Comprehending Capital Market

We know that everyone, be it individuals, businesses or governments needs capital for their day-to-day activities. Entrepreneur may need capital to establish a business, to run it , to modernize it  or to expand and diversify. Government may need capital to build infrastructure, support its federal institutions or to spend on military.

Now there are always two kinds of people in any economic system, one who saves money called as saver and one who needs money for its productive use. The question is how these two interact with each other. Capital market acts as as a link between these two. It facilitates this function by acting as an intermediary between savers and borrowers.

Capital market is the part of financial system which is concerned with raising medium or long term capital funds by dealing in investment instruments such as equity or stocks, bond and mortgages.

Capital market consists of development banks, commercial banks, stock exchange etc. It can be further classified into primary market and secondary market.

Image Coutesy: Successfulworkplace.org

Primary Market:

A company issues shares and/or debentures to establish new business or to expand it, the market where this company gets listed for the first time to issue new securities is called primary market. Since only new securities are only traded, it is also known as "new issue market". The investors in this market consists of bank, financial institution, insurance companies, mutual funds and individuals.

A company may use following methods to issue securities in the primary market:

1. Initial Public Offering (IPO): 

A company may issue its securities to the public for first time through various methods such as through prospectus, offer for sale or through private placement.

a. Through Prospectus: In this method, companies provide prospectus which give details of the company and then invites public to apply for the securities offered. Companies reach out to public through advertisements in newspaper or magazines.

b. Offer for Sale: In this companies don't directly sell their securities to public but sell it to the intermediary, known as Issue House. These intermediaries sell these securities to the public at higher price. This method provides a swift way to raise capital for the company.

c. Private Placement: In this companies sell their securities to a selected few wealthy individuals or institutional investors.

2. Right Issues:

Under this method, new shares are made available to its existing shareholder commensurate with the existing shares. The shareholder may buy these new shares or assign a part or all of these shares to another person. These new shares are generally offered at a price below the market price.

Secondary Market:

Secondary market is often termed as stock market or stock exchange. It is a place where existing securities such as shares, debenture or bonds are sold and purchased regularly. It is the secondary market which determines the price of a stock as most of the securities are traded here.

Functions of Secondary Market:

1. It facilitates purchasing and selling of already listed securities regularly and conveniently. It gives investors an opportunity to buy and sell these securities as and when they want, this leads to high degree of liquidity.

2. Determines the price of the securities based on fundamental law of demand and supply.

3.Maintains and provides regular information on the the prices and sales volume to press and other media. This helps investors make an informed decisions on purchase and sell of interested securities.

4.Stock exchange transactions are conducted among its members only with adequate transparency and established legal framework, thus providing high degree of security from fraudulent practices.

5.As stock market channelize savings into most productive investment avenues. This leads to economic growth in a country.

Now let me give an example for better understanding of all these procedures. Suppose an entrepreneur needs to expand his business, he needs capital to buy assets like machinery, factories, trademark, patent, technical expertise as well as to run day-to-day operations. So  he can sell its securities by getting listed with at least one stock market. Once he sell its financial securities to the investors either in the form of stocks or bond,  it raises the required capital. Now these financial securities can in turn be sold on secondary market. Assume that the company is doing well and there is an anticipation of upward movement in the stock price. More people will now like to buy its stock and a few willing to sell. This leads to high demand and low supply scenario. To buy these stocks buyer need to bid a higher price to match the asked price of the seller. This increases the stock price of the company. On the contrary, if the company is not doing well. More people will like to sell its stock and a few will be willing to buy. This leads to high supply and low demand scenario. This decreases the price of its stock.

References:

1.http://www.investopedia.com/walkthrough/corporate-finance/1/financial-markets.aspx

2.http://www.investopedia.com/terms/c/capitalmarkets.asp

3.http://www.slideshare.net/snehajc10/capitalmarket-130722112611phpapp01?next_slideshow=2

4. https://anilrazb.wordpress.com/capital-market-types/

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Understanding the Birth of Islam and its Five Pillars

Birth of Islam and story of Muhammad:

Before understanding Islam, we need to understand the society in which Islam was born. The Arabs at that time believed in polytheism. In fact, the Quraysh tribe in which Muhammad was born into practiced pilgrimage trade in Mecca where statues of many gods had been collected in a temple like structure called Kabaa.

