Second Harmonic Generation in Neurons: Electro-Optic Mechanism of Membrane Potential Sensitivity
Second harmonic generation (SHG) from membrane-bound chromophores can be used to image membrane potential in neurons. We investigate the biophysical mechanism responsible forthe SHG voltage sensitivity of the styryl dye FM 4-64 in pyramidal neurons from mouse neocortical slices. SHG signals are exquisitely sensitive to the polarization of the incident laser light. Using this polarization sensitivity in two complementary approaches, we estimate a ~36° tilt angle of the chromophore to the membrane normal. Changes in membrane potential do not affect the polarization of the SHG signal. The voltage response of FM 4-64 is faster than 1 ms and does not reverse sign when imaged at either side of its absorption peak. We conclude that FM 4-64 senses membrane potential through an electro-optic mechanism, without significant chromophore membrane reorientation, redistribution, or spectral shift.
Two-Dimensional Standing Wave Total Internal Reflection Fluorescence Microscopy: Superresolution Imaging of Single Molecular and Biological Specimens
The development of high resolution, high speed imaging techniques allows the study of dynamical processes in biological systems. Lateral resolution improvement of up to a factor of 2 has been achieved using structured illumination. In a total internal reflection fluorescence microscope, an evanescence excitation field is formed as light is total internally reflected at an interface between a high and a low index medium.
In the modern era of biological research, fluorescence microscopy is a powerful tool to visualize specific biomolecules to which fluorescent dyes can be selectively bound. Total internal reflection fluorescence (TIRF) microscopy recently has emerged as the method of choice to probe cellular processes near the basal plasma membrane of adherent cells by illuminating a very thin region on the order of 100 nm (1,2). The evanescent wave intensity decays exponentially from the interface, and this near-field excitation volume allows intrinsic optical sectioning to less than one-fifth of the excitation wavelength while keeping wide-field (WF) imaging capability. Although conventional WF fluorescence excitation generates out-of-focus emission, the selective excitation of TIRF removes the out-of-focus noise and reduces photobleaching of fluorophores outside the focal plane and is thus ideal for single-molecule imaging (3,4). On the other hand, TIRF does not allow deeper imaging into the interior of cells, and the lateral resolution of TIRF is identical to that of standard WF imaging.
The quest to image structural and functional biological information using far-field microscopy at high resolution has been hindered by the diffraction limit of light. The Abbe diffraction limit originates from the wave nature of light and depends on the wavelength and the numerical aperture (NA) of an objective lens. When an object that is substantially smaller than the diffraction limit is imaged by a microscope, its image would be significantly broadened compared to the original object. The intensity distribution of this effective point object is defined as the point spread function (PSF). The commonly accepted Rayleigh criterion defines the resolution as the distance between two point objects when one PSF falls on the first zero point of the other PSF, which can be barely distinguished in incoherent imaging. Also Sparrow suggested a resolution criterion when the gradient of the summed profile is zero or no dip at the midpoint (5). These resolution definitions are roughly equal to the full width at half-maximum (FWHM) of the PSF. With typical visible light emission and oil-immersion objectives, optical resolution is over 200 nm.
The challenge of achieving superresolution in optical microscopy beyond the diffraction limit has been overcome in practice only during the last couple of decades. In particular, extending lateral or transverse resolution has been exemplified with several techniques such as i) stimulated emission depletion (STED) microscopy, ii) saturated structured illumination microscopy (SSIM), iii) solid immersion lens (SEL), iv) structured illumination microscopy (SIM), and v) harmonic excitation light microscopy (HELM).
Since the SW modulation is inherently sinusoidal, to reconstruct the high resolution in the direction of the S W, a minimum of three image acquisitions at different phases of the SW are required. Since phase shift is in principle fast, SW-TfRF does not necessarily increase the total image acquisition time compared to conventional WF imaging.
The lateral resolution mostly depends on the evanescent SW fringe period, which is proportional to the excitation wavelength in the substrate. As with other high resolution techniques based on interference, there exists a side-band artifact. This artifact can be easily removed by linear deconvolution if the emission PSF is narrow enough to keep the side-band lower than 30% (18). Thus this effectively enhances the resolution much more than twofold, as demonstrated in this article.
With the current design, conventional TIRF images can be simply obtained by blocking one beam and conventional WF images can be taken by locating one beam at the center of the optical axis while blocking the other beam. This will be used for the comparison of different imaging modes.
Calibration of evanescent standing wave fringe period
As mentioned in the above section, the direct imaging measurement of the evanescent SW period is not trivial, due to its subdiffraction limited size. Instead, a thin uniform layer of fluorescent sample was prepared and SW emission was imaged by gradually increasing the incident angles from a subcritical angle, where SW can be imaged, to a supercritical angle where the SW cannot be imaged due to the resolution limit. This actual measurement of imaging SW fringes was matched with theoretical calculation from geometry within 2.5% and could be extrapolated to the setup angle of 67° ± 0.5°. We further need to calibrate the pixel size of the CCD camera.
