a few definitions of money quantity, some broader than others, i.e. including a wider range of financial instruments.
For the following definitions, a series of simplification has been taken to keep things easy. Moreover, there exist significant international differences in definitions, especially for broader money definitions (M2 and M3).
Larger than the monetary base, M1 comprehends cash and current accounts in banks.
M2 is M1 plus the savings account.
M3 is M2 plus other liquid liabilities of monetary financial institutions.
Thus, although a largely accepted image of money doesn't associate it to interest-bearing, some definitions do comprehend interest-bearing assets.
A crucial distinction is between nominal and real quantity of money, the latter being equal to the former divided by price level. In this way, real money dynamics becomes dependent on inflation.
This is particularly important, since inflation, in its turn, is dependent on nominal and real quantity of money, too.
"Significance of Money "
"Money is whatever can be used in order to settle payments. Nowadays, the most common kind of money are current accounts in the banks."
Cash, a self-evident component of money, has a short life out of the banks. Within few days is spent, for example in a shop, and the shopkeeper brings urgently cash back to a bank.
Money plays three main roles:
1. It is the medium of exchange that settle payments. People accept money in exchange of goods and services. Nothing is owed anymore.
2. Money is the most common medium of account, i.e. it is the good some quantity of which serves as unit of account for prices. Prices are expressed using monetary expressions.
3. Money is a store of value over time and across people, firms, countries. Selling things gives money that can be saved and spent in the future for many different goods and services. However, there exist other financial instruments - and even goods - that can serve as a store of value as well.
"Money is whatever can be used in order to settle payments. Nowadays, the most common kind of money are current accounts in the banks."
Cash, a self-evident component of money, has a short life out of the banks. Within few days is spent, for example in a shop, and the shopkeeper brings urgently cash back to a bank.
Money plays three main roles:
1. It is the medium of exchange that settle payments. People accept money in exchange of goods and services. Nothing is owed anymore.
2. Money is the most common medium of account, i.e. it is the good some quantity of which serves as unit of account for prices. Prices are expressed using monetary expressions.
3. Money is a store of value over time and across people, firms, countries. Selling things gives money that can be saved and spent in the future for many different goods and services. However, there exist other financial instruments - and even goods - that can serve as a store of value as well.
Self-Conciousness Of Social Group
One can have a strong consciousness of belonging to a certain group, who has specific material and non-material common interests as well as characteristic way of developing strategies, organizing and acting. But this is not always the case, since it is the result of personal, generational, collective experience.
Usually, the researcher take existing groups and then look at how they react to events and issues. But one can take the other way round and look how social identities arise from conflict and confrontation with "strangers". It's when you are under attack from "somebody" that you look at possible helpers - people on the same part of the barricades. A recognized leadership and an organizational hierarchy help a lot in transforming a latent identity into a co-ordinated multi-agent force.
In more "peaceful" situations, an individual may belong to more than one group and the axis - along which he feels to be defined - can be changed by mass media pressure as well as by specific events.
In a macro-perspective, "totalizing identities" as ethnicity, language, religion can reduce the subjective importance of other social boundaries.
In a micro-perspective, the consciousness of collective identity can arise from current participation to social activities and events, especially when they have a characteristic mass dimension: large factories, manifestations, church rites, stadiums, music concerts.
Usually, the researcher take existing groups and then look at how they react to events and issues. But one can take the other way round and look how social identities arise from conflict and confrontation with "strangers". It's when you are under attack from "somebody" that you look at possible helpers - people on the same part of the barricades. A recognized leadership and an organizational hierarchy help a lot in transforming a latent identity into a co-ordinated multi-agent force.
In more "peaceful" situations, an individual may belong to more than one group and the axis - along which he feels to be defined - can be changed by mass media pressure as well as by specific events.
In a macro-perspective, "totalizing identities" as ethnicity, language, religion can reduce the subjective importance of other social boundaries.
In a micro-perspective, the consciousness of collective identity can arise from current participation to social activities and events, especially when they have a characteristic mass dimension: large factories, manifestations, church rites, stadiums, music concerts.
Significance Of Social Group
by Valentino Piana (2004)
Social Groups
Contents
1. Significance
2. Social groups defined along income and non-income axes
3. Core vs. periphery
4. The boundaries of social groups
5. Self-consciousness of social groups
6. Formal models
7. Data
Throughout the world, societies are split into distinct, albeit sometimes overlapping, social groups.
While self-definition - and self-defined belonging to groups - widely varies over time and situations for even the same individual, there are several indicators and features along which the researcher can build clusters of people.
Indeed, the atomistic idea according to which everyone feels to be dissimilar from anybody else is a realistic picture only of very extreme social conditions. Networks of people linked by communication and emotional lines are very common, while their collapse into monistic units of disconnected individuals is more the result of crashes in the social texture than the standard state.
This is very important for economics since, for instance, social groups are important for consumption as visible behaviour can become a standard with which to compare your owns. Peer groups are often the reference for choosing whether a certain good is a "must have", engendering an imitation dynamics.
In this vein, another name for "social group" is "market segment", seen from the point of view of a seller or a mass medium, to which a differentiated product can be addressed.
Social Groups
Contents
1. Significance
2. Social groups defined along income and non-income axes
3. Core vs. periphery
4. The boundaries of social groups
5. Self-consciousness of social groups
6. Formal models
7. Data
Throughout the world, societies are split into distinct, albeit sometimes overlapping, social groups.
While self-definition - and self-defined belonging to groups - widely varies over time and situations for even the same individual, there are several indicators and features along which the researcher can build clusters of people.
Indeed, the atomistic idea according to which everyone feels to be dissimilar from anybody else is a realistic picture only of very extreme social conditions. Networks of people linked by communication and emotional lines are very common, while their collapse into monistic units of disconnected individuals is more the result of crashes in the social texture than the standard state.
This is very important for economics since, for instance, social groups are important for consumption as visible behaviour can become a standard with which to compare your owns. Peer groups are often the reference for choosing whether a certain good is a "must have", engendering an imitation dynamics.
In this vein, another name for "social group" is "market segment", seen from the point of view of a seller or a mass medium, to which a differentiated product can be addressed.
Social groups defined along income and non-income axes
A basic axis of social differentiation is personal income. A three-category distinction among the poor, the middle class and the rich, as the one we proposed here, can be too rough to capture all the intermediate nuances but still help characterize different societies.
The unit of analysis can be - but not need to be only - the individual. A second element should be kept into account when judging the individual's position: the size and composition of the household to which he or she belongs. Larger families pay less per-person for certain shared expenditure (like housing) and they can have more than one income-bearer. If not, a large family with only one income-bearer would be much poorer than a one-component family.
A third consideration is linked to the stability of income over time, with people having larger fluctuations in income belonging to different social groups than people reaching systematically and without renegotiation similar levels of income.
Another crucial axis of social differentiation is the ownership of assets. Families that own their home - having already paid back any financial instruments to buy it - can devote more money to active savings and consumption than families with the same level of income but that have to pay the rent. The ownership of durable goods is an important status element aiding different aspects of life. Financial assets (as Treasury bonds, shares, controlling majorities in firms,...) can constitute elements of common material interests for certain social groups.
Employment is an extremely important element in defining identities and common interests, common languages and values. Equally important are culture and levels of education.
The unit of analysis can be - but not need to be only - the individual. A second element should be kept into account when judging the individual's position: the size and composition of the household to which he or she belongs. Larger families pay less per-person for certain shared expenditure (like housing) and they can have more than one income-bearer. If not, a large family with only one income-bearer would be much poorer than a one-component family.
