Sigmund Freud and the Psychodynamic Perspective

Sigmund Freud and the Psychodynamic Perspective Introduction The origins of The Psychodynamic Perspective can be traced to the early work of Sigmund Freud. Using sub headings this essay will identify the main tenets of Freud’s approach to the understanding of human behaviour: his views on determinism; his use of hypnosis as therapy; his belief that human behaviour is controlled by separate yet interlinked layers of the mind (conscious and unconscious); his views on sex and aggression; and the importance he placed on unresolved and unseen conflict involving the ‘ego’, the ‘id’, and the ‘superego’ (Cave: 1999, p.31/2). The work will then explore how the perspective might be used in a healthcare setting, and will assess inherent strengths and weaknesses. Determinism Determinism, the belief that ‘every state of affairs, including every human event, act, and decision is the inevitable consequence of antecedent states of affairs’ (GuruNet: for details see References) greatly influenced Freud who sought to identify hidden causes for human behaviours. His theory is a dynamic process from the early years of a human’s life where the first interactions with others affect the development of the personality, through to the adult years where the person learns and adopts social values. Hypnosis During his time in France, Freud observed the work of Jean Charcot whose use  of hypnosis led to his ‘inducing and curing hysterical paralyses by means of direct  hypnotic suggestion.’ (Gay: 1998, p.49). Later work with Josef Breuer involved hypnosis where patients recalled traumatic experiences and expressed their emotions as a way to release the conflict within; this was the cathartic method. Freud began to develop his idea that emotionally disturbed patients had problems that were sexually orientated, and, as a development on his work in hypnosis he worked on the idea of ‘free association.’ (Nye: 1975, p.11). Instead of sending patients into a trance using his voice, Freud altered the technique of hypnosis so that the patient independently drew forth words and feelings which might be analysed or explained by the analyst. Unconscious and Conscious activity ‘Freud himself regarded the concept of the unconscious as fundamental to psychoanalysis. It is what makes the psychoanalytic approach distinctive; it is the defining characteristic of the Freudian perspective towards human action.’ (Bocock: 2002, P.32) One of the fundamental beliefs behind Freud’s work was indeed his distinction  between the unconscious, preconscious, and conscious areas of the human mind. He stipulated that the unconscious was the governing force where dreams, habits, thoughts and feelings originate from. In order to investigate these phenomenon he used psychoanalysis; as Nye phrases it in The Three Psychologies ‘it is the role of psychoanalysis to unravel the mystery by seeking the sources of thoughts, feelings, and actions in hidden drives and conflicts.’ (1975, p.10). Through using this technique Freud aimed to identify the nature of crucial communications occurring in early childhood which would affect adult behaviour. Dream interpretation is another of Freud’s infamous techniques; occurring when a person is asleep and unguarded he claimed that this was an opportunity for  unconscious drives and desires to manifest themselves through symbolic images. The  waking human mind however is conscious, meaning that it is aware of what is  immediate to it, and the preconscious is the level between. As Nye summarises it: ‘the unconscious consists of all aspects of our personalities of which we are unaware. The preconscious consists of that which is not immediately at the level of awareness  but is fairly accessible.’ (1975, p.13). The id As part of his understanding of human behaviour Freud identified the human personality as constituting three different structures: the id, the ego, and the superego. The id is what the human child is born with instinct which contains base biological drives; the id seeks immediate satisfaction of primitive impulses, and operates on the ‘pleasure principle’ (Freud: 1927, p.30), seeking to avoid pain and maximise gratification. The instincts that a person is born with remain with them for life: life energy and death energy, which exist side by side, respectively concern the drive to survive (eat, drink, reproduce), and the primitive tendency to return to the ‘inanimate state’ (Nye: 1975, p.14) which has its origins in the prehistory of the world where life forms were unstable. Sex and Aggression ‘In proposing two psychological entities: our animal selves, in the form of the id, and our social selves, the ego and super-ego, (Freud) directly addressed the relationship between biology and socialisation, and the dynamic between them. For Freud, being human was individual peoples endless negotiation between the two.’ (Bland: 2003). It is precisely such negotiation that causes the varieties and extremes of behaviour seen in human beings. As well as the life and death instincts, humans are driven by their sexual drive and their aggressive drive; these being underlying causes of human behaviour. Freud made no distinction between what people might class as ‘everyday’ feelings and sexual feelings. Because humans are animals they are driven to  experience primal urges and desires but simultaneously live in a society where  standards contain and condition human behaviour. Thus, this is where the conflict arises between the drives of the id and the learnt morality of the superego so that anxiety, fear, and neuroses can all be traced to a basic incompatibility of the human  instinct with the socialised world which has evolved around it. The nature of Freud’s concept of aggression is that it is innate and thus a natural state. As one of the most powerful energies within the human mind aggression can cause serious damage mental and physical if it is not released in some way. Freud’s claims that some of the innate destructive energy is never released and so a person harbours the death instinct which eventually overcomes the other drives resulting in death. (Nye: 1975). Ultimately, the emotional life of a human being is destined to be a turbulent one: powerful energies conflict and override each other, and it is the role of psychodynamic therapy to uncover and understand the layers and symbolism within the psyche. A further understanding of these complex processes may be achieved through examining Freud’s concept of the ego and the nature of its functions. The Ego Freud suggested that the ego is a form of mediation between the urges of the id and the learnt morality in the super-ego, evolving as a person grows older in order to help them cope with the world. As the ego develops so does the person’s perception of reality, and a wider view is attained than simply the pleasures of subjective gratification. Freud’s pleasure principle thus becomes replaced by the ’reality principle’ (Stoodley: 1959, p.169). The desires of the id cannot always be realised, so the ego causes humans to convert them into other modes of behaviour;  not only in cathartic sport activities but also in people’s careers. Understanding the work environment in the context of the Psychodynamic Perspective will be discussed later. Freud likens the ego to a ‘a man on horseback, who has to hold in check the superior strength of the horse; with this difference, that the rider seeks to do so with  his own strength while the ego uses borrowed forces. () Often a rider, if he is not to be parted from his horse, is obliged to guide it where it wants to go; so in the same  way the ego constantly carries into action the wishes of the id as if they were its own.’ (Freud: 1927, p.30). Freud’s approach was radical for his time because he saw psychology very much through the same eyes as he saw evolution; as a process involving accumulative and transferable energy. Freud suggested that the energy levels in a person originating from the id and controlled, to an extent, by the ego (depending on circumstances) were affected by restrictions placed on that person by those around them. If these energies were not allowed to have an outlet then the person might suffer from anxiety. A strong ego will therefore develop as the person’s circumstances allow them to adjust to the real world while also going part of the way to satisfying the demands of the id. The Superego The superego incorporates the values and morals of society which are learnt from a person’s parents and other influential figures, and develops as a result of rewards and punishments as the individual grows up. The superego provides the personality with a conscience; a form of overview concerning right and wrong actions, which can cause a person to feel guilty. Freud termed the superego’s internal standard of what a person should be as the ‘ego-ideal’. (Nye: 1975, p.20). The superego is responsible for extremes of behaviour such as introvert behaviour, where  it will concern the person with too many of society’s rules, inhibiting the id and ’immobilizing the ego’s attempts to achieve satisfaction in the real world (Nye: 1975, p.20). On the other hand it can also cause extrovert behaviour where the individual abandons the expected standards of society. Anxiety and defence mechanisms When anxieties develop they can often be explained through the processes which  Freud termed ‘anxiety or defence mechanisms.’ The problem is to do with the  desires of the id they can be controlled by the superego and directed by the ego, but they still remain as very strong inclinations within the psyche. A desire of the id to act in a particular way may be thought of as wrong or punishable and thus creates guilt and tension anxiety within the person. The impulse might be expressed in a disguised form that society does approve of for example becoming a racing car driver or boxer as an outlet for aggression. Other ways of coping with the presence of inner energies are: Repression This is the phenomenon of forcing the uncomfortable desires, painful feelings and memories into the unconscious, only for them to affect our behaviour and mental states on a subliminal level, maybe emerging as Freudian slips or as symbolic imagery in nightmares. It is the job of the ego to try and prevent the ‘forgotten’ thoughts from returning to the conscious mind. Projection This occurs when someone assigns their own negative thoughts to another in order to  absolve themselves of the feeling. Denial Negative aspects of a situation may be avoided if the ego simply does not  acknowledge that they are there; this may be conscious or unconscious. Sublimation When forbidden impulses are channelled into socially acceptable behaviour or a socially beneficial situation for example, an aggressive man might choose to become  a martial arts teacher or a soldier. Alternatively, when a substitute action or transfer  of energy replaces the reaction to the person or object that originally caused the upset it is called displacement. The Psychodynamic Perspective in a healthcare setting Freud’s work has been influential not just in the field of psychology but also in conjunction with the sphere of mental health and social care. His group dynamics where he suggests that a group of people admit the same person a leader into their superego and identify with each other (Cave: 1999, p.57) can help individuals to understand the sometimes complex relations between work colleagues. For example, when a new worker joins a team it takes time to become integrated: Freud would say that this was due to the ‘personal space’ barrier (Cave: 1999, p.58) not yet being broken. Once the person is accepted then the group directs hostility to others outside of it, the barrier changing to a ‘group space’ barrier. More importantly an awareness of group processes can help ‘inform, promote insight, change behaviour or alleviate suffering.’