Cell Analysis System is offered with multilaser option
ImageStream[R] is offered with multilaser capability that lets users add 2 lasers, including 405 and 658 nm lasers, that promote experimental flexibility and complexity by expanding available fluorescent dye selection. Additionally, optical system has feature that provides chromatic correction for lower-wavelength dyes excited by 405 nm laser. This enables hi-res imagery, resulting from fluorescence excitation from all 3 lasers, to be simultaneously captured across visible spectrum.
Amnis Corporation announced today the release of two major upgrades to its ImageStream system including the Commercial release of a multilaser capability and the Beta release of a new technology for dramatically extending the depth of field well beyond conventional optical limitations.
The Multilaser upgrade provides the customer with the flexibility of adding two additional lasers including a 405nm (violet) laser and a 658nm (red) laser. These lasers provide for increased experimental flexibility and sophistication by greatly expanding the fluorescent dye selection available to the customer. The upgrade is accompanied by a novel enhancement to the optical system which provides precise chromatic correction for lower wavelength dyes excited by the 405nm laser. The enhancement enables high resolution imagery resulting from fluorescence excitation from all three lasers to be captured simultaneously across the entire visible spectrum. Customers who purchase the 405nm laser can now perform cell cycle, mitotic analysis and other experiments incorporating the widely-used DNA binding dyes DAPI and Hoechst. The 658nm red laser provides similar advantages for a broad range of red fluorescent dyes. The laser options have been designed for field-based installation and are currently being installed at existing customer sites throughout the world. New instruments are also being shipped per customer order with one, two or all three lasers installed.
The Extended Depth of Field (EDF) upgrade, currently in Beta testing at seven customer sites, has demonstrated up to a 10 fold increase depth of field allowing cellular structures to be imaged in crisp focus at positions well beyond the limitations of conventional imaging techniques. The EDF technology employs a Wavefront Coded(TM) optical element, developed by CDM Optics of Boulder, Colorado, operating in concert with rapid optical deconvolution algorithms developed by Amnis Corporation. The EDF option was specifically developed to address emerging research and clinical applications in high throughput cellular genetics. William Ortyn, Amnis COO, says “We are extremely pleased with the results of the this work. We now have several ongoing collaborations directed toward clinical testing of the ImageStream with the EDF option.” to enable the early detection of cancer.” Dr. David Basiji, Amnis CEO, states “The new capabilities enabled by both the Multilaser and EDF options bring new strengths to the platform to better serve our customer base. These options, in conjunction with our FISHIS(R) technology, also begin to lay the foundation for the advancement of the platform into the clinical marketplace.”
Amnis Corporation, headquartered in Seattle, WA, develops, manufactures and markets the ImageStream system for high speed imaging of cells in flow. The ImageStream system generates six high resolution microscopic images of cells as they flow through the instrument at rates up to 300 cells per second. Offering a truly unique combination of the visual power of microscopy and the statistical power of flow cytometry, the ImageStream system enables scientists to conduct highly advanced research in hematology, immunology and oncology.
A future short of breath? Possible effects of climate change on smog
Smog arrives in U.S. northeastern and midwestern states with the summer’s merciless heat and still air, a brown haze that hangs in the sky until cool air rolls in and provides a welcome respite. In Los Angeles and Missoula, it thickens in mountain basins like soup in a pot. Houston’s smog worsens in September, when sea breezes off the Gulf of Mexico die down. For the rest of the world, although the composition and severity of smog can vary greatly from region to region, a pattern has emerged: Warm temperatures, pollutants, and sunlight often work together to produce unhealthy conditions, the dangers of which are just now becoming known. The United States and other countries have attempted to address the issue of air pollution. On “bad air days,” when particularly smoggy conditions are predicted, newscasters or authorities urge people to take public transportation and warn asthmatics and others with heart or lung conditions to stay indoors.
As more has become known about what meteorological conditions favor smog formation, predictions for the next day’s air quality have become increasingly accurate. But what about the long-term picture? In coming decades, climate change will likely have a large impact on temperatures at the Earth’s surface and on day-to-day weather patterns. Will higher temperatures at the surface favor smog formation? Or will these higher surface temperatures contribute to lofting of the smoggy air toward higher layers of the atmosphere? How will changes in cloud cover impact surface air quality? If a warmer atmosphere can hold more water vapor, will cloud cover increase, thereby slowing down the production of smog? Finally, how will developing countries adopt new technologies without further degrading their air quality in a changing world?
