Financial instruments

[edit] Spot
A spot transaction is a two-day delivery transaction (except in the case of the Canadian dollar and the Mexican Nuevo Peso, which settle the next day), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the spot market. Spot transactions has the second largest turnover by volume after Swap transactions among all FX transactions in the Global FX market.


[edit] Forward
See also: forward contract
One way to deal with the foreign exchange risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a one day, a few days, months or years. Usually the date is decided by both parties


[edit] Future
Main article: currency future
Foreign currency futures are exchange traded forward transactions with standard contract sizes and maturity dates — for example, $1000 for next November at an agreed rate [4],[5]. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.


[edit] Swap
Main article: foreign exchange swap
The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.


[edit] Option
Main article: foreign exchange option
A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world.


[edit] Exchange Traded Fund
Main article: exchange-traded fund
Exchange-traded funds (or ETFs) are open ended investment companies that can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the S&P 500 (e.g., SPY), but recently they are now replicating investments in the currency markets with the ETF increasing in value when the US Dollar weakens versus a specific currency, such as the Euro. Certain of these funds track the price movements of world currencies versus the US Dollar, and increase in value directly counter to the US Dollar, allowing for speculation in the US Dollar for US and US Dollar denominated investors and speculators.


[edit] Speculation
Controversy about currency speculators and their effect on currency devaluations and national economies recurs regularly. Nevertheless, economists including Milton Friedman have argued that speculators ultimately are a stabilizing influence on the market and perform the important function of providing a market for hedgers and transferring risk from those people who don't wish to bear it, to those who do.[16] Other economists such as Joseph Stiglitz consider this argument to be based more on politics and a free market philosophy than on economics.[17]

Large hedge funds and other well capitalized "position traders" are the main professional speculators.

Currency speculation is considered a highly suspect activity in many countries. While investment in traditional financial instruments like bonds or stocks often is considered to contribute positively to economic growth by providing capital, currency speculation does not; according to this view, it is simply gambling that often interferes with economic policy. For example, in 1992, currency speculation forced the Central Bank of Sweden to raise interest rates for a few days to 500% per annum, and later to devalue the krona.[18] Former Malaysian Prime Minister Mahathir Mohamad is one well known proponent of this view. He blamed the devaluation of the Malaysian ringgit in 1997 on George Soros and other speculators.

Gregory J. Millman reports on an opposing view, comparing speculators to "vigilantes" who simply help "enforce" international agreements and anticipate the effects of basic economic "laws" in order to profit.[19]

In this view, countries may develop unsustainable financial bubbles or otherwise mishandle their national economies, and foreign exchange speculators allegedly made the inevitable collapse happen sooner. A relatively quick collapse might even be preferable to continued economic mishandling. Mahathir Mohamad and other critics of speculation are viewed as trying to deflect the blame from themselves for having caused the unsustainable economic conditions. Given that Malaysia recovered quickly after imposing currency controls directly against IMF advice, this view is open to doubt.

Political conditions
Internal, regional, and international political conditions and events can have a profound effect on currency markets.

All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in India, Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.


[edit] Market psychology
Market psychology and trader perceptions influence the foreign exchange market in a variety of ways:

Flights to quality
Unsettling international events can lead to a "flight to quality," with investors seeking a "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The Swiss franc has been a traditional safe haven during times of political or economic uncertainty.[12]
Long-term trends
Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends. [13]
"Buy the rumor, sell the fact"
This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought".[14] To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.
Economic numbers
While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.
Technical trading considerations
As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form apparent patterns that traders may attempt to use. Many traders study price charts in order to identify such patterns.[15]

[edit] Algorithmic trading in foreign exchange
Electronic trading is growing in the FX market, and algorithmic trading is becoming much more common. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.[citation needed]

An algorithmic trader needs to be mindful of potential fraud by the broker. Part of the weekly algorithm should include a check to see if the amount of transaction errors when the trader is losing money occurs in the same proportion as when the trader would have made money.

Forex

Determinants of FX Rates
See also: exchange rates
The following theories explain the fluctuations in FX rates in a floating exchange rate regime (In a fixed exchange rate regime, FX rates are decided by its government):

(a) International parity conditions viz; purchasing power parity, interest rate parity, Domestic Fisher effect, International Fisher effect. Though to some extent the above theories provide logical explanation for the fluctuations in exchange rates, yet these theories falter as they are based on challengeable assumptions [e.g., free flow of goods, services and capital] which seldom hold true in the real world.

(b) Balance of payments model (see exchange rate). This model, however, focuses largely on tradable goods and services, ignoring the increasing role of global capital flows. It failed to provide any explanation for continuous appreciation of dollar during 1980s and most part of 1990s in face of soaring US current account deficit.

(c) Asset market model (see exchange rate) views currencies as an important asset class for constructing investment portfolios. Assets prices are influenced mostly by people’s willingness to hold the existing quantities of assets, which in turn depends on their expectations on the future worth of these assets. The asset market model of exchange rate determination states that “the exchange rate between two currencies represents the price that just balances the relative supplies of, and demand for, assets denominated in those currencies.”

None of the models developed so far succeed to explain FX rates levels and volatility in the longer time frames. For shorter time frames (less than a few days) algorithm can be devised to predict prices. Large and small institutions and professional individual traders have made consistent profits from it. It is understood from above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.

Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.


[edit] Economic factors
These include: (a)economic policy, disseminated by government agencies and central banks, (b)economic conditions, generally revealed through economic reports, and other economic indicators.

Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).
Economic conditions include:
Government budget deficits or surpluses
The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.
Balance of trade levels and trends
The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.
Inflation levels and trends
Typically a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising [. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
Economic growth and health
Reports such as GDP, employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.
Productivity of an economy
Increasing productivity in an economy should positively influence the value of its currency. It affects are more prominent if the increase is in the traded sector [3].

Production

464-49 to B-52AIn May 1948 AMC asked Boeing to incorporate the previously discarded, but now more fuel-efficient, jet engine into the design. This resulted in Boeing developing yet another revision — in July 1948, Model 464-40 substituted Westinghouse J40 turbojets for the turboprops.[15] Nevertheless, on 21 October 1948, Boeing was told to create an entirely new aircraft using Pratt & Whitney J57 turbojets.


XB-52 Prototype on flight line (X-4 in foreground).On 25 October, Boeing engineers produced a proposal and a hand-carved model of 464-49.[16] The new design built upon the basic layout of the B-47 Stratojet with 35° swept wings, eight engines paired in four underwing pods, and bicycle landing gear with wingtip outrigger wheels. A notable feature of the landing gear was the ability to pivot the main landing gear up to 20° from the aircraft centerline to increase safety during crosswind landings.[17] The aircraft was projected to exceed all design specifications.[3] Although the full-size mock-up inspection in April 1949 was generally favorable, range again became a concern since the J40s and the early model J57s had excessive fuel consumption.