(Cave: 1999, p.50). Understanding the relationships between individuals within a group is crucial for healthcare professionals who work in hospitals and care homes. For example, it could be beneficial to understand what facilitates group cohesion when working with discussion/therapy groups. Alternatively, a patient who is afraid of group work may  be best understood in isolation Freud’s psychoanalytic approach is commonly used in counselling and therapy for drug users, those who have been/are abused, and can be  beneficial to those suffering from obsessions and neurotic disorders. It is vital to have a good rapport and understanding between healthcare workers and patients to provide the best professional environment for recovery. Difficult situations often arise which require tact and discretion such as bereavement and can be understood in terms of Freud’s distinctions between the ego and the id and the conscious and unconscious mind. For example, an unusual pattern of behaviour (possibly anger or guilt) seen in a bereaved person might be attributed to a  defence mechanism which is masking the hidden conflict or upset associated with the death. Critical evaluation of the Psychodynamic Perspective Like all psychological theories, Freud’s is susceptible to heavy criticism because it is one of many perspectives all of which are formed by people trying to study other people making it difficult to attain complete objectivity. Skinner’s behaviourist theory criticises Freud for his belief that many guilt and anxiety complexes are sexually orientated (Nye: 1975, p.52), and there is also conflict between Freudian theorists and those psychologists who view behaviour as controlled by external factors: an example being the issue of suggestion in psychoanalysis and hypnosis. Take for instance, the case study of ‘Dora’ (Cave: 1975, p.37) whose abuse was suggested by Freud to be imagined, the consequence being that after counselling sessions with Freud she showed no signs of improvement. There is discrepancy about the meaning of dream symbols, and the outcome of hypnosis and psychoanalysis is often ambiguous and unreliable. Further problems occur when using hypnosis as therapy because the patient might not be properly under, and, as Freud himself found, they may even fall asleep. Nye notes that Freud used a restricted sample while developing his theory so  that it was not fully representative, and therefore his ideas only have limited applicability. (1975, p.146). Freud’s studies might also have been selectively chosen  to represent his ideas considering the complex nature of concepts such as the Oedipus complex it is unlikely that his findings were reliably consistent. As Webster says in criticism of Freud: (He) made no substantial intellectual discoveries. He was the creator of a complex pseudo-science which should be recognized as one of the great follies of Western civilization. In creating his particular pseudo-science, Freud developed an autocratic, anti-empirical intellectual style which has contributed immeasurably to the intellectual ills of our own era. (Webster: 1995, p.438) A large amount of Freudian theory is indeed based around hypothetical concepts such as the id and the ego, and is restricting in the sense that all behaviour can be traced back to some hidden primal source. Yet it is necessary to bear in mind that much of Freud’s theory has found its way into everyday language such as the ‘unconscious’ and ‘conscious mind‘, the ‘ego‘, etc, and this in itself suggests that the theory makes adequate sense to the human mind. Thus, we are left with a theory that is at the very least plausible but left very much open to interpretation: like many opposing theories evidence can be found for and against it, and it is left to the individual to determine whether or not the theory is acceptable to them. References Bland. J., 2003, About Gender: Freud, the Father of Psychoanalysis. Available from URL (http://www.gender.org.uk/about/01psanal/11_freud.htm). Bocock, R., 2002, Sigmund Freud. London: Routledge. Cave, S., 1999, Therapeutic Approaches in Psychology. London: Routledge. Gay, P., 1998. Freud: A Life for Our Time. New York: Norton. GuruNet, online dictionary, available from URL (www.questia.com). Freud, S., 1927. The Ego and the Id. Contributors: Joan Riviere transltr. London: Hogarth press, and the Institute of psycho-analysis. Messer, D., and Meldrum, 1995, Psychology for Nurses and Healthcare Professionals. Prentice Hall: London. Nye, R., 1975, The Three Psychologies, 3rd Ed. California: Brooks. Stoodley, B., H., 1959, The Concepts of Sigmund Freud. Glencoe: Free Press Webster, R., 1995, Available from URL (JavaScript:parent.bookWindow(../books/bookstz.html l WebsterR_1995) Background Reading Fine, R., D., 1962, Freud: A Critical Re-Evaluation of His Theories. New York: David Mckay. Jones, E., 1953, The Life and Work of Sigmund Freud: The Formative Years and the Great Discoveries, 1856-1900. Volume: 1. New York: Basic Books. Levine, M., P., 2000, The Analytic Freud: Philosophy and Psychoanalysis. London: Routledge. Mansfield, N., 2000, Theories of the Self from Freud to Haraway. St. Leonards, N.S.W: Allen Unwin.

