Thursday, August 7: Study day

Today, I turned in my last paper. We have our final tomorrow, so I have been studying the past couple of nights. After my final tomorrow, I will be getting ready to travel to the Netherlands for the weekend. There are six of us going (3 from MTSU and the rest from other schools). I won't be taking my laptop with me, so I will have to update everything either when I get back Sunday or when I get to the states. I'll be packing up to leave and saying goodbye to my friends this weekend.

This experience has been amazing. I have made so many new friends and seen so many amazing things I have only dreamed about seeing. I'm sorry to have to leave here, but I look forward to being back in the U.S.

Wedneday, August 6: LAST DAY OF CLASS

Today, we learned about capital budgeting with respect to the global market. When evaluating capital budgeting domestically, one can simply calculate the Net Present Value of long-term investments with fixed assets to evaluate on whether or not to undertake the investment. However, there are other factors for Multinational Corporations to account for when making international investments such as: exchange rates, tax differences, and overall riskiness. The Adjusted Present Value Model more effectively includes these factors into the calculation. The project will be accepted if it is greater-than or equal-to zero (0). However, if the investment is less than zero (0), then the project should not be undertaken.

At the end of class, we reviewed for the final. It should be a fun one, so I will be studying for the remainder of the week.

Tuesday, August 5: Westminster Abbey

Today, we decided to go see the "changing of the guard." However, we did not make it in time due to traffic and rain. After we saw the tail-end of the changing, we decided not to make it a wasted day, so we FINALLY got to see Westminster Abbey. It was an amazing experience. I spent about four (4) hours there, and experienced everything that it offered to a Protestant tourist.

Photography was not allowed in the cathedral, so I did not get to take any pictures. However, I was able to participate in my first Anglican service. I was allowed to worship and take communion as members do. I light a candle in respect for the Heintzman family and prayed for their family to be comforted during their time of trouble. The service lasted about 30 minutes and was very interesting. As I left, the residing pastor blessed that "the Peace of God be with me," and I learned that I was supposed to tell him "and with you" (a nice nun told me that).

It was an amazing experience. I felt blessed to be able to worship in a place with such a prestigious history as Westminster Abbey.




Westminster Abbey



Westminster Abbey

Monday, August 4: Lecture 7 / Sick day 2 / London @ Night

Today, we learned about economic exposure and it's important to multinational corporations. Changes in exchange rates effect asset values and operation cash flows. We learned how to calculate the foreign exchange "beta" (which shows the sensitivity of the dollar to the spot rate). Finally, we learned that MNC's ultimate goal is to hedge exchange rate exposure primarily by using currency options.

Following class, I rested for the rest of the day. I hate to say that it is unlikely that I will be able to visit Warwick Castle and Oxford while I am here.


After sleeping most of the day away, I decided that I was going to get out and see downtown London at night. I visited Westminster, the London Eye, the Tower of London and Tower Bridge. They looked great.


Westminster


Side shot overlooking the Thames River


Big Ben


London Eye


Tower of London


Tower Bridge

Sunday, August 3: Sick Day

Well, good news! I think I have a stomache virus. I have been laying in bed all day trying to not move very much. One week left in Europe and I can't leave my dorm. Oh, lucky me! Ha.

Saturday, August 2: Study Day!

Today was an uneventful day. I have stayed in and finished both of my essays for my class. In between writing the essays, I took time to take a walk down through West Hampstead. That is one thing that I am going to miss a lot about this place. In Tennessee, it is too humid to walk around very much without getting sticky and becoming a sweaty mess. Well, two essays down, now I just have my final on Friday, August 8.

Friday, August 1: Bath Spa / City of Bath

Today, Jessica and I decided to take a day trip since everybody else is in Paris for the weekend. It took us about an hour to get there on the Brit-Rail. We visited Bath Spa first. Here, there is a natural hot spring that dates back to prehistoric times. The Romans built a building around these springs and used them in a variety of different ways. They used it as a religious place to worship pagan gods they believed to dwell there. They also believed the springs had the powers to heal, so there were seats in the springs in certain places.