Side view of YB-52 bomberDespite talk of another revision of specifications or even a full design competition among aircraft manufacturers, General LeMay, now in charge of Strategic Air Command, insisted that performance should not be compromised due to delays in engine development.[18] In a final attempt to increase the range, Boeing created the larger 464-67, stating that once in production, the range could be further increased in subsequent modifications.[19] Following several direct interventions by LeMay,[20] on 14 February 1951 Boeing was awarded a production contract for 13 B-52As and 17 detachable reconnaissance pods.[21] The last major design change, also at the insistence of General LeMay, was a switch from the B-47 style tandem seating to a more conventional side-by-side cockpit which increased the effectiveness of the copilot and reduced crew fatigue.[22] Both XB-52 prototypes featured the original tandem seating arrangement with a framed bubble-type canopy.[23]


The YB-52 prototype with the bubble canopy is similar to that of the B-47The YB-52 (actually, the second XB-52 with more operational equipment) first flew on 15 April 1952,[24] a 2 hour 21 minute flight from Renton Field in Renton, Washington to Larson AFB with Boeing test pilot Alvin M. Johnston and Air Force Lieutenant Colonel Guy M. Townsend.[25][26] The XB-52 followed on 2 October 1952. The thorough development,[27] including 670 days in the wind tunnel and 130 days of aerodynamic and aeroelastic testing, paid off with smooth flight testing. Encouraged, the Air Force increased its order to 282 B-52s.[28]

Only three of the 13 B-52As ordered were built. All were returned to Boeing, and used in their test program.[29] On 9 June 1952 the February 1951 contract was updated to order the aircraft under new specifications. The final ten—the first aircraft to enter active service—were completed as B-52Bs.[29] At the roll out ceremony on 18 March 1954, Air Force Chief of Staff, General Twining said:

“ The long rifle was the great weapon of its day. ...Today this B-52 is the long rifle of the air age.[30] ”

b52

Development

[edit] Background
On 23 November 1945, Air Materiel Command (AMC) issued desired performance characteristics for a new strategic bomber "capable of carrying out the strategic mission without dependence upon advanced and intermediate bases controlled by other countries".[7] The aircraft was to have a crew of five plus turret gunners, and a six-man relief crew. It had to cruise at 300 mph (240 kn, 480 km/h) at 34,000 feet (10,400 m) with a combat radius of 5,000 statute miles (4,300 nmi, 8,000 km). The armament was to consist of an unspecified number of 20 mm cannon and 10,000 pounds (4,500 kg) of bombs.[8] On 13 February 1946, the Air Force issued bid invitations for these specifications, with Boeing, Consolidated Aircraft, and Glenn L. Martin Company submitting proposals.[8]

On 5 June 1946, Boeing's Model 462, a straight-wing aircraft powered by six Wright T35 turboprops with a gross weight of 360,000 pounds (160,000 kg) and combat radius of 3,110 statute miles (2,700 nmi, 5,010 km), was declared the winner.[9] On 28 June 1946, Boeing was issued a letter of contract for US$1.7 million (1946 dollars) to build a full-scale mock-up of the new XB-52 and do preliminary engineering and testing. However, by October 1946, the Air Force began to express concern about the sheer size of the new aircraft and its inability to meet the specified design requirements.[10] In response, Boeing produced Model 464, a smaller four-engine version with a 230,000 pound (105,000 kg) gross weight, which was briefly deemed acceptable.

Then, in November 1946, the Deputy Chief of Air Staff for Research and Development, General Curtis LeMay, expressed the desire for a cruise speed of 400 miles per hour (345 kn, 645 km/h), to which Boeing responded with a 300,000 pound (140,000 kg) aircraft.[11] In December 1946, Boeing was asked to change their design to a four-engine bomber with a top speed of 400 miles per hour, range of 12,000 statute miles (10,000 nmi, 19,000 km), and the ability to carry a nuclear weapon. The aircraft could weigh up to 480,000 pounds (220,000 kg).[11] Boeing responded with two models powered by the T-35 turboprops. The Model 464-16 was a "nuclear-only" bomber with a 10,000 pound payload, while the Model 464-17 was a general purpose bomber with a 90,000 pound (40,000 kg) payload. Due to the cost associated with purchasing two specialized aircraft, the Air Force selected Model 464-17 with the understanding that it could be adapted for nuclear strikes.[11]

In June 1947, the military requirements were updated and the Model 464-17 met all of them except for the range. It was becoming obvious to the Air Force that, even with the updated performance, the XB-52 would be obsolete by the time it entered production and would offer little improvement over the Convair B-36.[12] As a result, the entire project was put on hold for six months. During this time, Boeing continued to perfect the design which resulted in the Model 464-29 with a top speed of 455 miles per hour (395 kn, 730 km/h) and a 5,000-mile range.[12] In September 1947, the Heavy Bombardment Committee was convened to ascertain performance requirements for a nuclear bomber. Formalized on 8 December 1947, these called for a top speed of 500 miles per hour (440 kn, 800 km/h) and an 8,000 statute mile (7,000 nmi, 13,000 km) range, far beyond the capabilities of 464-29.[13]

The outright cancellation of the Boeing contract on 11 December 1947 was staved off by a plea from its president William McPherson Allen,[14] and in January 1948 Boeing was instructed to thoroughly explore recent technological innovations, including aerial refueling and the flying wing. Noting stability and control problems Northrop was experiencing with their YB-35 and YB-49 flying wing bombers, Boeing insisted on a conventional aircraft, and in April 1948 presented a US$30 million (1948 dollars) proposal for design, construction, and testing of two Model 464-35 prototypes. Further revisions of specifications during 1948 resulted in an aircraft with a top speed of 513 miles per hour (445 kn, 825 km/h) at 35,000 feet (10,700 m), a range of 6,909 statute miles (6,005 nmi, 11,125 km), and a 280,000 pounds (125,000 kg) gross weight which included 10,000 pounds of bombs and 19,875 US gallons (75,225 L) of fuel.[3]


[edit]

Boeing B-52 Stratofortress

The Boeing B-52 Stratofortress is a long-range, subsonic, jet-powered, strategic bomber operated by the United States Air Force (USAF) since 1955.

Beginning with the successful contract bid on 5 June 1946, the B-52 went through several design steps; from a straight wing aircraft powered by six turboprop engines to the final prototype YB-52, with eight turbojet engines. The aircraft made its first flight on 15 April 1952 with "Tex" Johnston as pilot.[5]

Built to carry nuclear weapons for Cold War-era deterrence missions, the B-52 Stratofortress replaced the Convair B-36. Although a veteran of a number of wars, the Stratofortress has dropped only conventional munitions in actual combat. The B-52 carries up to 70,000 pounds (32,000 kg) of weapons.[6]

The USAF has had B-52s in active service since 1955, initially with the Strategic Air Command (SAC), with all aircraft later absorbed into the Air Combat Command (ACC) following SAC's disestablishment in 1992. Superior performance at high subsonic speeds and relatively low operating costs have kept the B-52 in service despite proposals to replace it with the Mach 3 XB-70 Valkyrie, supersonic B-1B Lancer and stealthy B-2 Spirit. In January 2005, the B-52 became the second aircraft, after the English Electric Canberra, to mark 50 years of continuous service with its original primary operator. There are six aircraft altogether that have made this list as of 2009; the other four being the Tupolev Tu-95, the C-130 Hercules, the KC-135 Stratotanker, and the Lockheed U-2.

Managing your time

3. Check for alignment with your superiors and colleagues
Run your time allocations by your manager and key colleagues; ask them to share theirs, if possible. Sharing time allocations with a team gives a group focus and cohesion.

Managing your time

Now that you have a plan for leveraging your time, all you need to do is be ruthless in your execution of it.

Audit your time.