Is America Still The Greatest Nation Politics Essay

Is America Still The Greatest Nation Politics Essay The United States is unquestionably the strongest military and economic power in the world today, but other great empires have crumbled and America will suffer the same fate if even its own citizens and its friends around the world ever lose faith that America acts in the name of liberty, for the sake of democracy. What does this statement mean? The author of this statement was trying to express that no matter how great a nation is, if the citizens of the nation and other nations began to lose faith, then the nation could eventually fail as others have in the past. No matter what the nations moral or ethical makeup is, without individuals willing to stand up and defend it there will be no nation. This does not always mean military actions it also includes global economic stabilities and global partners that are willing to back a nation up during all phases good or bad. Is the world stage losing faith in American acts? Some may argue all you need to do is look at the way America uses the military to force our ways on other countries (i.e. Iraq or Korean War), or the way we are currently dealing with our own fiscal issues. America is one of the biggest nations in the world and we do have a large presence in the world community. One of the best examples of our presence would be that of our military. The Pentagon currently owns or rents 702 overseas bases in about 130 countries and has another 6,000 bases in the United States and its territories (Johnson). Even with this massive presence overseas it doesnt make us immune. The greatest example would be 9-11 and the flack we caught when invading Iraq. I remember after 9-11 happened may were in arms for getting even with the individuals that did this to America, but when President Bush decided to invade Iraq some attitude changed. People both globally and here at home began having doubt in the American go vernment. The American economy also has caused doubts not only across the nation but also world, a perfect example would be the credit downgrade that America received. [The] credit agency Standard Poors lowered the nations AAA rating for the first time since granting it in 1917à ¢Ã¢â€š ¬Ã‚ ¦one notch to AA-plus (Foxnews). This credit rating drop changed many views on America and made many wonder what would the government do to fix the issue. Throughout the 20th century America has found itself in several challenges to overcome, both at home and overseas. Two examples of how America has strong backing would be during the Great Depression and World War II. One of the biggest challenges it had to overcome was the Great Depression, it was an easy time for Americans to give up, but they didnt. The government had to step in and help restart the economy and it took several years to bounce back. Without handwork and strong support from the people, even though struggles, America may not have been able to recover. Another great challenge that America had to endure was World War II. Once Japan attacked Pearl Harbor, America had to face a great war on two different fronts, the Pacific and European wars. As the war progressed women had to replace men, who went to war, in factories. The American people were also called to help support the war by selling war bonds to raise money for war efforts. This along with rationing of precious go ods such as gas, tires, sugar, coffee, meat, butter, alcohol (Ayers 687) showed support from the American people. A great example of America not having support from home or overseas would be the Iraq War. After 9-11, President Bush was able to get the Patriot Act passed which gave broad powers to combat terrorism (Ayers 874). The President saw a threat in Iraq and wanted to make sure that the American people were going to be safe. After not receiving very little support from the United Nations in the decision to attack, he decided to take action. After the initial shock and awe the resentment began to grow from within the United States and around the world. Looking back on the 20th century and the present day, I do believe that America still has a strong presence in the world. One of Americas biggest strengths is the military. As stated earlier we have strong overseas presence both on land and sea. We have numerous bases overseas, in Japan and Europe, and with the greatest Navy in the world we can be off a countrys coastline within a few days ready to drop bombs if needed. Our economy, even with the tough times we are going though, still is able to produce more goods and services than most of the world. Prices throughout the world still use the U.S. dollar as the standard currency to base prices on. Most countries, including the ones that despise Americans, either follow our culture or try to copy what we are doing. They follow our music, movies, celebrities, and even wanting our freedoms. Though my experiences of traveling the world, when I was in the military, no matter what culture you find yourself in there is some type of American influence that can be found. This is why I believe that American still hold a strong stance in the world community. In my personal opinion, I dont think Americans are losing faith in America, I think we (as a whole) are losing faith in the government. The decisions that law makers are currently making to balance the budget has been a fight thats been going on for years. Most of the individuals I talk to feel that instead of trying to fix the problem at hand, the government tries to make due on campaign promises and kick the problem down the road. Several issues such as jobs being sent overseas (to places like China and Korea), the military budget, they fiscal cliff, and entitlements are causing Americans to lose faith in the way the government to trying to control the spending. If we as a country, both government and the civilian population, are unable to control the debt and get ourselves back to a fiscal economy the we will lose our place as an economic power. There are other countries that are building up and are ready to take over as the strongest nation, both economically and militarily, i.e. China. This could take several years to accomplish but if things dont change it could be reality. History shows that if we as American people are willing to stand up for the founding principles that out forefather stated, then the American dream can still survive. If we currently continue down the path we are on we could become a second rate in the world as a whole. Even if this takes place and the world looks at us differently down the road, I still believe that Americans as a whole will not lose faith and will continue to fight for what America stands for.