Smog consists of a mixture of chemicals, some in gas-phase and some in the form of tiny particles. Smog starts with the emissions of gases like nitrogen oxides, volatile organic compounds (VOCs), and sulfur dioxide, and of particles like organic carbon and soot. Many of these constituents form during combustion processes. Every time someone starts a car or a coal-fired power plant kicks in, the high temperatures of combustion cause the release of more smog precursors into the air. But some smog precursors have natural sources. For example, for reasons that are not entirely clear, many trees and grasses emit VOCs like isoprene or a class of molecules called monoterpenes. Plant biologists are still trying to sort out why plants evolved to emit these chemicals and what protective effect the molecules could have on leaf structure. Even tiny organisms in soil emit high quantities of N[O.sub.x] as they convert other forms of nitrogen into usable energy.
But this short answer–that higher temperature means worsening air quality–neglects many competing and complicating factors. For example, the source gases that form secondary organic particles condense less readily at higher temperatures, which could mean fewer such particles in the atmosphere in the future.
One of the main factors influencing pollution levels is the frequency and duration of stagnation episodes. Stagnant air traps air pollution, allowing the chemicals to interact and the products of emissions to accumulate. Stagnation episodes typically occur during the summer, when the heat and humidity can become unbearable, but they can occur at other times of the year as well. In December 1952, a cold air mass moved off the English Channel and parked over London for five days. The cold air trapped the plumes of soot emanating from coal-fired stoves and factories, leading to a thick, dirty haze. This smog event, known as the Great Smog of 1952, may have led to as many as 12,000 premature deaths in the days and months that followed.
In the coming decades, as climate changes, will such stagnation episodes take place more frequently? Will they last longer when they occur? To understand how future climate change could affect stagnation episodes, it is helpful to think about how such episodes in the present-day atmosphere come and go. Over mid-latitudes, stagnation is one phase of an endlessly repeating weather pattern. First, a cold front comes through from the west, bringing rain and cool weather. After the passage of the cold front, winds weaken, the sky clears, and temperatures begin to climb. The air may stagnate. Soon another cold front arrives. A wedge of cool or cold air pushes in, lifting the warm (and possibly polluted) air eastward and poleward. What drives these cold fronts is the Earth’s heat imbalance. The sun deposits most of its energy in the tropics, and the ocean and atmosphere respond with several mechanisms that redistribute that energy. Cold fronts contribute to this redistribution by pushing warm air toward the colder, higher latitudes.
It should be emphasized, however, that all the studies described above made one very large assumption: that the emissions of smog precursors related to human activity would stay constant through future decades. In fact, it is quite possible that such emissions will decline, as new technology is put in place and existing regulations on pollution are tightened. The main value of these studies is that they make clear the climate change penalty that will be needed to overcome to meet air quality standards.
Particles have a more complicated role influencing climate. Most particles, such as sulfate or organic particles, reflect incoming sunlight like tiny mirrors and therefore lead to cooling. Soot particles, on the other hand, absorb incoming sunlight and outgoing infrared radiation, making the net effect of these particles difficult to calculate. Some studies have suggested that plumes of soot and sulfate particles emanating from South Asia may have led to local cooling of the Indian subcontinent, diminishing the strength of summer monsoon. This effect could counteract the warming influence of greenhouse gases, which most models predict will intensify the monsoon.
Dyes from Enzyme-Mediated Oxidation of Aromatic Amines
This paper characterizes reaction products from the oxidoreductase enzymatic conversion of aromatic amines to dyes that have an affinity for wool fibers. The dyes are identified with the aid of mass spectrometry, FTIR, ^sup 1^H-NMR, combustion analysis, and by comparison of experimental and calculated [lambda]^sub max^ data. The results of these analyses indicate that the dyes are binuclear and trinuclear aromatic compounds, depending on the number of available coupling sites in the precursor molecules and the number of reactants employed in the coupling step. Pathways associated with this enzyme-induced formation of dyes are proposed that involve a two-electron oxidation of 1,4-diamines to electrophilic diimines.
Oxidoreductase enzymes include laccase, which is a polyphenol oxidase enzyme that belongs to the family of blue copper oxidases. A typical laccase molecule is 60-80 kDa, of which 15-20% is carbohydrates such as mannose, galactose, hexoseamine, glucose, arabinose, and fucose. The protein constituent of these enzymes contains 520-550 amino acid residues [17, 18], and the three different copper centers that are primarily responsible for enzyme activity are known to undergo single-electron reductions in the presence of oxidizable substrates such as aryl diamines, polyphenols, polyamines, aminophenols, and lignin [2, 8, 10, 18]. The reduced form of laccase can be oxidized by molecular oxygen in order to replenish its catalytic activity.