A third consideration is linked to the stability of income over time, with people having larger fluctuations in income belonging to different social groups than people reaching systematically and without renegotiation similar levels of income.
Another crucial axis of social differentiation is the ownership of assets. Families that own their home - having already paid back any financial instruments to buy it - can devote more money to active savings and consumption than families with the same level of income but that have to pay the rent. The ownership of durable goods is an important status element aiding different aspects of life. Financial assets (as Treasury bonds, shares, controlling majorities in firms,...) can constitute elements of common material interests for certain social groups.
Employment is an extremely important element in defining identities and common interests, common languages and values. Equally important are culture and levels of education.
Core vs. Periphery Of Social Group
Economists often ignore many of those axes and are tempted to treat each of them as uncorrelated to the others.
But sociology has convincingly shown that these axes tend to covariate, so that rich people tend to be more educated, to have top jobs, to participate more to social life and decision-making.
Thus one should distinguish a core of society (people with more than certain thresholds of income, education, ... and strong connections through social communication channels) - which actively takes part to public life - in contrast to social periphery, a more or less marginal layer of people (poor, emarginated, isolated) [1].
Social cohesion is what keep society united, avoiding the polarization of core vs. periphery. To measure social cohesion, one should look at how deep is the gap between the so-called "have's" and "have not's" (as in the case of "digital divide", the access to clean water, or the softer concept of "employability") and how fast is this gap filled through a diffusion dynamics.
Electoral participation is much higher in the core than in the periphery. This explains - in part - why, even in quite polarized society, democratic election can be won by parties making the interests of the small minority of rich.
But sociology has convincingly shown that these axes tend to covariate, so that rich people tend to be more educated, to have top jobs, to participate more to social life and decision-making.
Thus one should distinguish a core of society (people with more than certain thresholds of income, education, ... and strong connections through social communication channels) - which actively takes part to public life - in contrast to social periphery, a more or less marginal layer of people (poor, emarginated, isolated) [1].
Social cohesion is what keep society united, avoiding the polarization of core vs. periphery. To measure social cohesion, one should look at how deep is the gap between the so-called "have's" and "have not's" (as in the case of "digital divide", the access to clean water, or the softer concept of "employability") and how fast is this gap filled through a diffusion dynamics.
Electoral participation is much higher in the core than in the periphery. This explains - in part - why, even in quite polarized society, democratic election can be won by parties making the interests of the small minority of rich.
The Boundaries Of Social Groups
Groups can be defined as people doing the same thing, liking the same subjects, sharing the same opinions, aiming at the same goals. More technically, groups have common interests, share real experience, express similar way of thinking and reacting.
In a further dimension, one can look at social groups as connected networks of people. They actively exchange information and Weltanschauungen. In the presence of new events, they consult each other on the interpretation to give to them and to decide what to do.
Solidarity networks link families, relatives, friends, neighbours up to co-citizens and people even if not previously known.
The geographical boundaries of social groups are a distinct aspect to analyse, since they are partially influenced by similarities across nations as well as by the hierarchical structure of international relationships.
In a further dimension, one can look at social groups as connected networks of people. They actively exchange information and Weltanschauungen. In the presence of new events, they consult each other on the interpretation to give to them and to decide what to do.
Solidarity networks link families, relatives, friends, neighbours up to co-citizens and people even if not previously known.
The geographical boundaries of social groups are a distinct aspect to analyse, since they are partially influenced by similarities across nations as well as by the hierarchical structure of international relationships.
Electronic Trading
Electronic trading, sometimes called etrading, is a method of trading securities (such as stocks, and bonds), foreign currency, and exchange traded derivatives electronically. It uses information technology to bring together buyers and sellers through electronic media to create a virtual market place.
NASDAQ, NYSE Arca and Globex are examples of electronic market places. Exchanges that facilitate electronic trading in the United States are regulated by either the Securities and Exchange Commission or the Commodity Futures Trading Commission, and are generally called electronic communications networks or ECNs.
Etrading is widely believed to be more reliable than older methods of trade processing, but glitches and cancelled trades do occur.
NASDAQ, NYSE Arca and Globex are examples of electronic market places. Exchanges that facilitate electronic trading in the United States are regulated by either the Securities and Exchange Commission or the Commodity Futures Trading Commission, and are generally called electronic communications networks or ECNs.
Etrading is widely believed to be more reliable than older methods of trade processing, but glitches and cancelled trades do occur.
Philadelphia Stock Exchange
Philadelphia Stock Exchange (PHLX), now known as NASDAQ OMX PHLX, is the oldest stock exchange in the United States, founded in 1790. It is now owned by NASDAQ and located at 1900 Market Street, in Center City Philadelphia.
The Chicago Mercantile Exchange (CME)
The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc," or "the Merc") is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization. The exchange demutualized in November 2000, went public in December 2002, and it merged with the Chicago Board of Trade in July 2007 to become CME Group Inc. The Chief Executive Officer of CME Group is Craig S. Donohue. On August 18, 2008 shareholders approved a merger with the New York Mercantile Exchange.CME trades several types of financial instruments: interest rates, equities, currencies, and commodities. It also offers trading in alternative investments such as weather and real estate derivatives.
CME has the largest options and futures contracts open interest (number of contracts outstanding) of any futures exchange in the world.
On October 7, 2008, the Chicago Mercantile Exchange (CME) Group announced that it will be teaming up with Citadel Investment Group LLC to create a transparent electronic trading platform for credit default swaps. The joint venture between CME and Citadel will operate as an independent organization with its own board of directors and management team. The new venture plans to initially provide clearing services for contracts involving credit-default swap indices, which typically have more standardized terms than swap contracts for individual bonds.
It is expected to eventually expand its offering to include other derivative indices as well as the multitude of single-name corporate derivatives. Major market participants will be invited to join the platform as founding members, in return for receiving a 30 percent equity portion of the venture.
The Chicago Board of Trade (CBOT), established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million contracts. On 12 July 2007, the CBOT merged with the CME under the CME Group holding company and ceased to exist as an independent entity.
Chicago Board of Trade Building
Since 1930, the Chicago Board of Trade has been operating out of 141 West Jackson Boulevard, Chicago. It is housed in a building designed by architects Holabird & Root that is 605 feet (184 m) tall, the tallest in Chicago until the Richard J. Daley Center superseded it in 1965.This Art Deco building incorporates sculptural work by Alvin Meyer and is capped by a 31 foot (9.5 m) tall statue of the Roman goddess Ceres in reference to the exchange's heritage as a commodity market. Ceres is faceless because its sculptor, John Storrs, believed that the forty-five story building would be sufficiently taller than any other nearby structure and as a result that no one would be able to see the sculpture's face anyway.
On May 4, 1977, the Chicago Board of Trade Building was designated a Chicago Landmark.The building is now a National Historic Landmark. Today the Board of Trade Building is closely joined by numerous skyscrapers in the heart of Chicago's busy Loop commercial neighborhood.
Consumption
"CONSUMPTION"
INTRODUCTION:
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined by opposition to production. But the precise definition can vary because different schools of economists define production quite differently. According to some economists, only the final purchase of goods and services constitutes consumption, and every other commercial activity is some form of production. Other economists define consumption much more broadly, as the aggregate of all economic activity that does not entail the design, production and marketing of goods and services (e.g. "the selection, adoption, use, disposal and recycling of goods and services").