Philosophy of Science Essay -- Informative, Scientific Method

Background In the modern technological and highly specialized world scientists are seldom aware of the work of philosophers; it is practically unparalleled to find them queuing up, as they have done in Popper's case, to swear to the great practical beneficial influence which that philosophical work has had upon their own (1). In his paper he started by the following â€Å"The problem which troubled me at the time was neither, 'When is a theory true?' nor, 'When is a theory acceptable?' My problem was different I wished to distinguish between science and pseudo-science; knowing very well that science often errs, and that pseudo-science may happen to stumble on the truth† (2) Karl considers the empirical method of observations ensued by test or series of tests to approve a theory, and analysis of the results (empirical method) is not acceptable. As an alternative he recommended the following â€Å"I often formulated my problem as one of distinguishing between a genuinely empirical method and a non-empirical or even a pseudo-empirical method--that is to say, a method which, although it appeals to observation and experiment† (2) He established that the main problem in the philosophy of science is that of demarcation, i.e., (distinguishing between science and what he terms 'non-science). Karl popper summarized his ideas in seven points as followed: 1. It is easy to obtain confirmations, or verification, for nearly every theory-if we look for confirmations. 2. Confirmations should count only if they are the result of risky predictions 3. Every 'good' scientific theory is a prohibition: it forbids certain things to happen. 4. A theory which is not refutable by any conceivable event is non scientific. 5. Every g... ...ns no observation is free from the possibility of error. 6- Karl popper considered that scientific logic is deductive logic. so all scientific theories are tested by trying to falsify them. In order to do this, scientists deduce predictions from theories and if the predictions prove to be false, then deductive logic dictates that the theory is false. If the predictions prove to be true, then the theory is not proven true, simply this means that is corroboration to this theory. 7-last one (conventionalist twist) or a’ conventionalist stratagem'.)these words created to explain the trying some admirers of some theories to rescue the theory from refutation tried to save their theory, By introducing some auxiliary assumption, or by re-interpreting the theory in this way that it escapes refutation, but they destroyed or at least lowered, its scientific status (2).

Shaping Identity Essay -- essays research papers

Shaping Identity Identity. What is identity? One will say that it is the distinct personality of an individual. Others will say that identity is the behavior of a person in response to their surrounding environment. At certain points of time, some people search for their identity in order to understand their existence in life. In regards, identity is shaped into an individual through the social trials of life that involve family and peers, the religious beliefs by the practice of certain faiths, and cultural awareness through family history and traditions. These are what shape the identity of an individual.   Ã‚  Ã‚  Ã‚  Ã‚  In today's world, society creates an impact on human life. More of an impact can be seen among family and peers. They can be found at home, work, and school. At home with family, identity can be created on the difference of having one parent, divorced or separated parents, no parents, abusive parents, or even negligent parents. For example, children who grow up without a father or mother figure tend to become more independent at an early stage. Another example is where certain experiences within the family such as constantly witnessing parents argue can cause one's identity to be confined and distant. But, some people shape their identity similar to their parents. Such as a son became a soldier in the army because his father was in the army. Siblings, if any, are also an influence on the social identity of a person. They either become your friend, mentor, or you...