Recent studies in our laboratories determined that water-soluble arylamines such as 1-3 may be oxidized alone or in certain combinations to produce colorants with an affinity for wool [1,7]. While this work included studies leading to precursor structure-color relationships, the exact chemical structures of these products were not established. Since such information was deemed critical to the optimization of this interesting new technology, we have undertaken the current study.
To this end, we have isolated and characterized the yellow dye produced from diamine 1 and the blue dye from a mixture of amines 2 and 3, since both dyes produced promising results in screening studies. We have characterized the isolated products with the aid of mass spectrometry, FTIR, ^sup 1^H-NMR, combustion analysis, and by comparison of experimental and calculated [lambda]^sub max^ data. We then use the results of these analyses to determine plausible pathways to product formation.
All chemicals in this study came from the Aldrich Chemical Company, Fisher Scientific Company, or TCI America. Thin layer chromatography involved Whatman silica gel (250 µm, 60[Angstrom]) glass-backed plates and column chromatography involved 60[Angstrom]4 silica gel. TLC solutions were prepared by dissolving the dye-containing freeze-dried solids (15 mg) in distilled water (0.5 ml), the plates were spotted 10 mm from the bottom edge, and eluents were allowed to travel 60 mm. The principal TLC eluent was ethyl acetate : ethanol : water (2:1:1), which was designated as eluent 1. Other useful eluents are reported elsewhere [141.
Visible absorption spectra were obtained with a Varian Gary 3 uv-visible spectrometer. Elemental analysis was performed by Atlantic Microlab Inc., Norcross, Georgia. FTIR spectra were recorded on a Nicolet 510 P FTIR spectrophotometer using a Continuum microscope. Mass spectra were recorded by a Jeol HX110 double-focusing mass spectrometer, and ^sup 1^H-NMR spectra were recorded on a Bruker 500 MHz spectrometer. A Data Color International Spectraflash 600 Plus reflectance spectrophotometer was used to obtain color strength data on dyed wool fabrics.
Geometric optimizations were performed with the PM3 method in CAChe MOPAC 6.0, part of the CAChe Worksystem [3], on an Apple Macintosh Quadra 950 equipped with 64 MB RAM, a 40 MHz CXP RISC coprocessor, and a 3D stereoscopic monitor. Absorption maxima were calculated using PiSystem98 [12] on a 400 MHz Pentium II personal computer.
Dye formation was achieved by dissolving or suspending the amines (0.5 mM) in water (50 ml) at pH 5 with O. IM Britton-Robinson buffer and adding the enzyme Myceliophthora thermophila laccase (150 LACU), where 1 LACU (one laccase enzyme activity unit) is the amount of enzyme that catalyzes the conversion of 1 µM syringaldazine per minute at the following analytical conditions: pH 5.5, 23.2 mM acetate buffer, 19 µM syringaldazine, and 30°C. The solution was stirred at 60°C for 1 hour. Freeze-dried solids containing reaction products and enzyme were prepared by Novo Nordisk BioChem North America.
Focusing on the flight, not the plight of black men
THE RETENTION OF BLACK MEN AT THE COLLEGIATE LEVEL, WITHIN THE GENERAL CONTEXT OF THE “plight” of Black males, has been generating significant scholarly and public interest recently, with stories on the subject appearing in The New York Times, The Washington Post and Diverse, to name a few. Last year, I attended several regional and national conferences addressing the topic. I believe that every crisis creates an opportunity. And some colleges and universities are implementing strategic initiatives designed to improve the status of Black men in higher education.
From the “War on Drugs” to “No Child Left Behind,” Black men, young and old, are often placed in a defensive posture. Many Blacks and other minorities have been able to enjoy the individual fruits of their labor, but far too many have been left behind. From Frederick Douglass to the Rex,. Dr. Martin Luther King Jr., Blacks have always had to appeal to America’s moral consciousness. One of the goals of the Million Man March held more than l0 years ago was to bring about atonement and spiritual regeneration, yet there is still a need for spiritual healing among Black men.
“Why is it so hard for me to get a job, but so easy to sell drugs?” was the rhetorical question posed by University of Pennsylvania sociologist Elijah Anderson during the conference “Poor, Young, Black and Male: A Case for National Action?” We are all painfully aware of the statistics–there are more Black males in prison (840,000) than in college (635,000) in this country. So why do we build more prisons instead of programs to incorporate ex-offenders back into society? Where do we draw the line between personal integrity and societal responsibility while acknowledging the lingering effects of institutionalized racism? Mentoring and successful role modeling for young men are critical. One possible remedy is to reestablish the after-school and summer job programs that have become virtually extinct over the past few decades. Another possibility is to place more emphasis on academic enrichment programs in inner city and rural communities.
