Globalization has various aspects which affect the world in several different ways such as:

    * Industrial - emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. Particularly movement of material and goods between and within national boundaries. International trade in manufactured goods increased more than 100 times (from $95 billion to $12 trillion) in the 50 years since 1955. China’s trade with Africa rose sevenfold during 2000-07 alone.
    * Financial - emergence of worldwide financial markets and better access to external financing for borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were traded daily to support the expanded levels of trade and investment. As these worldwide structures grew more quickly than any transnational regulatory regime, the instability of the global financial infrastructure dramatically increased, as evidenced by the Financial crisis of 2007–2010.

As of 2005–2007, the Port of Shanghai holds the title as the World's busiest port.

    * Economic - realization of a global common market, based on the freedom of exchange of goods and capital. The interconnectedness of these markets, however meant that an economic collapse in any one given country could not be contained.[citation needed]

Almost all notable worldwide IT companies are now present in India. Four Indians were among the world's top 10 richest in 2008, worth a combined $160 billion. In 2007, China had 415,000 millionaires and India 123,000.

    * Health Policy - On the global scale, health becomes a commodity. In developing nations under the demands of Structural Adjustment Programs, health systems are fragmented and privatized. Global health policy makers have shifted during the 1990s from United Nations players to financial institutions. The result of this power transition is an increase in privatization in the health sector. This privatization fragments health policy by crowding it with many players with many private interests. These fragmented policy players emphasize partnerships, specific interventions to combat specific problems (as opposed to comprehensive health strategies). Influenced by global trade and global economy, health policy is directed by technological advances and innovative medical trade. Global priorities, in this situation, are sometimes at odds with national priorities where increased health infrastructure and basic primary care are of more value to the public than privatized care for the wealthy.
      Britain is a country of rich diversity. As of 2008, 40% of London's total population was from an ethnic minority group. The latest official figures show that in 2008, 590,000 people arrived to live in the UK whilst 427,000 left, meaning that net inward migration was 163,000.
    * Political - some use "globalization" to mean the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization.Politically, the United States has enjoyed a position of power among the world powers, in part because of its strong and wealthy economy. With the influence of globalization and with the help of The United States’ own economy, the People's Republic of China has experienced some tremendous growth within the past decade. If China continues to grow at the rate projected by the trends, then it is very likely that in the next twenty years, there will be a major reallocation of power among the world leaders. China will have enough wealth, industry, and technology to rival the United States for the position of leading world power.
    * Informational - increase in information flows between geographically remote locations. Arguably this is a technological change with the advent of fibre optic communications, satellites, and increased availability of telephone and Internet.
    * Language - the most popular language is Mandarin (845 million speakers) followed by Spanish (329 million speakers) and English (328 million speakers).
          o About 35% of the world's mail, telexes, and cables are in English.
          o Approximately 40% of the world's radio programs are in English.
          o About 50% of all Internet traffic uses English.
    * Competition - Survival in the new global business market calls for improved productivity and increased competition. Due to the market becoming worldwide, companies in various industries have to upgrade their products and use technology skillfully in order to face increased competition.
    * Ecological - the advent of global environmental challenges that might be solved with international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species. Since many factories are built in developing countries with less environmental regulation, globalism and free trade may increase pollution. On the other hand, economic development historically required a "dirty" industrial stage, and it is argued that developing countries should not, via regulation, be prohibited from increasing their standard of living.

The construction of continental hotels is a major consequence of globalization process in affiliation with tourism and travel industry, Dariush Grand Hotel, Kish, Iran

    * Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities which embodies cultural diffusion, the desire to increase one's standard of living and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture". Some bemoan the resulting consumerism and loss of languages. Also see Transformation of culture.
          o Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and, to a lesser extent, Bollywood movies). Some consider such "imported" culture a danger, since it may supplant the local culture, causing reduction in diversity or even assimilation. Others consider multiculturalism to promote peace and understanding between peoples. A third position gaining popularity is the notion that multiculturalism to a new form of monoculture in which no distinctions exist and everyone just shift between various lifestyles in terms of music, cloth and other aspects once more firmly attached to a single culture. Thus not mere cultural assimilation as mentioned above but the obliteration of culture as we know it today.
          o Greater international travel and tourism. WHO estimates that up to 500,000 people are on planes at any one time.[citation needed] In 2008, there were over 922 million international tourist arrivals, with a growth of 1.9% as compared to 2007.
          o Greater immigration, including illegal immigration. The IOM estimates there are more than 200 million migrants around the world today.] Newly available data show that remittance flows to developing countries reached $328 billion in 2008.
          o Spread of local consumer products (e.g., food) to other countries (often adapted to their culture).
          o Worldwide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Orkut, Facebook, and MySpace. Accessible to those who have Internet or Television, leaving out a substantial segment of the Earth's population.
          o Worldwide sporting events such as FIFA World Cup and the Olympic Games.
          o Incorporation of multinational corporations in to new media. As the sponsors of the All-Blacks rugby team, Adidas had created a parallel website with a downloadable interactive rugby game for its fans to play and compete.
    * Social - development of the system of non-governmental organisations as main agents of global public policy, including humanitarian aid and developmental efforts.
    * Technical
          o Development of a Global Information System, global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones
          o Increase in the number of standards applied globally; e.g., copyright laws, patents and world trade agreements.
    * Legal/Ethical
          o The creation of the international criminal court and international justice movements.
          o Crime importation and raising awareness of global crime-fighting efforts and cooperation.
          o The emergence of Global administrative law.
    * Religious
          o The spread and increased interrelations of various religious groups, ideas, and practices and their ideas of the meanings and values of particular spaces

Brokerage houses are also known as brokerage firms. These are basically legal and licensed companies which have the authority to sell and purchase securities and stocks. These act as intermediaries in between the sellers and the buyers. The demands of the clients with respect to the stocks and their respective investment are carried on by the brokers employed by the brokerage houses.

The services of the brokers are conferred on the basis of commissions. Different brokerage firms have different commission types and amounts. The services which are offered by a particular firm are dependent on the concept of price per trade. For example, any brokerage firm which might be charging lesser fees would turn out to be slow in the execution of services when compared with any higher charging firm. In the same manner, the firms which charge higher have more personalized services.

Some of the other fees which are included in the commissions are as follows

   1. Closing of account
   2. Transferring assets
   3. Wiring money

Some of the firms also charge the fees when the accounts are inactive. They also demand the IRA custodian fees payment. Along with it, the annual service fees are also coupled. Explaining the functioning of OTC stocks, Jeffery B.Little in his book "Understanding Wall street" explained that the client needs to pay for the up and down in the market.

Several different types of investment products are provided by the brokerage firms. Some of them prefers specialization in only few products to emancipate their efficiency. The most common ones are

   1. Corporate bonds
   2. Government bonds
   3. Mutual funds
   4. Stocks
   5. Options
   6. OTC bulletin stocks

There are several methods of trading available and they depend on the brokerage firms' convenience. Some of the simpler methods are telephones and internet.

The online brokers deal with online investments in both forex trading and stock exchanges. Some of the firms which have the facilities of online brokers are

   1. Schwab
   2. Fidelity
   3. eTrade
   4. Ameritrade
   5. Financial

The online sites of the brokerage firms have the following incorporations like

   1. Stock quotes
   2. Trade information
   3. Historical performance of different stocks
   4. History of the companies
   5. Financial status of different companies

The banking services are also provided by the brokerage firms. Some of the services are

   1. Cheque writing to ATM card and visas
   2. Money market sweeps

The rate of interest of money market account is comparatively higher in the brokerage firms.

Apart from these services, some of the brokerage houses also provide with market research and other investment strategies.

Amine Bouchentouf, in the book "High powered investing, all in one dummies" states the given ways on which the broker should be selected.

1. Reasonable prices: each brokerage house has its own pricing criteria. Thus one should always compare the prices before selecting the right firm. The pricing is normally based on the money on account, trades done per quarter, number of shares traded etc.

2. Good service: the firms should not put you on call waiting and voice mail.

3. Their website should be informative and user friendly.

4. Account opening incentives should be provided.

But unfortunately the popularity of the forex markets has resulted into higher forex scams. Its sad to witness one's entire hard earned money gets wiped out due to the busting of the brokerage firms. So, its very important for the forex investors to be more careful and make flawless selection of the brokerage firms on the basis of authenticity and reliability so that ultimate financial freedom can be enjoyed.

The forex selection bazaar emerged as an over-the-counter (OTC) monetary vehicle for huge banks, monetary units and large worldwide corporations to evade against overseas currency revelation. Same as the forex market, the forex selection market is measured as an "inter-bank" marketplace. However, with overabundance of real-time fiscal information and forex choice dealing software accessible to most depositors with the help of the Internet service, Nowadays, the forex choice market includes an progressively more huge number of persons and organizations who are contemplating and/or hedging overseas currency revelation through telephone or Internet web site forex exposure platforms.