Depression Essay -- essays research papers

One of the most common mental disorders in the world today affecting up to 340 million people worldwide is depression. Imagine the entire student body of Upper Darby High School infected with the exact same disease. Depression is a common but complex disorder diversely affecting a variety of people with a multitude of symptoms. The disorder may be brought into affect due to a large number of causes. What can be done? There are numerous manners in which to treat this disorder spanning from medication to counseling to support groups. Although depression is one of the most treatable mental illnesses in the world, only about one half of all cases of depression are diagnosed and successfully treated.   Ã‚  Ã‚  Ã‚  Ã‚  The most common symptoms of depression include low self-esteem, loss of energy, or lack of interest in activities previously experienced as pleasurable. Sleeping problems have also been associated with depression. A study shows roughly 80% of diseased individuals experience insomnia (depression.com 1). Possible problems may include: difficulty in falling asleep, waking up in the middle of the night with difficulty returning to sleep, waking up too early in the morning, brief periods of REM sleep, unusually long periods of stage 1 (light) sleep, or unusually brief periods of stage 3 and 4 ( deep, restorative) sleep (depression.com 1). Weight and depression are also commonly associated with each other. Many people begin loosing interest in eating which results in weight loss. Others may experience the opposite effect and gain weight by overeating. Various antidepressant medications are known to have different affects on appetite and weight (depression.com 3). Suicid al thoughts are also a more common symptom of depression. Most people do not commit suicide because of increased suicidal thoughts. The risk of doing so simply increases their suicidal tendency.   Ã‚  Ã‚  Ã‚  Ã‚  The causes of depression remain unclear and vary from person to person. Genetic factors of depression have become a growing interest among scientist. The most probable explanation of this disorder is a chemical imbalance in the human brain. Evidence suggests that depression is caused by a deficiency in noradrenaline and serotonin neurotransmitters (depression-net.com 2). Studies have shown that people with relatives who have depression gain a one in four ... ... electroconvulsive therapy. This is reserved for only the most sever cases of depression in which a patient has not responded to medication or for some reason is unable to take antidepressants. ECT is one of the most effective treatments for depression. Over the years, it has advanced to become a safer procedure (depression-net.com 5). The World Health Organization predicts that depression will be the greatest burden of ill health to the developing world by the year 2020. It is predicted to be the second largest cause of death and disability (depression-net 1). Will the new millennium spawn a new breed of ill mannered, drug intoxicated, depressed individuals? Depression is the most common mental disorder in the world today, and yet there are still many aspects of this illness that we do not know about. The exact cause of depression remains undetermined without a cure. There is no precise test that can be given to determine weather or not an individual has depression. There is a certain lack of understanding and knowledge among society. It is abnormal for a person to commit self inflicted harm intended upon ending his or her own lives. There is help for those depressed individuals.

Corporate Finance Essay

Introduction In 2001, the Tulsa, Oklahoma, Williams Company was in financial distress. The primarily energy-industry company was struggling with a shrinking energy trading market, which was marked by distressed entities such as Enron’s broadband unit and Global Crossing. Williams also suffered internally with a floundering telecommunications division and a plummeting stock price. These issues led credit rating agencies Moody’s and Standard & Poor’s to downgrade the credit rating of Williams’ bonds to the level of non-investment-grade junk bonds. Amidst all of this uncertainty, the company on January 21, 2002, announced a new CEO, Steven J. Malcolm. Malcolm realized one of the most important functions for Williams moving forward would be raising capital. Malcolm’s four-pronged plan to achieve this goal involved selling assets, reaching a resolution for its energy and trading book, managing and monitoring cash and businesses and â€Å"right-sizing† Williams to reflect the new scope of operations. However, Williams had a substantial amount of short-term and long-term debt maturing in the second half of 2002. In addition, its credit and commercial paper facilities needed to be renewed about the same time. With approximately $450 million dollars of cash on hand and only one undrawn revolving credit facility, Williams sought external financing to help meet its current cash flow needs. One group of investors led by Warren Buffett’s Berkshire Hathaway along with Lehman Brothers offered Williams a solution with a one-year $900 million loan. Under the terms of the agreement, each lender would loan $450 million to Williams Production RMT, a Williams subsidiary, whose major assets included natural gas properties in the Rocky Mountains. In addition to the repayment of the principal in one year, Williams would pay 5.8 percent interest quarterly and an additional 14 percent of the principal at maturity plus a â€Å"deferred setup fee.