After we were done visiting Bath Spa, we decided to walk around the City of Bath. Of course, we had to walk to one of the highest spots in the city so that we could get a good view of the entire city. Once we were completely out of energy, we ate at a nice little restaurant called... "ha!ha!". We had a great time, but it has wore me out. Off to bed!


Bath Spa



Utley and I



Avon River



City view



Abbey Cathedral

Thursday, July 31: Parliament

Today, our class took a field trip to parliament. We had a guided tour that was very informative. We got to sit in both the House of Lords (red seats) and the House of Commons (green seats). We were taken down the path that the Queen takes each year for the state address. Again, we were unable to take pictures once we were inside, so my pictures are mostly of the first room called "Westminster." This is the room where Nelson Mandela spoke to both houses.


It is very interesting how much history this place had. We learned that a monarch has not been allowed into the House of Commons since King George I. There was a noticeable difference in the entrances to each house. When entering the House of Lords, it was covered in gold and elegant designs. When entering the House of Commons, there was only a hint of gold and very basic sculpturing.


After the tour, we tried to go to Westminster Abbey, but it was closed. We could only get pictures from the outside. We will go back soon.


Big Ben



Westminster



Me and Dr. Michello




Westminster Abbey

Wednesday, July 30: Lecture 6 / Tower of London / Spamalot

Today we learned about swaps. We mainly focused on learning how to properly evaluate interest rate swaps to ensure that there is a profit after the fees are taken out by the swap bank. We learned that interest rate swaps (fixed-for-floating) are used to better match cash inflows and outflows, and to obtain a cost savings via the quality of spread differential. A currency swap (fixed-for-fixed) is used to obtain financing in the swapped denomination at a cost savings, and to hedge long-term foreign exchange rate risk.


After class, Reed, Marissa, and I decided to go to the Tower of London. We got to see the all of the royal insignia. We couldn't take any pictures inside most of the places, but we got some good ones where we could. We didn't get a tour by the "meat-eaters" because I got confused about what their real name was (blonde moment).


After the Tower, we came back and got dressed up to go to a play. The play was "Spamalot." I have not laughed as hard as I did during that play. It is a spin-off of the Monty Python and the Holy Grail. I took a picture during one of the scenes where the "Lady of the Lake," came to show Lancelot how to be a man. I got in trouble for taking it, so I didn't take any more pictures. The only downside to the theatre was that there was no A/C!! Good times, can't wait to see it back in the states.



Tower of London





Entrance to the jewels





Henry VIII's armor






Me, Marissa, and Reed outside of the Tower in front of the Tower Bridge


Spamalot

Lloyd's of London

Today, we went to one of the oldest and most prestigious insurance agencies in the world, the Lloyd's of London. We left campus in our business attire around 10:00AM for our 11:30 appointment. The building was absolutely magnificent looking. Its architecture was different from anything that I have seen before (see picture below).



Once we were inside, we went through a security check and were issued i.d. badges. They charged the group £100, but Dr. Michello took care of it so that each student only had to pay £1 each! Once we were in, we were guided through the business floor to a conference room. In the conference room, our guide informed us of the history of Lloyd's and what they do.



Lloyd's began in a coffee shop where underwriters worked with merchant vessels to insure their ships during voyages. The owner of the coffee shop, Edward Lloyd, did not actually participate in any of the business deals, however, he did provide the environment for a market to take place. Similar to the way it took place in 1688, Lloyd's currently serves as a market place where underwriters and agents can do business.


Currently, the most riskiest part of their business entails "terrorism insurance." Some of their most eccentric things that are insured are body parts (i.e. nose for wine taster, hands for a surgeon, etc). One falsity that was corrected while we were there was that Jennifer Lopez's rear-end was NOT insured by Lloyd's.