Most of the forex alternative trading is carried out through telephone as there are very few forex agents offering the online forex choice of trading platforms. Definition of forex seleciton - A forex selection is a monetary currency agreement that gives the forex choice purchaser the right and not the commitment, to trade a specific forex mark agreement (the underlying) at a particular outlay (the strike fee) on or prior to a particular date (the finishing date). The sum of the forex selection purchaser offers payment to the forex alternative vendor for the forex selection agreement rights is known as the forex selection "premium."

Either the Forex alternative Buyer - the purchaser, or possessor, of an overseas exchange alternative has the selection to retail the overseas currency alternative contract before ending, or he or she may select to grasp the overseas currency alternatives contract in anticipation of termination and implement the rights to obtain a location in the fundamental spot overseas currency. The work of exercising the overseas currency alternative and captivating the consequent underlying location in the overseas currency mark market is called as "assignment" or as "assigned" a mark position.

The preliminary financial compulsion of the overseas currency alternative purchaser is to disburse the finest to the vendor directly when the overseas currency alternative is initially acquired. Formerly the payment is made, the overseas currency alternative holder does not have other monetary obligation until the overseas currency selection becomes offset or terminate.

Coming towards the finishing date, the identify purchaser can implement the right to acquire the fundamental overseas currency mark position at the overseas currency alternative's strike cost, and a holder can apply the right to retail the underlying overseas currency spot place at the overseas currency selection strike value. Most overseas currency selections are not activated by the purchaser, and counterbalance the market before ending.

A overseas currency selection expires of no value if, at a time the overseas currency option expires, the strike price is "out-of-the-money." In simplest terms, a foreign currency alternative is "out-of-cash" if the fundamental overseas currency spot value is inferior to a overseas currency identify option's hit price, or the original overseas currency mark price is elevated than a put alternatives strike value. Once a overseas currency alternative has terminated worthless, the overseas currency selection agreement itself ends up and neither the purchaser nor the vendor possess any additional compulsion to the second party.

Since the early 1970s, with increasing internationalization of financial transactions,
the foreign exchange market has been
profoundly transformed, not only in size, but
in coverage, architecture, and mode of
operation. That transformation is the result of
structural shifts in the world economy and in
the international financial system. Among
the major developments that have occurred
in the global financial environment are the

following:

A basic change in the international monetary

system, from the fixed exchange rate “par
value” requirements of Bretton Woods that
existed until the early 1970s to the flexible
legal structure of today, in which nations can
choose to float their exchange rates or to
follow other exchange rate regimes and
practices of their choice.
w A tidal wave of financial deregulation
throughout the world, with massive elimination
of government controls and restrictions

in nearly all countries, resulting in greater
freedom for national and international
financial transactions, and in greatly increased
competition among financial institutions, both
within and across national borders.


A fundamental move toward institutionalization
and internationalization of
savings and investment

with funds managers
and institutions around the globe having
vastly larger sums available, which they are
investing and diversifying across borders
and currencies in novel ways and in ever
larger amounts as they seek to maximize
returns.


A broadening and deepening trend toward
international trade liberalization, within a
framework of multilateral trade agreements,
such as the Tokyo and the Uruguay Rounds of
the General Agreement on Tariffs and Trade,
the North American Free Trade Agreement,
and U.S. bilateral trade initiatives with China,
Japan, and the European Union.

a changing market in a changing world
Major advances in technology, making
possible instantaneous real-time transmission of
vast amounts of market information worldwide,
immediate and sophisticated manipulation of
that information to identify and exploit market
opportunities,and rapid and reliable execution of
financial transactions—all occurring with a level
of efficiency and reduced costs not dreamed
possible a generation earlier.

Breakthroughs in the theory and practice of
finance, resulting not only in the development
of innovative new financial instruments and
derivative products, but also in advances in
thinking that have changed our understanding
of the financial system and our techniques for
operating within it.

The common theme underlying all of these
developments is the role of markets—the growth
and development of markets, enhanced freedom
and competition in markets, improvements in the
efficiency of markets,increased reliance on market
forces and mechanisms, and the creation of better
market techniques and instruments.

