Early Computing Machines and Inventors

 

The abacus, which emerged about 5, 000 years ago in Asia Minor and is still in use today, may be considered the first computer. This de­vice allows users to make computations using a system of sliding beads arranged on a rack. Early merchants used the abacus to keep trading transactions. But as the use of paper and pencil spread, particularly in Europe, the abacus lost its importance. It took nearly 12 centuries, how­ever, for the next significant advance in computing devices to emerge. In 1642, Blaise Pascal (1623-1662), the 18-year-old son of a French tax collector, invented what he called a numerical wheel calculator to help his father with his duties. This brass rectangular box, also called a Pascaline, used eight movable dials to add sums up to eight figures long. Pascal's device used a base of ten to accomplish this. For example, as one dial moved ten notches, or one complete revolution, it moved the next dial -which represented the ten's column - one place. When the ten's dial moved one revolution, the dial representing the hundred's place moved one notch and so on. The drawback to the Pascaline, of course, was its limitation to addition.

In 1694, a German mathematician and philosopher, Gottfried Wil-helm von Leibniz (1646-1716), improved the Pascaline by creating a ma­chine that could also multiply. Like its predecessor, Leibniz's mechanical multiplier worked by a system of gears and dials. Partly by studying Pas­cal's original notes and drawings, Leibniz was able to refine his machine. The centerpiece of the machine was its stepped-drum gear design, which offered an elongated version of the simple flat gear. It wasn't until 1820, however, that mechanical calculators gained widespread use. Charles Xavier Thomas de Colmar, a Frenchman, invented a machine that could per­form the four basic arithmetic functions. Colmar's mechanical calculator, the arithmometer, presented a more practical approach to computing be­cause it could add, subtract, multiply and divide. With its enhanced versa­tility, the arithmometer was widely used up until the First World War. Although later inventors refined Colmar's calculator, together with fellow inventors Pascal and Leibniz, he helped define the age of mechanical com­putation. The real beginnings of computers as we know them today, how­ever, lay with an English mathematics professor, Charles Babbage (1791-1871). Frustrated at the many errors he found while examining calcula­tions for the Royal Astronomical Society, Babbage declared, " I wish to God these calculations had been performed by steam! " With those words, the automation of computers had begun. By 1812, Babbage noticed a nat­ural harmony between machines and mathematics: machines were best at performing tasks repeatedly without mistake; while mathematics, particu­larly the production of mathematic tables, often required the simple repe­tition of steps. The problem centered on applying the ability of machines to the needs of mathematics. Babbage's first attempt at solving this prob­lem was in 1822 when he proposed a machine to perform differential equa­tions, called a Difference Engine. Powered by steam and large as alocomotive, the machine would have a stored program and could perform calculations and print the results automatically. After working on the Dif­ference Engine for 10 years, Babbage was suddenly inspired to begin work on the first general-purpose computer, which he called the Analytical En­gine. Babbage's assistant, Augusta Ada King, Countess of Lovelace (1815-1842) and daughter of English poet Lord Byron, was instrumental in the machine's design. One of the few people who understood the Engine's design as well as Babbage, she helped revise plans, secure funding from the British government, and communicate the specifics of the Analytical En­gine to the public. Also, Lady Lovelace's fine understanding of the ma­chine allowed her to create the instruction routines to be fed into the com­puter, making her the first female computer programmer. In the 1980's, the U.S. Defense Department named a programming language ADA in her honor.

Babbage's steam-powered Engine, although ultimately never con­structed, may seem primitive by today's standards. However, it outlined the basic elements of a modern general purpose computer and was a breakthrough concept. Consisting of over 50, 000 components, the basic design of the Analytical Engine included input devices in the form of perforated cards containing operating instructions and a " store" for memory of 1, 000 numbers of up to 50 decimal digits long. It also con­tained a " mill" with a control unit that allowed processing instructions in any sequence, and output devices to produce printed results. Babbage borrowed the idea of punch cards to encode the machine's instructions from the Jacquard loom. The loom, produced in 1820 and named after its inventor, Joseph-Marie Jacquard, used punched boards that control­led the patterns to be woven.