Lloyd's of London Building



The floor where underwriting teams and agents meet


The broker sits on a stool at the end of the table and speaks to the underwriter (corner of the table) and his team (two individuals to his right).


1st floor looking up

Monday, July 28: 5th day of class

Today we reviewed Chapter 6 in our text books. The greater portion of our time discussing Baisle I's Tier I & II ratings and Baisle II's three pillars. We discussed how Baisle I inadequitely measured for the risk specifically pertaining to residential home loans. Baisle I had prime and sub-prime loans equally weighted when pertaining to risk, while Baisle II accounts for the risk better by showing that sub-prime loans are more risky. We briefly discussed what is being proposed for Baisle III, since Baisle II is already outdated.

Tomorrow, we are going to the Lloyd's of London. We are gettin dressed in our suits and doing it big in London!

Sunday, July 27: Brighton Beach

Today, Jessica, Britne, Cody and I decided to go to the beach! We took the Brit-rail to Brighton. Everybody was saying that it was the most beautiful day that they have had here this year. Their beach was covered in rocks instead of sand like the ones we were used to in Florida, the water was freezing, and people were everywhere!! However, we had a great time. We stayed there from 12:00 - 8:00, without sunscreen, so I look like a lobster!

On the way back, we saw these girls stomping and clapping to the "We will, we will ROCK YOU" song on the tube (subway). Everybody was looking at them like they were crazy, so our group decided to join them and sing with them. Ha. We had the whole car doing it. It was really funny! Needless to say, when people asked where we were from, they were not surprised when we said America.

Good Times!

Pier next to us with a carnival at the end

OCEAN!!

Stonehenge and Salisbury

Today, I got to see one of the oldest and mysterious places in the entire world, Stonehenge. It was more amazing than I had imagined. Some of the rocks came from great distances, and can weigh up to 16 or 17 tons! There are various assumptions about what it was there for. Some people say a calendar, some say royal burial ground, some say it is ritualistic, and others say ALIENS. Speaking of aliens, the crops where some "crop circles" were found in were right next to stonehenge. Weird, ay?

After Stonehenge, we visited a little town called Salisbury and saw Salisbury Cathedral. It was a beautiful place and a great little town. Today was a great experience that I will always remember.

Rockin it out...

Stonehenge

Salisbury Cathedral

Thursday, July 24: Bank of England

Today we visited the Bank of England. We left the campus around 8:30 and arrived at the bank at about 9:45. We had to go through security before we could get inside the bank. There were no pictures allowed after the security check point, so I don't have anything from the inside. We were given a brief description of what the bank's responsibilities are and how they changed in 1997. After the presentation, we watched a "drama documentary" about what would happen if their was not an entity that controlled interest rates to maintain inflation.

Afterwards, we were allowed to ask questions. A good question was asked with regards to why Great Britain has not gotten on board with the euro. He informed us that the euro would not benefit GB because their needs are not the same as other countries. It makes since that their economy is vastly different from the others using that currency, but I think it's mainly because GB does not want to be told what to do by someone else.

Following the question/answer session, I GOT TO PICK UP A BLOCK OF GOLD!! There were four cameras and a lady watching me, so I didn't try to take it with me. Visiting the bank was a very educating experience.

Bank of England

Big timing...

Wednesday, July 23: 4th Day of Class

Today, we began discussions of various ways to determine whether or not a market is efficient by reviewing Interest Rate Parity, Purchasing Power Parity, and the Fisher Effect. We learned how to take advantage of an inefficient market by using covered interest arbitrage and uncovered interest arbitrage. While reviewing interest rates, we studied how interest rates not only effect inflation but also directly relate to the depreciation of currencies.