Take out last week's calendar, and evaluate it using your newly established time allocations for each category. This will give you a sense of how much adjustment will be necessary going forward. Record how you spend your time in a time-management log — for many, this very discipline is half the battle. (See the sidebar "Sample Weekly Time Log for a Management Consultant.") "The last time I kept a time log, I was surprised to learn that, when I am in the office, I spend almost half of my time on the telephone, either taking calls or leaving messages for people who aren't available," writes Elaine Biech in The Consultant's Quick Start Guide: An Action Plan for Your First Year in Business (Jossey-Bass/Pfeiffer, 2001).

Time audits, says Blank, can also "reveal when and how you get distracted from things that matter." For instance, is multitasking really helping you? This skill is regularly held up as the sine qua non of modern-day managerial aptitudes, but a 2001 study by Joshua Rubinstein, David Meyer, and Jeffrey Evans indicates that people experience something akin to writer's block whenever they have to switch tasks. The more complicated the task you're switching from or to, the greater the time cost, that is, the longer it takes you to shift over to the new task, adopt its mindset, and then get warmed up again once you return to the original task. All told, the study estimates, these switching costs could reduce a company's efficiency by 20% to 40%.

Practice time-boxing.

To-do lists will be only marginally useful if you don't set parameters for how much time to devote to each task. When you make your list, carefully estimate the time each task will take, and box it into your calendar. This discipline not only will help you finish your list, but it also will improve your ability to estimate time and manage expectations of those around you. Particularly if you are in a new position or are confronting new tasks, ask for help estimating the time for each task — otherwise, you run the risk of missing deadlines and mismanaging expectations.

Pay attention to the areas where you're weakest.

If you always delegate the tasks you don't do well, your weak points will haunt you. Acknowledge your weaknesses, but use structure to shore them up. For example, many managers have difficulty saying no to colleagues who make impromptu requests for their time. Let these people know your priorities for leveraging your time and encourage them to schedule meetings with you.

"Most people manage their lives by crises," writes Stephen Covey in Principle-Centered Leadership(Summit Books, 1991). "The only priority setting they do is between one problem and another." But effective managers focus on opportunities, he adds, and they structure their schedules accordingly. "Unless something more important--not something more urgent — -comes along, we must discipline ourselves to do as we planned."

Spending Your Time

Though most managers understand intellectually that time is their scarcest resource, few make the effort to gain a strategic perspective on how they spend their hours each week. Still fewer make a regular practice of keeping track of how the priorities they say are most important jibe with the way they actually spend their time. "Those we label natural born leaders know how to leverage their time," writes Warren Blank in The 108 Skills of Natural Born Leaders (Amacom, 2001). For those in whom this talent is not innate, here's how to do it.

1. Break your responsibilities into categories

The categories will vary depending on your job function, but they must be both strategic and tactical — identify not more than six. Consider, for example, the following:

• Growth and improvement. This category focuses on opportunities, not on crises, and it's often the one in which the added value you bring to your company is the greatest. The challenge is to keep the time allotted to these high-leverage activities sacrosanct — don't let pressing but less important needs crowd them out.

• Managing people. You may want to break this category into managing up, managing across, and managing down. Managers are well aware that coaching and mentoring enable them to maximize their leverage, but especially in times of belt tightening, it helps to be reminded that you can't create efficiencies without upward and lateral alignment. Moreover, everyone agrees that communication is critical, but how many people actually plan time for it? In your haste to make your numbers, don't let your communication — in any of these three directions — falter.

• Primary day-to-day responsibilities. Depending on your role, this area could also be subdivided — say, into selling and delivering services.

• Administration. This includes necessary chores ranging from assessing resource needs to interviewing job candidates to responding to e-mail. Get ready for a shock when you add the numbers.

2. Ask yourself what percentage of your time you should be spending in each category

Before you assign percentages, Blank advises that you ask yourself this question: "Given what I truly want to accomplish today as a leader, what will be the best use of my time?" To answer, factor in the competing claims on your time: the activities that enable you to generate the most leverage, the company's strategic priorities, and the short-term needs of your supervisors, direct reports, and customers. Once you've assigned percentages, translate them into hourly figures for each category. Is the total number of hours realistic and sustainable for the time frame you're considering? To be useful, your time allocations may need to change quarterly, monthly, or even weekly.

Bill Gates , William Henry "Bill" Gates III

William Henry "Bill" Gates III (born October 28, 1955)[2] is an American business magnate, philanthropist, author, and chairman[3] of Microsoft, the software company he founded with Paul Allen. He is ranked consistently one of the world's wealthiest people[4] and the wealthiest overall as of 2009.[1] During his career at Microsoft, Gates held the positions of CEO and chief software architect, and remains the largest individual shareholder with more than 8 percent of the common stock.[5] He has also authored or co-authored several books.

Gates is one of the best-known entrepreneurs of the personal computer revolution. Although he is admired by many, a number of industry insiders criticize his business tactics, which they consider anti-competitive, an opinion which has in some cases been upheld by the courts.[6][7] In the later stages of his career, Gates has pursued a number of philanthropic endeavors, donating large amounts of money to various charitable organizations and scientific research programs through the Bill & Melinda Gates Foundation, established in 2000.

Bill Gates stepped down as chief executive officer of Microsoft in January, 2000. He remained as chairman and created the position of chief software architect. In June, 2006, Gates announced that he would be transitioning from full-time work at Microsoft to part-time work and full-time work at the Bill & Melinda Gates Foundation. He gradually transferred his duties to Ray Ozzie, chief software architect and Craig Mundie, chief research and strategy officer. Gates' last full-time day at Microsoft was June 27, 2008. He remains at Microsoft as non-executive chairman.

Famous people review : George Wahsington

George Washington (February 22, 1732[1][2][3] – December 14, 1799) was the leader of the Continental Army in the American Revolutionary War (1775–1783) and served as the first President of the United States of America (1789–1797).[4]

The Continental Congress appointed Washington commander-in-chief of the American revolutionary forces in 1775. The following year, he forced the British out of Boston, lost New York City, and crossed the Delaware River in New Jersey, defeating the surprised enemy units later that year. As a result of his strategy, Revolutionary forces captured the two main British combat armies at Saratoga and Yorktown. Negotiating with Congress, the colonial states, and French allies, he held together a tenuous army and a fragile nation amid the threats of disintegration and failure. Following the end of the war in 1783, Washington returned to private life and retired to his plantation at Mount Vernon, prompting an incredulous King George III to state, "If he does that, he will be the greatest man in the world."[5][6]

He presided over the Philadelphia Convention that drafted the United States Constitution in 1787 because of general dissatisfaction with the Articles of Confederation. Washington became President of the United States in 1789 and established many of the customs and usages of the new government's executive department. He sought to create a nation capable of surviving in a world torn asunder by war between Britain and France. His unilateral Proclamation of Neutrality of 1793 provided a basis for avoiding any involvement in foreign conflicts. He supported plans to build a strong central government by funding the national debt, implementing an effective tax system, and creating a national bank. Washington avoided the temptation of war and began a decade of peace with Britain via the Jay Treaty in 1795; he used his prestige to get it ratified over intense opposition from the Jeffersonians. Although never officially joining the Federalist Party, he supported its programs and was its inspirational leader. Washington's farewell address was a primer on republican virtue and a stern warning against partisanship, sectionalism, and involvement in foreign wars.

Washington is seen as a symbol of the United States and republicanism in practice.[7] His devotion to civic virtue made him an exemplary figure among early American politicians.[7][8]

Washington was awarded the very first Congressional Gold Medal with the Thanks of Congress.[9]

Washington died in 1799, and the funeral oration delivered by Henry Lee stated that of all Americans, he was "first in war, first in peace, and first in the hearts of his countrymen."[10] Washington has been consistently ranked by scholars as one of the greatest U.S. Presidents.

