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and similarly for obligor B. What is left is to determine the relationship between the correlation of the returns and the default event correlation for two obligors, as already discussed in the previous inset. We see that correlation depends both on the weights on the factors and on the correlation between the factors. It is possible to construct a model in which the correlation between the factors is zero (Moody s KMV Portfolio Manager is one such example). The Approach in the Macro Factor Model In a Macro Factor Model, the state of the economy, determined by the particular economic factors (e.g., gross domestic product, unemployment, etc.) chosen by the modeler, causes default rates and transition probabilities to change. Individual rms default probabilities are affected by how much they depend on the economic factors. A low state of economic activity implies that the average of all default probabilities is high, but how each obligor s probability varies depends on its weight on each macrofactor. Default correlation thus depends on the similarity or dissimilarity across rms on their allocation to macrofactors, and on the correlations in the movements of the macrofactors themselves. As with all the other models there is no explicit input or calculation of default correlation. (Default correlation is not calculated explicitly in any model for the purpose of calculating the loss distribution only for user interest is it calculated.)

UNIFIED IDENTITY ONLINE WITH OPENID While most websites today use their own user accounts, the OpenID effort offers a distributed identity scheme that should eventually allow you to log in to many different websites using the same username and password. A broad range of individuals and technology companies are working on developing and supporting OpenID. In order to use OpenID, you register with an OpenID provider who provides account management and authentication services. Your username will be a website address or URL (for example www.janesmith.net) rather than a short handle (like janesmith). Once you have an OpenID login, you can use it to log in at any OpenID-enabled service. You can find OpenID providers and OpenID-enabled sites listed at openid.net.

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Second-hand clothing In some high street shopping centres charity shops seem to be almost as common as new clothing shops. The huge increase in the number of these and second-hand clothing outlets can be explained in many ways. As people buy more new clothing the second-hand clothing shops are an obvious place for them to dispose of their unwanted fashions from last season. Economic reasons could lead us to assume that lack of money means that the only clothing some people can afford is from the second-hand market. Or it could be that more environmentally conscious people are preferring to buy second hand and so recycling clothing rather than always buying new. The retro look of the late 1990s meant that second-hand clothes shops were a good source of desirable genuinely fashionable items.

In the second type of pattern of discovery, a scientist uses a known phenomenon to invent a proof of principle application In this case a known phenomenon stimulates exploration for a particular application If the inventor is able to demonstrate the phenomenon accomplishing a particular application, we consider that he/she has completed a Proof of Principle Pattern The second type of pattern of discovery is illustrated by John Fleming s vacuum tube diode Before Fleming came on the scene, Thomas Edison had been experimenting with light bulbs and in 1883 he found that he could detect electrons owing through the vacuum to a metal plate mounted inside the bulb This was a serendipitous discovery by Edison, who did not set out to invent this process The phenomenon subsequently became known as the Edison Effect.

Time (milliseconds)

Given the cost and complexity of deploying and managing private networks, more and more enterprise customers are implementing IP services to connect multiple sites over a service provider s shared infrastructure with the requirement that the service provides the same access or security policies as a private network. This requirement motivated the creation of VPNs. Two implementation models have gained widespread use: the overlay model, in which the service provider provides emulated leased lines to the customer; the peer-to-peer model, in which the service provider and the customer exchange layer 3 routing information and the provider relays the data between the customer sites on the optimum path between the sites and without customer s involvement. The overlay model is easy to understand and implement since the service provider simply offers a set of Virtual Connections (VCs) connecting customers sites either by using some layer 2 WAN technologies such as frame relay and ATM, or with some IP-over-IP tunneling such as Generic Route Encapsulation (GRE) tunneling and IP security (IPsec) encryption. However, it has a few major drawbacks: It is well suited for enterprise customers with a few central sites and many remote sites. However, it becomes exceedingly hard to manage in a more meshed configuration due to scalability limitation.

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