Image Courtesy: Slideshare.net

Muhammad, the final prophet of God, was born in the year 570 CE in the city of Mecca. In his early youth, he became a camel driver, then a caravan leader and then a merchant. When he was around around 40 years of age, he was visited by an archangel, Gabriel, in his dream. The revelations that Muhammad received from Gabriel were subsequently collected and codified as the Quran. Since these revelations doesn't include the views of the people, Quran seen as the actual word of the God. Initially though there were many people claiming to have been visited by God in their dream, so Muhammad decided not to speak of these revelations to the public. It was his wife who encouraged him to spread the words of God, now as Islam was strict monotheistic, this didn't bode well with the leaders of Quraysh tribe as they practiced polytheism. If all the gods in the Kabaa were false as Muhammad was preaching, it would have been an economic disaster.

This made the Quraysh tribe people to force Muhammad and its follower out of Mecca in 622. They headed to Yithrab, also known as Medina. This journey , also called hijra, is so potent that it marks year 0 in the Islamic Calendar.In Medina, number of people who believed in these revelations, also known as Ummah, grew significantly. Muhammad, besides being a prophet, was also a good general. In the year 630, Muhammad along with the his follower conquered Mecca. After conquering Mecca,

the first decree of Muhammad was to cleanse the Kaaba of its idols and dedicate the shrine to Allah.One important thing to note here is that Allah is just an Arabic word for god irrespective of whether you are a Muslim or Christian or Jews.

By the end of 7th century, Islam was as powerful a political force as it was a religious one and for this very reason, there is no separate tradition of civic and religious laws like there is in Christianity, Judaism etc. Once Muhammad died in 632, there was a need for a political leader who will guide the Ummah. Muslims were then led by a series of four Caliph who continued to spread the message of Islam. The first Caliph was Abu Bakr, Muhammad's father-in-law and was commonly known as the The Truthful. Many people wanted Ali ,Muhammad's son-in-law, to lead the community, though eventually Ali did become the fourth Caliph, the initial disagreement sown the seeds of division between two major sects of Islam-Sunni and Shi'a.

Death of Muhammad and spread of Islam:

Abu Bakr started a series of successful military campaigns against the Byzantine and the Sassanian empire. All the Caliphs followed this tradition of conquest and sadly also assassination. Though Ali finally got his turn at Caliph, his ascension was very controversial and finally led to civil war.This eventually led to rise of Uthman's tribe, the Umayyads, as a dynasty that would rule over an ever expanding Islamic world for more than a hundred years. Many people believe that the words of Islam was spread based on swords. Although the truth is a little bit more complicated, Islam was not forced on the people but rather people who practiced different religion had to pay higher taxes. Now as higher tax on a product leads to reduction in consumption of that product similarly higher taxes for worshiping other gods led to a vast number of converts. Also, Islam gave many rights to women, orphans. There was no racism practiced in Islam and everyone was treated equally apart from the one with political stature. All these factors resulted in many people opting Islam without any military campaign.

Five Pillars of Islam:

1. Shahada: Faith
 
 It is declaration of faith. It reads as " There is no God but God and Muhammad is the messenger of God." It is important to recite these words to become a Muslim and to convert to Islam.

2. Salat: Prayer
 
 It is ritual prayers five times a day- at dawn, noon, afternoon, evening and night. All of these prayers are recited while facing in the direction of Kabaa in Mecca.These prayers are obligatory unless you haven't hit the puberty or are too sick or are menstruating.

3. Sawm: Fasting
 
Three types of fating is recognized in Quran. Ritual fasting, fasting as a compensation for repentance and ascetic fasting.

