Nation As A Myth Is India A Myth History Essay

Nation As A Myth Is India A Myth History Essay The dictionary definition of Nation is: A group of people who share the same culture, ethnicity and language, often possessing or seeking its own independent government. When one looks at this definition and then re-thinks about it for the Indian prospective, The first thing that come to the mind is either there is something remarkably wrong with the definition, as India has is a combination of a plethora of cultures, ethnicities and languages or hence is a complete misfit for being termed as a Nation or there is something wrong in the way with the way the world understand what a Nation is. Basically the whole concept of nation is an imaginary concept. Its never possible that people will be influenced by the same likes of culture or ethnicity. A human mind tends to deviate from what normal around it to explore new things, when a group of people live together by the will or by virtue its called a society. Each member of the society is unique, He might not be there purely because of his will to be there, But might be compelled to be there because of various factors. This might be financial, Social, And Family or lack of other options. We cannot interpret that the individuals staying in the society are part of the culture or adhere to the same ethnicity. The chances of them being there by choice is as good as for them being there by choice. Now taking the concept of a society to a broader target, it gives us a few foundation pillars towards the concept of a Nation. Although people might be a part of it, but its not necessary they want to be there. They mostly are there, because either the decision to be there was taken on their behalf by their Elders (in case of a partition or plebiscite), by their Leaders (Again a leader is not one which represents everyone but a majority) or they belonged to the land from birth. The concept of Nations is elaborated as expressed more much more complex than it was ever thought to be. As put in new literature by many writers, Nations is an imaginary concept and hence should be distinguished in the way they are imagined. The fact is, the concept of a nation is more of an idea; its an idea of people from a common culture and values, their desire and will towards freedom. We had been reading from the text books for ages that Unity in Diversity is what India stands for as a nation. But the whole idea of India as a nation is been criticized much because of its failure to become a single unified Nation state in the likes of Germany (after the East Germany and West Germany) and Japan. One can also claim that India has done much better in terms of keeping the minor states together, unlike the rest of Europeor the far gone USSR which are now divided into various small states. The Indian nation reflects the counter of the Europe small countries that were homogeneous when considered in terms of population and culture, England, Germany and France to name a few. Even Islamic nations like Iran, Iraq or Saudi Arabia were let down when it came to a concept of Nations and ended up in military dictatorship or medieva l style monarchies. India as a Nation: The nation state idea never worked for India, because of it size and diversity. For others like Europe, they had to work hard to suppress their divisions and prejudice the idea of nationhood. India also fails to stand as a nation unlike other Nations is because India set out for a democratic model, whereas the other nations were on imperialistic rule and not an integrated culture encompassing the subcontinent. Diversity in India adds to the failure of idea of the Indian Nation: India with it diversity has failed as a nation right from the formation of India as an independent country. Firstly the formation of the Islamic nation of Pakistan, Then the Issue of Kashmir, The North-East, The khalistan Movement, The recent show downs from Telangana, Gorkhanland etc. India had been suffering at the hands of the minor states, and in order to maintain a nationwide feel, has been dealing with them by avoiding the issue till the very last stage when any further push will result in a crack in the complete National structure and then bending down to the demands. Not to mention after a heavy disrupt and unnecessary bloodshed. The idea of the Nation of India chronologically speaking has never been a single State. History has its records that all those who tried to keep India as unified states failed in their endeavours weather it may be the King Ashoka or Alexander. What these great rulers identified in this land was that the diversity of its origin and existence is not only trivial to capture but to keep united in public interest is a herculean task. Yet, India emerged as a golden bird in the early 16th Century and attracted a lot of unwanted attention from other Nations. The British came to India for trade and sighted an opportunity to take charge as the nation was spread in forms of small princely states rather than as a Nation. It took our leader decades in the struggle for freedom, And the first thing that was set to harbinger the lack of National interests post independence was the partition of Pakistan and the formation of East and West Pakistan. The Indian political leaders had sleepless nights try ing to put a map in place for the unified princely states in India. Pivotal role of Indias Freedom: When the labour party in England won the elections, their chief agenda of decision of discontinuation of the British Empire in India, Different communities in India started demanding of India as a free state or as a State of States. It was for the United National Congress will that they 562 princely states became a part of India. But not all the states were happy for this, As a result of this political decision, there were riots between Hindus and Sikhs and Hindus and Muslims. The demand for Hindu State from the Hindu Mahasabha, The demand for Sikh State in Punjab, The Dravidians in South India, The Tamil State and the issue with Hyderabad and Kashmir who cited independence. All the demands for separate states were demands from the political parties as they saw an opportunity to have the power of the land and also to gain maximum benefits for themselves and their followers from the same. The formation of Pakistan, Added fuel to the already heated demands for separate States, and the feeling of discontent with India as a Nation started to fade even before it was established. India then was ruled by Indian National Congress and Pakistan was governed by The Muslim League. Whereas the other stated were pleased by giving them individual power in their own regions. A total of 25 states were created post independence to feed the political hunger of those regions. This set out the lifeless frame of the Indian Nation which was more of a compromise of State wise governing rather than a nationwide government. The other discontent states in the likes of Telengana, Gorkhaland, Kashmir and others were still left unanswered. And since then the issues have been kept avoiding till the time when avoidance resulted in further blows to the so called nationalism in the country. India has never been in a nationalistic phase, the fragmentation in India occurs due to the political will. Where a particular political party keeps fragmentation or demand for a separate ruling state as an agenda to come to power. And its not related to some minority areas which have a low impact on India, But India faces the pull from all directions and every corner with a demand for a separate state. In 2002 the then in power political party had to make way for three more states in order to fulfil the political appetite of the political parities of the concerned regions. But the government always fails to find a solution to the problem; In 2002 the government took the steps to avoid any more drama on the topic but indirectly ignited the sentiments of the political parties from other regions who have been fighting for a separate state. The Gorkhas with their issue for Gorkhaland, The Telangana issue which has been hot for a long time now, the demand for Bundelkhand, The demand for Saurashtra etc. Were reignited and the political parties got afresh agenda to create havoc. History and Social Issues of India as a Nation: This political view is not just challenged on the basis of Region, But also on the basis of Religion, Caste, Race and Language. With the political drama in Maharastra for the Marathi Manus has been a nuisance. Which is nothing more than a agenda to capture vote bank in the political parties there. The essence being, the parties capitalize of the fact that the people there have a lack of view of nationality and have a clearer picture and identification in their own culture and language. And believe that they first are Marathis, (or Tamils or Gorkhas for that sake) then Indians. Apart from the political views clash on basis on Regionalism and Language, issues which shake the will of India as a nation have been as pity as Interstate disputed over Water and