Although the situation with Black males is, in many regards, dire, we do have reasons to be optimistic. Approximately 600 Black men graduated from the all-male Morehouse College last year. And there are several programs aimed at working with Black male students, including Morgan State University’s Morgan Mile, Clemson University’s Call Me MISTER program and the REACH Mentoring Pilot Program here at Wright State University. Also worthy of recognition is the City University of New York’s African American Male Initiative, which is currently facing legal challenges. As a society, we seriously have to think about where and how we spend our resources when it comes to Black males. It appears there are two options–prison or outreach programs.
Attending the various conferences motivated me to design a course on Black male images, from the Middle Passage to the present. I’ll be teaching the course at Wright State alongside Dr. Martin Gooden, an assistant professor of psychology on campus. This class will take an interdisciplinary approach to the study of Black males in society, emphasizing sociopolitical and psychological perspectives. Thematically, it encompasses self-definition or identity, historical consciousness and community service. It is imperative that young Black males connect philosophically with intellectual traditions that help clarify their perspectives, increasing the likelihood that more of them will matriculate through college with positive experiences.
We need to begin a new dialogue about the flight of Black men, instead of focusing exclusively on their plight. I am referring to the astronauts, businessmen, scientists and physicians who take flight both figuratively and literally. Also on the horizon is U.S. Sen. Barack Obama, who recently announced his candidacy for the President of the United States. And there are the exceptional young men who run afoul of the law but retain enough dignity and humanity to return to college or the work force.
We have to be vigilant and visionary not to lose any generation. I would conclude by calling for a community-based, intergenerational national forum to create a blueprint for addressing Black male student retention and recruitment. With the attack on affirmative action and a shortage of grassroots programming, the goal is to empower young Black males, enabling them to become positive catalysts for societal change.
Posttraumatic growth and thriving with heart-centered therapies
Abstract: The predominant themes in the paper by Stiles (2007) are: whether the dissociative states experienced during childhood sexual abuse influence the adult woman survivor’s spiritual development (defined as the process by which one actively engages in the search for purpose and meaning in one’s life), and whether the experiences were ultimately of value. Stiles also refers to “the human psyche’s capacity to expand through dissociative experience.” In particular, she suggests early dissociative patterns may contribute to: a tendency to experience boundarylessness; merging with something beyond the self; awareness of the existence of states of nonordinary reality; and acceptance of a state of out-of-control overwhelm as near-death, i.e., “being near death is akin to being near God.”
A proclivity to experience dissociative states, resulting from childhood sexual abuse, does contribute to the adult woman survivor’s spiritual development; however, it also adds the challenge to integrate dissociated parts that have grown into autonomous subpersonalities in order to avoid either unconscious emotionality or disconnection from emotion and the body. Thus, what begins as seeking psychic refuge through dissociation ideally evolves into allowing the dissolving of one’s psychic self. This article will discuss these themes utilizing several theoretical perspectives: (1) the Coactivation Model of healthy coping (Larsen et al., 2003); (2) “posttraumatic growth” or “resilience”; (3) current research into purpose in life, and wisdom; and (4) the neuropsychology of mystical experience.
Gottman, Katz, and Hooven (1996) observed that one of the most valuable contributions parents make to the development of their children is to “coach” them to recognize, name, and communicate their fears, frustrations, anger, and pain. Successful coping depends not only on “grappling with the stressor, but also on coming to grips with and gaining insight into it” (Larsen et al, 2003, p. 221). In fact, for individuals with terminal illness, confronting and overcoming negative emotions may actually extend life itself. Spiegel et al. (1989) found that breast cancer patients randomly assigned to a support group where they were encouraged to express their feelings about their illness survived on average 37 months, twice as long as control patients survived.
When an individual encounters adversity, be it accidental or malicious, sudden or lingering, there are at least four potential consequences (O’ Leafy & Ickovics, 1995). One possibility is a downward slide in which the initial detrimental effect is compounded and the person eventually succumbs, defeated. A second possibility is that the individual survives but is diminished or impaired permanently. A third potential outcome is that the individual returns to the pre-adversity level of functioning, that is to say he or she recovers. The fourth possibility is that the person may surpass the previous level of functioning, and he or she thrives. The thriving outcome has been studied extensively, and is generally called traumatic growth. The following graphic representation (Illustration 1) is taken from Carver (1998), who adapted it in turn from O’Leary & Ickovics (1995).
Extreme transliminality may have negative as well as positive outcomes, however; excessive transliminality may allow unrestricted subliminal material into consciousness, or too much material too soon. An example is mania, with its flight of ideas, overly optimistic elation, and delusions of grandeur. Another is depression, in which highly unpleasant memories and morbid delusions rise up again and again. This also accounts for the intrusive thoughts or flashbacks common to those who suffer from PTSD.