Ritual fasting is an obligatory act during the month of Ramadan in which Muslims don't eat or drink during daylight hours.Since Ramadan is a lunar calendar month, it moves around the year and is most fun during winter when days are small and obviously least fun in summer as days are both hot and longer.

4. Zakat: Charity
 
It is practice of charitable giving to the community from which the wealth was accumulated. A non-poor Muslim is required to give some percentage of their income to the poor. If a person doesn't have enough money, he should compensate for it by other means such as good deeds and good behavior towards other.

5.Hajj: Pilgrimage to Mecca

  The Hajj is a pilgrimage that occurs during the Islamic months of Dhu al-Hijjah to the holy city of Mecca. A muslim is obliged to make the pilgrimage to Mecca at least once in their lives provided they are healthy and have enough money.

References: 

1.https://en.wikipedia.org/wiki/Five_Pillars_of_Islam

2.http://www.metmuseum.org/toah/hd/isla/hd_isla.htm

3.http://www.jewishhistory.org/the-rise-of-islam/

4.http://www.missionislam.com/knowledge/The%20Rightly-Guided%20Caliphs.htm

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Stereotype, Prejudice and Discrimination.

Have you ever judged someone just by looking,  on what their belief are or what they are capable of doing? If yes, what trigger these thoughts? Before we examine the thought process, let's understand the underlying factors.

These factors might cause us to help another person or harm them or even fear them. People often judge others based on their group affiliation through stereotype, prejudice and discrimination. Let's take a closer look at each.

Image Courtesy: Youthvoice.net

Stereotype:

Stereotype is a pattern which we assign to a group. It may or may not be true. Stereotype can also be positive or negative.Let me cite an example:

Many people associate intelligence with glasses. Now this is positive till we don't expect all people with glasses to be intelligent. Another stereotype can be teenager love to play video games. Issue arises when this pattern becomes an expected behavior. Just because someone wears glasses doesn't mean he/she is intelligent. Similarly just because one is teenager doesn't mean he/she loves to play video games.

Prejudice:

We all have been unfairly judged in our time and at the same time we too have done uninformed judging. Prejudice is a common human condition. Prejudice is formed of two words 'Pre' and 'Judge'.It basically means forming an opinion on someone or something before having all the facts and evidences.It's a thought or feeling that you hold internally and doesn't always leads to an action. For example, let's assume you have a stereotype belief that women can't fly an airplane. Now you form a prejudice that men are better suited for the job of pilot. But you may not act on it and hire anyone based on their talent irrespective of their gender. But if you decide not to hire a woman pilot because of your prejudice, then it becomes discrimination. Prejudice attitudes are often directed along the lines of gender, ethnic, socioeconomic status, culture or age etc.

Discrimination:

This means you go so far as to treat people differently based on your prejudice. Discrimination ,basically, involves putting group member at a disadvantage or treating them unfairly as a result of their group membership.The formal apartheid system of racial segregation in South Africa, the Nazis' mass killing of Jewish people and other group and centuries of bloodshed between Protestants and Catholics are all extreme examples of violent form of prejudice and discrimination.


Prejudice and discrimination can be non-conscious. These are based on your implicit thoughts. To understand these we have implicit association test (IAT) . This test was implemented in late 1990s to try to gauge the implicit attitudes, identities, belief or biases that other people are unwilling or unable to report. You can take the IAT online and measure your implicit attitude in all kinds of topics.

https://implicit.harvard.edu/implicit/india/takeatest.html

So that's one way to measure subtle,implicit prejudice. But these implicit prejudice is far from dead and thus discrimination studies are prominent is social psychology research. Discrimination studies sometimes predict with accuracy how discrimination might show up in broad social patterns like wage inequality, job opportunity gap or unfair justice system. According to a 2013 Pew Research Center survey, blacks perceived racial biases to be much more greater in criminal justice system than other institutions. Seven-in-ten blacks said that black were treated less fairly when dealing with police compared to whites. In comparison, 37% whites held that view. Also, 68% of blacks told that the court system was unfair to them, far more than whites(27%).