Territorial boundaries, Caste Related violence, Naxalism are a few to name. Partition of Pakistan: Taking the case of The Myth of India as a nation has been punctured right from the formation of India post independence, ending up with two different countries, India and Pakistan (East and West). Till date it remains to be a major issue and the scars of which continue to haunt us in the form of the battle for Kashmir which started in 1947 and continues till date with no solution in site. Both the involved parties believe its a part of their territory because they believe that its more closer to their culture and hence should be a part of their territory. But what they fail to see is that the case of plebiscite never came to discussion. India and Pakistan both have been having a hard nut with their own internal issues, Pakistan with the disputes and killing between the Shia and Sunni tries in the name of superior race, On the other hand India with the issues like Marathis and Biharis, Hindus and Muslims , Hindus and Sikhs etc. Both are not able to handle either existing states and wi sh to take another disputed state to their bag. The idea for India and Pakistan was not from the people of the respective groups but were driven by the political leaders of the groups. These leaders made the people belief that the only way of growth and progress of their community is via a separate nation only. A decision which they all repented later in life. At the time of partition when Indians started the quest for India to have and nationality was more than a requirement, and ended up being a matter of pride. This was the time when the Hindus and Muslims started having a desire for a nation. The sense of nationality could have existed without the desire for having a separate nation. North East: The North Eastern states face a similar issue when it comes to the sense of Nationality. They are a part of India, But how often have there been uprising from the North East fronts in demand for a separate land, The ULFA in Assam, The Gorkhas in the regions around Darjelling etc. The reasons why these states have always been a trouble for the centre is because of the lack of importance that the North Western Indian front is given over the decades. The political parties in order to control the vote bank gave citizenship to immigrants from Bangladesh, Which further boiled the anger of the region. These regions have never thought of India as a country but as a power at Centre which is to be followed. Hence to the North East the concept of nation comes from chance and not by choice. The mudslinging continues as the nation says that these states dont tend to treat them as part of India and the states believe that they are treated as foreigners in India, So why not be a separate nation. Rest of India they dont believe in North Eastern as Indians: They are often referred as Chini or Chinkis and are treated as foreigners. The Nagas in Nagaland believe they are a separate nation and consider rest of Indias as foreigners and always believed they were included in India against their will. Arunachal Pradesh has been confused which country they do belong to India or China. And as both the countries have been fighting on this front, Arunachal Pradesh believe they need a solution to their long standing problem now. This is just as big as the Kashmir issue but is never addressed. Khalistan Movement: The Sikhs wanted a land of their own right from the India freedom struggle. These unmet demands were outburst in the form of the state of Punjab during the Khalistan movement. The demand for a separate state by Bhindranwala, the ironic leader who demanded a separate land for Sikhs lead to further shows of why the concept of Indian nation is a political will rather than a cross culture believe. Telangana: Again when the case of Telangana was addressed, the issue that the political leaders brought up to the surface was the suffering and they believe they had nothing to lose in the battle. But a battle? With their own country, their own motherland, well this is because of the fact that for them the mother land in Telangana and not India. The leaders and the followers believe that since their issues are not addressed by the Indian government, its better to be on their own. The factor that the political parties capitalise to come to power is that they assure the formation of a new state in case they come to power. They capitalise on the vote bank, and then to gain more direct power and control follow their promises to ask for a separate state. This is negotiated till the time the elasticity permits. With the regionalism of politics, race and language, there are other sectors also that get affected. The long standing delusion of patriotism is now being replaced by the new found jingoism. This is not only evident from the uproars of the states but can easily be read even from the number of TV channels for specific states. Various Incidences in recent times: Attacks as the one triggered by MNS and Shiv Sena on the North Indian candidates for the All India Railway recruitment board entrance in West region in Mumbai shows how much politics goes into everything. The plot was to dent the feeling of India as a nation to Marathis, and to reinforce the power of Marathis in the state of Maharastra over the feeling on India as a nation. The anti Tamil riots in Karnataka in 1991, the attacks which mainly took place in Bangalore and Mysore was to show the disrespect against the orders of the Cauvery Water Tribunal appointed by the Government of India. Again a matter where Region over Nation. The various other cited examples include The attack on North Indians in Maharastra and the referring on Biharis as outsiders in Delhi by the Chief Minister of Delhi are clear depictions that the integrity is more towards regions rather than nations. So what is the point then of being in the essence of a nation? The answer is simple, To keep a central authority. Which also comes from a combined political view, But as we have seen from time to time, This tends to dilute and the comfort of regionalism overpowers the feel of nationalism. The being of India as a nation is more of a will from the political fronts, where the views of nationalism are intact only till the point when it does not clashes with any other major interest. The interest may be related to religion, region, caste or other social issues. As soon as a political agenda is created out of the same, the skeleton of India is ruptured. These ruptures not only make a mark at the time of the impact but also leave significant scars which are exploited time and time again based on the political requirements of the regional or nationalist parties The Failure of the State: The idea of India as a nation is clashes with the regional identity, Any political demand for statehood, or sub-statehood, when demonstrates identifiable support from masses clearly state the lack of Indian nationalism. The emergence of the various ethnic nations in India e.g. Bengali, Sikh, Gujarati, Manipuri, or Tamil have taken shape and protect their ideology with stronger support for their regions rather than the nation. The support is derived from the followers who put their region first to their Nation. And for them being a part of India is just a mere way of recognition till the point they get a identity of their own. The regional and sub regional accommodation of identity in India have served to weaken the bases of political secessionism and secessionism and separatism while not defeating the principle of internal self determination of nation. The concept of India as nation was never there in the essence of purity; It lacked the vigour and desire, and came into being as a way out of the then impossible structure of princely states structure. But, the political figures try to hold it together, and time and again, are faced by the protest when people decide that their individual or community interest is superior to that of the nation. This individualistic feeling of superiority than the nation has always been into India, right from when the states were asked to join in the Union of India. The existence of India as a nation in itself a myth, If given a chance, there will be a handful who will not be willing to have a state or sub state like the Europe or former USSR. Europe failed through history in uniting as a subcontinent, though some attempts in this direction were made (for example, Napoleon).   The only country of comparable size that has better succeeded than India through history in maintaining its unity as a country is China. But even China never had so much diversity as India. But still India is better off from the modern Europe with their nationalistic phase, when every Indian state will start functioning as different countries or starts regarding them as different nations all together. The foreign ruler ship prevented this from happening. Hopefully Indian political will would keep the Indian national interest at priority for a more stable time to come and help India avoid the European nationalistic phase.