In 1889, an American inventor, Herman Hollerith (1860-1929), also applied the Jacquard loom concept to computing. His first task was to find a faster way to compute the U.S. census. The previous census in 1880 had taken nearly seven years to count and with an expanding pop­ulation, the bureau feared it would take 10 years to count the latest cen­sus. Unlike Babbage's idea of using perforated cards to instruct the ma­chine, Hollerith's method used cards to store data information which he fed into a machine that compiled the results mechanically. Each punch on a card represented one number, and combinations of two punches represented one letter. As many as 80 variables could be stored on a single card. Instead of ten years, census takers compiled their results in just six weeks with Hollerith's machine. In addition to their speed, the punch cards served as a storage method for data and they helped reduce computational errors. Hollerith brought his punch card reader into the business world, founding Tabulating Machine Company in 1896, later to become International Business Machines (IBM) in 1924 after a series of mergers. Other companies such as Remington Rand and Burroghsalso manufactured punch readers for business use. Both business and government used punch cards for data processing until the 1960's.

In the ensuing years, several engineers made other significant ad­vances. Vannevar Bush (1890-1974) developed a calculator for solving differential equations in 1931. The machine could solve complex differ­ential equations that had long left scientists and mathematicians baffled. The machine was cumbersome because hundreds of gears and shafts were required to represent numbers and their various relationships to each other. To eliminate this bulkiness, John V. Atanasoff, a professor at Iowa State College (now called Iowa State University) and his gradu­ate student, Clifford Berry, envisioned an all-electronic computer that applied Boolean algebra to computer circuitry. This approach was based on the mid-19th century work of George Boole (1815-1864) who clari­fied the binary system of algebra, which stated that any mathematical equations could be stated simply as either true or false. By extending this concept to electronic circuits in the form of on or off Atanasoff and Berry had developed the first all-electronic computer by 1940. Their project, however, lost its funding and their work was overshadowed by similar developments by other scientists.

 

Ответьте на вопросы к тексту:

1. What may be considered the first computer in Asia Minor?

2. What did invent Blaise Pascal in 1642?

3. Who improved the Pascaline?

4. What machine did invent Charles Xavier and haw did it perform?

5. What did contain Analytical Engine?

6. Who brought a punch card reader into the business world?

7. Why everybody who deals with information needs a computer?

Специальность «Менеджмент»

Вариант 1

Текст 1

MONEY

Money has various uses in the modern world: it is a measure of the value of goods and services, a means of exchanging such goods and services and a way to store up buying (purchasing) power so that one can use it later. As a measure of value, it is of the very greatest use. If I work in an office, how can my employer know what to pay me for my services if there is no generally recog­nized measure of value? He may decide to pay me a cer­tain number of loaves of bread each week, but then I shall have to exchange some of these loaves for other things that I need: and how am I to know how many loaves of bread I should give for a pair of shoes or for the rent of my house, for example? Money gives us a very useful means of measuring such relative values.

Money is also of very great use as a means of exchang­ing goods and services. If, for example, I am a shoe-maker, it will not be at all convenient to me always to have to exchange the shoes I make for other goods or services. A doctor may want to buy a pair of shoes from me, for example, but I may not need medical care, so he will then have to find something else that I want, or look for another shoe-maker who needs him. Without money the tax-collector would come back to his office with an extraordinary collection of objects.

Considered as a means of storing up buying (purchas­ing) power, money has good and bad points. It can more easily be kept a long time than such things as food, which rots, or buildings, which slowly fall to pieces, or ma­chines, which rust. It takes up very little space, and if you put it in a bank, it is as safe as anything in this world can be.

But modern money has some very serious disadvan­tages as means of storing up buying power. In the old days, when money was in the form of gold and silver coins, the metal in each was really worth the amount stamped on the coin. But the paper in modern paper money and even the metal in most modern coins are worth very much less than the amount written on them. As a result, the buying power of modern money can change very greatly in a short time.