Now it's too easy to give examples to demonstrate how people are prejudiced but the real root of the issue lies in why they are prejudiced. Some of the possible answers might be that prejudice can be seen as a way of justifying social inequalities. This happens when people on both sides of spectrum starts believing that people get what they deserve and deserve what they get. This is called the "Just-World Phenomenon". This ideology is pervasive across countries. Prejudices can also be driven by "Us" vs "Them" or as psychologist call it ingroup-outgroup phenomenon. When many people think of casteism or racism or any other form of bias, they tend to think it's chiefly because of negative feelings towards other group. But research since 1970s have shown that many group biases are more a function of favoritism towards one's own group than negative feelings towards another group. The tendency of people to favor their own group is known as ingroup bias and has been found across cultures around the world. One of the startling fact regarding ingroup bias is how easily it's triggered. There were a series of experiments conducted between 1970 and 1981 by Henri Tajfel in Briston, England. In these experiments, people were divide into two groups based on minimal information like a preference for one type of painting vs another, or even just the toss of the coin. What Tajfel discovered that within minutes of diving into groups people tend to see their own group as superior and frequently seek to maintain an advantage over other groups. Soon enough, each group has inflated itself and derided the other group, even though division between the two was meaningless to begin with.

So what's the solution:

Some of the things that might help are:

1. One-on-one interaction: If you get to know someone as a person, you get to see beyond those stereotypical things that you have formed in your mind. You will start thinking, hey this isn't "them" this is my friend, I know about him.

2.When you recognize your prejudice and stereotype you can act on them.

3.When you starts celebrating the fact that people being different is a good thing. It adds to "Us" rather than taking anything away.

References:

1.http://www.understandingprejudice.org/apa/english/page2.htm

2.http://study.com/academy/lesson/prejudice-discrimination-stereotypes-definitions-examples.

3.http://www.pewresearch.org/fact-tank/2014/08/12/vast-majority-of-blacks-view-the-criminal-justice-system-as-unfair/

4.https://www.verywell.com/what-is-the-just-world-phenomenon-2795304

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Economic and Strategic significance of Indian Ocean Region.

Indian Ocean is one of the most concerted area where global economic activity and political activity conjoin.Prior to expounding the economic and strategic significance of Indian Ocean Region (IOR), I need to digress for a while to give a picture of the geography of IOR.

It is the third largest ocean of the world being proximate to Asia in its north, Africa to its west, Australia to its east while Antarctica in the south.It extends from the Bay of Bengal in north to Antarctica in south covering a range of 9600 kilometers and from Southern Africa in west to Western Australia in east with an estimated range of 7800 kilometers. The Indian ocean total area includes Andaman sea, Arabian sea, Bay of Bengal, Flores sea, Great Australian Bight, Gulf of Aden, Gulf of Oman, Java sea, Mozambique Channel, Persian Gulf, Red sea, Timor sea and other tributary water bodies. It also contains many small island nations such as the Madagascar, the Seychelles, Reunion island, Maldives Mauritius and Sri Lanka while a group of islands forming Indonesia is located in its east.

So, why is it considered to be of significance from economic and geopolitical perspective. Answer lies in the enormous trade that occur through the IOR. The economic development and population explosion of the littoral countries has led to an increase in the trade through this region. The major products commerced through this route encompass iron, coal, rubber, tea and crude oil. Iron ore from Western Australia states, India and South Africa is exported to Japan, while coal is exported to UK from Australia through this route. Processed sea food is emerging as a major export item, though petrolium dominates commerce as IOR is chief throughway for transport of petrolium products to UK, America and East Asia.