Proposal for Family Life Education Essay

Studies show that the national average for an adolescent’s first sexual intercourse encounter is seventeen years old. Despite this number being very close to the average age in other industrialized countries, the United States holds a higher percentage of teenage pregnancy and sexually transmitted disease (STD) contraction than those countries (Harper et al, 2010, p. 125). It’s becoming evident that while a majority of the nation’s youth is sexually active, they are not doing so with the appropriate knowledge to keep themselves and others healthy. It’s been proven that if parents were to educate students about sex education, healthy sexual behaviors might increase. Many parents, however, refuse to do this because they feel that talking about sex with youth will make them have sex, ignoring the fact that whether the youth are talked to or not, they are having sex. It has even been stated that some teens prefer to get the information from their parents, as opposed to other educators (Zamboni & Silver, 2009, p. 58 – 59). Unfortunately, if the parents refuse to talk to the students about sex, they become sexually active without this crucial information. As the rates of STDs and teenage pregnancies rise in our country, youths between the ages of 12 and 20 years old could definitely benefit from the introduction of a family life education program focused on teaching the difference between healthy and unhealthy sexual behaviors. A program known as Youth Understanding Sexual Health (YUSH) would be the perfect venue for doing just this. A program developed for teens in middle and/or high school, YUSH is a seven week program that seeks to ensure that these youths realize the difference between healthy and unhealthy behaviors, the consequences and results of participating in both, and how to make sure that they avoid negative, harmful, and otherwise unhealthy sexual behaviors. By instilling this information into the children at early ages before or soon after they have begun to participate in sexual behaviors, the program will meet several crucial goals. First, it will get these students in to a routine of practicing healthy sexual behaviors that they can take with them well into adulthood. Not only will this maintain their own sexual health, but it will protect their other potential sex partners. Second, the new knowledge that the teens will gain from the program will allow them to pass on information to their peers that may not be allowed to participate in the program, be too embarrassed or shy to seek information, or been unable to attend the program sessions for any other reason. Other aspects of society reach popularity in similar manners, including music, movies, video games, dances, or slang, so this information can be expected to spread in a very similar manner. According to Powell & Cassidy (2007), when developing an effective family life education program, its important make sure that they needs of the audience are appropriately addressed (p. 79 – 80). Of the three needs, felt, ascribed, and future needs, both felt and ascribed needs can be determined before the program has started. In order to effectively determine these needs, the appropriate assessments must be taken. Prior to the start of the program, certified family life educators (CFLEs) will conduct an assessment by using focus groups and questionnaires from potential program attendees within the target audience. Since the target audience is composed of students that attend local middle and high schools, the CFLEs will send home two things to the parents of all of the potential students: a letter requesting permission for the teens to participate in the program, which details the material that will be discussed and the extent of the programs, along with a questionnaire for the student and parent to complete together which addresses the information that both parties feel should be addressed in such a program. In order protect confidentiality; the questionnaire will be a two part survey with one aspect for parents and one aspect for the students to fill out. Using the questionnaires from the parents and information from the schools and community, CFLEs will be able to determine the ascribed needs of the program. The information obtained from the students’ surveys will reveal the felt needs of the program. The final category of needs, future needs, will be addressed throughout the duration of the program and will be met through a combination of student comprehension and effective facilitation by CFLEs. If YUSH seeks success, another thing that Powell & Cassidy (2007) suggest is well trained and effective educators. CFLEs will undergo extensive training in which they will learn to fully accept their roles as facilitators, exhibit effective listening skills and communication skills, and how to encourage the youth to participate in the program’s discussions and activities (p. 92 – 112). The National Council of Family Relations (NCFR) (2011) explains that there are certain requirements necessary before an individual can be a CFLE and this involves either graduating from an approved program or taking the CFLE exam. In addition to that certification, and in order to specialize in sexual health, YUSH facilitators will be trained to have a complete understanding of the material and how to appropriately present the information to the teens by means of seminars, training kits, and manuals. Qualified facilitators and understanding of the appropriate needs of the target audience are only two aspects of ensuring that YUSH is a successful program. A location and time for the program’s meeting must be established, as well as the frequency of meetings. When choosing a location, it’s important to make sure that there will be privacy, comfort, and no distractions. The location must be appropriate for the size of the group. With such a large target audience, it will be necessary to have several different groups. The groups can be separated by grade, with about 20 – 25 students in each group. These groups would meet during their health classes during school hours, but without regular teachers and/or administrators in the rooms, so that the adolescents feel comfortable. The curriculum of the YUSH program takes place once a week for seven weeks, with approximately 1 ? hour sessions each week. Each week will have a different topic to focus on with the schedule as follows: Week 1: Introduction to Sexual Health, Opening Questions and Concerns Week 2: Sexual Myths Week 3: Decision-Making, Abstinence Week 4: Protecting Yourself/Contraceptives Week 5: Sexually Transmitted Diseases Week 6: Risky Sexual Behaviors, Sexual Violence Week 7: Re-Cap, Evaluations, Final Concerns During the first session, YUSH facilitators will lead the youth in icebreakers to introduce themselves to one another as well as complete opening surveys that address what each student expects to take away from the program. Also, within this session, there will be questions posed by students to be asked at that time or at the end of the program. Rules of the program will be explained, including maintaining respect for others and their privacy. Participation should be encouraged and questions welcomed (Powell & Cassidy, 2007, p. 103 – 105). YUSH presenters will use a variety of presentation methods in each of the courses including a formal method or informal. Using Week 5’s topic of STDs as an example, the formal method would involve a lecture format with handouts, notes and power point presentations. CFLE would have teens identify what they have learned through this information with quizzes and tests. The quizzes, which would be a combination of fill-in-the-blank and multiple choice answers, will address the different types of STDs, how to contract them, how they are spread, the symptoms of each and how to treat them. This method would also involve the distribution of pamphlets and brochures to sum up the week’s discussion. An informal method of presenting the information involves using games and scenarios to enhance the teens’ understanding of STDs. A Jeopardy format in which youth match symptoms to disease might also be an effective means of presenting the information. YUSH facilitators would also have the option of using various scenarios and role play models to show the ways that STDs are spread, contracted and treated. The Department of Public Health of Seattle and King County (2011) suggests an interactive activity for showing the ways that STDs spread by using several small cups of water, one cup with a water/vinegar mixture, and several pH paper slips. During several different rounds, students will mix the contents of their cups with other students. At the end of the activity, students dip their test strips to see who might be potentially â€Å"infected. † After someone has interacted with the vinegar mixture, or someone else who has interacted with that mixture, they are more than likely infected. The activity shows that even though it may not be visibly noticeable (because the vinegar mixture is still clear like the water); it’s easily spread if no protection is used. The fact that some students may have noticed the vinegar smell shows that though sometimes the symptoms may be noticeable, they can still be overlooked by others (p. 2 – 8). Another informal method of presenting the topics of the week would be via interactive methods such as projects, guest speakers, and field trips which exemplify that week’s information. Guest speakers would be extremely effective during Week 4’s discussion of protection and contraceptives. In this example, guest speakers would come from various family planning centers to show students the various contraceptives options that they can choose from and explain how to decide which ones best fit their lifestyles. Finally, the reasons for supporting and bringing this program to life will be evident in the evaluations of the program’s effectiveness, determined in the last week of YUSH and in the weeks afterwards. According to Powell & Cassidy (2007), the best way to determine the effectiveness of a family life, more specifically sexual education program, is to witness the changes in behaviors and attitudes (p. 185). As rates of teenage pregnancy and STDs decrease in areas that will have adopted the YUSH program, it will be very apparent that the program has worked and that youth were paying attention in the courses. Furthermore, surveys and questionnaires will be distributed on the last day of the program which will seek to determine how participants and parents feel about the knowledge gained in the program. The last day of class will also be used to wrap up the course by answering questions that haven’t been answered thus far and taking suggestions about any necessary aspects of the program. As a follow-up to the program, CFLEs will send additional newsletters to participants as well as invite them back to be program assistants at the next session of YUSH. References Department of Public Health: Seattle & King County (2011, January 1). STD Risks. Family Life and Sexual Health. Retrieved April 3, 2011, from http://www. kingcounty. gov/healthservices/health/personal/famplan/educators/FLASH. aspx Harper, C. , Henderson, J. , Schalet, A. , Becker, D. , Stratton, L. , & Raine, T. (2010). Abstinence and Teenagers: Prevention Counseling Practices of Health Care Providers Serving High-Risk Patients in the United States. Perspectives on Sexual & Reproductive Health, 42(2), 125-132. Retrieved April 3, 2011, from the EBSCO database. National Council on Family Relations. (2011, January 2). CFLE Certification. NCFR. Retrieved April 3, 2011, from http://www. ncfr. org/ Powell, L. H. , & Cassidy, D. (2007).