...It is not surprising, therefore, that some peo­ple are doubtful about the wisdom of saving money.

 

Ответьте на вопросы к тексту:

1. What are the main uses of money?

2. What can you say about modem money and its disadvantages?

3. Why is saving money sometimes necessary?

4. What is the meaning of money to you?

 

Текст 2

TAXATION

Everyone knows that taxation is necessary in a modern state: without it, it would not be possible to pay the soldiers and policemen who protect us: nor the workers in govern­ment offices who look after our health, our food, our water, and all the other things that we cannot do for ourselves, nor also the ministers and members of parliament who gov­ern the country for us. By means of taxation we pay for things' that we need just as much as we need somewhere to live and something to eat.

But though everyone knows that taxation is necessary, different people have different ideas about how taxation should be arranged. Should each person have to pay a cer­tain amount of money to the government each year? Or should there be a tax on things that people buy and sell? If the first kind of taxation is used, should everyone pay the same tax, whether he is rich or poor? If the second kind of taxation is preferred, should everything be taxed equally?

In most countries, a direct tax on persons, which is called income tax exists. It is arranged in such a way, that the poorest people pay nothing, and the percentage of tax grows greater as the taxpayer's income grows.

But countries with direct taxation nearly always have indirect taxation, too. Many things imported into the coun­try have to pay taxes or " duties". Of course, it is the men and women who buy these imported things in the shops who really have to pay the duties, in the form of higher prices. In some countries, too, there is a tax on things sold in the shops. If the most necessary things are taxed, a lot of money is collected, but the poor people suffer most. If un­necessary things like jewels and fur coats are taxed, less money is obtained, but the tax is fairer, as the rich pay it.

Probably this last kind of indirect tax, together with a direct tax on incomes which is low for the poor and high for the rich, is the best arrangement

 

Ответьте на вопросы к тексту:

1. Why is taxation necessary in modern society?

2. How is income tax arranged?

3. Who has to pay the duties that are collected on imported goods?

4. Why is it fairer if unnecessary things are taxed?

5. Should everyone pay the same tax irrespective of his income?

6. Which of the two systems of indirect taxation is fairer?

7. What part of our income do we pay in taxes?

 

Текст 3

EQUAL PAY FOR EQUAL WORK

If seems quite clearly unjust to pay two people different amounts of money for doing the same work. But it is not as easy as it appears at first sight to introduce equal pay for equal work.

First of all, one must be sure that the work is in fact equal. Two people may be working side by side in a factory and doing the same work, but one may be doing it twice as fast as the other; or one may be making no mistakes, while the other is making a lot. In some kinds of work, one can solve the problem of speed if one pays by the amount of work done and not by the hour: work paid for in this way is called piece-work. But it is not always possible to do this, so it is sometimes useful to pay workers at different rates, which takes differences in skill into account. This usually means that the younger and therefore less experienced worker gets less than the older and more experienced one, which seems reasonable enough.

What does not appear to be reasonable is when two equally skilled, equally fast workers receive different rates of pay. In Great Britain, for instance, women are paid less than men for the same work.

The employer's argument in places where this happens is that men usually have a wife and children to support and women usually have not. They say that most women work­ers are either unmarried and have no one to support, or have husbands who also work and bring home money, so that it would be unjust for them to be paid as much as a man who has a wife who does not work because she has several children at home to look after.

This, of course, is quite true: but you do find some men workers who are unmarried and have no one to support, and some women workers who are widows and have children to support. Other women workers, though they have no children, may have old or sick parents and young brothers and sisters who cannot yet work.

The fact is that the problem of paying workers accord­ing to their family needs cannot be solved simply by giving the men more and the women less. The answer is to pay both alike, and to leave it to the state to see that justice is done by means of taxation and allowances.