This trade route is also known for being dangerous due to the presence of a number of critical choke points. A few of the significant choke points are Strait of Hormuz, Strait of Malacca and Bab-el-Mandeb. More than 80% of the world's seaborne trade in oil transits through Indian Ocean choke points. Strait of Hormuz is the only waterways which gives an outlet to the major oil producing nations such as UAE, Oman, Iran etc. It is very narrow with two 3 km channels exclusively used for inbound and outbound of vessels. Any disruption in the Strait of Hormuz may lead to jacking up of oil prices causing inflation. It may also lead to non-availability of energy resources altogether in a number of countries.

Percentage of the World oil shipment through Indian Ocean choke points.
Courtesy : wsws.org

Strait of Malacca is a strait that lies between Singapore, Malaysia and Indonesia. This route is the shortest routes that connects the Persian Gulf and its market in Asia. This strait connects the Indian Ocean with the South China sea and the Pacific Ocean. Thus, it carries the crude oil coming from the Persian Gulf by crossing Indian Ocean through the Strait of Malacca to the South China sea and Pacific Ocean towards China, South Kora, Japan and other Pacific Rim states. Again, any disruption in this channel will lead to rise in the freight cost and also delay in shipping as alternate route is substantially very long.

Bab-el-Mandeb is the third most busiest and crucial throughway after Strait of Hormuz and Strait of Malacca. It connects Indian Ocean with the Red Sea by the way of Gulf of Aden. This strait carries most of the European crude oil imports as it allows the tanker to carry oil from the Persian Gulf through the Suez Canal and then through pipeline to Europe and USA. In the event of closure of Bab -el-Mandeb, all the tankers have to be routed through Cape of Good Hope to Europe and America. This will again jack up the shipping cost besides adding 4750 nautical miles and 12-14 extra days.

Apart from all the trade that occurs through this region, Indian Ocean is becoming increasingly important with discoveries of oil and gas reserves. Recently, China has proposed India for joint exploration of Indian Ocean with its deep sea mining technology.

From all this, we can posit that Indian Ocean is becoming hub of global economic activity and hence this route is also of strategic importance with many major countries having their naval bases in this region. US uses the island of Diego Garcia as a major air-naval base.France, meanwhile, maintains a significant presence in the Indian Ocean with naval bases in Djibouti, Reunion and Abu Dhabi. India has a huge military presence in Andaman and Nicobar island. India also has established listening posts in the Seychelles, Madagascar and Mauritius. India has also included Maldives under its security grid.

Courtesy : cimsec.org

In a nut shell, with rapid increase in energy demand across the globe and Indian Ocean being immensely rich in that, Indian Ocean is going to be more significant in global politics and economic arena than it has ever been before.

References:

1.http://thediplomat.com/2011/03/why-the-indian-ocean-matters/2/

2.http://www.britannica.com/place/Indian-Ocean/Trade-and-transportation

3.http://pu.edu.pk/images/journal/csas/PDF/5%20Qamir%20Fatima_30_2.pdf

4.https://en.wikipedia.org/wiki/Indian_Ocean

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Understanding the basics of International Trade

We all know that our stuffs are from everywhere. Bangladesh, China, US, South Korea and the list goes on. But what does it tell about the global economy and who stands to benefit from this? Before I put forward my perspective to these gripping questions, let me illustrate what International Trade is with an example.

Image Courtesy: Investopedia

Let's say Country A is a world leader when it comes to exporting of defense products and services. Export is basically when a good or service is shipped to another country for sale or trade. Country A also imports a lot of goods (say shoes).Now, though country A can produce enough shoes on its own, it focuses on producing defense equipment that it is better at. Country A buys shoes from other countries because it can get these shoes cheaply from other countries.This is the advantage of international trade. It doesn't make sense to produce everything on your own if you can trade with other countries that have a comparative advantage.

The annual difference between a country's import and export is called net export. If the total worth of a country's export exceeds its total import,it is said to have trade surplus. If the reverse is true, it is said to have trade deficit. It may seem like exporting will make a country wealthy while importing will make it poor. After all, if we buy products from other countries, we are shipping jobs overseas. right?Well, it's not necessarily true.

