|
Written by Adam Seline
|
|
The controversial awarding of the Nobel Peace Prize to first-term US president Barack Obama has served to largely overshadow this year’s other Nobel laureates. Regardless of the questionable choice for the peace distinction, the awardees in the fields of physics, chemistry, and medicine have demonstrated great merit in their respective fields, having made discoveries well worthy of Nobel recognition.
The prize in physics was split between two outstanding research projects. The first was given to Charles K. Kao “for groundbreaking achievements concerning the transmission of light in fibers for optical communication.” Dr. Kao’s 1966 work in the field of fiber optic technology has led to many practical innovations today. The global communications networks wholly dependent upon fiber optics for information transmission, such as the Internet, were made possible by Dr. Kao’s calculations.
The other recipients of the physics prize are Willard S. Boyle and George E. Smith of Bell Laboratories for their groundbreaking work in digital imaging technology. In 1969 they were the first researchers to develop a successful imaging technology using a charge-coupled device (CCD) as a digital sensor, resulting in the development of the first digital camera.
The prize in chemistry was given to Venkatraman Ramakrishnan, Thomas A. Steitz, and Ada E. Yonath. Using the innovative method of X-ray crystallography to map the entire atomic structure of the ribosome, these researchers have succeeded in vastly increasing the scientific community’s understanding of the structure and function of the crucial organelle. The ribosome is the “protein factory” in every cell, making individual protein from instructions in DNA, and thus controls the internal chemistry of organisms. The crystallographic map of the ribosome allows the researchers to assess how various new antibiotics bind with the ribosome, which has proven very helpful in the development of new antibiotic treatments.
Elizabeth H. Blackburn, Carol W. Greider, and Jack W. Szostak are the recipients of this year’s prize in the field of medicine. The awarded scientists have discovered how chromosomes are copied during cell division without any degradation. They have found that the answer lies with the telomeres, the ends of the chromosomes, and telomerase, the enzyme that forms them. The lengthy investigation, spanning a period from 1980 to 1984, involved two key stages of research. First, Dr. Blackburn and Dr. Szostak discovered that it is a unique DNA sequence in the telomeres that protects the chromosome from degradation. Next, Dr. Blackburn and Dr. Greider recognized the enzyme that makes these unique sequences, telomerase.
The research of all these scientists have contributed greatly to the furtherance of human knowledge and development. From breakthroughs in communications to atomic mapping, these scientists are well deserving of Nobel recognition. |
|
Written by Eoin O’Liatháin
|
|
From the internet that brought you the Star Wars Kid, piano playing kittens, the evolution of dance, and the Numa Numa Guy, a whole new viral experience has arrived. An amateur channel over at YouTube has created what is called the “Symphony of Science” – a series of music videos (four so far) with science as its subject and scientists as its cast.
The aim of this music project, according to the website, is “to deliver scientific knowledge and philosophy in musical form.” This pretty much sums up what the videos are about, the merging of scientific truths with music. It may sound like a lame attempt by uncool authorities to get kids more excited about science but I can assure you that the videos are seriously awesome. Amassing almost five million views between them the YouTube community has clearly taken a liking to the Symphony.
So what are the videos about and why are they super? Well, firstly the videos are more of an opera than a symphony in the technical sense of the term. This probably is not adding to the appeal but keep reading. Clips of cosmology and evolution are set to electronic musical backing while audio-visual excerpts of notable science heroes such as Carl Sagan are manipulated to conform to the background music. The videos make use of sight and sound and everything spoken is in song. A neat little tool called Auto-tune achieves the transformation from spoken word to sung song. Clips from Sagan’s Cosmos television series are included, along with quotes from other greats such as Richard Feynman, Richard Dawkins, Stephen Hawking, and even Bill Nye the Science Guy. These clips are all compiled into about four minutes of pure informative awe-inspiring sensual pleasure. All you have to do is sit back and listen.
Spoken dialogue has been transformed into musical videos before, but what makes this music video distinct is the pairing of powerful scientific ideas, where we come from and all that, with a fun, accessible and artistic form. Not only does the viewer get the sublime power of Sagan telling us that, “We are a way for the cosmos to know itself,” or Feynman discussing “the inconceivable nature of nature” but now it is available in musical verse.
The effect is remarkable: scientific profundities through music highlights and amplifies the sublime power of science resulting in an almost spiritual experience. Some recent comments on the videos include, “gives me the shivers!”, “Sexual and sensual scientific sounds”, and one that makes you want to give it a thumbs down for being a tad lame, “I shed manly tears”. While the videos may not procure tears, manly or otherwise, from your eyes they will surely leave some degree of impression upon you.
As citizens of the modern age, science is where we can best gain access to the sublime. To get your fix check out the Symphony of Science videos. You may find that you get lost somewhere between eternity and infinity. |
|
Written by Patricia Barber
|
|
Picture yourself in a lush rainforest, away from the stress and strain of modern life. Imagine staring into the empathic eyes of a gorilla. See yourself standing on an unspoilt coastline staring out into the vast sprawling sea. Jennifer Finn introduces us to the most fashionable and in-vogue form of tourism around– Ecotourism
The International Ecotourism Society (TIES) defines ecotourism as “responsible travel to natural areas that conserves the environment and improves the well-being of local people.” It promotes the idea that travel can be much more meaningful than just sightseeing, taking pictures and buying souvenirs. Ecotourism has created the concept of green travel which allows everyone to enjoy their picturesque surroundings without causing harm to them. Ecotourism is about uniting conservation, communities and sustainable travel. It acts as a stimulus to the host country’s economy whilst also empowering the local working-class people. If you’re looking for more than just a regular vacation, ecotourism can offer you the experience of a lifetime. It encourages travel in an environmentally-friendly manner. It’s more about appreciating the beauty of nature than exploiting it. It’s a mutually beneficial way of travelling in that you enjoy your holiday and in the process you have contributed to the local economy and helped conservationists in their quest to save endangered wildlife and other species.