 

Ответьте на вопросы к тексту:

1. What is called piece-work?

2. What is the difference between piece-work and time-work systems?

3. Why is it sometimes necessary to pay workers at different rates?

4. Should men and women be paid at different rates?

 

Текст 4

BRITISH ECONOMY

Britain lives by manufacture and trade. For every person employed in agriculture eleven people are employed in mining, manufacturing and building. The United Kingdom is one of the world's largest exporters of manufactured goods per head of population.

Apart from coal and iron ore Britain has very few natural resources and mostly depends on imports. Its agriculture provides only half the food it needs. The other half and most of the raw materials for its industries such as oil and various metals (copper, zinc, uranium ore and others) have to be imported. Britain also has to import timber, cotton, fruit and farm products.

Britain used to be richly forested, but most of the forests were cut down to make more room for cultivation. The greater part of land is used for cattle and sheep breeding, and pig raising. Among the crops grown on the farms are wheat, barley and oats. The fields are mainly in the eastern part of the country. Most of the farms are small (one third of them is less than one hundred acres). Farms tend to be bigger where the soil is less fertile.

In the past century Britain secured a leading position in the world as manufacturer, merchant and banker. After World War I the world demand for the products of Britain's traditional industries — textiles, coal and machinery — fell off, and Britain began expanding trade in new engineering products and electrical goods.

The crisis of 1929—1933 brought about mass unemployment, which reached its peak in 1932. Britain's share in the world industrial output decreased. After the crisis production and employment increased following some revival in world trade and as a result of the extensive armament program.

During World War II Britain's economy was fully employed in the war effort. Massed raids of German planes on British industrial centres caused considerable damage to Britain's industry. World War II brought about a further weakening of Britain's might. Great Britain is no longer the leading power it used to be. It has lost its colonies which used to supply it with cheap raw materials.

Britain produces high quality expensive goods, which has always been characteristic of its industry. A shortage of raw materials, as well as the high cost of production makes it unprofitable for British industry to produce semi-finished goods or cheap articles. Britain mostly produces articles requiring skilled labour, such as precision instruments, electronic equipment, chemicals and high quality consumer goods. Britain produces and exports cotton and woollen goods, leather goods, and articles made of various kinds of synthetic (man-made) materials.

The original basis of British industry was coalmining, and the early factories grew up not far from the main mining areas. Glasgow and Newcastle became great centres of engineering and shipbuilding. Lancashire produced cotton goods and Yorkshire woollens, with Sheffield concentrating on iron and steel. Birmingham developed light engineering. There appeared a tendency for industry and population to move to the south, particularly to the London area. (Britain's industry is now widely dispersed.) Great progress was made in the development of new industries, such as the aircraft, automobile, electronic industries and others. A number of atomic power reactors were made. Great emphasis was made on the development of the war industry.

 

Ответьте на вопросы к тексту:

1. What kind of goods does Britain export?

2. What kind of goods does Britain import?

3. What is the role of Britain in world trade?

4. What makes it unprofitable for British industry to produce semi-finished goods or cheap articles?

5. What progress was made in the development of new industries?

 

Текст 5

US ECONOMY

The United States is rich in natural resources, the main being iron ore, coal and oil. The nation produces more than 100 million tons of iron a year. Four fifths of the ore mined in the USA comes from the Great Lakes region. Though a great deal of the ore has been used up, its resources have not been exhausted. Most of the coal mined in the USA is used by power plants to produce electricity. Coal is also used in the chemical industries for the manufacture of plastics and other synthetics. The production, processing and marketing of such oil products as petrol (called «gasoline» or «gas» in the USA) make up one of America's largest industries.

The basic metals and minerals mined in the United States are zinc, copper and silver.

Some of the main crops grown in the USA are wheat, maize, cotton, tobacco and fruit.

Cattle breeding and pig raising make up an important branch of America's agriculture.

To make the farmer's work more productive scientific methods of farming are employed and modern technique of freezing, canning and packaging farm products is used.