The Uses And Misuses Of Derivatives Finance Essay - Free Essay Example

Sample details Pages: 22 Words: 6534 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Compare and contrast essay Did you like this example? Hedge funds are pools of investment that invest in almost any opportunity in any market where they foresee impressive gains at reduced risk. Hedging refers to implementing strategies that manage or protect against an identified risk exposure. They take leveraged positions in publically traded equity, debt, foreign exchange and derivatives. Don’t waste time! Our writers will create an original "The Uses And Misuses Of Derivatives Finance Essay" essay for you Create order The primary aim of most hedge funds is to reduce volatility and risk while attempting to preserve capital and deliver positive returns under all market conditions (Friedland., 2008). Derivatives provide institutions the opportunity to break financial risks into smaller components and then to buy or sell those components to manage risk. Hedge funds hold a number of assets; they use derivatives to protect against the adverse price movement of these assets. Hedge funds play more of the role of speculators than of hedgers. They use derivatives when buying and selling assets and by putting long-short positions, they seek to hedge themselves against broad market moves while profiting from changes in the relative value of the instruments they go long or short. Hedge funds offer a variety of unique strategies to utilize when investing in hedge funds, these are called hedging techniques. These include Market Neutral Strategies, Event Drive / Special Situations Strategies, Long Short , Global Macro, Sector and Country, Dynamic Strategies, Funds of Funds, Funds of Funds of Funds etc. (https://www.global-derivatives.com) Market Neutral Strategies are used in Market Neutral Funds. They tend to take positions which offset each other through both a long and short position simultaneously to reduce their risk exposure. These strategies include Long Short and Convertible Arbitrage. Long-Short methodology attempts to reduce market risk by taking both long and short positions in the market. This can be done by taking a long position in undervalued assed and a short position in overvalued ones. In these funds, it is anticipated that the undervalued assets will increase in value than any losses incurred from the overvalued assets, or vice versa. Convertible arbitrage is a relatively more complex strategy. In this convertible securities such as convertible bonds which can be converted into normal shares or bonds are bought, to take advantage of any price discrepancies be tween the convertible security and that of the exchangeable underlying. A position can be taken for buying convertible security or selling the underlying asset to realise any difference in prices. (https://www.global-derivatives.com) Event Driven / Special Situations Strategies intend to make profit from events related to particular companies. Event Driven funds take a bet that something in the future will happen which will affect the company and its assets in a particular way. These funds include Distressed Securities and Merger/ Risk Arbitrage; these securities include debt and equity of companies undergoing reorganization or bankruptcy, it is hoped that companies will recover and increase in value. These securities have very low value and can be given to the management of a company during the restructuring process. Merger/Risk Arbitrage funds tend to analyze companies which are potential takeover or merger targets by taking two positions. An example of it would be to buy the s tocks of a company that is being acquired with hope that its prices will rise and to sell stocks of the company that is acquiring, in anticipation that its value might fall. (https://www.global-derivatives.com) Long Short is another strategy which includes buying and selling a security based on the sentiments in the market or of a company. It includes short selling, long, and growth fund. Short selling occurs when a person anticipates that the price will fall in future and sells a stock which it does not possess, through borrowing. If the price really falls in future, they buy the lot from the market at a lower price and return it to the one they borrowed from earlier at lower price, thus making a profit. Long is another strategy in hedge funds, it is a fixed income instrument that benefits from the rise in the price of the held asset. They often utilize leveraged positions to maximize returns. Global Macro is an economics based strategy which intends to benefit from shifts i n global economic conditions such as inflation, interest rates and other macro-economic factors; a common example of it is the use of interest rate derivatives for speculative purposes, they give profit from economic movements within particular countries. Sector and Country strategies include sector funds and emerging markets. Sector funds are hedge funds that specialize within a particular industry for example technology, textile etc. these investments consist of long or short positions in stock, debt, or even derivatives on the stocks. Emerging markets include funds that emphasize on emerging markets with less-developed economies and aim to profit from market growth which influence the securities positively. Securities in these hedge funds include sovereign debt or corporate securities with the anticipation that their prices will rise with economic growth. Dynamic strategies include elements such as market timings and opportunistic. Strategy of market timing involves the rig ht timing of the market. It includes making profit based on the correct timing of investments across markets by moving between various asset classes depending upon the view of the manager regarding the market environment. Opportunistic strategy involves switching across asset classes, they use a number of strategies mentioned above depending upon the managers discretion, and the reason for switching strategies is to make the most profit. (https://www.global-derivatives.com) Funds of funds is the strategy of hedge funds to invest in other hedge funds in order to diversify the risk and exposure. The success of these funds depends upon the managers way of handling the funds rather than the performance of the actual investments. Funds of funds of funds or F3s is a new concept to hedge the risk exposure in terms of investments by reducing the volatility of the funds itself. They are good for high risk-averse investors willing to invest in the hedge funds industry. (https://www.glob al-derivatives.com) Amaranth Advisors LLC (Amaranth) Formation and Background Amaranth comprises of Amaranth LLC and Amaranth Advisors LLC. It was founded by Nick Maounis (Maounis) in 2000 as a multi-strategy hedge fund with a special focus on convertible arbitrage (selling (short) equity stocks and at the same time buying (long) convertibles of the same company creating a delta neutral portfolio), with its headquarter in Greenwich, Connecticut and with approximately $600 million in capital. Maounis experience was in managing a number of various arbitrage accounts in the US, Japan, Europe and Canada. The aim was to make profits from the small discrepancies in prices of stocks and bonds, through its structure of three principal funds Amaranth Partners LLC, Amaranth Capital Partners LLC, and Amaranth International Limited and the 27 investment professionals. It sought to employ a group of arbitrage trading strategies particularly featuring convertible bonds, stocks of merging companies and utilities. However, Over the years, the trading activity of Amaranth expanded into merger arbitrage (making a riskless profit by purchasing individual stocks of two merging companies and selling them together), leveraged loans (loans given/extended to individuals or companies that already have large debts on their books), blank-check companies (developing companies) ,volatility trading arbitrage (buying or selling an option on an underlying instrument and selling or buying a varying percentage of the underlying instrument this to gain from the difference between the implied volatility of an option and forecasted future probable volatility of the corresponding underlying instrument), long/short equity, and energy trading. (ICMR, 2010) Strategy As noted above, at the time of formations and throughout its term, the firm emphasized that it was a multi-strategy hedge fund, but as it could be noted in the aftermaths that most of the firms investments and losses were in natural gas derivatives. Amaranths basic strategy comprised of trading in the Natural Gas market; the firm took a long position in winters, with hope that the prices will rise, especially when the demand for natural gas