The interplay of these forces, feeding off each
other in a dynamic and synergistic way, created a
global environment of creativity and ferment. In
the 1970s, exchange rates became more volatile
and imbalances in international payments grew
much larger for well-known reasons: the advent of
a floating exchange rate system, deregulation,
and major macroeconomic shifts in the world
economy. That caused financing needs to
expand, which—at a time of rapid technological
advance—provided fertile ground for the
development of new financial products and
mechanisms. These innovations helped market
participants circumvent existing controls and
encouraged further moves toward deregulation,
which led to additional new products, facilitated
the financing of still larger imbalances, and
encouraged a trend toward institutionalization
of savings and diversification of investment.
Financial markets grew progressively larger and
more sophisticated, integrated, and efficient.
In that environment, foreign exchange trading
increased rapidly and changed intrinsically.
The market has expanded from one of banks to
one in which many other kinds of financial and
non-financial institutions also participate—
including nonfinancial corporations, investment
firms, pension funds, and hedge funds. Its
focus has broadened from servicing importers
and exporters to handling the vast amounts of
overseas investment and other capital flows that
currently take place. It has evolved from a series
of loosely connected national financial centers to
a single integrated international market that
plays a far more extensive and direct role in our
economies, affecting all aspects of our lives and
our prosperity.

Almost every nation has its own national
currency or monetary unit—its dollar, its peso,
its rupee—used for making and receiving
payments within its own borders. But foreign
currencies are usually needed for payments
across national borders. Thus, in any nation
whose residents conduct business abroad or
engage in financial transactions with persons in
other countries, there must be a mechanism for
providing access to foreign currencies, so that
payments can be made in a form acceptable to
foreigners. In other words, there is need for
“foreign exchange” transactions—exchanges of
one currency for another.

As an investor in the stock market, if you think that you do not need too much of hand-holding and you can do your own research, trading through a discount brokerage is the right option for you. Discount brokers offer to conduct the stock trading for you without providing you with financial advice and without influencing your investment decisions. The most important benefit that you derive out of investing though a discount brokerage is that they charge considerably less than the usual full-service brokerages. If new to the stock market, it is always advisable to go for “full- services, as this helps you to take wise decisions and gain from the insights of an experienced broker. As you become more conversant with the market and its trends, there is not a better option than a discount brokerage.
Posted by Ashish Hadke at 3:39 PM 0 comments
Labels: Discount Brokerage
Sunday, April 19, 2009
ROLE OF THE EXCHANGE RATE
The exchange rate is a price—the number of units
of one nation’s currency that must be surrendered
in order to acquire one unit of another nation’scurrency. There are scores of “exchange rates”
for the U.S. dollar. In the spot market, there is an
exchange rate for every other national currency
Posted by Ashish Hadke at 3:09 PM 0 comments
Labels: ROLE OF THE EXCHANGE RATE
WHAT “FOREIGN EXCHANGE” MEANS
“Foreign exchange” refers to money denominated
in the currency of another nation or
group of nations. Any person who exchanges
money denominated in his own nation’s
currency for money denominated in another
nation’s currency acquires foreign exchange.
That holds true whether the amount of the
transaction is equal to a few dollars or to
billions of dollars; whether the person
involved is a tourist cashing a traveler’s check
in a restaurant abroad or an investor
exchanging hundreds of millions of dollars for
the acquisition of a foreign company; and
whether the form of money being acquired
is foreign currency notes, foreign currencydenominated
bank deposits, or other shortterm
claims denominated in foreign currency.
A foreign exchange transaction is still a shift
of funds, or short-term financial claims, from
one country and currency to another.
Thus, within the United States, any money
denominated in any currency other than theU.S. dollar is, broadly speaking, “foreign
exchange.”
Foreign exchange can be cash, funds available
on credit cards and debit cards, traveler’s checks,
bank deposits, or other short-term claims. It is
still “foreign exchange” if it is a short-term
negotiable financial claim denominated in a
currency other than the U.S. dollar.
But, in the foreign exchange market described
in this book—the international network of major
foreign exchange dealers engaged in high-volume
trading around the world—foreign exchange
transactions almost always take the form of an
exchange of bank deposits of different national
currency denominations. If one bank agrees to
sell dollars for Deutsche marks to another bank,
there will be an exchange between the two parties
of a dollar bank deposit for a DEM bank deposit.
In this book, “foreign exchange” means a bank
balance denominated in a foreign (non-U.S.
dollar) currency.