Green travel allows an ecotourist to experience life in unindustrialized surroundings. It’s not about camping in a field in the middle of nowhere; it’s about appreciating all that Mother Nature has to offer. You don’t have to stay in a tent either: you can stay in an eco hotel. One such eco hotel is Hacienda Tres Rios which is located in Mexico. This hotel has five green stars attributable to its environesilkemental awareness. It is an eco-luxury resort situated in the heart of the Riviera Maya. It’s nestled within a nature park for guests to enjoy. The hotel has achieved environmentally sustainable development through the responsible and intelligent use of the world’s natural resources and ecosystems. Apart from encouraging the creation of eco hotels, ecotourism has encouraged a new wave of popularity in skiing, hiking and adventure holidays.
Ecotourism is not just for the wealthy: it’s for everyone, including students. Whilst flying to the United States on a J1 Visa is a popular and exciting way of spending your summer holiday, the United States will still be there when you graduate; sadly some ecotourism destinations and endangered species may not.
BELIZE
The Rainforest offers the most natural escape from busy modern life. Whether you travel to the rainforest of the Amazon or the rainforest of Belize, you are sure to find solace under its vast green canopy. This rainforest canopy nurtures many endangered species of plant and animal life. It is a beautiful classroom for ecotourists to learn about diverse species of flora and fauna. Whilst most popular tourist resorts will always be there, one must savour the experience of the rainforest because someday they may disappear.
Costa Rica
Costa Rica is considered to be one of the most bio-diverse regions in the world. This label is due to its twenty natural parks, eight biological reserves and countless protected areas that captivate an audience of ecotourism lovers of all nationalities, who come from far and wide to witness these areas. It is home to Tortuguero National Park which is most famous for the sea turtle nesting that takes place there every year. Costa Rica is also home to “Nature Air”, the world’s first carbon neutral airline. Nature Air enhances your travelling experience by providing panoramic window views and pilots who are trained to point out waterfalls, volcanoes and landmarks along the journey.
HiMALAYAS
The Himalayas: are sometimes referred to as the “Abode of Snow”. They stretch from Jammu and Kashmir in North India to Arunachal Pradesh in Northeast India. The Himalayas yield great scope for adventure sports such as skiing, mountaineering and trekking. The surrounding land is sprinkled with luxuriant valleys and idyllic lakes. The Himalayan region is also the place where rare medicinal herbs grow. In the Himalayan foothills, the Terai, there are the tropical forests of Sal, Teak and Shisham. This place encapsulates a paradise for orienteers.
Ireland
Closer to home, ecotourism is also popular on the Emerald Isle. Irish ecotourism encourages you to take some time out of the pub and to nourish your soul a bit instead.
Gaeltacht areas such as Achill Island off the West Coast, offer tourists a taste of what life was like when everyone still spoke Irish and when you relied a lot more on the land. Home to some of the most breathtaking beaches, towering cliffs and natural land formations, Ireland will certainly not disappoint. Plus you’ll save on airfare!
Kenya
By going on safari in a place like Kenya, you are putting yourself out there and venturing into the wild. You’re allowing yourself to witness lions, tigers, zebra, elephants, leopards and buffaloes in their natural habitat. A safari is also a popular option for bird watchers due to the vast array of bird species to be seen. When returning home from your safari, you are sure to have with you a photo album resembling an issue of National Geographic.
Kilimanjaro
Mount Kilimanjaro: if you’re the adventurer-type, climbing Mount Kili-manjaro could be just the right ecotourism activity for you. The Njari Lodge and Campsite is situated in the surrounding area of Mount Kilimanjaro, making it a popular place for keen adventurers to stay. The area is fed by a constant supply of fresh drinking water from the glaciers of Kilimanjaro. Upon rising at sunrise, the view that greets you from your veranda is that of the snow-capped peak of Mount Kilimanjaro. A percentage of income from this campsite goes towards helping village projects such as the local primary school.
Unlike popular tourist resorts on the continent, this campsite does not have electricity. However, your hosts will go out of their way to provide you with an electricity generator if you request it. Ecotourism in a place like this is not difficult to cope with. It’s a way of saying goodbye to mod-cons and living without them for the duration of your stay. It’s a way of detoxing your mind, body and soul in a natural way whilst boosting local commerce at the same time. Your presence in eco destinations is valued by the local people and they will welcome you, cater for your every need and treat you well. You are on holiday after all and you should enjoy it.
Rwanda
Rwanda is home to the Virungas, the endangered mountain gorilla. These gentle giants are tolerant to human visitors. So you can feel safe in the presence of the Virungas and your mountain guide. Nyungwe Forest National Park sprawls across the majestic hills of southeast Rwanda. Rich in floral diversity, it encompasses over two hundred different types of tree, as well as being home to humankind’s closest living relative, the chimpanzee.