Contents:
Significance
Composition
Determinants
Impact on other variables
Long-term trends
Business cycle behaviour
Significance
Consumption is the value of goods and services bought by people. Individual buying acts are aggregated over time and space.
Consumption is normally the largest GDP component. Many persons judge the economic performance of their country mainly in terms of consumption level and dynamics.
Composition
First, consumption may be divided according to the durability of the purchased objects. In this vein, a broad classification separates durable goods (as cars and television sets) from non-durable goods (as food) and from services (as restaurant expenditure). These three categories often show different paths of growth.
Second, consumption is divided according to the needs it satisfies. A commonly used classification identifies ten chapters of expenditure:
1. Food
2. Clothing and foot wear
3. Housing
4. Heating and energy
5. Health
6. Transport
7. House furniture and appliances
8. Communication
9. Culture and schooling
10. Entertainment
People in different position in respect to income have systematically different structures of consumption. The rich spend more for each chapter in absolute terms, but they spend a lower percentage in income for food and other basic needs. The percentage values of an aggregation over all the households in a country can thus be used for judging income distribution and the development level of the society.
The rich have both higher levels of consumption and savings. In differentiated product markets, the rich can usually buy better goods than the poor. This happens also because they tend to use different decision making rules. In other words, consumption depends on social groups and their behaviours, as well as their proneness to advertising.
Third, for exactness' sake, one should distinguish "consumption" as use of goods and services from "consumption expenditure" as buying acts. For durable goods this difference may be relevant, since they are used for long time periods.
Fourth, only newly produced goods enter into the definition of consumption, wheareas the purchase of, say, an old house is not considered consumption, since it was already counted in the GDP of the year in which it was built.
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Determinants
Current income is the most relevant determinant of consumption. Income comes from labour (employment and wages), capital (e.g. profits leading to dividends, rents, etc.), remittances from abroad.
Cumulated savings in the past can be squeezed in case of necessity and give rise to a jump in consumption, similarly with what happens with wealth increase, due for instance to stock exchange boom or house prices boom.
Expectations on future income, especially if concerning short-term credible events, may also play an important role.
At household level, there are many possible rules set to control monthly, weekly or even daily consumption expenditure. They relate not only to income but also to the following factors among others:
1. general lifestyles, in particular attitudes toward savings or consumption as "values" in itself;
2. a standard level of consumption the family tries to maintain over time;
3. decisions regarding active saving strategies, like an investment scheme for pension aims;
4. the relative success of past investment in shares or other financial instruments; in fact, a stock-exchange boom is likely to promote an euphoria tide with growing consumption;
5. opportunities of consumer credit, depending in turn by interest rates and marketing strategies by banks and special consumer credit institutions;
6. past decisions on durables. For instance, a family having bought a car will reduce expenditure on public transport in favour e.g. of fuel;
7. status symbols diffusion - "social musts" - that can be favoured by a pro-diffusion-of-innovation tax ;
8. new employment perspectives, also as far as the corresponding investments in human and physical capital are concerned;
9. innovative sale proposals in terms of both new products and new services, effectively advertised;
10. temporary money (cash) excess.
According to age of the decision-maker, individual and household consumption varies, both in values and composition. Thus, aggregate consumption may be influenced by demographic factors, such as an older and older population, even though one should not rely too much on these relationships since demographic variables are extremely slow in changes, whereas consumption clearly reacts to economic climate.
Other things equal, a higher price level (inflation) reduces the real current income, thus real consumption.
back to top
Impact on other variables
A GDP component as it is, consumption has an immediate impact on it. An increase of consumption rises GDP by the same amount, other things equal. Moreover, since current income (GDP) is an important determinant of consumption, the increase of income will be followed by a further rise in consumption: a positive feedback loop has been triggered between consumption and income.
An autonomous increase of consumption, if at the same level of income, would reduce savings, but the positive loop just described (known as the "Keynesian multiplier") will imply an increase of income level with a positive impact on future savings.
If directed to goods and services produced abroad, an increase of consumption will immediately push up imports, while a similar indirect effect will result from consuming domestic products requiring foreign raw materials, energy, semi-manufactured goods.
Since usually the States separately tax consumption (say with a VAT tax), an increase of consumption will also boost this type of State revenue, as well as import duties revenue in the case of imported goods. The growth mechanism of consumption-income will also provide State revenue through income taxes.
To the extent firms decide to invest forecasting future demand and comparing it with present production capacity, an increase of consumption may induce new investment. In particular:
1. soaring consumption rises the production capacity utilization, with positive effects on profits;
2. it improves expectations on future demand;
3. it improves the financial conditions for funding investment both through profits and loans.
If exports are a second-best solution for domestic firm, an increase of domestic consumption might decrease export, since at the same level of production firms would prefer to sell inside the country. To verify this by yourself, try and play "You are an exporter".
An increased demand may also induce firms to increase prices, the more so when they operate at full production capacity or they operate on monopolized markets. Thus increased price level and accelerated inflation can be an effect of booming consumption.
Consumption can lead to CO2 emissions in the atmosphere, thus contributing to climate change.
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Long-term trends
In Western countries, consumption has always grown in the last 50 years, except in few deep recessions. Its growth is smoother than investment's rise or net exports' growth. In particular, services have always systematically grown at a fairly steady pace, non-durables have often mirrored the business cycle and durables have often over-shot the fluctuations in GDP.
Sustainable lifestyles, based on satisfaction of basic needs, green consumer goods, dematerialisation, and carbon footprint off-setting, will be more and more relevant in the future.
Business cycle behaviour
As the main component of GDP, it is pro-cyclical almost by definition: any large fall in consumption would reduce GDP. Consumption has a smoother dynamics than GDP. During a recovery, it sustains and stabilises the trend. Durable goods are particularly cyclical and they may peak shorly before GDP.
source: Valentino Plaza
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INTRODUCTION:
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined by opposition to production. But the precise definition can vary because different schools of economists define production quite differently. According to some economists, only the final purchase of goods and services constitutes consumption, and every other commercial activity is some form of production. Other economists define consumption much more broadly, as the aggregate of all economic activity that does not entail the design, production and marketing of goods and services (e.g. "the selection, adoption, use, disposal and recycling of goods and services").
Contents:
Significance
Composition
Determinants
Impact on other variables
Long-term trends
Business cycle behaviour
Significance
Consumption is the value of goods and services bought by people. Individual buying acts are aggregated over time and space.
Consumption is normally the largest GDP component. Many persons judge the economic performance of their country mainly in terms of consumption level and dynamics.
Composition
First, consumption may be divided according to the durability of the purchased objects. In this vein, a broad classification separates durable goods (as cars and television sets) from non-durable goods (as food) and from services (as restaurant expenditure). These three categories often show different paths of growth.
Second, consumption is divided according to the needs it satisfies. A commonly used classification identifies ten chapters of expenditure:
1. Food
2. Clothing and foot wear
3. Housing
4. Heating and energy
5. Health
6. Transport
7. House furniture and appliances
8. Communication
9. Culture and schooling
10. Entertainment
People in different position in respect to income have systematically different structures of consumption. The rich spend more for each chapter in absolute terms, but they spend a lower percentage in income for food and other basic needs. The percentage values of an aggregation over all the households in a country can thus be used for judging income distribution and the development level of the society.