Reporting on research by Richard Davidson at the University of Wisconsin, Madison, Begley (2007) discusses several interesting changes in brain activity for individuals experiencing meditation. Using fMRI imaging to detect which regions of the brain became active during meditation, Davidson found that brains became activitated in regions that monitor one’s emotions, plan movements, and generate positive feelings such as happiness, i.e., the region of the brain he calls “the chief operating officer of the brain.” This part of the cortex is known to powerfully inhibit the center of impulsive emotions and instinctual urges, the amygdala, and plays an important role in maternal/infant and social bonding. Other regions became quieter during meditation, those that keep track of what is self and what is other, explaining the experience of boundarylessness, loosened identifications and fluid ego boundaries. In its simplest terms, the trained meditator has gradually learned to empty the mind.
1. tolerance of ambiguity, i.e., coactivation of positive and negative emotions, and of sympathetic and parasympathetic activations;
2. capability of finding purpose and meaning in life’s turbulence and using negative emotional experiences as catalysts for emotional growth;
3. willingness to loosen one’s ego identification through experiencing states of nonordinary reality, boundarylessness, merging, and acceptance that being near God may be akin to being near death.
Structural dissociation
There may be a connection between the neurological damage done by early abuse and “posttraumatic growth,” including receptivity to spiritual exploration. While it is premature to assert such a connection, we will identify some of the known neurological consequences of early child abuse. “The integrative failure that is characteristic of traumatized individuals may also relate to structural brain changes, notably in the hippocampus” (Nijenhuis, Van der Hart, & Steele, 2004). The hippocampus is a brain structure instrumental in the synthesis of experiences, providing a conscious structure, context and a time stamp to the experience in the process of memory encoding, storage and retrieval. Smaller hippocampal volumes were reported in female adult survivors of childhood sexual abuse (Bremner et al., 1997). That damage consists of a loss of neurons and synapses (a loss of up to l8%), and results in corruption of thought process and learning, particularly deficits of encoding short-term into long-term memory.
The traumatic experiences, etched in procedural memory but not converted into long-term memory, interfere with current working memory. Past threats are perceived to be present threats, suggested by intrusive thoughts, flashbacks, and hypervigilance. Not only does PTSD obscure the ability to distinguish between past and present lost, but the “repertoire of survival skills remains confined to those skills that were acquired up to the time of the trauma, and they lack the resilience to learn new strategies” (Scaer, 2005, p. 67). An aspect of this individual is frozen in the past, or perhaps more accurately that frozen dissociated part of the person is carried like deadweight in the ever-present–a “primitively organized alternative self”.
Taking the high road: as organizations drive toward their business objectives, OCEG chair Scott L. Mitchell says they must have the ability to navigate any obstacles that appear in their path
ODAY’S COMPANIES ARE TRANSPARENT. It’s not easy for them to keep information behind closed doors anymore. For one thing, people can instantly compare what companies are saying and doing now to what they were saying and doing a year ago, or five years ago, or 10 years ago. If something is running amok, it’s going to be found out much more quickly and written about much more broadly than in the past. In fact, organizations don’t need to worry about whether their misdeed makes the front page of the next day’s Wall Street Journal, they need to worry about whether they’re picked up by a blogger later that morning.
As a result, says Scott Mitchell, companies must make operations as clean as possible on two levels: what they’re actually doing and how they’re going about doing it. The slightest misstep can be broadcast in detail from Shanghai to Saskatoon in the blink of an eye. Mitchell is chair and chief executive officer (CEO) of both the nonprofit Open Compliance & Ethics Group (OCEG) and DoubleDrum Capital and sits on The Committee of Sponsoring Organizations of The Treadway Commission Task Force.
Indeed, issues of corporate responsibility and ethical behavior comprise a cause Mitchell holds near to his heart, as evidenced by his enthusiasm for these topics when Internal Auditor recently discussed with him the changes he sees coming in the internal audit space.
Q. You see structural change coming in the way corporations approach controls. What are the deficiencies with the process-based model that make a move to a goal-based model necessary?