B2

Program costs
The program was the subject of public controversy for its costs to American taxpayers. In 1996 the General Accounting Office disclosed that the B-2 bomber "will be, by far, the most costly bombers to operate on a per aircraft basis" costing over three times as much as the B-1B (US$9.6 million annually) and over four times as much as the B-52H ($US6.8 million annually). In September 1997, each hour of B-2 flight necessitated 119 hours of maintenance in turn. Comparable maintenance needs for the B-52 and the B-1B are 53 and 60 hours respectively for each hour of flight. A key reason for this cost are the air-conditioned hangars large enough for the bomber's 172 ft (52.4 m) wingspan, which are needed to maintain the aircraft's stealthy properties, especially its "low-observable" stealthy skins.[20][21] These maintenance requirements raise serious questions about the ability to deploy the B-2 overseas.[22]

The total "military construction" cost related to the program was projected to be US$553.6 million in 1997 dollars. The cost to procure each B-2 "air vehicle" was US$737 million in 1997 dollars based only on air vehicle cost of US$15.48 billion.[3] The procurement cost per plane as detailed in General Accounting Office (GAO) reports, which include spare parts and software support, was $929 million per plane in 1997 dollars.[3]

The total program cost projected through 2004 was US$44.75 billion in 1997 dollars. This includes development, procurement, facilities, construction, and spare parts. The total program cost averaged US$2.13 billion per plane.[3]


[edit] Opposition
In its consideration of the fiscal year 1990 defense budget, the House Armed Services Committee trimmed $800 million from the B-2 research and development budget, while at the same time staving off a motion to kill the bomber. The opposition was bipartisan, with Congressman Ron Dellums (D-CA), John Kasich (R-OH), and John G. Rowland (R-CT) authorizing the motion to kill the bomber; the growing cost of the B-2 appeared to be the factor driving the opposition. At the peak production period specified in 1989, the schedule called for spending US$7 billion to $8 billion per year in 1989 dollars, something Committee Chair Les Aspin (D-WI) said "won't fly financially."[23]

In 1990, the US Department of Defense accused Northrop of using faulty components in the flight control system. More recent issues with the bomber have included cracks in the tail. Efforts have also been made to reduce the probability of bird ingestion, which could damage engine fan blades.[24]

In time, a number of prominent members of Congress began to oppose the program's expansion, to include former Democratic presidential nominee John Kerry who cast votes against the B-2 Stealth Bomber in 1989, 1991 and 1992 while a United States Senator representing Massachusetts. By 1992, Republican President George H.W. Bush called for the cancellation of the B-2 and promised to cut military spending by 30% in the wake of the collapse of the Soviet Union.[25]

In May 1995, on the basis of its 1995 Heavy Bomber Force Study, the DOD determined that additional B-2 procurements would exacerbate efforts to develop and implement long term recapitalization plans for the USAF bomber force.

In October 1995, former Chief of Staff of the United States Air Force, General Mike Ryan, and Former Chairman of the Joint Chiefs of Staff, General John Shalikashvili, strongly recommended against Congressional action to fund the purchase any additional B-2s, arguing that to do so would require unacceptable cuts in existing conventional and nuclear-capable aircraft to pay for the new bombers,[26] and because the military had much higher priorities on which to spend its limited procurement dollars.[27]

Some B-2 advocates argued that procuring twenty additional B-2s would save money because B-2s would be able to deeply penetrate anti-aircraft defenses and use low-cost, short-range attack weapons rather than expensive standoff weapons. However, in 1995, the Congressional Budget Office (CBO), and its Director of National Security Analysis, found that additional B-2s would reduce the cost of weapons expended by the bomber force by less than US$2 billion in 1995 dollars during the first two weeks of a conflict, which is when the Air Force envisions bombers would make their greatest contribution. This is a small fraction of the US$26.8 billion (in 1995 dollars) life cycle cost that the CBO projected an additional twenty B-2s would cost.[28]

In 1997, as Ranking Member of the House Armed Services Committee and National Security Committee, Congressman Ron Dellums, a long-time opponent of the bomber, cited five independent studies and offered an amendment to that year's defense authorization bill to cap production of the bombers with the existing 21 aircraft. The amendment was narrowly defeated.[29] Nonetheless, Congress has never approved funding for the purchase of any additional B-2 bombers to date.


[edit] UpgradesIn 2008, the US Congress funded upgrades to the B-2s weapon control systems for hitting moving targets.[30]

On 29 December 2008, Air Force officials awarded a production contract to Northrop Grumman to modernize the B-2 fleet's radar. The contract provides advanced state-of-the-art radar components, with the aim of sustained operational viability of the B-2 fleet into the future. The contract has a target value of approximately US$468 million.[31] The award follows successful flight testing with the upgraded equipment. A modification to the radar was needed since the U.S. Department of Commerce required the B-2 to use a different radar frequency.[32]

B2

Development
In a 1994 live fire exercise near Point Mugu, California, a B-2 depicted dropping forty-seven 500 lb (230 kg) class Mark 82 bombs, which is more than half of a B-2's total ordnance payload.
[edit] ATB project
The B-2 Spirit originated from the Advanced Technology Bomber (ATB) black project that began in 1979.[6] The Cold War was well underway, and on the campaign trail in 1979 and 1980, candidate Ronald Reagan promised a restoration of American military strength. On 22 August 1980, the incumbent Carter administration publicly disclosed that the Department of Defense was working to develop stealth aircraft including the ATB.[7]

After the evaluations of the companies' proposals, the ATB competition was reduced to the Northrop/Boeing and Lockheed/Rockwell teams with each receiving a study contract for further work.[6] The Northrop design was larger while the Lockheed design was smaller and included a small tail.[8] The black project was funded under the code name "Aurora".[8] The Northrop/Boeing team's ATB design was selected over the Lockheed/Rockwell design on October 20, 1981.[6][9]

The Northrop design received the designation B-2 and the name "Spirit". The bomber's design was changed in the mid-1980s when the mission profile was changed from high-altitude to low-altitude, terrain-following. The redesign delayed the B-2's first flight by two years and added about US$1 billion to the program's cost.[7] An estimated US$23 billion was secretly spent for research and development on the B-2 by 1989.[10] At the program's peak, approximately 13,000 people were employed at a dedicated plant in Pico Rivera, California for the plane's engineering and portions of its manufacturing.[11]

The B-2 was first publicly displayed on November 22, 1988, at Air Force Plant 42, Palmdale, California, where it was assembled. Its first public flight was on July 17, 1989 from Palmdale.[12]


[edit] ProcurementA procurement of 132 aircraft was planned in the mid-1980s, but was later reduced to 75.[13] By the early 1990s, the Soviet Union had disintegrated, which effectively rendered void the Spirit's primary Cold War mission. In light of budgetary pressures and congressional opposition, in his 1992 State of the Union Address, President George H.W. Bush announced B-2 production would be limited to a total of 20 aircraft.[14] In 1996, however, the Clinton administration, though originally committed to ending production of the bombers once the 20th aircraft was completed, authorized the conversion of a 21st bomber, a prototype test model, to Block 30 full operational status at a cost of nearly $500 million.[15]

The bomber's high costs reflected the innovation of a paperless computer aided design (CAD) system, and a computerized manufacturing control system. The costs also reflect the inefficiencies of separating design teams into different parts of the country for both design intelligence compartmentalization as a counter-espionage measure, and by parceling out the supply chain with the requisite lucrative contracts to congressional districts as a political reward.