The rich have both higher levels of consumption and savings. In differentiated product markets, the rich can usually buy better goods than the poor. This happens also because they tend to use different decision making rules. In other words, consumption depends on social groups and their behaviours, as well as their proneness to advertising.
Third, for exactness' sake, one should distinguish "consumption" as use of goods and services from "consumption expenditure" as buying acts. For durable goods this difference may be relevant, since they are used for long time periods.
Fourth, only newly produced goods enter into the definition of consumption, wheareas the purchase of, say, an old house is not considered consumption, since it was already counted in the GDP of the year in which it was built.
back to top
Determinants
Current income is the most relevant determinant of consumption. Income comes from labour (employment and wages), capital (e.g. profits leading to dividends, rents, etc.), remittances from abroad.
Cumulated savings in the past can be squeezed in case of necessity and give rise to a jump in consumption, similarly with what happens with wealth increase, due for instance to stock exchange boom or house prices boom.
Expectations on future income, especially if concerning short-term credible events, may also play an important role.
At household level, there are many possible rules set to control monthly, weekly or even daily consumption expenditure. They relate not only to income but also to the following factors among others:
1. general lifestyles, in particular attitudes toward savings or consumption as "values" in itself;
2. a standard level of consumption the family tries to maintain over time;
3. decisions regarding active saving strategies, like an investment scheme for pension aims;
4. the relative success of past investment in shares or other financial instruments; in fact, a stock-exchange boom is likely to promote an euphoria tide with growing consumption;
5. opportunities of consumer credit, depending in turn by interest rates and marketing strategies by banks and special consumer credit institutions;
6. past decisions on durables. For instance, a family having bought a car will reduce expenditure on public transport in favour e.g. of fuel;
7. status symbols diffusion - "social musts" - that can be favoured by a pro-diffusion-of-innovation tax ;
8. new employment perspectives, also as far as the corresponding investments in human and physical capital are concerned;
9. innovative sale proposals in terms of both new products and new services, effectively advertised;
10. temporary money (cash) excess.
According to age of the decision-maker, individual and household consumption varies, both in values and composition. Thus, aggregate consumption may be influenced by demographic factors, such as an older and older population, even though one should not rely too much on these relationships since demographic variables are extremely slow in changes, whereas consumption clearly reacts to economic climate.
Other things equal, a higher price level (inflation) reduces the real current income, thus real consumption.
back to top
Impact on other variables
A GDP component as it is, consumption has an immediate impact on it. An increase of consumption rises GDP by the same amount, other things equal. Moreover, since current income (GDP) is an important determinant of consumption, the increase of income will be followed by a further rise in consumption: a positive feedback loop has been triggered between consumption and income.
An autonomous increase of consumption, if at the same level of income, would reduce savings, but the positive loop just described (known as the "Keynesian multiplier") will imply an increase of income level with a positive impact on future savings.
If directed to goods and services produced abroad, an increase of consumption will immediately push up imports, while a similar indirect effect will result from consuming domestic products requiring foreign raw materials, energy, semi-manufactured goods.
Since usually the States separately tax consumption (say with a VAT tax), an increase of consumption will also boost this type of State revenue, as well as import duties revenue in the case of imported goods. The growth mechanism of consumption-income will also provide State revenue through income taxes.
To the extent firms decide to invest forecasting future demand and comparing it with present production capacity, an increase of consumption may induce new investment. In particular:
1. soaring consumption rises the production capacity utilization, with positive effects on profits;
2. it improves expectations on future demand;
3. it improves the financial conditions for funding investment both through profits and loans.
If exports are a second-best solution for domestic firm, an increase of domestic consumption might decrease export, since at the same level of production firms would prefer to sell inside the country. To verify this by yourself, try and play "You are an exporter".
An increased demand may also induce firms to increase prices, the more so when they operate at full production capacity or they operate on monopolized markets. Thus increased price level and accelerated inflation can be an effect of booming consumption.
Consumption can lead to CO2 emissions in the atmosphere, thus contributing to climate change.
back to top
Long-term trends
In Western countries, consumption has always grown in the last 50 years, except in few deep recessions. Its growth is smoother than investment's rise or net exports' growth. In particular, services have always systematically grown at a fairly steady pace, non-durables have often mirrored the business cycle and durables have often over-shot the fluctuations in GDP.
Sustainable lifestyles, based on satisfaction of basic needs, green consumer goods, dematerialisation, and carbon footprint off-setting, will be more and more relevant in the future.
Business cycle behaviour
As the main component of GDP, it is pro-cyclical almost by definition: any large fall in consumption would reduce GDP. Consumption has a smoother dynamics than GDP. During a recovery, it sustains and stabilises the trend. Durable goods are particularly cyclical and they may peak shorly before GDP.
source: Valentino Plaza
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Poverty
"Poverty"
INTRODUCTION:
INTRODUCTION: Poverty refers to the condition of not having the means to afford basic human needs such as clean water, nutrition, health care,education, clothing and shelter. This is also referred to as absolute poverty or destitution. Relative poverty is the condition of having fewer resources or less income than others within a society or country, or compared to worldwide averages.
Contents:
Significance
Poverty in terms of Consumption
Poverty in terms of income
Poverty with respect to other dimension
Determinants
Infact on other variables
Long term trends
Business Cycle behaviour
Formal models
Significance
Poverty is a severe constraint on normal living. It is a forced reduction in consumption, due to insufficient income and menacing surrounding conditions.
The poor are a social group whose dimension depends on overall per-capita GDP but, even more, by inequality in income distribution.
There are several levels of absolute poverty between extreme poverty, at the one end, and normality, at the other.
Relative poverty threshold is a percentage of the overall average in income or consumption in a society, allowing for context-specific indications.
Contrary to the neoclassical approach based on utility, evolutionary economics emphasises the limited choice of the poor and a need-based approach with a criterium of sufficiency (satisfaction point).
Poverty in terms of consumption
The most extreme poverty leads to permanent and unescapable hunger, insufficient and unhealthy diet. Hunger and malnutrition weaken the body, the mind and the capability to work. It becomes a trap because of feedbacks between low occupability, low productivity, low income and hunger.
International aid is directed towards countries where hunger is endemic, but they are usually insufficient and not timely to overcome the poverty trap and the dependence of the poor from the will of the donor.
Throughout its life, the human being is subject to health risks. The poor is subjet to them more often, more severely, and he's worse equipped to react to them. Diseases can be food-borne (with a link to bad diet) and contagious (with network effects). Medecines and medical advice can be so costly that the poor spend too large a part of their meagre income for health or even cannot afford the best remedies. The welfare state is a collective response to health problems, but many poor countries have only limited coverage in welfare.
Garments are used to protect the body from daily and seasonal distress, with the poor having only a limited set of garments, often inadequate in physical or social terms.
Shelter is offered by houses and equivalent buildings, with poor lacking them altogether (homelessness) or partially (e.g. collective dormitories, slums, etc.).
Due to price rises beyond the overall price level increase, certain specific goods might have reached so high prices that a person that earlier could afford them is now prevented form consuming them.
In other words, the poor do not satisfy their basic needs - as defined by Amartya Sen - through adequate quantity and quality of goods and services, not only in terms of level but also in terms of uncertainty and risk of negative shocks.
Poverty in terms of income
Constantly zero income - out of unemployment - of a socially isolated person without a previously cumulated capital is the most extreme poverty condition. In rather short time, unless reversed, this can lead to zero consumption and death.