As an organization drives toward its business objectives and puts in place a business model to achieve them, it needs to address the obstacles to their achievement. That’s of great concern to shareholders, and it’s one of the classic definitions of risk management. An organization also needs to know that there are boundaries to its conduct. One kind is legal, of course, but corporations also face their own voluntary boundaries–the values they espouse and what they stand for in the marketplace. Another kind of boundary to corporate activity is an organization’s contractual obligations. Fortunately, as a corporation drives toward its objectives, it can count on assistance from a number of processes. A lot of leading organizations are finding that their control processes have a tremendous amount of overlap and commonality to them–and when you think about your control processes as a whole, you gain efficiency and effectiveness. In fact, many organizations are finding that when they don’t try to figure out what “governance” is and where it starts and where it ends, when they take a step back and say, “What do the processes aim to do?” they realize much more impact on the business itself. In fact, the acronym that corporations should use–GRC, for governance, risk, and compliance–is finally coming into the mainstream. When all of the processes and all of the departments in the enterprise are helping it drive toward its objectives–while staying within its boundaries–you reap a lot more benefits.
Q. Why don’t more corporations do that now?
If I were to try to simplify the reasons, one is volatility and another is inflexibility. There are so many boundaries corporations face, and they change all the time. And they’re increasingly complex, especially when you layer in global competition and all the recent merger and acquisition activity. An average corporation faces about 70,000 pages of federal regulations regarding its operations, and at any point in time there are some 4,000 new rules in the pipeline. If it’s not a new U.S. Sarbanes-Oxley Act of 2002 issue, there are 3,999 others coming down the pike that it needs to deal with. What has happened historically is companies organize their control processes around the regulations that come out. Many organizations created Sarbanes-Oxley teams and departments, and solution providers started selling Sarbanes-Oxley solutions. Everybody started organizing around a narrow regulatory regime. So rather than look at each regulation as part of the fabric of GRC, companies ended up creating silos around each issue. There are all these different silos with different people using different processes and totally different vocabularies and approaches–and they’re probably not sharing any information with each other. Even though ethical behavior is an interdisciplinary problem–almost like a quality management problem–you rarely see a single executive in charge of GRC. It’s almost always a combination of executives.
Q. What are some of the key cross-disciplinary risks organizations face at the nexus of governance, compliance, and ethics?
The financial risks are pretty clear. Bribery, for example, cuts across a number of departments. It’s an ethics risk, a compliance risk, a sales and marketing issue, and, ultimately, if it’s not dealt with, it can turn into a huge governance issue. But those are easy to see. What about employment? What about fair wages? There are ethical issues there, because managers at individual outlets of a large retail organization, for example, often have wide latitude in determining wages. There’s also a compliance issue there because the U.S. Fair Labor Standards Act (FLSA) covers wages. In fact, ask a board member at a large retailer which is more dangerous, Sarbanes-Oxley or employment issues. The No. 1 area of litigation and the No. 1 area of successful class action lawsuits is employment. That’s a good example of my point. You can’t say that FLSA compliance is a legal compliance issue alone. When you try to separate it into its component parts, you focus too much on individual aspects of the problem. When the approach is integrated, the issues are easier to address.
Q. Can you offer an example of a company that has placed a greater emphasis on ethics, governance, and compliance issues as a result of changes around them?
A very large professional services firm recently changed the way it compensates business development partners, particularly in emerging growth countries. The organization used to be purely numbers driven, but now it also reviews contract compliance as a performance metric. Suppose a partner hit its number, say US $10 million. That was all that was reviewed before. Now the firm examines that number and asks how many of the 100 contracts that provided the US $10 million were not standard contracts. The suggestion isn’t if someone signs one he or she is breaking the law. But the organization has found that when there’s a greater incidence of partners signing nonstandard contracts, the revenue involved is at greater risk because those partners are more likely to default. By tying performance measures to existing risk and compliance measures, the firm has created a much clearer understanding of its real revenues. Now the development partners have incentives to be in line with the risk and compliance objectives of the business as well. The end result is there’s less revenue at risk.
Significance and Performance of Real Estate Markets in India
This paper reviews the real estate markets in India and assesses the risk-adjusted performance and portfolio diversification benefits for the real estate markets (office, retail and residential) of New Delhi and Mumbai (two largest cities in India) over the 1998: Q2-2005:Q4 period. The real estate markets were found to under-perform the stock market in India over 1998-2005, with most markets improving their performance in more recent years, although there was some loss of portfolio diversification benefits for office and residential real estate with stocks. Deregulation of the capital markets and international investment in India is also likely to have a significant impact on future FDI levels and the growth of real estate funds for real estate investment in India.
In recent years, global real estate securities funds have been seeking real estate investment opportunities in the emerging real estate markets, particularly in Asia. This investor interest has sparked the establishment of over 59 global real estate securities funds with over $14 billion in assets under management, including the ING Clarion Global Real Estate Income Fund ($2.7 billion), the Nikko AMP Global REIT Fund ($1.3 billion), and the ABN AMRO Global Property Securities Fund ($1.3 billion) (EPRA, 2005a). Importantly, Asia accounts for 27.5% of these fund assets under management, compared to Europe (25.1%) and the United States (45.4%), including ten funds with in excess of 40% of assets in Asia (e.g., Nikko AMP Global REIT Fund, Fidelity International Real Estate Fund, and Cohen & Steers International Realty Fund) (EPRA, 2005a).
This trend reflects studies highlighting the portfolio diversification benefits of including international real estate in mixed-asset portfolios (Wilson and Okunev, 1996; Steinert and Crowe, 2001; Bond, Karolyi, and Sanders, 2003; Conover, Friday, and Sirmans, 2003; and Hoesli, Lekander, and Witkiewicz, 2005). Importantly, international diversification has been shown to be more effective in the Asian real estate markets than in the European real estate markets (Bond et al., 2003), as well as there being long-term diversification opportunities by investing in real estate in several Asian countries (Garvey, Santry, and Stevenson, 2001). This has seen recent attention given to the dynamics of the real estate markets in specific Asian countries (e.g., Hong Kong) (Newell and Chau, 1996; Chau, MacGregor, and Schwann, 2001; Chau, Wong, and Newell, 2003; Schwann and Chau, 2003; and Newell, Chau, and Wong, 2004), the development of REITs in Asia (UBS, 2005; and Ooi, Newell, and Sing, 2006) and the rapidly expanding real estate investment opportunities in China (Tse, Chiang, and Raftery, 1998; Webb and Tse, 2000; Chu and Sing, 2004; and Newell, Chau, Wong, and McKinnell, 2005).
While China has attracted considerable international attention due to its rapid economic growth and real estate investment opportunities in major areas such as Beijing, Shanghai, Guangzhou, and Shenzhen (Newell et al., 2005), the other market in Asia that will attract significantly increased attention from international real estate investors in the near future is India. With a population of over 1 billion, real GDP growth is forecast at 6.9% p.a. over 2005-2015, recent introduction of economic liberalization policies, and relaxing of foreign investor guidelines for real estate investment in India, significant opportunities for real estate investment in India will emerge in the near future.
To date, most of the real estate focus on India has been on the impact of international outsourcing and offshoring to India; particularly in the areas of IT services and IT-based business processes (e.g., JLL, 2003a,b, 2005a,b,c), as well as real estate market reports by leading real estate companies such as Jones Lang LaSaIIe and Cushman & Wakefield (e.g., JLL, 2005d, 2006). No real estate research on India has yet been published in any of the leading real estate research journals. As such, this paper will review the real estate markets in India, and assess the risk-adjusted performance and portfolio diversification benefits of the office, retail and residential real estate markets in New Delhi and Mumbai (two largest cities in India) over 1998:Q2-2005:Q4, with the overall investment implications assessed for real estate investment in India.
Fundamental to India’s economic success in Asia and internationally has been strong economic growth (Exhibit 2), only exceeded by China amongst the Asian countries. Currently accounting for 6% of the world’s GDP (DB, 2005a), the GDP growth for India is 5.5% p.a. projected over 2006-2020 (DB, 2005b). This projection casts India as the fastest growing global economy over the next fifteen years, becoming the third largest economy in the world by 2020, with Indian GDP per capita to double by 2020. Thus, India is viewed as a key element in the “Chindia” and the “BRIC” economies,1 which are seen as key emerging markets playing an expanding role in the global economies.
he value of share trading on the Indian stock market (43% of total market cap.) is consistent with the more mature Asian markets; e.g., Hong Kong (44%), Singapore (45%), Japan (59%), but significantly less than that seen for other lessmature Asian stock markets; e.g., China (99%). The volatility of the Indian stock market (23.8% over 2004-2005) was above that seen for the more mature stock markets both in Asia [e.g., Hong Kong (15.1%), Singapore (11.5%)] and internationally [e.g., U.S. (10.3%), U.K. (9.5%)], and comparable to that seen for other emerging markets [e.g., China (20.4%), Brazil (25.0%), Russia (36.4%)].
While twenty sub-sector performance indices are available on the BSE, no real estate company subsector index is available. Unlike most other Asian countries (e.g., Japan, Singapore, Korea, Hong Kong, Thailand), there are currently no REITs in India. The guidelines and regulations for I-REITs are likely to be developed in the near future by the securities and Exchange Board of India and the Association of Mutual Funds of India, as a flow-on effect of the introduction of real estate funds with the deregulation of the capital markets in India in 2004.
Major listed real estate companies include Ansal Properties, Unitech, and India Bulls; being predominantly in the area of real estate development. This low level of exposure for real estate companies on the Indian stock market reflects commercial real estate typically being held by the large private corporations or houses such as Raheja and Hiranandani, and the significant role by large unlisted real estate developers in India such as DLF, Vatika, MGF, Vipul, Essel, Omaxe, Niho, and Parasvanath.
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