The Seychelles is one of the pioneers of ecotourism. It has gained worldwide recognition as an environmentally-friendly destination. Described as “a luxurious retreat for the discerning traveller”, the Seychelles is a protected area that strives to preserve the beautiful but fragile ecosystem there. The Seychelles is the epitome of a hidden treasure and a tropical paradise.
It is said that after God had finished creating the world, he had a handful of diamonds left over. And so he decided to create something marvellous just east of Africa. He scattered the remaining diamonds in the ocean and thus the “Seychelles” were born – a divine place that thrives on ecotourism.
Editor's Note
It’s true. Ecotourism is so hot right now. But wait! Before you shell out your life savings, be sure to know what exactly you’re getting yourself into, because “ecotourism” is a buzzword used by heroes and villains alike. Here are a few questions you need to ask yourself before heading out into the wonderful, yet sometimes idealistic world of ecotourism.
“Just what exactly are you paying for?”
Have you ever made a New Year’s resolution to start eating healthy, but had to give up once you realised just how bloody expensive it was to eat healthy? That’s kind of how ecotourism is. After all, couldn’t you just be environmentally responsible on your own? What exactly does this organisation, which you’ve just shelled out your summer savings to, do that costs so much? Read the fine print, because you may be being taken for a ride. Many companies survive on the fact that you know nothing about the area, especially in the developing world.
“Don’t trust the white man”
Alright, alright, the white man isn’t all bad. But whether its consciously or not, western tourists always trust a white tour guide, often more than they should. The white man may even try to persuade you by slithering sweet nothings into your ear, warning you of the trickery of the locals. Again, the white man is not all bad, but keep notice. Just because they have one token “local” on staff doesn’t make them automatically “legit”.
“Do I really get to dance with gorillas?”
No. You don’t really get to dance with gorillas. Seeing an actual gorilla is not even guaranteed, and should you run into one, they’re not likely to ask you in for tea. Sound ridiculous? Some ecotourism companies will conjure up idealistic images that will have you reaching for your wallet, but make sure to ask the right questions of your guide so as to make sure you’re not left disappointed.
“Oh, Guerillas, I thought you meant Gorillas”
Truth be told, Western media does not give as much attention to civil wars in the developing world as you might think. If you can name two or less wars going on in the developing world, its possible you may need to do some more homework, particular to the region you’re considering exploring. It may save your life. |
|
Written by Marcus Spray
|
|
The idea of life on Mars has transfixed humans ever since 1854, when William Whewell first theorised the existence of land and seas on the red planet. Later telescopic observations of Martian “canals” further fuelled the speculation, inspiring H.G. Wells’ 1898 War of the Worlds. The 20th century would be filled with more scientific investigation and pop culture references, ranging from the satiric Mars Attack to the BBC’s Doctor Who. Of course, the imagined seas and canals were very soon shown to be nonexistent. But other discoveries have been made, strengthening the case for the existence of real “Martians”. Now, at the dawn of a new decade, shocking new research indicates that the presence of methane on Mars could be evidence of life on the Red Planet.
Methane was first discovered on Mars in 2004, but until now scientists have been mystified as to its origin. Biological processes or volcanic activity were both cited as potential sources, while others maintained the methane came from impacting meteorites on the Martian surface. However, the possibility of meteroric origin has been ruled out by scientists from Imperial College London who claim the methane must have come from something happening on the surface.
Experiments were conducted which showed that meteorites falling from the sky produce about 10kg of methane each year. This, however, was far below the 100-300 tonnes needed to maintain the current levels, indicating that the two likely sources are either volcanic activity or gases produced by microbes living on the planet’s surface.
Professor Mark Sephton of the Department of Earth Science and Engineering at Imperial College London, and co-author of the report, comments, “This work is a big step forward. As Sherlock Holmes said, eliminate all other factors and the one that remains must be the truth. The list of possible sources of methane gas is getting smaller and excitingly, extraterrestrial life still remains an option.”
The findings have impressed Kevin Nolan, physics lecturer at the Tallaght Institute of Technology and author of the internationally sold book, Mars, A Cosmic Stepping Stone. “The methane being generated on Mars is indigenous to Mars,” he said. “It is a big deal.” The gas hasn’t been around there for long, he explained.
The sun breaks down methane very quickly and changes it into other chemicals. “It doesn’t last for more than two years in the Martian atmosphere. If methane is there, it is being produced right now.”
Although many associate the Red Planet with explosive volcanos, Nolan claims there are few signs of recent volcanic activity, with the last major events taking place several million years ago.
At best, there were signs of activity several hundred thousand years ago, and thus any resultant methane would have been destroyed long ago.
This leaves the tantalising possibility that living, multiplying microbes currently occupying the Martian biosphere are the source of the methane. Nolan believes this finding is philosophically significant as well as biologically. It could teach us about the origins of life and also about its cosmic abundance, providing “insights into the nature of life itself.”
The discovery of traces of methane in 2004 by the European Space Agency’s Mars Express shocked scientists around the globe and prompted American and European researchers to plan a joint satellite mission for 2018 to investigate the source of the methane.
“This will affect all future explorations of Mars,” Mr. Nolan said. It will give scientists a target at the surface to go dig for the possible first confirmation of life of extraterrestrial origin.