However, the most frequent condition of the extreme poor is a life of limited irregular income flows due to single occasions, possibly obtained through the family and social networks.
In many cases, the normal chain from of personal skill & time to employment, wage, and income is broken down, with the poor searching directly for consumption goods (as food), feeling unable to get a job, either because of lack of available jobs or because of his perceived or real inability to perform.
Moreover, the activities put in place in search for food are highly inefficient and usually unsustainable in the long run.
In other cases, the job is irregular and badly paid (in terms of level and effective payments after promises). Working poor are, furthermore, working all the time but getting so low hourly wages that total monthly wage is unsufficient to cover basic expenditure. All their wage is normally spent on consumption with no savings, especially if they feel that there is some stability over time assured.
Below this condition, in case of irregular income , the poor can try to accumulate - once and for all - a small capital to face negative shocks; since banks are costly and may refuse to open an account to e.g. an homeless, he might keep with himself a certain amount of money or exchangeable things, with all the risks of being robbed.
In other words, decumulating savings is a short-living unsustainable tactics used by the poor as a reaction to negative shocks but does not substitute the need for a stable flow of income of sufficient amount.
Less visible - but not less real - is the level of poverty that, although allowing daily satisfaction of needs, imposes a closed life without social activities, trips, enjoyment of culture.
Poverty with respect to other dimensions
Poverty is usually associated with low education, precarious health, unproper or repellent social image, narrow experience of different places, difficulties in finding friends outside the circle of the poor. Ethnic minorities or migrants have often a larger proportion of poor than the rest of the population.
In family terms, single mothers with little children, on the one hand, and large families with many children, on the other, are particularly at risk of poverty.
Determinants
Underdevelopment is the cause of the largest number of poor in the world. Low per-capita GDP levels, due to low employment, productivity and wages, plus income inequality result in large shares of the population living with less than 1 or 2 $ per day.
Specific needs could be particularly difficult to be satisfied in certain countries, as with food where desertification and primitive agriculture constrain harvesting or as with devasted houses by hurricanes or as with health during epidemics of contagious diseases.
However, social and political causes and mechanisms are by far more important in explaing why, in face of difficulties, no adequate policies are expressed and implemented by governments.
In particular, in dictatorships the will of the poor can be simply ignored, or repressed, by the ruling elites. In democracy, the poor may not go to the polls or vote for irresolutive politicians, with the middle class and the rich making an alliance to exclude the poor from countries' priorities.
Income inequality is the major determinant of poverty both in developed and non-developed countries. Rising unemployment is a major source of spreading poverty. Lack of access to crucial assets and services (health care, schooling, infrastructure) exclude the poor from the very beginning. By contrast, access to finance as with microfinance is a viable strategy for exiting poverty.
Individual choice and exogenous negative shocks can lead specific persons to the edge of poverty, with alcoholism, narcotics, and gambling being some of the sources of marginalization.
Impact on other variables
The poor buy less (smaller quantities, narrower bundles, less often) and restrict themselves to worse quality goods (less performing, older, less innovative) than the middle class or the rich.
Thus, sales are lower when a large part of the population is poor (than they have would be otherwise). Total business turn-over, production, value added and employment are consequently reduced.
Vertical product differentiation exhibits a tendence towards low quality goods, with innovation hampered. R&D efforts are diverted from targeting horizontal differentiation features particularly useful to the poor. Goods suitable to the poor are not invented or diffused enough.
The poor tend to consume their entire income (apart from occasional precautionary savings), so usually personal savings will be low (where poverty is widespread). Capital accumulation is more difficult there, with FDI unlikely to target local demand; FDI could be attracted by low wages, but skilled labour might be difficult to find. The linkages between poverty, illiteracy and exports are explored in this paper.
Tax revenue will be low because it is ineffective to tax the poor, because of meagre tax base and necessarily low tax rates. In utility, welfare and political terms, it is too painful to raise tax from the poor. In addition, their income comes often from the grey economy. This creates a vicious cycle with low GDP requiring a pro-development economic policy (e.g. infrastructure) with difficulties in funding it.
Persistent perspective of poverty may lead people to migrate abroad, looking for employment to send money home as remittances.
To the extent poverty is associated with urban segregation, criminality and violence can be high as a result, depending also on general cultural climate.
Long term trends
The United Nations Millennium Goals indicate the overall goal of halving, between 1990 and 2015, the proportion of people whose income is less than $1 day. Eradicating poverty is the stated goal of World Bank.
However, the absolute number of the poor has been rising for decades in most developing countries, with the percentage fall over globe's population being due largely to a handful of countries, as China and India.
In developped countries, a bottom group of poor is consolidating, with social marginalization and cumulative feedback mechanisms, trapping the poor down.
Poverty eradication is a key goal that should be coupled with sustainable development and the mitigation of climate change. In this vein, our book on "Innovative Economic Policies for Climate Change Mitigation" puts forth the proposal of leveraging microfinance for the diffusion of clean tech across the poor.
Business cycle behaviour
Poverty is anti-cyclical, widening and deepening during recessions. Recovery and booms are not always capable of reducing poverty below certain thresholds, due to social marginalization and difficult occupability of the poor.
Formal models
1.) The decision-making routines of the poor
2.) Product innovation in a polarized society
back to top
The Causes of Homelessness
"People become homeless for a wide variety of reasons – loss of job, marital breakdown, mental illness, and alcohol and drug addiction. But when it comes to youth and children, the reasons tend to revolve around the family. "
Overall, were classified as runaways.
Over half of these children report they were “thrown out” by their parents. When youth were asked whose decision it was to leave home, others noted it was “their decision”, others said it was the decision of one or both parents and indicated it was a joint decision by themselves and their parents.
Abuse in the home
Ultimately, experts say that the vast majority of youth or children rarely leave happy homes for the streets. Several studies have indicated that youth have experienced some form of sexual, physical or emotional abuse. Many of the rest simply felt neglected.
One study showed that girls and boys left home because of sexual abuse. Physical abuse was a factor among females and males. Violence and parents’ drug and alcohol abuse were also huge factors.
Substantiated cases of physical abuse, cases of neglect. The increase in cases of emotional maltreatment, largely as a result to exposure to domestic violence.
Social factors
Various studies have identified some key social factors besides sexual and physical abuse.
Many children simply have a poor relationship with their parents. Youth characterized their relationship with their mothers as poor or fair, and said they had a poor or fair relationship with their fathers. Other of street youths said they had no contact at all with their fathers, had a poor relationship.
A higher-than-average portion of the youth come from single parent homes, from homes where one parent is deceased and from homes where the parents have split up.
Possibilities indicates that street youth are much more likely to be lesbian, gay, bisexual and transgendered than the general population .
A staggering portion nearly have had some involvement with the child welfare system. In other words, a huge number were once wards of state, living in foster homes or youth shelters and have now fled to the streets.
Overall, were classified as runaways.
Over half of these children report they were “thrown out” by their parents. When youth were asked whose decision it was to leave home, others noted it was “their decision”, others said it was the decision of one or both parents and indicated it was a joint decision by themselves and their parents.
Abuse in the home
Ultimately, experts say that the vast majority of youth or children rarely leave happy homes for the streets. Several studies have indicated that youth have experienced some form of sexual, physical or emotional abuse. Many of the rest simply felt neglected.
One study showed that girls and boys left home because of sexual abuse. Physical abuse was a factor among females and males. Violence and parents’ drug and alcohol abuse were also huge factors.