Northrop made a proposal to the USAF in 1995 to build 20 additional aircraft with a flyaway cost of $566M each.[16]

B2

The Northrop Grumman B-2 Spirit (also known as the "Stealth Bomber") is a multirole heavy bomber with "low observable" stealth technology capable of penetrating dense anti-aircraft defenses to deploy both conventional and nuclear weapons. Because of its considerable capital and operations costs, the project was controversial in Congress and among Pentagon brass during its development and placement into service. During the late 1980s and early 1990s, the United States scaled back initial plans to purchase 132 of the bombers. By the mid 1990s, Congress made appropriations to purchase a total fleet of just 21 of the bombers.

The cost of each air vehicle averaged US$737 million per plane in 1997 dollars.[3] Total procurement costs averaged US$929 million per plane, which includes spare parts, equipment, retrofitting, and software support.[3] The total program cost, which includes development, engineering and testing, averaged US$2.1 billion per aircraft (in 1997 dollars).[3]

Twenty B-2s are operated by the United States Air Force. Though originally designed in the 1980s for Cold War operations scenarios, B-2s have been used in combat to drop bombs on Kosovo in the late 1990s, and see continued use during the ongoing wars in Iraq and Afghanistan.[4] One aircraft was lost when it crashed on takeoff in 2008.[5]

The crew of two aboard the bomber can drop up to eighty 500 lb (230 kg) class JDAM "smart" bombs, or sixteen 2,400 lb (1,100 kg) B83 nuclear bombs in a single pass through extremely dense anti-aircraft defenses. It has been the subject of espionage and counter-espionage activity. The bomber has been a prominent public spectacle at air shows since the 1990s.

[edit] Current approaches to political economy
Contemporarily, political economy refers to different, but related, approaches to studying economic and political behaviours, ranging from the combining of economics with other fields, to the using of different, fundamental assumptions that challenge orthodox economic assumptions:

Political economy most commonly refers to interdisciplinary studies drawing upon economics, law, and political science in explaining how political institutions, the political environment, and the economic system — capitalist, socialist, mixed — influence each other. When narrowly construed, it refers to applied topics in economics implicating public policy, such as monopoly, market protection, government fiscal policy,[2] and rent seeking.[3]
Historians have employed political economy to explore the ways in the past that persons and groups with common economic interests have used politics to effect changes beneficial to their interests. [4]
"International political economy" (IPE) is an interdisciplinary field comprising approaches to international trade and finance, and state policies affecting international trade, i.e. monetary and fiscal policies. In the U.S., these approaches are associated with the journal International Organization, which, in the 1970s, became the leading journal of international political economy under the editorship of Robert Keohane, Peter J. Katzenstein, and Stephen Krasner. They are also associated with the journal The Review of International Political Economy. There also is a more critical school of IPE, inspired by Karl Polanyi's work; two major figures are Susan Strange and Robert W. Cox.[5]
Economists and political scientists often associate the term with approaches using rational choice assumptions, especially game theory, in explaining phenomena beyond economics' standard remit, in which context the term "positive political economy" is common.[6]
Anthropologists, sociologists, and geographers, use political economy in referring to the neo-Marxian approaches to development and underdevelopment postulated by André Gunder Frank and Immanuel Wallerstein.
Contemporary political economy students treat economic ideologies as the phenomenon to explain, per the traditions of Marxian political economy. Thus, Charles S. Maier suggests that a political economy approach: interrogates economic doctrines to disclose their sociological and political premises....in sum, [it] regards economic ideas and behavior not as frameworks for analysis, but as beliefs and actions that must themselves be explained. [7] This approach informs Andrew Gamble's The Free Economy and the Strong State (Palgrave Macmillan, 1988), and Colin Hay's The Political Economy of New Labour (Manchester University Press, 1999). It also informs much work published in New Political Economy an international journal founded by Sheffield University scholars in 1996.[8]

[edit] Disciplines related to political economy
Because political economy is not a unified discipline, there are studies using the term that overlap in subject matter, but have radically different perspectives:

Sociology studies the effects of persons' involvement in society as members of groups, and how that changes their ability to function. Many sociologists start from a perspective of production-determining relation from Karl Marx.
Political Science focuses on the interaction between institutions and human behavior, the way in which the former shapes choices and how the latter change institutional frameworks. Along with economics, it has made the best works in the field by authors like Shepsle, Ostrom, Ordeshook, among others.
Anthropology studies political economy by studying the relationship between the world capitalist system and local cultures.
Psychology is the fulcrum on which political economy exerts its force in studying decision-making (not only in prices), but as the field of study whose assumptions model political economy.
History documents change, using it to argue political economy; historical works have political economy as the narrative's frame.
Economics focuses on markets by leaving the political - governments, states, legal frameworks - as givens. Economics dropped the adjective political in the 19th century, but works backwards, by describing "The Ideal Market", urging governments to formulate policy and law to approach said ideal. Economists and political economists often disagree on what is preeminent in developing production, market, and political structure theories.
Law concerns the creation of policy and its mediation via political actions that have specific results, it deals with political economy as political capital and as social infrastructure - and the sociological results of one society upon another.
Human Geography is concerned with politico-economic processes, emphasizing space and environment.
Ecology deals with political economy, because human activity has the greatest effect upon the environment, its central concern being the environment's suitability for human activity. The ecological effects of economic activity spur research upon changing market economy incentives.
International Relations often uses political economy to study political and economic development.
Cultural Studies studies social class, production, labor, race, gender, and sex.
Communications examines the institutional aspects of media and telecommuncation systems, with particular attention to the historical relationships between owners, labor, consumers, advertisers, and the state.

[edit] History of the term
Originally, political economy meant the study of the conditions under which production or consumption within limited parameters was organized in the nation-states. The phrase économie politique (translated in English as political economy) first appeared in France in 1615 with the well known book by Antoine de Montchrétien: Traité de l’economie politique. French physiocrats, Adam Smith, David Ricardo and Karl Marx were some of the exponents of political economy. In 1805, Thomas Malthus became England's first professor of political economy, at the East India Company College, Haileybury, Hertfordshire. The world's first professorship in political economy was established in 1763 at the University of Vienna, Austria; Joseph von Sonnenfels was the first tenured professor.

In the United States, political economy first was taught at the College of William and Mary; in 1784 Adam Smith's Wealth of Nations was a required textbook.[1]

Glasgow University, where Smith was Professor of Logic and Moral Philosophy, changed the name of its Department of Political Economy to the Department of Economics (ostensibly to avoid confusing prospective undergraduates) in academic year 1797–1798, leaving the graduating class of 1798 as the last to be graduated with a Scottish Master of Arts degree in Political Economy.

Political economy

Political economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy. It developed in the 18th century as the study of the economies of states — polities, hence political economy.

In late nineteenth century, the term "political economy" was generally replaced by the term economics, used by those seeking to place the study of economy upon mathematical and axiomatic bases, rather than the structural relationships of production and consumption (cf. marginalism, Alfred Marshall).