All in all, the findings and its implications seem to present a strong argument in favour of life existing on Mars. We will have to wait until 2018 for conclusive proof but for the moment it no longer seems as far-fetched to suggest that the ubiquitous sci-fi Martians that have appeared so often in our fantasies may become a reality.
The Universe, perhaps, will no longer seem so lonely. |
|
Written by Lisa Keenan
|
|
The last eighteen months have seen marked hostility towards financial institutions. Critics have a shared distrust of these institutions and of the people who work there. What I find fascinating is that anti-bank sentiment has only reached fever-pitch now: financial scandals are not new, and those which are coming to light now are not even particularly complex. As world leaders attempt to restore confidence in the global financial system and desperately search for solutions to get their economies back on track, it is interesting to note that as far back as 2003 criticisms of the financial system were in the public domain and viable solutions were being offered.
Frank Partnoy is in a unique position to provide meaningful analysis of the financial markets. A former investment banker and derivatives broker, Partnoy left Wall Street to become an academic. In his second book, Infectious Greed, he offers a very comprehensive history of the birth of the modern financial markets, their failings and potential solutions to the problem of corruption and greed.
Partnoy argues that while there has been a dramatic increase in the number of financial scandals from the late-eighties to the early-2000s, these incidents have usually been looked at in isolation rather than as part of a wider problem. Taking a broad view of what has happened to trigger these scandals is what Infectious Greed aims to do.
The book is essentially a history of derivatives – “financial instruments which derive their value from other assets” – and it is these instruments which the author argues are at the root of the form of financial markets which we see today. Partnoy traces their origins, their dissemination throughout the market and, ultimately, their use and abuse by institutions desperate to book profits and hide losses. He guides us through a dizzying array of scandals without once losing the thread of his narrative or obscuring his main point. Although the subject matter is rather technical, the author manages to make it comprehensible to those who have little prior knowledge by including various definitions and examples while avoiding a didactic tone.
Although Partnoy rightly describes the corruption and deceit which taint our modern financial markets as an “epidemic,” he avoids the pessimistic stance which many journalists and pundits are taking today. He identifies the key issues which must be addressed if we are to get our financial markets back on track (and, incidentally, addressing these issues would also prevent difficulties in these markets spilling over into the rest of the economy) and makes six key recommendations. Extensive regulation of all financial instruments, prosecuting those who commit complex financial fraud and loosening the hold of the oligopoly of credit ratings agencies are some of the usual suspects which make it onto the list. Ultimately, though, Partnoy argues that the public must take some responsibility for what has happened. As he says “today, there are an astonishing number of individuals buying and selling stocks” and most of these individuals are unaware of the type of activities in which the companies in which they invest are involved. Lack of oversight by those who at the end of the day own these companies is another reason why the market has succumbed to infection. |
|
|
Written by Ciara Smith
|
|
The development of China into a major economic superpower, within a time span of only 28 years, has been described as one of the greatest economic success stories of modern times. By some measures, China has become the world’s second largest economy and analysts have predicted that it could be the largest within a decade. Although China’s prosperity and integration has had a number of positive influences on the world economy, there is no doubt that it threatens to undermine the US and its economic power as it stands today. Some contend that China’s economic policies, such as subsidies to its state sector, an undervalued currency and low wages, threaten US jobs, wages, technological supremacy and living standards.
Currently, the United States and China view each other as the strongest challenger to their power in the international economic system. Both countries have had an increase of economic interdependence for the past twenty-five years. This has made the possibility of a war of major military powers breaking out remote, but has done nothing to diffuse the rivalry between them. China has sought to gain advantage in this interdependent relationship not only economically, but also politically by seeking influence in regions of the world such as Asia, Latin America, the Middle East and Africa. The US has seen its influence reduced in these regions due to its interdependent relationship with China.
The continuing economic investment that the United States has made in China over the past twenty-five years – free trade agreements, the expansion of private business ties between the business communities of both countries and the purchase of cheap Chinese exports for home consumption – has given China an advantage in terms of its economic power in the world.
China has also been making increasingly aggressive investments in some of the world’s most prestigious financial companies in recent months, most of them American. Morgan Stanley, Bear Stearns, Blackstone Group and Britain’s Barclays have all negotiated major stakes by Chinese government-controlled investment funds. China is leading a surge of strategic investments from Asia and the Middle East that, so far, have sunk about $25 billion into Wall Street banks. This is just the start of what some believe is a dramatic reversal of financial power in the shadow of Wall Street’s credit turmoil.
So how does this relate to Irish graduates and future career prospects? China is fast becoming the workplace of the world. Its growth in manufacturing alongside investment is impressive. Manufactured goods exports rose during the 1990s at a 15% annual rate to about $220 billion in 2006. On one estimate, China now makes 50% of the world’s telephones, 41% of video monitors, 23% of washing machines, 30% of air conditioners and 30% of colour TVs. Many companies in the United States, Japan, Taiwan and elsewhere are moving operations there. Jobs are shrinking even in Mexico’s factories, as work shifts to the Chinese market. Furthermore, demand for skilled workers continues to soar.
The Chinese language has fast become business’s second tongue, with Mandarin-Chinese topping the list for the most spoken language worldwide. While the demand for Chinese language is growing, it is nearly impossible to find teachers to of the language. Despite the universal language of the world being English, English-speaking students want to learn Chinese and that is a major problem that needs to be addressed.