Substantiated cases of physical abuse, cases of neglect. The increase in cases of emotional maltreatment, largely as a result to exposure to domestic violence.
Social factors
Various studies have identified some key social factors besides sexual and physical abuse.
Many children simply have a poor relationship with their parents. Youth characterized their relationship with their mothers as poor or fair, and said they had a poor or fair relationship with their fathers. Other of street youths said they had no contact at all with their fathers, had a poor relationship.
A higher-than-average portion of the youth come from single parent homes, from homes where one parent is deceased and from homes where the parents have split up.
Possibilities indicates that street youth are much more likely to be lesbian, gay, bisexual and transgendered than the general population .
A staggering portion nearly have had some involvement with the child welfare system. In other words, a huge number were once wards of state, living in foster homes or youth shelters and have now fled to the streets.
Behind Streets Life
One reason many youth live on the streets is because their families were made homeless or they can't find affordable housing or a steady source of income to get off the street.A shortage of good jobs and affordable housing. Housing was a factor in one in five cases where children were taken into care.
And a lack of inadequate housing caused a delay in the return of children to their parents in more cases. From low-income mothers who spoke about losing, or the fear of losing their children because they couldn’t afford housing and were being evicted from their homes.
Indeed, while the loss of income and of affordable housing would seem to affect why adults become homeless, it would be naïve to believe these factors don’t also affect youth. After all, the reason many youth end up on the streets is because their families were made homeless, or they themselves can’t find affordable housing or a steady source of income to get off the street.
Help Protect The Children
HOW CAN YOU HELP PROTECT THE CHILDREN IN YOUR LIFE FROM BEING SUCKED INTO PROSTITUTION?
Keep your children in school as long as possible.
Talk to them in an age-appropriate manner about the methods recruiters use.
If they are ever in danger, it will help them to recognize it sooner.
Seek God’s help to work out family issues.
Broken and breaking families greatly increase the children’s vulnerability.
Let your children know that if they are ever in trouble or danger, they can always call no matter what time it is, no matter where they are, no matter how old they are, no matter what they have done.
Recruiters look for children they think will never call home.
Don't let your children fall in that category.
Try to keep open lines of communication with your children so that they can talk to you if they are in danger or trouble.
Most prostitutes, and ALL child prostitutes, are victims who need help.
Avoid talking about them in a judgmental way.
If you say something like, “People who do that are lower than dirt,” then if someday your child finds herself in a compromised situation, do you think she will feel free to come to you?
Always be willing to take them back.
Help is available for the problems.
They need to know that prostitution is not the only option for them.
If your child is missing, report it to the authorities as soon as possible, along with all possible information about the child.
There is a better chance of recovering the child if you act early.
Don’t send your daughter out selling on the streets.
The streets are being watched by pimps and many other wicked men.
Encourage your children to move in groups rather than in isolation.
Always know where your children are and when you can expect them home.
Avoid high-risk areas unless a trustworthy adult is present.
Children should not be sexualized too early.
If you child has been sexually abused, make sure it has stopped and that the child is protected now.
Then seek counseling for the child.
Pray daily for and with your childern, asking God's protection over them.
Remember that even for prostitutes and even for pimps, salvation is available through Jesus Christ.
He clearly says , “the one who comes to Me I will not cast out for any reason” (John 6:37).
Keep your children in school as long as possible.
Talk to them in an age-appropriate manner about the methods recruiters use.
If they are ever in danger, it will help them to recognize it sooner.
Seek God’s help to work out family issues.
Broken and breaking families greatly increase the children’s vulnerability.
Let your children know that if they are ever in trouble or danger, they can always call no matter what time it is, no matter where they are, no matter how old they are, no matter what they have done.
Recruiters look for children they think will never call home.
Don't let your children fall in that category.
Try to keep open lines of communication with your children so that they can talk to you if they are in danger or trouble.
Most prostitutes, and ALL child prostitutes, are victims who need help.
Avoid talking about them in a judgmental way.
If you say something like, “People who do that are lower than dirt,” then if someday your child finds herself in a compromised situation, do you think she will feel free to come to you?
Always be willing to take them back.
Help is available for the problems.
They need to know that prostitution is not the only option for them.
If your child is missing, report it to the authorities as soon as possible, along with all possible information about the child.
There is a better chance of recovering the child if you act early.
Don’t send your daughter out selling on the streets.
The streets are being watched by pimps and many other wicked men.
Encourage your children to move in groups rather than in isolation.
Always know where your children are and when you can expect them home.
Avoid high-risk areas unless a trustworthy adult is present.
Children should not be sexualized too early.
If you child has been sexually abused, make sure it has stopped and that the child is protected now.
Then seek counseling for the child.
Pray daily for and with your childern, asking God's protection over them.
Remember that even for prostitutes and even for pimps, salvation is available through Jesus Christ.
He clearly says , “the one who comes to Me I will not cast out for any reason” (John 6:37).
Recruiting a Prostitute--The Isolation Phase:
The Isolation Phase:
The “boyfriend” begins to discourage or forbid contact with family or old friends so that he gains total control of the victim’s thinking (psychological brainwashing). If she has not done so already, he urges her to drop out of school. She is under his constant watch and has no personal freedom. The victim becomes totally dependent on him.
The “boyfriend” begins to discourage or forbid contact with family or old friends so that he gains total control of the victim’s thinking (psychological brainwashing). If she has not done so already, he urges her to drop out of school. She is under his constant watch and has no personal freedom. The victim becomes totally dependent on him.
Recruiting a Prostitute--The Coercion Phase:
The Coercion Phase:
The pimp forces the victim into prostitution out of shame (Don’t you love me as much as the others do?), of course giving over most or all of the profits to him. Since she is now cut off from her former life, she often feels she must do this because she has nowhere else to turn. If she hesitates, her family or other people she most loves are threatened, using the information gained in the seduction and attachment phase. She may also be informed that she "owes" the pimp for the meals and gifts, perhaps for transportation, housing, and clothes. She has to work to pay off her "bill." Meanwhile, she incurs other expenses, which makes it virtually impossible for her ever to get free.
The pimp forces the victim into prostitution out of shame (Don’t you love me as much as the others do?), of course giving over most or all of the profits to him. Since she is now cut off from her former life, she often feels she must do this because she has nowhere else to turn. If she hesitates, her family or other people she most loves are threatened, using the information gained in the seduction and attachment phase. She may also be informed that she "owes" the pimp for the meals and gifts, perhaps for transportation, housing, and clothes. She has to work to pay off her "bill." Meanwhile, she incurs other expenses, which makes it virtually impossible for her ever to get free.
Recruiting a Prostitute--The Final Phase:
The Final Phase: Violence:
The victim begins to be beaten severely if she refuses or tries to escape. Early in their prostitution careers, victims are often beaten around the ankles with a coat hanger just to show “what will happen to you if you don’t do just as I say.” For many girls who are recruited very young, this begins when their first period comes. The girl may report that she cannot work because she has got her period. She is then beaten severely, thrown some sponges and told to stuff those up her vagina and get back to work. For many, this is the moment of awakening when they realized that they have been sucked into a terrible trap. They have become a slave and the pimp is their master. No love, no compliments now, only beatings, torture, degrading talk, and sex with whoever comes along with few bucks for the master.