exceeds the supply and storage capacity due to the cold season. Its winter months were November, December, January, February and March. Amaranth used to take a short position in summers when it anticipated that the prices will fall. Part of its strategy also included taking short position in April and long position in March. Moreover, another strategy was to purchase call options on winter months and put options on non-winter months. Amaranth used to bet that natural gas prices will rise, and the spreads in March and April prices will rise as well. Nature of Natural Gas Market By nature, the natural gas market is very risky and volatile. Majorly because there is a commercial need for the commodity. This situation creates a need for an institution to control its supply and storage. In America, there has been inadequate storage capacity of natural gas for peak the winter season demand. Therefore the price of natural gas is higher in winters; firstly due high demand and secondly due to increase the incentives to store natural gas. These factors raise the prices of winter natural gas contracts to an all time high level. Apart from that, the market of natural gas is also volatile because the natural gas production in America is lower than the rise in the demand for natural gas. U.S. Natural Gas markets are shielded from the global energy factors because a very small amount of US natural gas need are met by imports of Liquid Natural Gas (LNG). Commodities trades require less margin money (collateral) than other markets. On the main exchanges, trades p ost 10 percent of their positions value, whereas in the stock market, 50 percent is common. (Davis, Sender, Zuckerman, 2006). After gaining credit from banks, it is very easy for commodity hedge funds to get highly leveraged quickly. Traders of natural gas have a number of options. The largest exchange for trading natural gas is the NYMEX (New York Mercantile Exchange) which has standardized futures contracts up to few delivery months up to 5 years that are traded on the exchange. Traders can also use ICE (Intercontinental Exchange) which is an over-the-counter market for trading natural gas futures contracts. There has been a lot of debate if hedge funds have an impact on energy trading. According to Gary Gensler (a former Goldman Sachs banker and treasury department official and chairman of the Commodity Futures and Trading Commission (CFTC) the chief regulator for energy futures energy trading said I believe that excessive speculation in commodity futures can cause sudde n or unreasonable fluctuations or unwarranted changes in commodity prices,. He also expressed his opinion that the rapid growth of commodity index funds and increased hedge fund allocation to commodity assets contributed to the bubble in commodity prices. (Delamaide, Jan 11, 2010) Performance The founders original expertise was in convertible bonds (Till, 2006). The firm later specialized in leveraged loans, blank-check companies and in energy trading. Till June 30th 2006, energy trades accounted for about half of the funds capital and generated about 75% of their profits. (Till, 2006) In 2002 Amaranth started trading with JP Morgan Chase, in energy commodity trading. The winters of 2003 were exceptionally cold and lasted till February, this raised the prices of natural gas manifolds, and this in turn gave huge profits to Amaranth due to its long position in winters. By 2004-5 Amaranth shifted most of its investments into energy trading. The company used to make huge profits from placing spread trades and placing bullish bets on energy in 2005. In the same year America was severely hit by Hurricane Katrina, which adversely impacted it natural gas and oil production and refining capacity. This raised the price of natural gas and Amaranth reaped huge profits out of it. The accounts of Amaranth LLC showed robust performance by the company since its inception. The compound annual return for the period September 2000-November 2005 according to media reports was 14.72 net of all costs. (Gupta Kazemi) The chart below shows Amaranths returns till May 2005. The chart compares the Amaranths returns against CISDM Equal Weighted Hedge Fund Index and CISDM Convertible Arbitrage Index. Amaranth had gained a noteworthy position in May 2005, in CISDM Equal Weighted Hedge Fund Index. The chart show the volatility Amaranth was facing in May 2005, this volatility had brought high returns in the past but things then started taking the turn towards the wrong side. Amaranths returns; source: (Gupta Kazemi) NYMEX (New York Mercantile Exchange) noticed Amaranths considerable open interest of 51% in Aug 2006 in September natural gas futures contract, which would expire at the end of the month. NYMEX (New York Mercantile Exchange) brought its concerns i nto notice to Amaranth. Amaranth not only reduced their September but also Octobers positions, as per the directions of NYMEX (New York Mercantile Exchange). Alongside Amaranth increased their positions in October and September positions under ICE contracts, thus escalating their overall positions in natural gas. (Gupta Kazemi) According to US Securities and Exchange Commission filings, investors in Amaranths funds included a number of Wall Street banks including Morgan Stanley, Credit Suisse Group and Deutsche Bank AG. (Burton Leising, 2006) Amaranth was marketing energy and commodities fund to open in December 2006 of about $5 billion. The fund was to be managed by Hunter and Jeff Baired, co-head of Amaranths Global energy and commodities business. But unfortunately the events that followed didnt allow it to happen. (Burton Leising, 2006) Collapse and Beyond Amaranth used to bet that natural gas prices will rise, and the spreads in March and April prices will rise as well. However in 2006, so did not happen and gas prices began to decline due to rising inventories leaving Amaranth on the wrong side of the market trend and consequently reducing its portfolio value of $9.2 billion by less than half. Headed by Brian Hunter, it seemed that Amaranth had not anticipated the rise in the natural gas storage capacity, and the weather pattern bringing a warmer winter. It was in a weeks time that Amaranth lost 65% of its $9.2 billion assets. On September 14 alone, the fund lost $681 million from its natural gas exposure. On September 20th 2006, Amaranth sold its entire energy trading portfolio in a flurry to J.P. Morgan Chase and Citadel Investment Group. It did so at significant discounts to the portfolios then mark-to-market value. (Till, 2006) At the time of liquidation of Amaranth, the spread on gas future declined. The spread on positions held by Amaranth were $2.85 in late August, but after the liquidation had reached below $0.75. (MORGENSON ANDERSON, September 20, 2006). This indicates the lower price expectations in both the bid and ask price for every $1 invested in Amaranths holdings. When Amaranth Advisors LLC announced that it had suffered losses just as big as LTCMs, markets did not respond for Amaranth the way as they did for LTCM (Long Term Capital Management). New York Fed did not hold summit meeting for a bailout plan; but JP. Morgan Co. and Merrill Lynch Co started selling off Amaranths portfolio of natural gas futures. The co-founder of Energy Hedge Fund Centre (which tracks 520 energy funds) said, There is not systematic risk. The market can absorb this. (Mufson, 2006). The reasons for such a reaction were that, firstly Amaranth (although was doing rash trading) but borrowed less heavily and had less leverage than LTCM (Long Term Capital Management); secondly its positions were small er and focused in natural gas futures. LTCM s failure threatened the stability of banks, whereas Amaranths failure only hurt imprudent investors in the natural gas market who hadnt done any research before investing. Amaranths co-founder and chief executive, Nicholas Maounis, said in his letter to investors that the fund was aggressively reducing our natural gas exposure to meet payments to creditors. The said that there was large scale fluctuations in the value of the fund, which was up sharply in August, would be down 35 percent for the year after the sell-off. Later Maounis said that the conditions in the natural gas market deteriorated and market liquidity dried up so quickly that the fund was unable to unwind its energy positions. He said it became clear that we couldnt trade out of it. Amaranth had no choice but to sell its positions at a huge loss because the fund was faced with margin calls and couldnt borrow anymore because of the liquidity problem that emerged once news of its losses hit the market. Maounis apologized to the institutional investors, pension funds and wealthy individuals who lost money as a result of the bad trades. He said We