President Obama’s recent trip to China resulted in a commitment to expand the number of American students studying in China from 20,000 to 100,000. This would represent a huge jump in American students studying abroad. Last year 13,000 American students travelled to China to study in a number of universities. Obama commented that the US desperately needs to expand its Chinese expertise – and the most effective way to do so is to study in that country. His intentions highlight the importance of China and its role in America’s future, something we too should consider.
At home, education is one of the most important ties between Ireland and China. Ireland is a very attractive high-quality destination for Chinese students. We offer an excellent English-speaking education system and a close link between academics and enterprise. But, we are failing to realize what China can offer our graduates. Only in October 2008, a Memorandum of Understanding between the China Scholarship Council and the Irish Universities Association on PhD Cooperation was officially launched in Beijing in the presence of the Taoiseach, Mr. Brian Cowen, the Minister for Education and Science, Mr. Batt O’Keeffe, and the Minister for Industry and Commerce, Mr. John McGuinness. This provides the framework for the further development of the exchanges of top quality students between Ireland and China.
Since then, very little has been done to encourage us to open our eyes to the vast opportunities available in Chinese third-level institutions. Tsinghua University, Peking University and the Chinese University of Hong Kong all made the top one hundred universities in 2009 and provide the latest in technology and learning facilities to students. China’s emergence is one of the most important forces currently reshaping the world economy and for graduates a vital part of the world of business and careers. |
|
Written by Jason Somerville
|
|
Sometimes ignorance can be bliss when trading in stocks. Taking long breaks from watching the stock ticker might be just what an emotionally-hyped trader needs, writes Jason Somerville
They say “ignorance is bliss” and indeed it is a phrase that is uttered too frequently. However, might it also be profitable? One of the greatest obstacles that a trader must overcome is that of human emotion. Experienced traders often warn of the dangers of becoming emotionally attached to a stock. Those who do may exasperate their losses by failing to exit a stock despite the clear warning signs.
But that doesn’t seem very rational. Homo economicus would be rolling in his fossilised grave.
What Homo economicus doesn’t understand is that emotions affect the decision-making process. While it may prove trivial for day-to-day decision-making, it can have disastrous consequences for some traders’ portfolios.
When an investor sees the value of an investment fall she experiences disappointment and regret. These emotions have a much stronger impact on a trader than the elation and rejoicing that is elicited from seeing an investment rise. Throw into the mix the anxiety associated with a financial loss and the decision-making of traders appears to be more prone to irrationality than most.
Interestingly, traders are presumed to be the most calculated of all decision-makers. After all they receive years of training in finance and economics and are frequently told to avoid irrational decision-making. Despite this, they are frequently observed succumbing to the most basic limitations of human judgment. This shouldn’t be surprising given the complex ways in which emotions affect our cognitive ability.
The “trick” then to being a good investor is that you should buy a stock and not give in to the temptation of real time prices on the Bloomberg screen. By doing so you can avoid the rollercoaster of emotion that often clouds people’s judgement. But why is it that seeing an investment fall elicits a stronger emotional response than an increase? The answer resides in the phrase “losses loom larger than gains.”
The Irish economy provides an excellent example. In the period between 1990 and 2007 Ireland experienced unprecedented economic growth. From a country once viewed as an economic liability within the Eurozone, Ireland came to be ranked as the 4th richest country in the world in 2005 in terms of Gross Domestic Product. However, the recent downturn has been so extreme that Ireland has become perceived, both at home and abroad, as a country in economic difficulty.
While the structural imbalances that have developed within the Irish economy over the past decade cannot be ignored, the reality is that Ireland is still a very wealthy country that continues to attract multi-national investment. An explanation for such biased representation is based on prospect theory which was put forward by Nobel laureate Daniel Kahneman and his associate Amos Tversky.
The most basic assertion that prospect theory makes is that economic actors place a greater value on a loss when compared to an equivocal gain. Indeed, this claim has been empirically supported. Shlomo Benartzi and Richard Thaler have suggested that this is because people display “myopic loss aversion.” In other words nearsightedness (myopia) and a tendency to place a higher value on avoiding a loss can explain why Ireland is currently perceived as an economic laggard when in fact, we are still one of the richest countries in the developed world.
If we place a greater value on losses than we do gains then it’s not surprising that when a trader sees a 20% drop in an investment they experience a greater influx of emotion when compared with a similar gain. Making decisions while heavily under the influence of emotions can lead to irrational decisions which markets have a tendency to punish.
So perhaps all those Bloomberg screens were a waste of money? Not exactly: caution is still required. One of the greatest paradoxes of the efficient market hypothesises is that a market is only efficient because inefficiency exists. Therefore the more traders endorse such rational techniques the more efficient traders will be.
The net result? Markets will be inefficient and such techniques will prove useless. |
|
Written by Kate Palmer
|
|
Two terms in, Kate Palmer finds out whether this year’s sabbatical officers have lived up to the election promises they made last year.
When voting, it’s easy to be swayed by utopian ideals set out in the glossy manifestos forced upon us during campaigning season. In a bid to gain votes, it seems nominees will promise almost anything to secure a much-coveted office in House Six. Now we are almost halfway through the academic year, Trinity News plans to look back at the promises of our current sabbatical officers, and decipher what was a realistic policy-pledge from pure electioneering.