Assume you have a choice to buy a dress which is made in India or in Nepal. Now because of lower wages in Nepal, the imported dress will cost you less.Say, you end up saving 500 rupees, now what do you do with that money? You may either invest this money or spend on some other products or services like going to a restaurant or for a game of cricket. This in turn creates job in those sectors.So, basically international trade reshuffle jobs, though the quality of these jobs may differ.

Trade between countries depend on demand for a country's goods, political stability, interest rates, but the most important factor is exchange rates. Exchange rate is basically how much your currency is worth when you trade it for other country's currency. Lets consider a scenario, assume 1 yuan (Chinese Currency) is equal to 10 rupees. If a Chinese tourist in India wants to buy a shirt that cost 3000 rupees, he needs to pay 300 yuan. Likewise if an Indian tourist in China wants to buy a cell phone which cost 900 yuan, he would have to pay 9000 rupees. Now lets think about what will happen when exchange rate goes up i.e 1 yuan now equivalent to 15 rupees. We say yuan is appreciated. Now to buy the same shirt, the Chinese tourist would just pay 200 yuan. Similarly, now the Indian tourist in china needs to pay 13500 rupees for the same phone. It works the same way with import and export. Once yuan appreciates, it gets cheaper for the Chinese consumers to import goods from other countries and its export to other countries become more expensive. This results in the rise of import and a fall in export.

Most currencies, like the rupee and the dollar have floating exchange rate that change based on supply and demands. If India buys goods from US , it exchanges rupees for dollars. This creates a demand for the dollar and the dollar appreciates. At the same time, rupee depreciates. There are a few countries that peg their currency to another currency. This is when the central bank wants to keep its currency value in a certain range. It buys or sells currencies to achieve that. The Chinese government was well known for buying US dollars to keep the Chinese currency depreciated. When US would buy goods from China, Yuan would appreciate, then the Chinese government would buy dollars which kept the exchange rate about the same. This kept the Chinese import cheap for the Americans.

Now a little information on who stands on top when it comes to exporting and importing. China is the largest exporter overall and US is the largest importer based on the World Trade Organisation. India is positioned at 20th when it comes to exporting but is positioned at 8th when it comes to importing.

References:
1.http://study.com/academy/lesson/importing-and-exporting-in-a-global-market.html
2.http://www.investopedia.com/terms/e/export.asp
3.https://en.wikipedia.org/wiki/List_of_countries_by_imports
4.https://en.wikipedia.org/wiki/List_of_countries_by_exports

For further info:
1.http://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp
2.http://trade.gov/fta/
3.http://study.com/academy/lesson/the-world-trade-organization-definition-history-purpose-members.html

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Mysterious Dark Matter

For thousands of years, we looked up and believed that the illuminated matters was all that made up our universe. But, one of the puzzling discoveries of the 20th century has revealed the fact that this illuminating stuff just accounts for 5% of the mass of the universe.

 Before I dig deep on the story of dark matter, let me elucidate how gravity affects the motion of stars in universe. Say a star is revolving around a galactic center where most of the visible matter is concentrated. At any point of time, there will be two force acting on the star. One is the gravitational pull of the galactic center which tries to pull the star towards itself and other will be the tangential force. Tangential force is basically because of the velocity of the star. The resultant force at any given time will keep the star in orbit. If the velocity was to increase, tangential force will increase and the star will fling off from its orbit.

In 1933, Swiss astrophysicist Fritz Zwicky looked up to Coma cluster galaxy and observed that the stars at the edge of the galaxy orbited at more or less the same speed as the stars near the galactic center. He calculated the  mass of the illuminating matter and was perplexed to find out that the gravity effect of the visible galaxy was not sufficient to support for the rapid rotation rates and hence the mass must be hidden from view. He termed this unseen mass as dunkle Materie (Dark Matter).

Scientists have not yet directly observed this dark matter as dark matter does interact with ordinary matter, made up of neutron, proton and electron. It doesn't even interact with any form of electromagnetic spectrum. But scientists are compelled to believe its existence because of the gravitational affect it has on visible matter and light.