The United States is a highly industrialised country with various branches of heavy industry prevailing, namely, the mining, metallurgical, automobile and chemical industries as well as engineering. Many branches of light industry are also developed, among them are the textile, food and wood-working industries.

A great deal of attention in American industry is devoted to re­search and emphasis is made on the use of labour-saving machines. In the past few years the number of workers has increased only a few per cent, while the number of scientists and engineers in the plants has almost doubled.

Mechanisation and automation do away with thousands of office jobs, intensify production and increase labour productivity. But they also bring about a further growth of unemployment.

New industries are created as new discoveries are made in physics, chemistry and other sciences. Atomic energy, for example, has created a wide range of new industries. Electronics has become a major industry.

Throughout American industry great emphasis is being made on management training. A great number of schools are training young people to become industrial leaders.

American industry is distributed unevenly. Most of the industrial enterprises are located in the eastern part of the country. But industry is spreading out as there is a tendency to build factories far removed from the home plant and closer to natural resources and markets. Good transportation facilities and rapid communications systems make it possible for the main plants to keep in touch with branch factories.

The leading US exports are industrial machinery, electronic equipment, textiles, grain, iron, coal, oil products and chemicals.

 

Ответьте на вопросы к тексту:

1.What are main natural resources in US?

2.What methods of farming are employed in US?

3.What do mechanisation and automation do in US industry?

4.Where are most of the industrial enterprises located?

5.What are US leading exports?

 

Текст 6

Managing Productivity

Productivity has become a day-to-day concern for managers because productivity indicates the overall efficiency of their firms. The unit of output can be anything: money, units of product, customers served, or whatever is meaningful to the organization. What managers attempt to do is to produce more output with less input. It means making more from what you have and working smarter rather than harder.

The One-Minute Manager was written by Kenneth Blanchard, a professor of management at the University of Massachusetts, with coauthor Spencer Johnson, a medical doctor.

The purpose of this book is to propose a new management style that consists of three steps, each of which takes one minute to perform. The first step is a one-minute goal setting, each in which manager and employee agree on goals and transfer them to written form. Each goal is to be written in 250 words or less on one piece of paper so that it can be read in one minute. The second step is a one-minute praising in which the manager congratulates the employee for a job well-done, tells him or her specifically what was good about performance and what it means for the organization. After that, a handshake and some encouragement bring the one-minute praising to a conclusion. The third step is a one-minute reprimand in which the manager tells the employee specifically what was wrong with performance and how he or she feels about it, taking care to separate the value of the employee from the one (take that instigated the criticism.

By using this style, the authors claim that managers can save a lot time and improve employee productivity.

 

Ответьте на вопросы к тексту:

1. What is the purpose of One-Minute Management?

2. What are the three steps in One-Minute Management?

3. How do employees set goals in this system?

4. Who wrote The One-Minute Manager?

Текст 7

SAVINGS ACCOUNT

To open a savings account at a bank a small initial deposit is needed. If you open your account with 500 dollars or more and keep that much at all times, there is no service charge. If you fall below the 500-dollar limit, you will be charged 5 dollars a month.

A bank computer adds all the daily figures and then divides by the number of days in your statement period. That's called your average daily balance.

When you open an account, you'll be in touch with your money thanks to a bank machine services. These machines can handle most regular teller transactions. You can make deposits, cash withdrawals, and balance inquiries with your automatic teller card. The machine is at work 24 hours a day, seven days a week.

If, for example, you want to open a savings account with a deposit of 1000 dollars, you are supposed to fill in (A.E. — out) an application. Besides you need to write a deposit ticket for 1000 dollars. After filling in the application you are given a pass­book. Once you place your money in a savings account, interest on the money begins to accrue. The bank will pay you 4 or 5% interest.

CHECKING ACCOUNT

If you want to open a checking account, you are supposed to maintain an average daily balance of 1000 dollars. As long as you keep this average balance you won't be charged for banking ser­vices. Should you fall below the 1000-dollar limit, you would have to pay a service charge of 6 dollars a month, and each of your transactions would be charged separately.