Contents [hide]
1 History of the term
2 Current approaches to political economy
3 Disciplines related to political economy
4 References
5 See also
6 External links

B1

New problems
The B-1A mockup review occurred in late October 1971. There were 297 requests for alterations. The first of four prototype B-1A models (s/n 74-0158) flew on 23 December 1974.[15] As the program continued the per-unit cost continued to rise. In 1970, the estimated per-unit price was $40 million, and by 1972, the cost had risen slightly to $45.6 million. By 1975, this figure had climbed to $70 million.[11]

In 1976 Viktor Belenko defected to Japan with his MiG-25 "Foxbat". During debriefing he described a new "super-Foxbat" (almost certainly referring to the MiG-31) that had look-down/shoot-down radar systems in order to attack cruise missiles. This would also make any low-level penetration aircraft "visible" and easy to attack. Countering this problem would require another upgrade to the electronic countermeasures suite, already one of the most complex and expensive ever fitted. The debate over the need for the bomber opened anew, and this time the reduced low-speed dash was a particular target. Given the performance and the armament suite that was similar to the B-52, the program was increasingly questioned as a very expensive solution that appeared to have limited benefits over the existing fleet.

The program remained highly controversial. In particular, Senator William Proxmire continually derided it in public, arguing it was an outlandishly expensive dinosaur. During the 1976 federal election campaign, Jimmy Carter made it one of the Democratic Party's platforms, saying "The B-1 bomber is an example of a proposed system which should not be funded and would be wasteful of taxpayers' dollars."[16]


[edit] Another cancellation

The Rockwell B-1A, 1984.When Carter took office in 1977 he ordered a review of the entire program. By this point the projected cost of the program had risen to over $100 million per aircraft, although this was lifetime cost over 20 years. He was informed of the relatively new work on stealth aircraft that had started in 1975, and decided that this was a far better avenue of approach than the B-1. Pentagon officials also stated that the ALCM (Air Launched Cruise Missile) launched from the existing B-52 fleet would give the USAF equal capability of penetrating Soviet airspace. With a range of 1,500 miles (2,400 km), the ALCM could be launched well outside the range of any Soviet defenses, and penetrate at low altitude just like a bomber, but in much greater numbers. A small number of B-52 operating outside interception range could launch hundreds of ALCMs, saturating the defense. A program to improve the B-52 and develop and deploy the ALCM would cost perhaps 20% of the price to deploy the planned 244 B-1As.[16]

On 30 June 1977 Carter announced that the B-1A would be canceled in favor of ICBMs, SLBMs, and a fleet of modernized B-52s armed with ALCMs.[11] Carter called it "one of the most difficult decisions that I've made since I've been in office." No mention of the stealth work was made public, the program being top secret, but today it is known that he authorized the Advanced Technology Bomber (ATB) project in early 1978, which eventually led to the B-2 Spirit.[17]

Unsurprisingly, the reaction to the cancellation was split along partisan lines. Robert Dornan claimed, "They're breaking out the vodka and caviar in Moscow." In contrast, it appears the Soviets were not at all excited by this development, considering a large number of ALCMs represented a much greater threat than a smaller number of B-1s. Tass commented that "the implementation of these militaristic plans has seriously complicated efforts for the limitation of the strategic arms race."[16] Western military leaders were generally happy with the decision. Alexander Haig, then commanding NATO, described the ALCM as an "attractive alternative" to the B-1. French General Georges Buis stated "The B-1 is a formidable weapon, but not terribly useful. For the price of one bomber, you can have 200 cruise missiles."[16]

Flight tests of the four B-1A prototypes for the B-1A program continued through April 1981. The program included 70 flights totalling 378 hours. A top speed of Mach 2.22 was reached by the second B-1A. Engine testing also continued during this time with the YF101 engines totalling almost 7,600 hours.[18]


[edit] Shifting priorities
It was during this period that the Soviets, also acting in proxy through Cuba, started to exert themselves in several new theaters of action, in particular the Cuban support in Angola starting in 1975 and the Soviet invasion of Afghanistan in 1979. The U.S. strategy to this point was containment and a conventional and nuclear war in Europe, which almost all military planning had been focused on. These newer actions revealed that the military was simply incapable of supporting any sort of effort outside these narrow confines.[19]

The Army responded by accelerating its Rapid Deployment Force concept, but suffered from major problems with airlift and sealift capability. While gaming a USSR-led invasion of Iran from Afghanistan, then considered (incorrectly) to be a major Soviet goal, it was discovered that only small numbers of units could be in the field in anything close to a week. In order to slow an advance while this happened they relied on air power, but critically the Iran-Afghanistan border was outside the U.S. Navy's range, leaving this role to the Air Force. They, in turn, had limited capability to offer ground support in many areas that were outside the range of friendly airbases. Although the B-52 had the range to support on-demand global missions, the B-52's long runway requirements dramatically limited the forward basing possibilities. In real-world scenarios the capabilities of this force against any given potential target was limited, something the B-1 would be better prepared to handle due to its better takeoff performance and range.

During the 1980 presidential campaign, Ronald Reagan campaigned heavily on the platform that Carter was weak on defense, using the cancellation of the B-1 program as a prime example, a theme he continued using into the 1980s.[20] During this time Carter's defense secretary, Harold Brown, announced the stealth bomber project, apparently implying that this was the reason for the B-1 cancellation. Brown later denied this claim, stating Carter was simply opposed to any military buildup. Although Reagan's primary attack on Carter's decision was now rendered moot, he immediately changed his complaint saying that Carter was giving away secrets and politicizing the Pentagon, charges that led to a round of sparring between Brown and Reagan in the press. Interestingly, it was Brown that had led the original AMSA program, but later came to prefer the cruise missile after taking the job of Defense Secretary in 1977.

B1

Design studies
The first post-B-70 study was known as the Subsonic Low Altitude Bomber (SLAB), which was completed in 1961. This was followed by the similar Extended Range Strike Aircraft (ERSA), which added a Variable-sweep wing planform, something then very much in vogue in the aviation industry.[11] ERSA envisioned a relatively small aircraft with a 10,000 lb (4,500 kg) load and a range of 8,750 nautical miles (16,200 km), with 2,500 nmi (4,600 km) being flown at low altitudes. In August 1963 the similar Low-Altitude Manned Penetrator (LAMP) design was completed, which called for an aircraft with a 20,000 lb (9,000 kg) load and somewhat shorter range of 7,150 nautical miles (13,200 km).

These all culminated in the October 1963 Advanced Manned Precision Strike System (AMPSS), which led to industry studies at Boeing, General Dynamics, and North American. In mid-1964, the USAF had revised its requirements and retitled the project as Advanced Manned Strategic Aircraft (AMSA), which differed from AMPSS primarily in that it also demanded a high-speed high-altitude capability, albeit slower than the Valkyrie at about Mach 2.[2] Given the lengthy series of design studies, Rockwell engineers joked that the new name actually stood for "America's Most Studied Aircraft".[12]


[edit] First cancellation
The cancellation of the B-70 project had led some to question the need for a new strategic bomber at all. The Air Force was adamant about retaining bombers as part of the nuclear triad concept that included bombers, SLBMs, and ICBMs in a combined package that complicated any potential defense. The arguments for keeping the bombers, however, were hotly debated. The original argument was that the bombers could be kept in the air during times of increased defensive posture, where they would be difficult to attack. Missiles of the era, like the Atlas and Redstone, required a lengthy fuelling procedure immediately before launch, and were therefore vulnerable to air attack while still on the ground. They also had low accuracy; enough to attack cities as a strategic deterrent, but not enough to attack hardened military targets. To attack these targets, the bombers were required.