From Einstein theory on space time continuum, we can say that the more massive an object is, the more gravity it exhibits and the more space it warps and the more it can warp the path of a light beam. You know what else bends light, lens.  Thus, this phenomenon of bending of light beam by gravity is known as gravitational lensing. By tracking the beam of light coming from multiple source of lights in the space,  scientists have plotted a 3D map of the dark matter.

Scientists now believe that the dark matter was created at the moment of big bang and played a critical role in the formation of the stars and planets. Basically dark matter which doesn't react with ordinary matter acted like scaffolding upon which ordinary matter could attach itself. Scientists had long wondered why universe formed in a random pattern, now they know it is because of the gravitational pull of the dark matter.

There are many contesting ideas about what the dark matter could be. One of the most widely accepted hypothesis about dark matter is that it could be composed of weakly interacting massive particles (WIMPs). The others posit that dark matter effects could be explained by modifying the existing theory of gravity. They propose for multiple forms of gravity and propose that large scale gravity differ from the gravity that we are accustomed to.


References:

1.http://science.nationalgeographic.com/science/space/dark-matter/
2.http://www.cfhtlens.org/public/what-gravitational-lensing
3.https://en.wikipedia.org/wiki/Dark_matter 
4.https://einstein.stanford.edu/content/relativity/q411.html

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Understanding the teleological arguments:

Teleology (from Greek telos, meaning end or purpose) is the philosophical study of nature by attempting to describe things in terms of their apparent purpose, directive principle, or goal. A purpose that is imposed by a human use, such as that of a fork, is called extrinsic.Natural teleology, common in classical philosophy but controversial today,contends that natural entities also have intrinsic purposes irrespective of the human use or opinion.

Let me cite an example of a tea cup, we see the tea cup is perfectly designed to hold tea without allowing the liquid to leak. Its handle is designed to fit our fingers and how it holds the liquid hot without burning our fingers. So we wouldn't assume that a tea cup was simply there to be exhibiting these attributes designed for its function without someone having created it that way.

Image Courtesy: pursuedfaith.wikispace.com

William Paley, an English clergyman and philosopher, to make case for his belief in the existence of God gave his arguments based on the concepts of analogy. This kind of arguments invites us to consider two form of events ( say situation A and situation B). Situation A is where we already have certain kinds of knowledge and then he gives his arguments for his belief and then he correlates it to situation B where we are less familiar and then he states, in the interest of consistency, whatever conclusion we draw about situation A would have to be similar to situation B.

We can use this argument by analogy for anything, but Paley used it to prove the existence of God in what came to known as the Watchmaker Analogy. He describes the situation A as follows:

Imagine one day, you find a watch in the jungle. Would we assume that watch was always there on its own or would we see the complexities in its parts and how they fit together in a particular way to accomplish a goal? If so, wouldn't we think that watch must have been designed by someone on purpose.

Paley was arguing that the teleology demonstrated by watch would lead us to conclude that it was designed was an intelligent designer with ends on his mind. So, in the same way as teleology of a watch implies the existence of a watch maker and the teleology of a cup implies the existence of cup maker, the teleology of the world implies the existence of a world maker.

He continued his analogy by comparing watch to a living organism. Look at the complexities of a human body. Heart and lungs working together, producing sweat to keep our body from overheating and the breaking of food to release energy.  Look at how the elements of the natural world operates according to the complex laws that sustains a beautiful harmony. Paley said that this couldn't have possibly just have happened any more than the design of a watch could just have happened. There must be a designer. 

If you accept this analogy then you accept that as the purposefulness of a watch implies the existence of a watchmaker so does the purposefulness of world implies the existence of a world maker. In the book, the language of God, Francis Collins tells that the conditions that allow life in the universe can only occur when certain fundamental physical constants are in very narrow range.

References:
1.http://www.philosophyofreligion.info/theistic-proofs/the-teleological-argument/

2.https://en.wikipedia.org/wiki/Watchmaker_analogy

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