† The deferred setup fee would be equivalent to the greater of 15 percent of the principal or 21 percent of the purchase price less RMT’s indebtedness. This would be influenced by any further asset liquidation by RMT. The loan, guaranteed by Williams Company as well as certain subsidiaries, also contained several covenants that Williams must meet to avoid breach of contract. The positive covenants included maintaining an interest coverage ratio of greater than 1.5 to 1 and maintaining a fixed charge coverage ratio of at least 1.15 to 1. Negative covenants limited restrictive payments (including redemption of capital stock) and capital expenditures in excess of $300 million. Thorough evaluation of the terms and lending scenario reveals this loan would create a beneficial scenario not just for the lenders, but for the borrower as well. For Williams, the loan provided temporary relief from multiple short-term debt security maturations and enhanced the company’s ability to secure a credit facility of $700 million. This would likely be followed by favorable market reactions in the form of increased stock price as a result of decreased uncertainty of future cash flows. Also, any Buffett investments in Williams would signal a strong endorsement of the company’s future prospects, likely leading to increases in Williams’ stock price. Likewise, for Berkshire Hathaway and Lehman Brothers, this deal should supply high returns on investment. Assuming the loan would be held to maturity, the lenders would divide returns of approximately 34% on this loan. Given that Williams guaranteed the loan, backing it with asset and capital stock, such returns on this risk would be a huge win for both lenders. Although the risk-free rate would be necessary to determine the exact net present value of the investment opportunity facing Berkshire Hathaway and Lehman Brothers, sufficient information is available to find the project’s internal rate of return. The IRR for this agreement ranges between 11.87% and 13.01%. The return on investment (ROI) for this particular agreement ranges between 52% and 58%. In either case, the numbers range because of provision (c) listed in the case’s Exhibit 1. The â€Å"deferred setup fee† fluctuates depending on potential sales of RMT’s assets. Terms of the proposed financing Guarantees Those involved in the lending process establish financing terms to protect the positions of all parties. The debt guarantee in Williams’ proposed financing, for example, provided insurance for the repayment of debt. Williams would essentially act as a co-signer for Williams Production RMT’s obligations to Berkshire Hathaway and Lehman Brothers. Per the terms, Williams would have to agree to make payments in place of Williams Production RMT if any of the payments were late or not paid. Using a guarantor would allow Williams Production RMT access to a loan at a lower interest rate than if Williams had not secured the loan. The logic behind this is that two individuals or entities promising to pay back the debt means there is lessened risk for overall default. That means Berkshire and Lehman may be willing to accept a lower interest rate in return for less risk of loss. It is quite possible that Williams Production RMT would not have been able to obtain a loan without a gu arantee. Covenants Equity and debt investors have a somewhat adversarial position, though both want a company to succeed. Equity investors want the company to take a certain amount of risk so they have the chance of seeing large returns. Debt investors want a company to be more conservative to protect the issuer and to ensure that the company will repay its debts. Like many other companies, Williams’ top priority, however, is to maximize stockholder wealth. This creates a dilemma in a debt offering. Berkshire Hathaway and Lehman Brothers therefore use debt covenants to limit the amount of risk Williams can take in the hopes that the company’s actions will not endanger loan repayment. Collectively, these covenants outline the rights of the lenders and restrictions upon Williams in regards to the loan. When a company does not live up to its debt covenant, it breaches the contract. In theory, such action would trigger automatic payment to creditors. In reality, however, many companies default because they are not in good financial health and thus cannot pay. Therefore, breach of covenant usually means that the two parties renegotiate the terms of the debt, often calling for higher interest rates or other incentives for the issuer to allow Williams more time to pay. Williams’ financial problem During the first half of 2002, Williams suffered a number of financial difficulties. The company’s total cash flow decreased by 680.22 percent as compared with 2001. During the year, Williams’ only net positive cash inflows came from financing, which netted the company $1.061 billion. In contrast to cash inflows, the company’s outflows totaled $1.589 billion from operations and investing. Overall, the decrease can largely be attributed to the decrease in cash flow from operations, which amounted to a decrease of $2.566 billion. Specific to operations, much to blame is the company’s decrease in working capital of $879 million. To adjust for this decrease in cash flows, the company liquidated a number of assets in 2002. The most valuable included the Kern River and Williams pipelines, which generated immediate cash proceeds of $1.124 billion. The question remained, however, as to how Williams would be able to find a way to pay debts