Students’ Union President Cónán Ó Broin has undoubtedly made good his promise to fight fees, which he says have been at the “forefront” of his campaign. “It’s been an awful lot of work”, Ó Broin tells Trinity News, “It’s taken three and a half months of work, lobbying every TD and Senator. Together with the Students’ Union Presidents of UCD and DIT we’ve met with over 40 politicians on the matter”. Ó Broin describes the successful prevention of tuition fees as “sheer euphoria”, in a campaign which has put the Students’ Union into the national limelight. However, this is not the first time fees have been on the Government’s agenda, as with a previous scare in 2002, and Ó Broin admits there is a “strong prospect” the issue may arise again. “The fact is, that the University is under funded by the Government, but it is unacceptable to assume tuition fees are the answer to this”.
Ó Broin’s work is by no means done, as the Students’ Union President is currently embroiled in a conflict with the University over the expenditure of the 1,500 Student Charge. Ó Broin explains, “only about 800 of the registration fee students pay actually goes on student services. Students are simply being charged for cuts the Government have made, and the College are trying to justify the rise in the registration fee by changing the definition of “student services” to include facilities such as the Library and ISS Services”. He describes the actions of the College as a “deception”, and is organising meetings with the Provost in order to solve what he describes as an “abuse by the Minister for Education and Minister for Finance, with millions of students’ money in question”.
Pressing demands in what Ó Broin calls the “toughest and most challenging” year to be part of the Students’ Union means he has not been able to promote Irish culture in Trinity as much as planned. He sees the installation of moveable GAA posts onto the Cricket pitch as “symbolic” event for Trinity College, which he says “proves that the stereotypical image of Trinity and stereotypical image of GAA are not necessarily incompatible”.
Both Students’ Union President and Education Officer, Ashley Cooke, have been at the forefront of the campaign for improved Library services. Success on the Library front has yet to be seen, as Sunday opening hours remain a point of contention. Cooke made promises to improve Library services back in 2008, and admits it is a situation which has left students “unhappy and angry with the current circumstances”. He explains the recruitment moratorium has been a major setback in the campaign, although is confident it is an issue he will “not give up on”, and expects Sunday opening hours to be operational over the next coming weeks.
Somewhat less ambitious, although infinitely more successful, was Cooke’s election promise to reform the grinds system in Trinity. The previous system involved e-mailing a page of contacts to individuals interested in getting or giving tuition, which was out of date and unreliable. Cooke has created an online database for which he has received a number of testimonials: “Lecturers have come up to me around College, telling me how useful the system is, and one of them even thanked me for the help it had given to their son. It’s something that not enough people knew about before, and I hope I’ve helped people who needed that tuition”, says Cooke. He has also made moves to ensure a 24-hour study space is available on-campus, although he says the lack of bathroom facilities and no access to books means it is “not enough”. He continues, “although we don’t have an adequate facility now, when the proposed student centre comes along, we are promised a 24-hour study space”, in reference to a proposed development in Luce Hall which has not yet received planning permission.
The proposed student centre has been part of an unfulfilled election promise of Entertainments Officer, Mick Birmingham. His 2008 manifesto says it is “ridiculous that we don’t have a venue for student gigs”, although now Birmingham admits the reality is “a little more difficult than it might seem”. He argues the new term structure has made it difficult to employ staff for a 24-weeklong academic year, and explains how the plans have been “rejigged” to double the capacity to 800. “I’ll say the student centre won’t be long off the ground”, assures Birmingham, “it will be up by the next time the Provost comes along, although if they say it’ll be ready in the summer we should probably expect it around January the next year!”
Trinity has yet to see an off-license on campus, although Birmingham assures this is an election promise which has not yet been broken. “It’s something the Junior Dean isn’t exactly thrilled about. It’s important in a position like this to pick your battles”, say Birmingham, who says it is important to avoid “pissing off people you need to have on your side”. Students have yet to see a Night Bus service provided by the Ents Office, and Birmingham explains the license fees associates with a regular bus service makes it a “lot more complicated and expensive than I first envisaged”.
The year is not up yet however, and Birmingham assures students he has “got a lot more to do” for the rest of his sabbatical, and “the exam season can give me a change to dot the ‘i’s and cross the ‘t’s”. Perhaps we can expect a lot more from Birmingham’s tenure, as after all, the biggest College event of the year has yet to take place. “The Trinity Ball is my biggest achievement so far”, says Birmingham, who has did not reveal the lineup.
“Welfairie” Cormac Cashman has mainly lived up to his election promises, so much so that he is running for a second tenure. The Welfare Officer promised in his “Need a hug?” campaign an accommodation advisory service, and help with student finance. Cashman describes the Accommodation Advisory Service as a “huge success”, enabling “three times as many students to get a place through the College service”. He tells Trinity News that countless students have come to his office for help with budgeting and financing, or just to have a “shoulder to cry on”. Cormac’s promise to introduce a Welfare week is planned for this March’s Mental Health Awareness Week, which is set to include free fruit every morning and ‘stress pigs’ for the overworked student. Cashman also plans to make a number of additions to SHAG Week, including a full-time pharmacists on campus, which will take place later this term.
Rob Donohoe has transformed the role of Deputy President to become Communications Officer. Scrapping the controversial Record, he is founder of The University Times, a Students’ Union funded broadsheet newspaper. Donohoe tells us how he was “thrown in the deep end” when his sabbatical position began: “When I started as editor for the University Times, I didn’t know a lot about what’s involved with editing a paper”, says Donohoe, “I thought the best idea was to change the direction of the paper, I didn’t want to just modify The Record because you’re always going to have the baggage of the old paper.” Donohue enlisted the help of Gearoid O Rourke, previous Trinity News Editor and designer to make the newspaper a success.