In the early 1960s newer generations of missiles with solid rocket motors were being introduced that could be launched quickly, even faster than bombers, and were sited in underground silos for protection. Sneak attacks on these weapons would be very difficult for the USSR, which lacked the required accuracy in their own weapons and would have to use their bombers in order to be effective against them. US air defenses would have made such an attack extremely unlikely to succeed. Accuracy of the new weapons was so improved that direct attacks against similar weapons in the USSR were a real possibility, and attacks on other military bases were now possible. Making matters more troublesome for the Air Force was the introduction and rapid improvement of the U.S. Navy's SLBM force, which had considerably better survivability than either bombers or hardened missile silos. After this period the Air Force used a number of different arguments to make its case for the strategic bomber, including the conventional role and "recall-ability", but these arguments were much less convincing.

One of the biggest critics of the bomber portion of the triad was Secretary of Defense Robert McNamara who preferred ICBMs over bombers for the Air Force side of the deterrent force. In testimony before Congress, McNamara said, "The strategic missile forces for 1967-71 will provide more force than is required for 'Assured Destruction' ... a new advanced strategic aircraft does not at this time appear justified."[13] His opposition led to the AMSA program being stopped in 1964.[11] The program was revived only a few years later however, and in 1968 an advanced development contract was issued to IBM and North American Rockwell. McNamara remained opposed to the program in favor of upgrading the existing B-52 fleet, and adding just under 300 FB-111s for shorter range roles then being filled by the B-58. He vetoed the AMSA program and canceled it once again.[11]


[edit] B-1A program

A B-1A in flight showing its underside, 1981.President Richard Nixon re-established the program after taking office, in keeping with his administration's flexible response strategy that required a broad range of options short of general nuclear war.[13] Secretary of Defense Melvin Laird reviewed the programs and decided to lower the numbers of FB-111s, claiming it lacked the required range, and recommended that the AMSA design studies be accelerated. In April 1969 the program officially became the B-1A. This was the first entry in the new bomber designation series, first created in 1962.

After the prolonged development period, the production contract was finally awarded in 1970. The original program called for two test airframes, five flyable aircraft, and 40 engines. This was cut in 1971 to one ground- and three flight test aircraft (74-0158 through 0160). First flight was set for April 1974. The company changed its name to Rockwell International and named its aircraft division North American Aircraft Operations in 1973.[14] A fourth prototype (76-1074) was ordered in the FY 1976 budget. This fourth aircraft was to be built to production standards. At one time, some 240 B-1As planned to be built, with initial operational capability set for 1979.[11]

Rockwell's design featured a number of features common to 1960s U.S. designs. These included the use of variable-sweep wings in order to provide both high lift during takeoff and landing, and low drag during a high-speed dash phase. With the wings set to their widest position the aircraft had considerably better lift and power than the B-52, allowing it to operate from a much wider variety of bases. Penetration of the USSR's defenses would take place in a dash, crossing them as quickly as possible before entering into the less defended "heartland" where speeds could be reduced again. The large size and fuel capacity of the design would allow this dash portion of the flight to be relatively long.


USAF Rockwell B-1B Lancer arrives at RIAT 2008In order to achieve the required Mach 2 performance at high altitudes, the air intake inlets were variable. In addition, the exhaust nozzles were fully variable. Initially, it had been expected that a Mach 1.2 performance could be achieved at low altitude, which required that titanium be used in critical areas in the fuselage and wing structure. However, this low altitude performance requirement was lowered to only Mach 0.85, reducing the amount of titanium, and the overall cost.

Crew escape was provided for using an escape pod that ejected a portion of the entire cockpit with both pilots inside, as opposed to the more conventional ejection seats; it was felt that egress during a high-speed, high-altitude dash would be too dangerous without pressurization. A pair of small canards mounted near the nose are part of an active vibration damping system that smooths out the otherwise bumpy low-altitude ride, reducing crew fatigue and improving airframe life.

An extensive suite of electronics was planned, including a Litton LN-15 inertial navigation system, a Doppler radar altimeter, a Hughes forward-looking infrared, a General Electric APQ-114 forward-looking radar and a Texas Instruments APQ-146 terrain-following radar. The terrain-following radar, in particular, would allow the B-1 to fly at much lower altitudes during the "dash" phase of the mission than the B-52, which relied on older systems that demanded higher minimum altitudes during bad weather.

Overall it had a range similar to that of the B-52, although more of the flight could be low-level. A combination of flying lower due to better navigation systems and a greatly reduced radar cross section made it much safer from attack by missiles, and the latter also improved its odds against fighters as well. In situations where fighters were the expected competition (i.e. outside the USSR), its high-speed dash was a potentially useful technique the B-52 could not match. A convincing B-52 replacement had arrived.

[edit] Investment management firms
Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases.

Some investment management firms also have more speculative specialist currency overlay operations, which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small, many have a large value of assets under management (AUM), and hence can generate large trades.


[edit] Retail foreign exchange brokers
There are two types of retail brokers offering the opportunity for speculative trading: retail foreign exchange brokers and market makers. Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail brokers, while largely controlled and regulated by the CFTC and NFA might be subject to foreign exchange scams.[8][9] At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD (No Dealing Desk) and STP (Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.


[edit] Non-bank Foreign Exchange Companies
Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as foreign exchange brokers but are distinct in that they do not offer speculative trading but currency exchange with payments. I.e., there is usually a physical delivery of currency to a bank account.

It is estimated that in the UK, 14% of currency transfers/payments[10] are made via Foreign Exchange Companies.[11] These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.


[edit] Money Transfer/Remittance Companies
Money transfer/remittance companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, the Aite Group estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally.

Market participants

Unlike a stock market, where all participants have access to the same prices, the foreign exchange market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. The difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the foreign exchange market are determined by the size of the “line” (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail FX-metal market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the foreign exchange market to align currencies to their economic needs.


Banks
The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.

Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.


Commercial companies
An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.


Central banks
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high—that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.

The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.[7] Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.


[edit] Hedge funds as speculators
About 70% to 90% of the foreign exchange transactions are speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996. They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency, if the economic fundamentals are in the hedge funds' favor.

foreign exchange market

Market size and liquidity
The foreign exchange market is unique because of

its trading volumes,
the extreme liquidity of the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
the variety of factors that affect exchange rates.
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of leverage

Main foreign exchange market turnover, 1988 - 2007, measured in billions of USD.As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements,[2] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this. This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:

$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
According to AzureBloom,
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%.[4]
In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.

Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.

Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account.

According to AzureBloom,
FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Top 10 currency traders [5]
% of overall volume, May 2008 Rank Name Volume
1 Deutsche Bank 21.70%
2 UBS AG 15.80%
3 Barclays Capital 9.12%
4 Citi 7.49%
5 Royal Bank of Scotland 7.30%
6 JPMorgan 4.19%
7 HSBC 4.10%
8 Lehman Brothers 3.58%
9 Goldman Sachs 3.47%
10 Morgan Stanley 2.86%

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[6] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".


These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.

foreign exchange

The foreign exchange market (currency, forex, or FX) is where currency trading takes place. It is where banks and other official institutions facilitate the buying and selling of foreign currencies. [1]FX transactions typically involve one party purchasing a quantity of one currency in exchange for paying a quantity of another. The foreign exchange market that we see today started evolving during the 1970s when worldover countries gradually switched to floating exchange rate from their erstwhile exchange rate regime, which remained fixed as per the Bretton Woods system till 1971.

Presently, the FX market is one of the largest and most liquid financial markets in the world, and includes trading between large banks, central banks, currency speculators, corporations, governments, and other institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Traditional daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements.[2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]

The purpose of FX market is to facilitate trade and investment. The need for a foreign exchange market arises because of the presence of multifarious international currencies such as US Dollar, Pound Sterling, etc., and the need for trading in such currencies.

politics

Authoritarian-libertarian politics
Authoritarianism and libertarianism refer to the amount of individual freedom each person possesses in that society relative to the state. One author describes authoritarian political systems as those where "individual rights and goals are subjugated to group goals, expectations and conformities",[7] while a libertarian political system is one in which individual rights and civil liberties are paramount. More extreme than libertarians are anarchists, who argue for the total abolition of government, while the most extreme authoritarians are totalitarians who support state control over all aspects of society.

For instance, classical liberalism (also known as laissez-faire liberalism[8], or, in much of the world, simply liberalism) is a doctrine stressing individual freedom and limited government. This includes the importance of human rationality, individual property rights, free markets, natural rights, the protection of civil liberties, constitutional limitation of government, and individual freedom from restraint as exemplified in the writings of John Locke, Adam Smith, David Hume, David Ricardo, Voltaire, Montesquieu and others. According to the libertarian Institute for Humane Studies, "the libertarian, or 'classical liberal,' perspective is that individual well-being, prosperity, and social harmony are fostered by 'as much liberty as possible' and 'as little government as necessary.'"[9

political studies, as an academic discipline

As an academic discipline
Political science (also political studies), the study of politics, examines the acquisition and application of power. Related areas of study include political philosophy, which seeks a rationale for politics and an ethic of public behaviour, political economy, which attempts to develop understandings of the relationships between politics and the economy and the governance of the two, and public administration, which examines the practices of governance.


[edit] Spectra

[edit] Left-right politics
Main article: Left-Right politics
Recently in history, political analysts and politicians divide politics into left wing and right wing politics, often also using the idea of center politics as a middle path of policy between the right and left. This classification is comparatively recent (it was not used by Aristotle or Hobbes, for instance), and dates from the French Revolution era, when those members of the National Assembly who opposed the monarchy sat on the left, while those who supported it sat on the right.[4] The original meaning disappeared quickly. A particularly influential event was the publication of the Communist Manifesto by Karl Marx and Frederick Engels in 1848. The Manifesto suggested a course of action for a proletarian revolution to overthrow the bourgeois society and abolish private property, in the belief that this would lead to a classless and stateless society.

The meaning of left-wing and right-wing varies considerably between different countries and at different times, but generally speaking, it can be said that the right wing often values tradition and capitalism while the left wing often values egalitarianism.

According to Norberto Bobbio, one of the major exponents of this distinction, the Left believes in attempting to eradicate social inequality, while the Right regards most social inequality as the result of ineradicable natural inequalities, and sees attempts to enforce social equality as utopian or authoritarian.[5]

Some ideologies, notably Christian Democracy, claim to combine left and right wing politics; according to Geoffrey K. Roberts and Patricia Hogwood, "In terms of ideology, Christian Democracy has incorporated many of the views held by liberals, conservatives and socialists within a wider framework of moral and Christian principles."[6] Movements which claim or formerly claimed to be above the left-right divide include Gaullism in France, Peronism in Argentina, and National Action Politics in Mexico.

Politics

Politics is the process by which groups of people make decisions. The term is generally applied to behaviour within civil governments, but politics has been observed in all human group interactions, including corporate, academic, and religious institutions. It consists of "social relations involving authority or power"[1] and refers to the regulation of a political unit,[2] and to the methods and tactics used to formulate and apply policy.[3]

"Politics" ultimately comes from the Greek word "polis" meaning state or city. "Politikos" describes anything concerning the state or city affairs. In Latin, this was "politicus" and in French "politique". Thus it became "politics" in the English language

B-1

Development
The B-1 was conceived as the Advanced Manned Strategic Aircraft (AMSA) program around 1965. AMSA was the last in a series of 1960s programs that looked at replacing the B-52 with a long-range multi-role supersonic aircraft that could drop bombs and launch nuclear missiles.[2]


[edit] The Valkyrie and changing tactics
In December 1957, U.S. Air Force selected North American Aviation's proposal to replace the B-52 Stratofortress. This would lead to the B-70 Valkyrie.[3] The Valkyrie was a six-engine bomber that could fly very high at Mach 3 to avoid interceptor aircraft, the only effective anti-bomber weapon in the 1950s. At the time, Soviet interceptors were unable to intercept the high-flying Lockheed U-2;[4] the Valkyrie was to fly at similar altitudes and much higher speeds. But by the late 1950s, anti-aircraft surface-to-air missiles (SAMs) could threaten high-altitude aircraft,[5] as demonstrated by the downing of Gary Powers' U-2 in 1960.

Recognizing this, the USAF Strategic Air Command had begun moving to low-level penetration before the U-2 downing. This greatly reduces radar detection distances while at that time SAMs were ineffective and interceptors less effective against low-flying aircraft.[6] Also the flight path to a target could be routed around known anti-aircraft sites, and the landscape could be used to the bomber's advantage to stay out of the radar's line-of-sight operation. Aircraft speed became much less important. The targets themselves often had defenses located nearby to prevent this sort of approach all the way in, but stand-off weapons such as the AGM-69 SRAM provided an attack capability from outside the defensive missile's range. Low-altitude flight also made the bombers very difficult to detect from aircraft at higher altitudes, including interceptors, as radar systems of that generation could not "look down" due to the clutter that resulted from ground reflections.

Operations at low levels would limit the B-70 to subsonic speed, while dramatically decreasing its range due to much higher fuel requirements. The result would be an aircraft with similar speed but much less range than the B-52 it would have replaced. The Mach 2 B-58 was similarly limited to subsonic speeds at low altitudes. Unsuited for this new role, the viability of the B-70 as a bomber was questioned. Citing high cost, a growing ICBM force, and poor survivability against missiles,[7] the operational bomber fleet was canceled in 1961 by President John F. Kennedy, and the program was changed to a supersonic research program with two XB-70 prototype aircraft.[8]


[edit] B-52 soldiers onAlthough never intended for the low-level role, the B-52's flexibility allowed it to outlast its intended successor as the nature of the air war environment changed. The B-52's large airframe and ample internal room made it relatively simple to add greatly improved electronic countermeasures suites. Additionally, no other aircraft had anything close to the B-52's bombload capacity when used in the tactical role. With improved coordination with ground spotters, B-52s with "big belly" modifications delivered up to 60,000 pounds (27,215 kg)[9] of high explosive bombs during the Vietnam War. The same would not have been true of the Valkyrie, which featured a much smaller bombload of 25,000 pounds (11,000 kg).[10]

That was not to say the B-52 was a perfect aircraft. Higher speed would aid even a low-level approach in the strategic role, something the F-111 was taking advantage of. In the high-load tactical role the B-52 was limited to a small number of airfields due to its very long takeoff roll. By the early 1960s the state of the art in engine and airframe design had improved considerably; an aircraft designed to match the B-52 in performance could meet both of these additional requirements as well. Although the B-52 had proven to be surprisingly adaptable in both the strategic and tactical roles, during the early 1960s a number of studies followed these technical developments in order to design a worthy B-52 replacement.