of $2.347 billion within the next year and eventually long-term debts of $11.972 billion. In May 2002, the firm sold another $1.7 billion in assets and announced its intention to sell an $1.5 to $3 billion in assets. Previously, in December 2001, Williams planned to cut its 2002 capital spending by 25 percent or $1 billion to bolster its balance sheet. Williams also issued $1 billion in equity-linked securities called FELINE PACS and decided to cut its dividend by 95 percent. While seemingly drastic measures, the negative total cash flow of $619 million reveals that reducing dividend payments and selling off two major sources of operating income was not sufficient for Williams to dig itself out from under its debt obligations without independent financial assistance. Signs of distress It was clear that Williams was in deep. Though the signs of distress were many, the most noticeable was that the company’s cash flows were insufficient to meet its short-term debt. Unless the company continued to take drastic action, it could have found itself entering into bankruptcy proceedings within the next year. Another concerning sign included that in 2002, Williams’ 95 percent decrease in dividend payments and its more than 90 percent decrease in stock price should have indicated that the firm was struggling. Particularly striking was the fact that dividend disbursements had been increasing for the prior 10 years and that Williams Communications stock closed at a mere $0.01 per share on July 31, 2002. Williams also sent strongly negative signals with its 2002 sales of its Kern River and Williams pipelines. Although these netted the company immediate cash amounting to $1.124 billion, the sale was made at the sacrifice of substantial cash inflows, suggesting this was an act of desperation. Investors weren’t the only ones receiving signs of Williams’ distress. Credit agencies also observed uncertainty in Williams’ future, as indicated by the company’s fluctuating credit ratings. With Williams in July 2002 settling at a B+ Standard & Poor’s long-term credit rating, the company saw resulting increases in bond yields. Whereas Williams had bond yields of approximately 7 percent in December 2001, its yields fell just under 20 percent in July 2002, further complicating its situation. Recommendation Williams’ plight left it with few options for restoring its financial solvency, and most were of limited feasibility. Williams could have issued additional equity at the then current stock price of $2.95 per share, though this would dilute the company’s current share base. In addition, most companies only hold seasoned equity offerings when they believe their stock is overpriced. Considering that Williams’ stock price had fallen by more than 90%, Williams should not consider an equity offering. The company also could have issued more bonds. This option was not feasible, however, due to the company’s credit downgrade.With Standard & Poor’s rating the company a B+ in July 2002, Williams would have to issue many bonds and pay a substantial yield amounting to just under 20 percent per annum. Williams also could have sold assets. Since Williams had already sold close to $3.0 billion in assets, however, selling more could damage the company’s ability to generate operating cash flows. Though Berkshire and Lehman presented an opportunity, most lenders were hesitant to provide Williams capital due to the company’s financial turmoil. This large, 35 percent interest loan appears to have the most favorable terms possible for Williams in its last-ditch effort to save itself. The real winner here, however, would be Berkshire Hathaway and Lehman Brothers, both of whom would glean a lucrative return on their investment, given it is successful. Williams, on the other hand, should agree to the loan only because it has no other feasible options.

Jhumpa Lahiri’s Unaccustomed Earth: Summary

Hema and Kaushik had an affair they meet in Italy after having a two long decades. Hema, now a college professor, who is upset about her previous affair with a married man and plans to settle down by marrying someone she barely knows. Kaushik, a world traveling, successful photojournalist, is preparing to accept a desk job in Hong Kong. In spite of all that, they find their deep connection irresistible and must reckon it with the lives they have chosen to lead. Her parents introduce Navin to Hema and they had an arrange marriage.She thought that Julian was going to leave his wife, to be with her so she agreed to marry Julian. She decide not to marry Navin because she concerned it to be and arrange not a marriage and she said that nerving was He decide not to leave his wife so Hema decide to marry Navin. She had just know Navin for only three weeks before she decide to marry him. The parent did not know about Julian it was and surprise to them because they thought is was single becaus e she was shy, she had devoted all her time to her studies to be bothered with a men.Her mother asked hema on her thirty-fifth birthdays, if she had preferred women. They had never heard about Julian and about them having an affair with him for two half years they had no idea about him, never mind that he was an married man. When she was in Rome, she communicated with Navin by E-mail or she talked with him a few times on the phone the conversation got heavy. They also talked about their honeymoon in Goa. Hema did not miss him but she looked forward to Calcutta to marry him and returning with him on the plane, and on time for her to resume teaching at Wellesley.