The victim begins to be beaten severely if she refuses or tries to escape. Early in their prostitution careers, victims are often beaten around the ankles with a coat hanger just to show “what will happen to you if you don’t do just as I say.” For many girls who are recruited very young, this begins when their first period comes. The girl may report that she cannot work because she has got her period. She is then beaten severely, thrown some sponges and told to stuff those up her vagina and get back to work. For many, this is the moment of awakening when they realized that they have been sucked into a terrible trap. They have become a slave and the pimp is their master. No love, no compliments now, only beatings, torture, degrading talk, and sex with whoever comes along with few bucks for the master.
The Seduction & Attachment Phase
There is almost always a definite pattern to the prostitute recruiting process:
Recruiting a Prostitute
The pimp seeks to be the girl’s friend and eventually boyfriend. He gives her presents, takes her out to eat, maybe lets her have her hair or her nails done, tells her he loves her. He tells her that he will take good care of her and never let anything bad happen to her again. He wants to get married to and have a child with her "someday". He has sex with her and tells her how great she is at it. In fact, she’s so good she should be paid for it. The victim enjoys the attention which she believes to be sincere. She is unaware that all this is literally being put on a “bill” that she will be expected to pay later. In fact, the bill may become so great that she will never escape the clutches of her seductor.
During this time the recruiter gains information about her family and about what is really important to her. This information will later be used to keep her in his grip by threatening the things and people closest to her.
During this time, the recruiter seeks to have the girl attach herself emotionally to him so that she will be emotionally unable to turn against him later on. This is easy with girls who have poor family relationships, poor or non-existent father relationships, and who feel deserted and violated already, who have no valid trust relationships with the adults in their lives, because they are so desperate for affirmation and love.
Sometimes in this phase, false promises are made. They may be made to the girl herself, or to her parents. Promises usually include free travel abroad, a well-paying job in the city, or the opportunity for free education. Sometimes parents give girls over to those who promise such glorious things, thinking they have done their daughters a favor and solved the problem of family poverty, too. The promisors are really chld traffickers who are seeking only to exploit their children. The girls rarely make anything, for they are soon turned over to pimps or brothels, where they are forced to perform sex over and over just in order to survive. Their families have unknowingly sold them into a form of modern-day slavery.
Help Protect Children Against the Lure of Prostitution.
Do you know how girls are recruited to become prostitutes?
Here's how girls are recruited into prostitution (commercial sexual exploitation of children)
Pimps are also professional “recruiters”. They watch the streets, transportation terminals, shopping malls, bars and other places, as well, of course, as chat rooms on the net, watching for girls they can easily recruit to become prostitutes lining THEIR pockets. They might be watching your daughter.
The pimp begin a relationship with a girl with the express intent from the very beginning of commercially exploiting the girl—not just sexually exploiting her, although that will happen too, and that is bad enough, but commercially exploiting her—forcing her into prostitution for his financial benefit.
The pimps are: experts at spotting which children are most vulnerable, most susceptible to their recruiting techniques.
Especially vulnerable are:
Children who are alone or in two’s
Children who are on the street
Children who have dropped out of school or are not in school
Children who have run away or are running away
Children with a history of earlier sexual abuse of any kind
Children with a history of family problems
Girls (although boys can be exploited, too)
Children from very poor families
Here's how girls are recruited into prostitution (commercial sexual exploitation of children)
Pimps are also professional “recruiters”. They watch the streets, transportation terminals, shopping malls, bars and other places, as well, of course, as chat rooms on the net, watching for girls they can easily recruit to become prostitutes lining THEIR pockets. They might be watching your daughter.
The pimp begin a relationship with a girl with the express intent from the very beginning of commercially exploiting the girl—not just sexually exploiting her, although that will happen too, and that is bad enough, but commercially exploiting her—forcing her into prostitution for his financial benefit.
The pimps are: experts at spotting which children are most vulnerable, most susceptible to their recruiting techniques.
Especially vulnerable are:
Children who are alone or in two’s
Children who are on the street
Children who have dropped out of school or are not in school
Children who have run away or are running away
Children with a history of earlier sexual abuse of any kind
Children with a history of family problems
Girls (although boys can be exploited, too)
Children from very poor families
Begging
Begging (or panhandling) is to request a donation in a supplicating manner. Beggars are commonly found in public places such as street corners or public transport, where they request money, most commonly in the form of spare change. They may use cups, boxes or hats to collect the donations.
History of Begging
There are few current techniques for begging which have not been used for hundreds of years, or are not based on older techniques, adapted to modern technology. Beggars rarely recorded their techniques, and often used to disguise their own communication. What is known of them is largely from records of law enforcement, penitential or rogue literature.
From early modern England the best examples are Thomas Harman, and Robert Greene in his coney-catching pamphlets. There is no reason to suppose that what he recorded was new. There are similar writers for many European countries in the early modern period.
In a 1786 James Gillray caricature,
the plentiful money bags handed to
King George III are contrasted with
the beggar whose legs and arms were amputated,
in the left corner
Street Vendor
Street hawkers selling bags and sunglasses in central Rome, Italy.
A hawker is the name given to vendors in many areas of the world selling merchandise that can be easily transported; it is roughly synonymous with peddler or costermonger. In most places where the term is used, a hawker sells items of food that are native to the area. Whether stationary or mobile, hawkers usually advertise by loud street cries or chants, and conduct banter with customers, so to attract attention and enhance sales.A hawker selling Goat meat in Kabul
Life Of A Streets Children
Street Children: Rejected from Childhood on
How dangerous is the situation many of these little street children face virtually alone in such a hostile world! Thank God that Christians care!
Children end up on the streets for many reasons. Some run away from abusive situations. Some street children are orphans of war, tribal fighting, and AIDS. Some were born on the streets to homeless single mothers. Some street kids are teenagers with various disabilities.
When a family has a child with a disability, they may feel ashamed, so they hide the child during his early years, not allowing him outside where others might see him. If a handicapped child or adult tries to go to church, he is often met at the door and told he is not welcome.
So he grows up hidden away, untaught, unvalued, unloved even within his own home. Often in cases of remarriage after death or divorce, the children of the first marriage are not welcomed and are sometimes abused and insulted by the new partner.
Out to the Streets
When such a child becomes a teen, he is often thrown out to fend for himself, and ends up sleeping on the city streets. He may find partial shelter after hours under a store awning or under a makeshift booth in one of the filthy outdoor markets.
Life as a Street Child
Streets children: Child's life
There he might find work enough to feed himself on "good" days by selling bags or carrying boxes to cars for shoppers, begging, or maybe stealing. Children who are able to walk spend long, hot days carting cardboard displays of goods for sale between cars at intersections. They make enough to eat most days. Street children never make enough to rent a room or visit the doctor.
They are almost never welcome in society. For the most part, these young people spend their whole lives knowing nothing but rejection. They are also objects of rape and sexual attack. People know that street children will not and cannot bring charges against them. So they are often used and abused, but seldom loved or valued.
There he might find work enough to feed himself on "good" days by selling bags or carrying boxes to cars for shoppers, begging, or maybe stealing. Children who are able to walk spend long, hot days carting cardboard displays of goods for sale between cars at intersections. They make enough to eat most days. Street children never make enough to rent a room or visit the doctor.
They are almost never welcome in society. For the most part, these young people spend their whole lives knowing nothing but rejection. They are also objects of rape and sexual attack. People know that street children will not and cannot bring charges against them. So they are often used and abused, but seldom loved or valued.
Lane Width
The width of a travel lane on a roadway greatly influences the safety and speed of driving, as well as the total width of a roadway. The roadway width in turn determines the pedestrian crossing distance and the roadway width potentially available for other uses such as bike lanes, parking lanes, or landscaped curb extensions. Conventional traffic engineering theory holds that 12 feet is the optimal lane width, whether for highways, urban streets or rural roads. For example, the Missouri Department of Transportation states,
Narrow lanes force drivers to operate their vehicles laterally closer to each other than they would normally desire...In a capacity sense the effective width of travelway is reduced... In addition to the capacity effect, the resultant erratic operation has an undesirable effect on driver comfort and crash rates.
Bigger Is Not Better
raised_intersection-burden.jpgDespite the accepted engineering wisdom, narrower lane widths are actually associated with fewer traffic injuries and fatalities. A large study of crash data from all 50 U.S. states over 14 years revealed the following:
* Those states with more arterial roads with lane widths of 9 feet or less had fewer traffic injuries. Lane widths of 10 feet or 11 feet are also associated with fewer injuries and fatalities compared to 12 foot lanes.
* For collector streets (residential streets that provide vehicle access to large arterial roads), the same pattern is found. That is, 12 foot wide lanes are associated with more injuries and fatalities.
The author concludes, "these results are quite surprising, as it is general practice to improve the safety of roads by increasing lane widths. One possible behavioral response is that drivers increase their speed when lanes are wider and offset any safety benefit from increased lateral spacing. Another possibility is...that drivers may feel safer and reduce cautionary behavior."
In another study, a researcher found that two segments of the same road, that differed primarily in lane width and adjacent land uses, had 31% fewer crashes during the five years of 1999-2003. The lane width of the narrower section was 11 feet, while it was 12.5 feet in the wider section. Traffic was faster on the wider section, which undoubtedly added to the crash risk.
Narrow Urban Lanes = Less Congestion
Narrow lanes force drivers to operate their vehicles laterally closer to each other than they would normally desire...In a capacity sense the effective width of travelway is reduced... In addition to the capacity effect, the resultant erratic operation has an undesirable effect on driver comfort and crash rates.
Bigger Is Not Better
raised_intersection-burden.jpgDespite the accepted engineering wisdom, narrower lane widths are actually associated with fewer traffic injuries and fatalities. A large study of crash data from all 50 U.S. states over 14 years revealed the following:
* Those states with more arterial roads with lane widths of 9 feet or less had fewer traffic injuries. Lane widths of 10 feet or 11 feet are also associated with fewer injuries and fatalities compared to 12 foot lanes.
* For collector streets (residential streets that provide vehicle access to large arterial roads), the same pattern is found. That is, 12 foot wide lanes are associated with more injuries and fatalities.
The author concludes, "these results are quite surprising, as it is general practice to improve the safety of roads by increasing lane widths. One possible behavioral response is that drivers increase their speed when lanes are wider and offset any safety benefit from increased lateral spacing. Another possibility is...that drivers may feel safer and reduce cautionary behavior."
In another study, a researcher found that two segments of the same road, that differed primarily in lane width and adjacent land uses, had 31% fewer crashes during the five years of 1999-2003. The lane width of the narrower section was 11 feet, while it was 12.5 feet in the wider section. Traffic was faster on the wider section, which undoubtedly added to the crash risk.
Narrow Urban Lanes = Less Congestion
Street design expert Dan Burden points out that, at busy urban intersections, narrower lanes allow crossing pedestrians to clear the intersection significantly faster. This allows the green time for cars to be increased, reducing congestion.
Children's Stories 3
I came to Delhi with my mother and her second husband. I was seven then. I am thirteen now. My mother abandoned me at the bus terminal while I was fast asleep and I have not seen her since.Suddenly, I was an orphan. I met some boys who used to beg at the station and I joined them in begging to feed myself. I did not have a name, so friends started calling me Rajan, which means the king.
I started wiping cars when they stopped at a red light. After a while we moved to Connaught Place, the main shopping area in the capital, where we started picking rag. I also worked in a roadside eatery for a while.
While working there I met people working for a charity that help destitute children, called Jamghat. I work for them now.
I am quite happy here. Even if I find out where my mother is I will not return to her.
I am studying. I am also learning sewing, not neatly but now I can write letters to some extent. I like cricket. I went to Pakistan recently to play. It was an event called Cricket for Peace.
Police have beaten me several times. They beat me once while I was sleeping. I do mime for the Jamghat in which I portray what the police do.
Whenever I feel like rambling I go to my old hangouts. I still see my old friends. I take a bus but do not pay the fare.
I have seen the whole capital without paying any fare. I have travelled to many cities without a ticket. I have been to Mumbai, Haridwar and Dehradun.
I am living with kids like myself and I am very happy. I think I will study well and then help children like myself.
Children's Stories 2
Carlos Heredia, 9, started juggling a year ago. First it was a game, now it is an afternoon job in a busy street of La Paz, Bolivia.His situation is similar to that of millions of 'street kids' in Latin America. Usually they have a home in poverty stricken areas or shanty towns, but their desperate economic situation compels them to live in the streets all day, doing what they can to earn money.
We have to eat. I go to school in the morning and then I come to this corner to juggle with my oranges. I don't have time for lunch, I do that at 4 pm when there are less cars to get money from.
After that I come back here with my brother who is 11 years old. He can't juggle so he dances by my side.
We make about 20 bolivianos ($2.50) each day. At night we go home. It's far away - two hours' journey.
Many cars give us money, other drivers get mad at us, they sound their claxons or start their cars when we are still in front of them, and they don't give us any money.
Children's Stories 1
My name is Alexey. Everybody calls me Lesha. I am nine years old. I live on the street right in front of the block of flats, where my parents used to live.They are both alcoholics and they sold their flat so that they could pay for the booze. Now they are homeless themselves and stay with their alcoholic friends constantly moving from one place to another.
I meet my former neighbours and beg for some food or a little money. They usually don't sympathise because I am smelly. I smoke and sniff glue.
I don't want to go back to my parents, but also I don't like hostels for kids like me. You have to do what you are told and wake up at a certain time. I am used to being free to do what I want.
Drivers Behaving Rudely
Just because there's a livable streets revolution underway in NYC doesn't mean that drivers have gotten the message. Cars blocking crosswalks, drivers failing to yield to pedestrians, unnecessary honking and a slew of other quality-of-walking violations are still a routine occurrence to contend with on nearly every corner of New York City.
Mark Gorton, publisher of Streetsblog, wants to put drivers on notice of their rudeness. While he acknowledges the majority of drivers are not bad or mean people, their actions speak otherwise and they may not even realize it. After all, one rude driver sitting in a crosswalk can inconvenience or endanger dozens of pedestrians in one light cycle. Yet would that same person take a shopping cart in a supermarket and purposely block an aisle and make people navigate around him or her? The betting line says likely not.
So what is it about driving a car that allows people to get a societal pass on their rudeness? by Clarence Eckerson, Jr.
Parking Spot Squat
In June 2006, Transportation Alternatives volunteers staged a "Parking Spot Squat" in Brooklyn's busy Park Slope neighborhood. The volunteers "liberated" two parking spaces, providing amenities that allowed residents to sit and relax.
The demonstrations created a temporary, but much-needed public space.
The event caused many to question traditional notions of the way public space is reserved for automobiles, and why that space is turned over to drivers at such a low cost. Many similar events have followed, and REBAR sponsored an amazing display of public space reclaimation in San Francisco. by Clarence Eckerson, Jr.
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