feel bad about losing our money. We feel even worse about losing your money. (CBC-News, 2006) Officially at Amaranth desperately tried to sell the fund to Citigroup. But despite the extensive talks and negotiations, Citigroup decided to walk away from making any deal. (Taulli, Sep 29th 2006 ) On July 25, 2007, the Commodity Futures Trading Commission (CFTC) charged Amaranth and head energy trader Brian Hunter with Attempted Manipulation of the Price of Natural Gas Futures including making false statements to the New York Mercantile Exchange (NYMEX). The Federal Energy Regulatory Commission has also charged Amaranth and its traders with market manipulation. Amaranth filed a lawsuit against JP Morgan claiming US$ 1 billion in damages, on the grounds that the bank interfered in the companys work to make a deal with Goldman Sachs and Citadel Investments. The Federal Energy Regulatory Commission (FERC) later announced a settlement with Amaranths defendants. However Commodity Futures Trading Commission (CFTC) did not withdraw its charges on Amaranth and on August 12, 2009, the federal court ordered Amaranth to pay a $7.5 million civil monetary penalty. The court also enjoins Amaranth from violating the anti-manipulation provisions of the Commodity Exchange Act. (Release, 2009) Amaranth then sued Touradji and his employees (Touradji Capital Management LP), by filing a complaint on September 18, 2006 in New York Supreme court in Manhattan, seeking at least $350 million for claims including breach of contract and misappropriation of trade secrets. Amaranth says that Touradji Capital Management LP breached two contracts agreed to in September 2006 regarding the transfer and purchase of Amaranths base-metals portfolio. According to the official documents, Touradji Capital Managem ent LP used the information to recover profits obtained by defendants through improper trading practices and misuse of plaintiffs propriety and confidential information. Maounis, through a spokesman, refused to comment on the Touradji Capital Management LP suit (Chanjaroen, 2006). However in September 2009, Amaranth withdrew the summon it filed against Touradji Capital Management. Neither of the parties made a payment of any kind due to the withdrawal of notice. After the fall of Amaranth, Goldman Sachs was quick to come into action, and struck a deal to take over hedge fund manager of Amaranth Advisor LLCs lease at Greenwich America. Goldman occupied about 124,000 square feet at the property, which had served at Amaranths headquarters before the company was wound up in September. Amaranths lease was to expire in at the end of 2015 and had a rate of about $35 per square foot. (Ambroz, April 10, 2007) Internal control or Management of Amaranth Maouniss original expertise was in convertible bonds. In mid 2004 Maounis hired Brian Hunter (Hunter) an energy trader who was working for Deutshe Bank energy trading desk. Calgary-based Hunter was Amaranths head energy trader, who was given a free hand to trade the commodity market, due to his past experience of taking huge positions and making huge profits in the natural gas market. Maounis was impressed that Hunters made hundreds of millions of dollars (around 1 billion) for the firm in 2005 after Hurricane Katrina sent natural gas prices soaring, made the 32-year-old Canadian a co-head of commodities trading. Maounis let Hunter increase the size of his natural gas positions so that they became more than half of the entire firms exposure. This was against Amaranths claim of maintaining a multi-strategy fund. Before Hunters arrival, all commodities positions made up about 20 percent of Amaranths portfolio with natural gas having roughly 7 percent share. Amaranths partners h ad a confidence built on past success and they thought that they had a fool-proof strategy (taking long position in winters and short in summers); the company had reaped huge profits in 2002-2005 from this strategy. Amaranths website said moving nimbly and effectively within an ever-changing investment landscape and said that its employees possess fearlessness with respect to complexity, learning, as well as invention, and continuously strive for perfection. Maounis, said he had chosen the companys name, which means unfading in Greek. According to the wall street journal, Brian Hunters had so much success in trading natural gas futures, or bets, on the future prices of the commodity, that Amaranth allowed him to work from his home in Calgary, where he drove a Ferrari in summer and a Bentley in winters. (Hedge fund: a gamble too far, 2006, September 20). Analysts estimate that in order to fund his positions, Hunter was borrowing $8 for every $1 of Amaranths own funds. When the bet went in his favour, he could pay back the debt and keep the rest of the profit for Amaranth. As the bets started to go against him September 2006, his borrowing amplified his losses. (Hedge fund: a gamble too far, 2006, September 20). It is commonly believed that hedge funds improve the efficiency of the financial markets by introducing liquidity and innovation (Hedge fund: a gamble too far, 2006, September 20). However Amaranths collapse shows that the hedge fund managers earn for their lavish salaries only and not for the investors who have put up their earnings and savings in their funds. Operational risk is the risk associated with the internal management of the company and the probability of making wrong decisions that might harm the performance of the firm. Amaranth seemed to be suffering highly from operational risk. Hunters had a target of making $2 billion for the year at the end of August 2006. Analysts comment of such a target that Hunters must have had an unconsci ously large position for this market, One of the biggest players in the energy markets, such as Goldman Sachs Group, would take up positions less than a tenth as big as Hunters, traders said. Hunter was involved in rash trading in the market as his positions were often twice as big as the next biggest. It is also said that in Amaranth, there was an exclusive risk manager for every trading book, who sat with the risk takers on the trading desk. (https://www.icmrindia.org/casestudies/catalogue/Finance/Collapse-Amaranth%20Advisors-Case%20Studies.htm#Risk_Management)The risk managers were well qualified and had advance degrees. Paul Touradji, founder and managing partner of Touradji Capital Management, said was obvious about risk control and not about commodities. Touradji admitted that he exited the natural gas market for a year because Amaranth had entered the market, comparing its presence with that of well-financed poker player sitting down with poorer players and making big b ets. I cant think of a right counterstrategy other than to say, I am going to be at the bar until youre done, Touradji said. (https://www.hedgefundintelligence.com/Event.aspx?ProductID=7035ElementID=4983, 2006) Problems Diversification is the key element of all investment portfolios. It reduces the unsystematic risk of instability in any part of the economy. Amaranth specialized in the natural gas industry so much that it failed to realise that if it took any incorrect venture at any point in time, it would not have to face severe consequences. This is counted as a factor of poor risk management. One of the biggest issues with hedge funds is that there is lack of transparency for investors and they have no idea as to what the fund is doing with their money. Most hedge funds make money with the performance fees that are generated when the fund achieves larger gains; the bigger the gains the larger the fees for the hedge funds. If the funds stays still or falls, the performance fee is exactly the same. This type of fee structure can force hedge fund traders to implement exceedingly risky strategies. Much of the blame for what happened to Amaranth is being put on Brian Hunters, although he had a strategy, experience and understanding in the natural gas market; which worked well with various weather shocks, but the fund manager failed to take into account the rise in storage capacity of natural gas. The arrival of a relatively warm winter did not raise the demand of natural gas as much as in the previous years. These factors did not increase the price of natural gas as much, thus creating problems for Amaranth which has a long position. Amaranth was operating on a high leverage. As told earlier, Amaranth was operating on an 8:1 of debt to equity ratio. This amplified the credit problems for Amaranth because once it started facing liquidity problems; it ran out of cash to maintain its cash flows. After its collapse but before liquidating, Amaranth placed restrictions on its investors to withdraw holdings of cash. That is, they were allowed to withdraw for certain number of days but were required to submit the amount before the end of the term because inability to do s o resulted in a penalty. Investors were not allowed their savings beyond 7.5% of their savings. (MORGENSON ANDERSON, September 20, 2006). The bankruptcy of funds causes damage to a number of individuals and companies that have their stake with them. In the Case of Amaranth, Morgan Stanley, invested $126 million, or about 5 percent, of its $2.3 billion funds of hedge funds in Amaranth. Even New York Fed Governor Timothy F. Geithner warned that hedge fund failures could hurt market participants other than those investors and lenders who have chosen to do business directly with those funds. (Mufson, 2006). This is because the instability created in the market (because of the bankruptcy of the company and the loss of a lot of people) can result in a systemic risk, which influences other sectors as well. It is commonly said that Amaranths systems did not measure risks correctly and did not take steps that would reduce the risk. The risk models that were employed by hedge funds use historic data, but the natural gas markets in 2006 were more volatile than any other year since 2001, making models less useful. A managing director of Lyster Watson Co, an advisory firm that invests in hedge funds for clients but not with Amaranth said, It was a total failure of risk control to put your entire business at risk and not seem to know it. They were more leveraged than they realised. (Davis, Sender, Zuckerman, 2006). Lessons to be learnt Derivatives as we know are risky sources of investments, and there a number of lessons that one can learn from the incident of Amaranth. Before making an investment (esp. in sector fund) it is important to analyze the performance of the sector relating to the profits and losses, during the past few years. A monthly sector analysis reveals that a -24% monthly loss is normal and the monthly volatility of the energy strategies was around 12% (Till, 2006), therefore due consideration should be made by investors before investing in such an industry. The second factor that fund managers should consider is of marketability or liquidity, which is the ease with which the contracts can be sold into the market again. The exchange traded futures market of natural gas contracts is way smaller than the over-the-counter natural gas positions. This should put the question in investors minds that in case the market of natural gas declines so how will they sell their contracts and liquidate their position. The strategy of Amaranth did not include an exit strategy. The following case of MotherRock also proves this point. Before the fall of Amaranth, on August 2, 2006 MotherRock, a natural-gas-oriented hedge fund had announced that it was shutting down, its losses had reached up to $300 million; it had made a wrong short position and was therefore forced to liquidate due to mounting losses. This should have sent alarming bell to the investors in Amaranth to secure their position in the market and they make sure that the dont face liquidity risk in near future (liquidity risk explained later). All successful investors have an exit strategy as part of their main strategy; liquidity is one of the four core factors to consider when investing in the market, these factors are risk, return, liquidity and maturity. Liquidity risk includes the risk that liabilities cannot be met when they fall due and can only be met at an uneconomic price. This risk can be accounted for by wide ning the bid/offer spread. An institution might lose liquidity if its credit ratings fall, it experiences sudden unexpected cash outflows or some other event that causes the counterparties to avoid trading with or lending to the institution. A firm can also be exposed to liquidity risk if markets on which it depends are subject to loss of liquidity. Liquidity risk tends to compound other risks. If a trading organization has a position in an illiquid asset, its limited ability to liquidate that position at short notice will compound its market risk. Suppose a firm has offsetting cash flows with two different parties on a given day. If the counterparty that owes it a payment defaults, the firm will have to raise cash from other sources to make its payment. Should it be unable to make its payment, it will default too. Here liquidity risk is compounding credit risk. A position can be hedged against market risk, through diversification of the portfolio by including assets with different unsystemic risks, but still has liquidity risk. Amaranths investments were high-risk funds that lacked liquidity due to the nature of the natural gas futures market. They did not have any counter party to take their position under a week, when they needed it most. One reason that can explain this liquidity problem is that the counter parties had already locked their position in the forward contracts relating to production or storage. It seemed that due to their past experience, of success in assuming long position in winters and short position in summers, Amaranth failed to anticipate the liquidity risk they were getting into by being unable to find a counter party. (Till, 2006). This was the job of the funds risks managers to employ scenario analysis based on this past events. Taking all the factors mentioned above proves that Amaranth was taking immense risk with respect to liquidity. Amaranth was giving the natural gas comodity market a service by providing liquidity to the participants who could lock in the value of future production or storage contracts. However the scale of its services was way larger than its capital base; that is, Amaranth was operating on very high leverage. One of the most important lessons to be learnt from this incident is that risk management can look good and sound well yet still be very weak. After the collapse of Amaranth, Nicholas Maounis, told his investors that Amaranths risk management gurus thought it was highly remote that Amaranth would lose the natural gas bet. He defended the full-time, well-credentialed and experienced risk professionals who were modelling and monitoring the energy portfolios risks. Sometimes, even the highly improbable happens. That is what happened in September. (ANDERSON, 2006) On the other hand, a number of analysts thought that Amaranth failed to notice the changes in weather and the less likelihood of a natural disaster in the near future. Kent Bayazitoglu, head quantitative analyst wit h Gelber Associates, an energy consulting firm said, Given the bearish conditions, there was a more than 50 percent likelihood this would happen. The question was when. (ANDERSON, 2006). The Amaranth Advisors outcome is a classic case that demonstrates the pitfall of a quantitative approach to risk management. Companies that use quantitative approach to risk management, based on analysing data to control risk is an out dated and useless method. In the world of today, there is a need to adopt a more forward looking approach ERM Enterprise Risk Management includes the best practices and scenario based approach for a more balanced and comprehensive view of risk. According to Steven Minsky, who is the CEO of LogicManager, ERM is a process comprised of a series of iterative and sequential steps to enable continuous improvement in decision making and performance with regards to the reduction of uncertainty within an organization. ERM formalizes risk tolerance to acceptable levels. This approach addresses the root cause of potential future problems rather than monitor transactions for historic symptoms. He tells that the Amaranth Advisors acted in a very brash manner and took steps being over confident on their quantitative and historic methods of calculating risk, which eventually proved outdated. (Minsky) The episode of Amarant halso shows that mutual funds in comparison, are actually a good investement. They provide diversification and low cost (hedge funds have high fee structures). Mutual funds are more transparent and provide investors with more information about the number, type and trade in stocks. Timeline of Amaranths collapse Source: (Chincarini, 2006) Regulatory control during that time In hearing about Amaranth before various House and Senate committees as well as at the CFTC itself, it became clear, at least to many lawmakers, that contracts on unregulated trading venues can influence prices. This case was so straightforward that the Federal Energy Regulatory Commission to flex its new post-Enron mandate to stop manipulation of energy prices by pursuing disciplinary action against Amaranth. (Delamaide, Jan 11, 2010) Amaranth was registered as a commodity pool operator with the Commodity Futures Trading Commission (CFTC), is a member of the National Futures Association and counted among the its affiliates two SEC-registered broker dealers who are members of the National Association of Securities Dealers and one investment counsel and portfolio manager registered with the Ontario Securities Commission. And at least on paper, Amaranth did devote significant resources to regulatory compliance and was subject to many compliance obligations. (Amaranth, Hedge Fund R isk Management and Pensions, 2006) The trading of natural gas derivatives on hedge funds provides a level of predictability in the natural gas market. Traders can access these markets through New York Mercantile Exchange (NYMEX), for exchange-traded contracts; and Intercontinental Exchange (ICE) for over-the-counter contracts. As told earlier that when NYMEX (New York Mercantile Exchange) noticed Amaranths open interest of 51% in Aug 2006 in September natural gas futures contract, which would expire at the end of the month. NYMEX brought its concerns into notice to Amaranth. As a result Amaranth reduced their September and Octobers positions, as per the directions of NYMEX; but increased its positions in October and September positions under ICE contracts, thus escalating overall positions in natural gas. The collapse of Amaranth could have been avoided if ICE (Intercontinental Exchange) had the same authority as NYMEX (New York Mercantile Exchange) to limit Amaranths open interest. NYMEX (New York Mercantile Exchange) had the authority to direct Amaranth or any other company to reduce its open interest in NYMEX (New York Mercantile Exchange). However ICE did not have the authority to do so. The agency that regulates commodities market is called Commodity Futures Trading Commission (CFTC). This commission collects daily information on trades and positions from the clearing firms that operate on NYMEX (New York Mercantile Exchange). It demands traders with large positions to report their holdings and can demand disclosure if it finds an anomaly during surveillance. Amaranth started trading on ICE, which is an over-the-counter market; as a result Commodity Futures Trading Commission (C.F.T.C.) got limited information about the hedge funds trading and holdings. Traders with large positions on NYMEX (New York Mercantile Exchange) and other large futures exchanges only are required to disclose their position to the regulators. According to the Commod ity Futures Modernization Act 2000, the authority of regulators to collect information on over-the-counter markets is limited. (MORGENSON ANDERSON, September 20, 2006) After the collapse of Amaranth Commodity Futures Trading Commission (CFTC) and Federal Energy Regulatory Commission (FERC) had filed the lawsuit Amaranth and two of its traders- Matthew Donhoe (Donhoe) and Brian Hunters (Hunters) , alleging that they had manipulated natural gas market prices through their trading activities in February and April 2006. Commodity Futures Trading Commission (CFTC) had originally charged US $20 million and FERC (Federal Energy Regulatory Commission) had sought US $ 291 million in fines from Amaranth and its traders. These charges were later settled at a total of $7.5 million. Moreover it was found that Amaranth was exploiting the gap between the regulatory regimes of Federal Energy Regulatory Commission (FERC) and Commodity Futures Trading Commission (CFTC). FERC (Federal Energy Re gulatory Commission) alleged the following in their case order: Amaranth and its traders intentionally manipulated the settlement price of the NG Futures Contract knowing that the NG Futures Contract settlement price is explicitly used to price a substantial volume of Commission-jurisdictional natural gas transactions (namely, physical basis transactions, described below, and the various monthly indices that are calculated using physical basis transactions). Accordingly, the Respondents intentionally or recklessly manipulated prices in connection with Commission-jurisdictional transactions, and thus violated the Commissions Anti-Manipulation Rule (https://www.dykema.com/publications/docs/EnergyLaw360.pdf) Mr. Hunter is still not exempted from the charges on him. According to an analysis, it was found that the price movements of Amaranth were consistent with the manipulative scheme alleged by FERC. Mr. Hunter has claimed that there was no abnormal price fluctuation; however, t here is significant evidence that prices were driven downward and subsequently recovered, consistent with the alleged manipulation. There are also evidences that Amaranths trading behaviour during the issue time periods of contracts was unusual when compared with the behaviour of other market participants and Amaranths own historical records. Nine of ten Amaranths defendants agreed to pay $7.5 million. The case then proceeded against the sole remaining defendant, Mr. Hunter. (Dr.King). On the other hand Hunters attorney Michael Kim of Krobe Kim LLP told Reuters Friday, When the case is fully examined, we are confident that Brian Hunter will be vindicated. (Levin, May 27, 2008) Legislation brings more visibility to the market and strengthening the hands of regulators will ensure that hedge fund activity in the energy markets will be more closely monitored and limited. These are some of the most relevant information from news papers and other sources. 1 By September 22, 2 006 the NAV of the fund has decreased 65% month-to-date and 55% year to date.  [1] 2 On September 14, 2006 the funds experience roughly $560 million in trading losses on natural gas positions.  [2] 3 By February 28, 2006 approximately 39% of the funds capital was allocated to energy and commodities portfolio.  [3] 4 Amaranth sometimes held positions to buy or sell tens of billions of dollars of commodities.  [4] 5 Amaranths overall fund gained around 6% in June, was roughly flat in July, and rose 6% in August according to investors.  [5] 6 It had $9 billion at the start of September  [6] 7 Spreads and options are of their very nature instruments allow the user to capture upside with a much clearer understanding with respect to downside exposure.  [7] 8 Mr. Hunter sometimes held 100,000 positions in a single contract  [8] 9 People familiar with the trades say he bet prices for near-by month contract would fall and winter contracts would rise.  [9] 10 Some of Amaranths trades wagered that prices for natural gas futures contracts for March 2007 would be much higher than those for April 2007  [10] 11 UBP officials said 80% of Amaranths performance last year and most of its performance this year was driven by energy investments suggesting there might not be much else  [11] 12 The New York Mercantile Exchange told Amaranth LLC that the natural gas bets were too big a month before the trades led to a $6 billion loss  [12] Source: (Chincarini, 2006)

The Impact of Stalin on Russia and the Russian People Essay

The Impact of Stalin on Russia and the Russian People Joseph Stalin was born to a poor family in the province of Georgia in 1879. Stalins real surname was Djugasvili; he adopted the name Stalin whilst in prison as he felt the translation Man of Steel would help his image. Stalin joined the Bolshevik party as a young man and soon became an active member organizing bank raids to gain money for party funds; this led to Stalins imprisonment a number of times. Stalin first met Lenin in December 1905 in Finland and was quite surprised to see him as an ordinary man unlike the person he had imagined. In 1918 Stalin was made Commissar for Nationalities of the Bolshevik party, then in 1922 he became†¦show more content†¦Stalin was extremely ambitious and his initial taste of power had made him even more egotistical. Trotsky fled but was hunted down and eliminated to ensure Stalin retained power. The long term effects of this ensured that future opponents of Stalin would also be eliminated. With Lenin dead and Trotsky eliminated Stalin realized he was now able to concentrate on his own policies. He abandoned Lenins idea of World Revolution and adopted his own policy of Socialism in One Country. He began with state control of Industry and Agriculture. This led to Stalin adopting his Five Year Plans for Industry and Collectivisation of Agriculture. An organisation called GOSPLAN was created to plan everything out. The first five-year plan was created to improve heavy industries production such as coal, oil, iron, steel and electricity. The second continued to emphasise on heavy industry but also made a commitment to communication systems such as railways. The third put an emphasis on weapon production, as war did seem to be approaching. The long-term effects of this were that Russia was able to withstand German invasion in World War Two and drive back the German forces. Stalins adoption of the Five Year Plans proved to be very successful. 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