Donohoe was keen to reverse the policy of erstwhile Students’ Union newspaper, The Record, which banned criticism of the Union. He comments: “I don’t think The University Times is biased at all”, and says he has “no problem with reporting on anything which may be perceived as portraying the Students’ Union in a negative light”. Donohue describes his fellow sabbatical officers as “supportive” of the independence of the paper. “At the same time, I don’t just put in fluff about positive things the Union has done, and in that sense only include news into the paper”. Donohue describes his position as a “dual role”, combining that of a sabbatical officer and Editor, “I need to be independent, but also take some input from the Union. Sometimes I let my input as Communications Officer seep into an editorial role, because in the Union I might come across something newsworthy!”
Donohoe is evidently proud of his creation, which he describes as a “work in progress”. He says, “the paper has been improving with every issue that’s come out, and we’re going to keep getting better with the next one, and one after that!” Donohoe hopes The University Times will be available to students in years to come, “I hope people will remember that I founded it”, he adds.
“The main piece of advice I’d give for someone taking over the role of Communications Officer would be to make sure there’s continuity with staff on the paper”. Says Donohoe. He comments on the element of uncertainty surrounding the new publication during Michaelmas term: “I know how hard it is when starting from scratch, and the first issues were particularly tough because there weren’t many staff at all. Maybe this was because people would not know what to expect from the paper or didn’t expect it to change that much.”
“I hope that the paper can continue in the same light under next year’s Communications Officer. I’d hate to see the paper go in a completely different direction every year, although at the same time I recognise that each Editor would want to make his or her own mark”.
It seems this year’s sabbatical team have got on well so far without any major disagreements. “In this way I’m personally blessed”, says Ó Broin, who points out that he and Ashley Cooke have been working closely together on the ongoing campaign for improved Library opening hours. Rob Donohoe says, “It’s been fantastic working with the other sabbatical officers, we all get on well”, pointing out that he lives with Mick Birmingham, and “we have all agreed on a lot of things. You know how it can be when there’s a weak link, it can let the team down, but we didn’t have that”.
As ever, some of the more grandiose issues of our sabbatical team have of yet failed to materialise. However, we should not let that overshadow the achievements of a Union which has represented, informed, supported and entertained the student body to which it is accountable. The national profile of Trinity’s Students’ Union makes it all the more important that we, the student electorate, choose a candidate most equipped for a position where impracticable daydreams rarely become reality. |
|
Written by Alan McQuaid
|
|
Alan McQuaid, Senior Economic Analyst at Bloxham Stockbrokers, looks ahead to what might happen to US economic policy when the money finally runs out
It looks like US policymakers may finally have reached the end of the road, or at least a major roadblock, in their ability to get households to take on more leverage.
The US consumer debt overshoot in the past decade was far in excess of anything we had seen before, and it was based on very misguided assumptions about the future path of house prices. The hangover from the housing boom and bust will be long lasting in terms of banks’ willingness to lend and consumers’ willingness to borrow. On the surface it is hard to see how the United States can borrow and spend its way out of a crisis that was caused by too much borrowing and spending in the first place. But, that’s what the Debt Super-cycle (the long-term decline in balance sheet liquidity and rise in indebtedness during the post-WWII period) process has always been about, and things will only change when the limits of borrowing have been fully exhausted. And there is one final act left to go in this long-running saga.
If consumers are no longer willing to borrow and spend at a level that guarantees decent growth, then governments have shown that they will do it on their behalf. As a result, the major economies are in the midst of an unprecedented peacetime surge in government deficits and debt. In other words, there is a transition from rapidly-expanding private debt, to rapidly-expanding public debt. The private sector’s ability to carry rising loads is limited by its income.
In theory, the public sector is less constrained because it has the power to generate taxes, and is less prone to going bankrupt than borrowers in the private sector. However, in practice, the financial markets will act as disciplinarians when they perceive that public debt trends are headed out of control. For the US, a fiscally-related financial market crisis should be several years away given that government debt servicing costs are currently less than 8% of total spending. To put that into perspective, when Canada faced the debt wall in the first half of the 1990s, debt servicing costs exceeded 20% of spending. But the fact remains that major fiscal restraint will be needed in the years ahead if the United States, the UK and many other economies are to avoid a crisis.
It is also the case that government borrowing and spending can provide only a partial offset to restraint in the private sector. If we are right that the private sector Debt Super-cycle is exhausted, then it implies weaker than normal economic growth in the developed economies during the next few years. The situation in the emerging world is quite different. It has taken decades of building imbalances and excesses to get the US and several other advanced economies into their current financially debilitated state. In contrast, the emerging world is in a very different stage in its development. Consumer and business debt loads are low because credit infrastructure has been generally undeveloped, and weak or non-existent property ownership rights prevented the development of mortgage markets. Also, many countries suffered external financing crises in the 1980s and 1990s, requiring them to strengthen their balance sheets.
Finally, savings are high because of limited investment opportunities, and the need to set aside money for education, health and pensions. The solution is obvious. While Western consumers concentrate on rebuilding financial health, those in the healthier Asian emerging economies can become more oriented toward borrowing and spending. Such a shift would go a long way to encouraging a much-needed transition in the world economy. The US needs to spend less and save more, while Asia, especially China, needs to do the opposite.
All in all, it is now widely accepted that we are in the midst of a gradual shift in global economic power toward Asia and certain other emerging countries. As part of that process, Asia should become more oriented toward domestic demand, and less dependent on exports to the West. And that is unlikely to occur without Asian consumers becoming more Western in their use of credit.
Debt is not evil as it is necessary to have freely available credit in a modern functioning economy. Few people can afford to buy homes and cars for cash, and companies need access to credit in order to finance investment and inventories. Of course, credit does get abused, and it is up to financial regulators to minimise the dangers, a task in which they failed miserably all across the globe in the past decade. |
|
Written by Grace Walsh
|
|
While British media focus on the cultural importance of Cadbury following its sale to Kraft Foods, the history of brokering a deal for the troubled choclatier is primarily an issue of business and finance. Grace Walsh gives us the overview
The midnight deal that sealed the fate of Cadbury formally ended five months of hostile takeover negotiations. Kraft’s £11.6 billion bid is comprised of an 840 pence per share offer plus a 10 pence dividend on the unaffected share price as of 4 September 2009. Cadbury shareholders officially have until February 2 this year to approve the deal. As Kraft’s offer is largely comprised of cash it does not require its own shareholders to vote on the acquisition and only requires the agreement of fifty percent of Cadbury shareholders to move forward with the takeover.
Kraft increased its borrowing to $9.5 billion to finance the cash part of the offer, following shareholder Warren Buffet’s criticism of using too much stock to finance the deal. Mr. Buffet argued that Kraft’s use of stock in the Cadbury deal was an “expensive currency”, prompting speculation that Kraft’s shares were undervalued at current prices. CEO of Kraft, Irene Rosenfeld’s final offer of sixty percent cash, which she had hoped would sate Mr. Buffet’s fears of using too much stock, also drew criticism from the shareholder. He said he felt “poor” following the Cadbury deal because it came with $1.3 billion of reorganisation costs and $390 million of deal fees. He was also unhappy with the sale of Kraft’s “very fine pizza business” this month to Nestlé. Mr. Buffet stated publicly that he and Ms. Rosenfeld had a strong relationship, calling her a “good operator”, but he openly admitted his concerns regarding the success of the acquisition. Kraft’s level of debt will rise to over $30 billion including the $3 billion of Cadbury debt it will assume.
Kraft’s reasons for acquiring the booming UK confectioner include its desire to exploit positive synergies to the tune of at least $675 million and to boost its growth, which had been stagnant, with Cadbury’s girth and optimism. 2009 was a profitable year for Cadbury with 5% organic growth and EBITDA of £1.02 billion.
Kraft’s initial offer of 720 pence per share only gave an enterprise value of twelve times EBITDA, relatively low for an industry where takeover values usually fluctuate between fourteen and fifteen times EBITDA. Their final offer of 840 pence per share plus a ten pence dividend came closer to satisfying Cadbury’s initial demand of 850 pence per share, amounting to approximately fifteen times EBITDA. Although some shareholders have expressed disappointment that the company’s board did not get a higher price, most are expected to approve the deal.
In September of last year, Cadbury dismissed Kraft’s initial offer of £10.2 billion as derisory and rapidly mounted a stiff defence to Kraft’s offer. Lazard Ltd., Citigroup and Deutsche Bank advised Kraft whilst Morgan Stanley, UBS and Goldman Sachs represented Cadbury’s interests. The takeover bid drew speculation that rival bids would appear from Swiss confectionery giant, Nestlé, American favourite Hershey and Italian family-run business Ferrero. However, Nestlé failed to engage in the bidding process due to regulatory concerns that merging the two companies would have negative effects on competition.
Hershey markets Cadbury products in the US under an exclusive licence and was rumoured to be considering mounting a rival bid for the UK-based confectioner. Hershey, who is controlled by a trust and would represent a stronger cultural fit and fewer job losses than Kraft, was understood to be the preferred option for Cadbury. The American chief executive of Cadbury is twice believed to have sought a merger between the two companies. Attempts failed both times as the controlling trust behind Hershey refused to support the deal. Following their failure to top Kraft’s offer and pay a £118 million break fee, Hershey disqualified itself from the race to rescue the UK’s “national treasure”.
Early reports from sources close to the Ferrero family stated that they were “absolutley united” on their decision to jointly explore an acquisition of Cadbury with Hershey. However, late last week they formally withdraw as a counter-bidder to Kraft before a UK Takeover Panel. Cadbury’s white knight failed to appear and the deal was approved on the 2 February.
Following the announcement of the proceeding acquisition of Cadbury, the Confederation of British Industry, a powerful lobby group, issued a stark warning to British and US business: beware of embarking on a wave of value-destroying acquisitions as the country emerges from recession. Mergers and acquisitions are often seen as a quick and sure-fire way to achieve growth following recessionary cost-cutting and saving. In the aftermath of the financial crisis the cost of borrowing has increased dramatically, hovering two hundred basis points above the LIBOR, as opposed to fifty in 2007. Combined with the fall in the value of the sterling, many firms including Kraft are looking towards the UK for expansion. Kraft’s rationale for acquiring Cadbury, driven by these factors and the lure of synergies, in a recessionary time may well be considered profitable, but fears of arbitrage and concerns over Kraft’s financial standing pose significant threats to the long-term viability of this deal. |
|