For instance: When the Federal Reserve lowered interest rates earlier in the year, they inevitably setup the dollar to depreciate. They made the market borrower friendly since they would be able to borrow money at a lower interest rate. However, they harmed the investment portion of the loans. Investors are not getting good enough returns from the interest rates offered, so they are taking their money to other countries. Currently, an investor would profit greatly to convert their currency to dollars, borrow money in the U.S. at a lower interest rate, and invest in a country that is offering more friendly rates. Therefore, we are losing foreign investors (and their capital) to other countries.

The London Eye

Today was our first full sunny day here, so decided to take the trolley and underground over to the London Eye this afternoon. The London Eye is like an over-sized ferris wheel. It was an enjoyable experience, except for the fact that I don't like heights. It cost about £15, but it gave me a lot of good pictures of the town.


The London Eye


Dan, Cody, and I.


Palace of Westminster




Important, but can't remember?


Kind-a don't like heights.


The Gherkin (Egg shaped building)

3rd Day of Class and THE DARK KNIGHT PREMIERE!

Today in class, we began our discussions of the futures market. We talked about the profit that can be obtained when the exchange market allows for an arbitrage situation. We further discussed the American government's choices to bail out Bear Sterns and liberally give money back to tax payers that has not seemed to help the economy. We debated the Fed's latest decisions, and discussed the possible outcomes if the Fed would start buying back the US dollar to decrease the supply in the market while simultaneously increasing the demand. Dr. Michello took it easy on us today because he could see that everybody had a long weekend.


After class, we decided to head downtown to see the premiere of The Dark Knight (new Batman Movie). It was awesome! I was about three feet from Christian Bale, and I about lost it when the Bat-mobile drove up in front of us and reved it's engine! That is an experience I will always remember!


The Red Carpet




Batmobile!


Christian Bale - Batman

**Tried to upload videos of the Batmobile, Michael Caine, and Maggie Gyllenhaal; but I got impatient**

Edinburgh, Scotland: Thursday, July 17 - Saturday, July 19

Thursday afternoon, John and I headed out to Edinburgh, Scotland via the Brit-Rail. It was a 4.5 hour train ride with a lot of great views on the way. We arrived in Edinburgh around 10:00 PM, so we were not able to see much. After we checked into the hotel, we went out and enjoyed some of the local night life. Both of us found a nice Scottish ale called, "Caledonian." It is brewed in Scotland, and unable to be shipped anywhere else because of it's inability to travel. We hung out at a place called "The Rat Pack." It was interesting to say the least! I met two chaps there named "Willie," from Ireland, and "Oliver," from Scotland. I introduced them the delicacies of Grizzly tobacco. They fell in love with it, until it made them sick. They emailed me the next day, and I think they will try to come meet up with our group sometime this month in London. They were some good lads.

Train Station

Bored on the Train

Big John

Lighthouse on the ocean

On Friday, I woke up and decided to hike around the city. I ended up walking up a goat path that led to Edinburgh Castle. My short stubby legs didn't hike too well, but it was worth it. It was a magnificent image from the top. The castle was filled with so many historical artifacts and stories since it has been there since before Christ. It was difficult for me to comprehend a country having that much history. I got to see the royal artifacts, but was unable to take pictures.

After the castle, I walked down the "Royal Mile." I visited St. Giles' Cathedral, and did my tourist thing in there. It was a magnificent place of worship; I can only imagine how amazing the services are there. Walking through the streets of Scotland, was an experience in itself. The street entertainers are absolutely crazy. I listened to an old fashioned bagpipe player (in a kilt), watched a gypsy act like a crazy woman, and viewed a show by a lad that couldn't have been 15. After a long day, John and I decided to take it easy for the afternoon. We went and ate dinner at "Dirty Dicks" and called it a night. We headed back to London Saturday morning. I wish I would have gotten me a kilt while I was there...

"The Call" - A gift from America to Scotland for their help during WWI

Edinburgh Castle

Edinburgh Castle

View from Castle

View from Castle

View from Castle

I look better in a dress than this guy...

St. Giles' Cathedral