A transaction charge means that you'll have to pay 25 cents for each check made by you or your spouse and also 25 cents for each cash withdrawal. But you can easily avoid paying these charges by maintaining 1000 dollars or more on your account.

Interest is paid if your average daily balance is over 2500 dol­lars. Unless you fall below 2500 dollars, you'll be paid 6, 5% in­terest. The bank credits the interest you've earned automatically to your account.

You can order your checkbooks after having filled in (out — A.E.) an application and your deposit ticket.

For getting a credit card you must have an income of 15 000 dollars or more. This income must be proved by your last pay stub or a copy of your tax return. As soon as the bank has this information, credit cards will be given to you and your wife.

CREDIT CARDS

Credit cards are accepted by millions of businessmen in the United States and abroad. They can be used at hotels, restau­rants, department stores, theatres, and airline ticket offices — just about anywhere. They even entitle owners to instant cash. The card holder simply asks a teller to charge a cash advance, or loan, rather than a purchase to his or her account. The transac­tion is approved by phone and the money handed over almost immediately.

VISA and Master Card are the best-known bank cards. They are also most established, having been first offered to consumers more than 25 years ago. The Discovery Card is the newest. Con­sumers have been drawn up to the Discovery Card by attractive discounts up to $ 150 on certain purchases and an annual rebate 1 % of the amount charged against the card.

TRAVELLER'S CHECKS

One more possibility of making payments without using your cash is traveller’s checks. Traveler’s checks can provide you a safe and convenient way of traveling with large amounts of money. They come in twenty dollar, fifty dollar and one hun­dred dollar denominations. Traveler’s checks are insured against loss and theft and are treated as cash by most businesses. You may purchase traveler’s checks at most banks.

 

Ответьте на вопросы к тексту:

1. What is the difference between a savings account and a checking account?

2. Where and how can be used credit cards?

3. What are traveller’s checks?

4. Where can traveler’s checks be bought?

Вариант 2

Текст 1

Socialism, Communism, or whatever one chooses to call it, by converting private property into public wealth, and substituting cooperation for competition, will restore socie­ty to its proper condition of a thoroughly healthy organism, and ensure the material well-being of each member of the community. It will, in fact, give life its proper basis and its proper environment. But for the full development of life to its highest mode of perfection, something more is needed. What is needed is Individualism.

At present, in consequence of the existence of private property, a great many people are enabled to develop a cer­tain very limited amount of Individualism. They are either under no necessity to work for their living, or are enabled to choose the sphere of activity that is really congenial to them, and gives them pleasure. These are the poets, the philoso­phers, the men of science, the men of culture in a word, the real men, the men who have realized themselves, and in whom all Humanity gains a partial realization.

Upon the other hand, there are a great many people who, having no private property of their own, are compelled to do the work that is quite uncongenial to them, and to which they are forced by the unreasonable, degrading Tyranny of want. These are the poor; and amongst them there is no grace of manner, or charm of speech, or civilization or cul­ture, or joy of life. From their collective force Humanity gains much in material prosperity. But it is only the material result that it gains, and the man who is poor is in himself absolutely of no importance. He is only the smallest atom of a force that crushes him: indeed, prefers him crushed, as in that case he is far more obedient

Under the new conditions Individualism will be far freer, far finer, and far more intensified than it is now. For the recognition of private property had really harmed Indivi­dualism, and obscured it, by confusing" a man with what he possesses. It has made gain, not growth, its aim. So that men thought that the important thing was to have, and did not know that the important thing is to be. The true perfection of man lies, not in what man has, but in what man is. Private property has crushed true Individualism, and set up an Individualism that is false.

In a community like ours, where property brings immense distinction, social position, honour, respect, titles, and other pleasant things of the kind, man, being naturally ambitious, makes it his aim to accumulate this property, and goes on accumulating it long after he has got far more than he wants, or can use, or enjoy, or perhaps even know of.

With the abolition of private property, then, we shall have true, beautiful, healthy Individualism. Nobody will waste his life in accumulating things, and the symbols of things. One will live. To live is the rarest thing in the world. Most people exist; that is all. (Wilde 0. The Soul of Man under Socialism: Complete Works of Oscar Wilde. London, 1968. P 1080-1083).

Crashes are generally said to be salutary reminders of the old wisdom that markets can fall as well as rise. Mar­ket commentators habitually berate investors for forget­ting this " lesson" later on. But the lesson many people leamt from 1987 is not, in truth, that markets can fall. It is rather that the consequences of a crash do not need to be calamitous, and will probably be only temporary. As the folk memory of 1987 displaces the folk memory of 1929, the popular fear of shares seems therefore to be fading.

The trouble is that the apparent lesson of 1987 - that crashes can be free of pain - is not the only thing that has added to equities' lustre in the decade. That lesson has absorbed at the same time as two other big changed have helped boost demand.

One change is demographic: the large bulge in the number of affluent people in the rich world who are now between the ages of 40 and 60, and who possess a vast pool of personal savings looking for a profitable home. In the past decade, millions of people who had never before done so have invested in the stockmarket through mutual funds and other instruments, instead of in cash or bonds, and have profited mightily from their decision. The other change is globalisation, and the opportunity this has given to the rich world's savers to spread their risk and increase their returns by investing in the fast-growing economies of Latin America, Asia and Eastern Europe. There could hardly be a happier coincidence. Or could there?

One reason to feel less sanguine about this week's anniversary is the growing misunderstanding of the real benefits of globalisation. Instead of being seen as an opportunity to diversify investment and therefore to spread risk, globalisation has lately become muddled up| with the so-called " new paradigm" in America - the seductive doctrine, verging on clap-trap, that says that inflation is dead, that old economic laws have been repealed and that America's stockmarkets can therefore keep on growing indefinitely at their present rate. On this view, emerging markets are being seen less as attractive in­vestment opportunities, more as a reason to believe that the globalisation of labour and product markets can fore­ver stop workers and firms from raising wages and prices.

It is hardly surprising that emerging markets have recently lost some of their appeal as means of diversifying risk. Since their peak in 1993, when their share prices jumped by an average of 75%, bad news has marched through most of these new markets. In 1994-95 the collapse of the Mexican peso lowered returns from most of Latin America, and recent months have toppled one currency after another in East Asia. Several of Eastern Europe's cur­rencies now look vulnerable too. As a group, over the past dozen years, emerging stockmarkets have under-performed Wall Street. In principle, this does invalidate the case for investing in these markets in order to reduce overall risk. In practice, it is yet another reason why, having digested what they think is the lesson from a decade ago, investors are now in grave danger of driving Wall Street far too high.

For a second, bigger, reason to worry is that the apparent lesson of 1987 is wrong: crashes are hardly ever benign. It is true that the crash of 1987 did little lasting damage. But a stock-market slump in Japan in 1990 knocked the stuffing out of its banks and led to a period of stagnation from which it has still to emerge. The crash of 1987 was relatively painless because, unlike the Bank of Japan, the American Fed moved quickly to reassure banks and stave off a slump in investment and demand by easing monetary policy.

At today's valuations a similar drop in New York would destroy some $2 trillion of wealth. There is no guarantee, if this happened, that the Fed would be able to repeat its damage-averting trick in the present looser mo­netary conditions without setting fire to inflation. In that case, history would repeat itself as tragedy, and plumme­ting investors would find no helpful coil of elastic wrapped around their feet.

 

Ответьте на вопросы к тексту:

1. What was the striking thing about the crash of 1987?

2. What are crashes generally considered to be?

3. Why are new markets not so appealing?

4. Why was the crash of 1987 relatively painless?

5. In what case the history can be repeated?

 

Текст 2

⇐ Предыдущая10111213141516171819Следующая ⇒

Поделиться: