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jerryking : recessions   72

Opinion | How Technology Saved China’s Economy - The New York Times
By Ruchir Sharma
Mr. Sharma is an author, global investor and contributing opinion writer.

Jan. 20, 2020,
China  China_rising  recessions  Ruchir_Sharma  surveillance_state  technology 
4 weeks ago by jerryking
What Will a Recession Do to Venture Capital? | Real Vision
The Interview · Featuring Josh Wolfe and Raoul Pal
Published on: July 24th, 2019 • Duration: 35 minutes

Josh Wolfe, co-founder of Lux Capital, sits down with Raoul Pal to examine the indicators that are warning that the economic cycle is reaching an inflection point. Wolfe and Pal discuss the idea that inflated valuations in venture capital are being caused by the incremental buyer's desperate search for growth. Wolfe warns that if the cycle indeed turns, a liquidity crisis could emerge. Filmed on July 9, 2019 in New York.
recessions  Softbank  vc  venture_capital 
10 weeks ago by jerryking
Stock Market Drops. VCs Hold Partner Meetings. What Happens Next? | TechCrunch
So let me give you the news 2 months early. If the economy and the stock market continue to languish that’s exactly what’s going to happen.

I’ll bet most partners’ meetings this week consisted of looking just a little bit closer at the cash needs of their portfolio companies – making sure they’re “fully funded.” I’ll bet many of them did a review of their “investment pace” as in – how quickly should we be investing. I’ll bet many did a slow roll on deals that might have gotten approved today. Not a “no” but not yet a “yes.”

It’s impossible to sit in a partners’ meeting on a day like today without having an iPhone on watching the stock market free fall and no matter how much of a public tech cheerleader you are – privately I guarantee there was much concern.

If we do head South it will take a few weeks or months until the memos to portfolio companies get published and the Powerpoint presentations get sent out. But the internal conversation started today – trust me. VCs will take a “wait and see” approach right now. Don’t want to call it either way. It’s too early.
economic_downturn  economy  entrepreneurship  history  investors  technology  business  recessions  start_ups  vc  venture_capital  via:sha 
12 weeks ago by jerryking
Smart Startup Advice: Don't Panic - Profit
Oct. 12, 2008 | Business Insider | by Peter Kafka

Bibliography
Silicon Valley Finds It Isn't Immune From Credit Crisis - WSJ.com
Sequoia Capital deck startups and the economic downturn
Inside Details of Sequoia Capital's Doomsday Meeting With its Companies - G...
VC dean Alan Patricof warns against panic, urges entrepreneurs to seize the...
Master of 500 Hats: Fear is the Mind Killer of the Silicon Valley Entrepren...
Angel Investor Ron Conway Emails His Portfolio Companies Over Financial Mel...
Benchmark Capital Advises Startups To Conserve Capital, Look For Opportunity...
How Bad Will The Ad Market Get? Time To Get Out The History Books
News Corp. Estimates Cut in advertising
advice  economic_downturn  panic  recessions  start_ups  vc  venture_capital 
november 2019 by jerryking
Companies should learn from history to avoid repeating mistakes of the past
September 27, 2019 | The Globe and Mail | by HARVEY SCHACHTER.

Those who cannot learn from history are doomed to repeat it. -George Santayana
*****************************************************************
BEST BUSINESS HISTORY BOOKS
If you want to improve your knowledge of business history, two good places to start might be Prof. Martin’s books, From Wall Street to Bay Street, the first overview of the Canadian financial system in half a century, co-written with Christopher Kobrak, and Relentless Change, the only case book for the study of Canadian business history. Beyond that, here’s three others he suggests you could benefit from:

* Northern Enterprise: Five Centuries of Business History by Michael Bliss;
* Historical Atlas of Canada, Volumes I to III with different editors;
* Madisson Database Project 2018 by The Groningen Growth and Development Centre, Faculty of Economics and Business, University of Groningen, The Netherlands.
*****************************************************************

Joe Martin, a professor of Canadian business history and strategy at Rotman School of Management, is on a mission. He believes Canadians lack sufficient knowledge of history in general and business history in particular. But rather than seize upon Santayana’s famed quote about the value of history, he points to an anonymous businessman who said, “I study history so I can make my own mistakes.”.....We fail in business schools, where virtually no courses are offered (other than at Harvard Business School, which has included history programs since its founding in 1908 and now has about 20 historians affiliated to the school). And we fail in corporations, where new leaders think history begins with their ascension and the few histories produced on the organization tend to be heavily sanitized....Certain themes recur in business history, of course. Recessions are one. Some signs suggest we may be on the cusp of one now, but each time they hit many corporate leaders seem flabbergasted, as if nobody ever experienced this situation before....Then there’s boom-and-bust. In the dot-com heyday of the late 1990s, Prof. Martin notes in an interview, he was chairman of Angoss Software Corp. and watching his net worth go up $250,000 a week. It was glorious until it started going down $250,000 a week. It seemed new, but history is littered with equivalent situations. .....At the core of understanding the history of our economy should be the baseball diamond growth model developed at the Stern School at New York University. At home plate is government because an effective political system enables economic growth. First base is a sound financial system, to allow growth. At second base are enterprising entrepreneurs to build upon that. Third base is for sophisticated managers of large corporations......As for corporate histories, he prefers them done by historians, with full access to the material, including key players. ....“Learn from history so you don’t repeat the mistakes of the past. That’s critical,”
best_of  boom-to-bust  books  business_archives  business_history  Canada  Canadian  dotcom  Harvey_Schachter  history  Joe_Martin  lessons_learned  Michael_Bliss  quotes  recessions  Rotman 
september 2019 by jerryking
How the ultra-high-net-worth investor prepares for a recession
August 27, 2019 | - The Globe and Mail | by TARA DESCHAMPS, SPECIAL TO THE GLOBE AND MAIL.

investment managers thinking more strategically about how to protect their clients’ wealth, which includes everything from traditional stocks and bonds to alternative assets such as real estate, private equity and debt.

Mr. Janson, who still has “deep, long scars” from the 2008 recession, which he spent in Switzerland as a portfolio manager, says his main advice for UHNW individuals is to diversify. By spreading assets around, investors have a better chance of softening the blow to their overall portfolio if one sector is hit harder than others.

“Too many Canadians have too many eggs in one or two baskets, usually stocks and bonds,” Mr. Janson says. “You should be thinking about all asset classes, whether that’s stocks, bonds, private equity, private debt, real estate debt, real estate equity, hedge funds and others.”

Mr. Janson also keeps an eye on real estate investments as an opportunity. Housing prices typically fall during a recession, and more homes hit the market when owners can no longer afford the mortgages or need to shore up cash.

If the UHNW want to be involved in real estate in a recession, Mr. Janson recommends they look for “defensive” pockets in the market.
asset_classes  diversification  high_net_worth  howto  personal_finance  precaution  preparation  recessions 
august 2019 by jerryking
A Recession Is Coming (Eventually). Here’s Where You’ll See It First. - The New York Times
By Ben Casselman
July 28, 2019

Another recession will come eventually. Fortunately, economic expansions, unlike coin-flip streaks, usually provide some hints about when they are nearing their end — if you know where to look. Below is a guide to some of the indicators that have historically done the best job of sounding the alarm.

Indicator 1: The Unemployment Rate
What to watch for: Rapid increases, even from a low level.
What it’s saying: All clear.

Indicator 2: The Yield Curve
What to watch for: Interest rates on 10-year Treasury bonds falling below those on three-month bonds. (It has already happened.)
What it’s saying: Storm warning.

Indicator 3: The ISM Manufacturing Index
What to watch for: The index falling below about 45 for an extended period.
What it's saying: Mostly cloudy.

Indicator 4: Consumer Sentiment
What to watch for: Declines of 15 percent or more over a year.
What it's saying: Partly cloudy.

Indicator 5: Choose Your Favorite

* Temporary staffing levels: Temp workers are, by definition, flexible — companies hire them when they need help quickly and get rid of them when demand dries up. That makes them a good measure of business sentiment.
* The quits rate: When workers are confident in the economy, they are more likely to quit voluntarily.
* Residential building permits: The housing market has frequently led the economy both into and out of recessions. That has made building permits — which are generally issued several weeks before construction begins — one of the best historical indicators of economic activity.
* Auto sales: After houses, cars are the most expensive thing most families buy.
consumer_confidence  economics  forecasting  indices  interim  lagging_indicators  leading_indicators  manufacturers  recessions  unemployment  warning_signs  yield_curve 
august 2019 by jerryking
How to Prepare for the Next Recession: Automate the Rescue Plan
Suppan
San Diego 4h ago
As someone with an engineering background (both education and mindset) this kind of simplistic design of complex systems is very concerning.

If anyone remembers Nassim Tal...
complexity  economic_downturn  ecosystems  howto  letters_to_the_editor  modelling  models  Nassim_Taleb  oversimplification  preparation  recessions 
may 2019 by jerryking
Innovation, Recession-Style - Businessweek
By Scott D. Anthony,David S. Duncan andRichard N. Foster on December 19, 2008
Scott_Anthony  Innosight  crisis  innovation  recessions 
november 2012 by jerryking
A Crucial Test for a Commercial Broker -
March 12, 2008 | Businessweek | By Christopher Palmeri.

Now, White is telling his salespeople to find creative ways to drum up new business, from pitching environmental consulting services to existing clients to devising novel ways to finance deals. White knows a downturn is inevitable, but he hopes to cushion the blow. ...Its property managers now dispense green advice. Last year, CBRE helped shave $150,000 a year in electricity expenses at Phoenix Plaza, a pair of Arizona office buildings owned by General Electric's (GE) pension fund. CBRE installed energy-efficient lighting and cooling systems as well as sensors that adjust landscaping irrigation to reflect levels of rainfall. CBRE hopes to sell such expertise as consulting to other clients.
advice  business_development  commercial_real_estate  CBRE  diversification  economic_downturn  energy_conservation  green  management_consulting  property_management  novel  recessions  Wayne_Sankarlal 
september 2012 by jerryking
In a Downturn, Provoke Your Customers
March 2009 | HBR | by Philip Lay, Todd Hewlin, and Geoffrey Moore

The downturn is making it tougher than ever to make a sale. The companies you serve are slashing budgets. Senior executives—
not the managers you’ve traditionally dealt with—are now the decision makers. But you can motivate those executives to allocate funds for your offering—by using provocation-based selling:
• Identify a critical problem facing your customer—one so ominous that, even in a downturn, it will find the money to address it.
• Formulate a provocative view of the problem—a fresh perspective that frames the problem in a jarring new light.
• Lodge your provocation with an executive who has the power to approve the solution you’re proposing. To win support,convey the magnitude and intractability of the problem—without putting him on the defensive.
boldness  economic_downturn  fresh_eyes  Geoffrey_Moore  HBR  howto  pain_points  perspectives  problems  problem_solving  provocations  selling_the_problem  recessions  sales_cycle  selling  solutions 
august 2012 by jerryking
Prime time for corporate nurses
January 29, 1991 | Financial Post | by Barry Critchley and Susan Gittins
turnarounds  restructurings  recessions 
july 2012 by jerryking
Parting Shot - WSJ.com
September 25, 2000 | WSJ | By HAL LANCASTER.
Parting Shot
What's a recession? Perhaps it's time to remember
warning_signs  recessions  anticipating  checklists  overconfidence 
july 2012 by jerryking
TDP - The Tech Comeback Is Real
By: Bret Swanson
Wall Street Journal
July 1, 2003
comebacks  technology  Silicon_Valley  recessions 
may 2012 by jerryking
The Superball Economy - WSJ.com
March 3, 2003 | WSJ | By ANDY KESSLER.

Design is cheaper. If you look closely, Silicon Valley has very few manufacturers left. Chips are made in Taiwan, boards assembled in China or Thailand. We are now a Valley of designers. And there are lots of programmers and chip-heads and communications protocol folks walking the streets willing to work for much cheaper than three years ago. Office space is plentiful. Word has it there is space available for 50 cents per square foot per month, down from $12.

Bandwidth is cheaper. Global Crossing spent $12 billion on undersea fiber optics that someone is going to buy for $250 million. WorldCom and others have strung the U.S. with more fiber than in Frosted Mini-Wheats. And it won't be just for phone calls. Find companies that use that cheap bandwidth, and you'll find the boom.

Video is cheaper. Napster music sharing was child's play compared to what is next. Hours of video can be captured, stored and shared with today's cheap PCs and broadband lines. Jack Valenti, call your office.

Wireless data is cheaper. The Federal Communications Commission set aside frequencies for hospitals and microwave ovens that might interfere with phones or radar. This Industrial, Scientific and Medical block of spectrum is known as the junk band. While stupid telecom companies overbid for spectrum for third generation 3G cell phone devices, clever engineers figured out how to hop around the junk band -- letting out-of-work programmers surf job listings at Starbucks. Intel is putting these radios in many of their chips.

Distributed computing is cheaper. Google uses 12,000 cheap PCs to log the Internet so you can look up your neighbor and figure out how much she makes. Even distributed programming is cheaper. Microsoft's biggest problem is far-flung programmers creating operating systems like Linux at home in their pajamas. Bill Gates is reportedly all over the Valley asking for help to combat this "Open Source" nuisance.

About the only thing not cheap is capital. Venture capitalists are stingy, the IPO window is closed, and stocks are at four-year lows. Hmmm. Forget that last boom, it's ancient history. Look for new products not possible or too expensive three years ago. Slam down your new Superballs and be ready.
Andy_Kessler  Silicon_Valley  economic_downturn  protocols  recessions  optimism  design  bandwidth  open_source  new_products  distributed_computing  venture_capital  IPOs  inexpensive  cheap_revolution  abundance  economic_dynamism  leaps_of_faith  FCC  overpaid  wireless_spectrum 
may 2012 by jerryking
Oil Industry Braces for Drop in U.S. Thirst for Gasoline - WSJ.com
APRIL 13, 2009 | WSJ |By RUSSELL GOLD and ANA CAMPOY. Declining gasoline-tax revenue is forcing local and federal governments to search for new sources of funding. Oil refiners, which for decades focused on bringing U.S. drivers more gallons of gasoline, are retooling their businesses. Some have said they could shut down some of their refineries entirely, along with thousands of small gas stations. Oil companies are beginning to invest in biofuels and battery technology.
oil_industry  Exxon_Mobil  economic_downturn  recessions  retailers  gas_stations  decline  oil_refiners 
october 2011 by jerryking
Tim and Nina Zagat: The Burger and Fries Recovery - WSJ.com
* JANUARY 25, 2011

The Burger and Fries Recovery
Expensive wines are no longer PC, but many Americans are still better
off spending an extra hour at work and letting someone else do the
cooking. By TIM AND NINA ZAGAT
restaurants  recessions  industries 
january 2011 by jerryking
How to Innovate After a Recession -
Sept. 7, 2010 | BusinessWeek | By Vijay Govindarajan who
outlines a 3-pronged plan for making innovation flourish in a
post-recession environment. Why can't organizations execute innovation,
especially Fortune 500 companies which have such vast resources and
capabilities? (1) The true challenge: execution. Business organizations
are not built for innovation, but for efficiency. Organizations today
are only modestly more prepared for the challenges of innovation than
they were 50 yrs. ago. While most companies have plenty of creativity
and technology, they lack the managerial skills to convert ideas into
reality.(2) Building a special project team. To be successful in
execution, each innovation initiative needs a special kind of team and a
special kind of plan.(3) Conducting the innovation experiment (i)
Formalize the experiment. (ii) Break down the hypothesis.(iii) Seek
the truth.
innovation  recessions  economic_downturn  Vijay_Govindarajan  experimentation  execution  Fortune_500 
september 2010 by jerryking
Recession Exacerbates Race Gap in Job Market - WSJ.com
MAY 8, 2010 | Wall Street Journal | by SUDEEP REDDY. The
recession is showing that even a college degree isn't enough to close
the stubborn employment gap between white and black Americans.

In April, the nationwide jobless rate for white college graduates, ages
25 and older, stood at 4%, according to the Labor Department. The rate
for college graduates in the same age bracket who identify themselves as
black or African-American was 7.4%. And that gap—3.4 percentage
points—has widened since the recession started in December 2007, when
the comparable figure was 0.9 percentage point.
economic_downturn  hiring  African-Americans  college-educated  race_relations  jobs  job_opportunities  recessions  racial_disparities  downward_mobility 
may 2010 by jerryking
Distressed companies provide valuable lessons in economic downturns - The Globe and Mail
May 3, 2010 10:29 | Globe & Mail | Harvey Schachter .
Distressed companies provide valuable lessons in economic downturns.

SPEED RATHER THAN PERFECTION;

CASH IS KING;

FOCUS ON HIGH–IMPACT ISSUES;

MAKE THE TOUGH PEOPLE CALLS (JCK i.e. get the right people in place);

UNFREEZE THE ORGANIZATION: In a distressed organization, decisions that usually take months to make can be taken in hours or days. Those rapid decisions, they argue, are at least as good as the slow, agonized decisions of the past - so unfreeze your organization with quicker decisions, and a willingness to shake up your systems to improve performance.

Avoid doing the following: CUT FAT, NOT MUSCLE; FOCUS ON MORE THAN SURVIVAL:
cash_reserves  cost-cutting  distressed_debt  economic_downturn  Harvey_Schachter  high-impact  Jeffrey_Gitomer  immobilize  lessons_learned  paralyze  recessions  speed  the_right_people  turnarounds  under-performing 
may 2010 by jerryking
Goldman Sachs Rakes In Profit in Credit Crisis - NYTimes.com
November 19, 2007 | New York Times | By JENNY ANDERSON and
LANDON THOMAS Jr.
At that point, the holdings of Goldman’s mortgage desk were down
somewhat, but the notoriously nervous Mr. Viniar was worried about
bigger problems. After reviewing the full portfolio with other
executives, his message was clear: the bank should reduce its stockpile
of mortgages and mortgage-related securities and buy expensive insurance
as protection against further losses, a person briefed on the meeting
said.
Rarely on Wall Street, where money travels in herds, has one firm gotten
it so right when nearly everyone else was getting it so wrong.
With its mix of swagger and contrary thinking, it was just the kind of
bet that has long defined Goldman’s hard-nosed, go-it-alone style.
Goldman’s secret sauce, say executives, analysts and historians, is
high-octane business acumen, tempered with paranoia and institutionally
encouraged — though not always observed — humility.
====================================

Strategic nous - "practical intelligence/good judgement/shrewdness" = "high-octane business acumen"
business_acumen  contrarians  crisis  economic_downturn  Goldman_Sachs  hard_times  herd_behaviour  herd_instincts  humility  Lloyd_Blankfein  paranoia  profits  proprietary  recessions  special_sauce  stockpiles  Wall_Street 
february 2010 by jerryking
The Recession’s Racial Divide - NYTimes.com
September 12, 2009 | New York Times | By BARBARA EHRENREICH
and DEDRICK MUHAMMAD. "Plenty of formerly middle- or working-class
whites have followed similar paths to ruin: the layoff or reduced hours,
the credit traps and ever-rising debts, the lost home. But one thing
distinguishes hard-pressed African-Americans as a group: Thanks to a
legacy of a discrimination in both hiring and lending, they’re less
likely than whites to be cushioned against the blows by wealthy
relatives or well-stocked savings accounts."
African-Americans  economic_downturn  depression  race_relations  recessions  racial_disparities  racial_discrimination 
september 2009 by jerryking
The small saviours of Canada's economy -
Aug. 18, 2009 | Globe & Mail | KEVIN CARMICHAEL. While
the slogan of the Ottawa conference was "Changing the World Through EO,"
the real mantra was voiced by Peter Thomas, founder of the Canadian
unit of real estate firm Century 21, in an address that attendees
couldn't stop talking about: Recessions are when money is transferred to
smart people from dumb people.
small_business  entrepreneur  economic_downturn  real_estate  recessions  smart_people  Century_21  Kevin_Carmichael  Carpe_diem  wealth_transfers 
august 2009 by jerryking
Recession Strategies: Companies Need to Focus on Future as Well as Present - WSJ.com
JUNE 22, 2009 | Wall Street Journal | Executive Briefing:

In Dr. Govindarajan’s three-box framework, Box One involves managing the present—for example, improving the efficiency of today’s businesses. Box Two involves selectively forgetting the past. And Box Three? That’s about creating the future. Often, Dr. Govindarajan maintains, companies spend too much of their time managing Box One—the present—and think that’s strategy. Instead, he argues, companies need to spend more time and energy on thinking about Box Two and Box Three.

Preparing for the Recovery
Despite the recession, companies must do more than just play defense.
When thinking about innovation, companies need to go beyond cost cutting
and spend more time thinking about what (Vijay Govindarajan) terms as
"Box Two and Box Three—selectively forgetting the past and creating the
future".

----
BUSINESS INSIGHT:Can companies really plan today for the year 2025?

DR. GOVINDARAJAN: You cannot plan for the year 2025, but you can prepare for it. There’s a big difference in my mind between planning for the future and preparing for it. Preparing for the future simply involves asking what the broad trends are. If people in your organization can at least have a shared perspective on some of the big, nonlinear shifts that may happen, you can begin to think about actions that may be relevant if such shifts occur—if say, technology in your business changes in certain ways. You want to do your current plan in a way that prepares your organization for the future.

The future is full of surprises; you know that. What you want is to be able to prepare to respond and adapt and benefit from surprises. And that’s what happens when you explicitly think about 2025 in 2009.
breakthroughs  contingency_planning  cost-cutting  economic_downturn  far-sightedness  foresight  forward_looking  high-risk  innovation  large_payoffs  nonlinear  offensive_tactics  recessions  scenario-planning  strategy  surprises  Vijay_Govindarajan 
june 2009 by jerryking
Emerging Patterns in the Crisis Economy - Vineet Nayar - Harvard Business Review
Vineet Nayar Inverted Wisdom rss RSS Feed
Emerging Patterns in the Crisis Economy

10:30 AM Thursday May 14, 2009

Tags:Economy, Financial crisis, Recession
pattern_recognition  economy  economic_downturn  recessions  hbr 
june 2009 by jerryking
New Unrest on Campus as Donors Rebel - WSJ.com
APRIL 23, 2009 | The Wall Street Journal | by JOHN HECHINGER
donors  economy  endowments  recessions 
may 2009 by jerryking
'A Failure of Capitalism - The Crisis of ’08 and the Descent Into Depression,' by Richard A. Posner - Review - NYTimes.com
May 14, 2009 | New York Times | by JONATHAN RAUCH who reviews A
FAILURE OF CAPITALISM: The Crisis of ’08 and the Descent Into
Depression, by Richard A. Posner, In this compact and bracingly lucid
volume, he offers a simple, but not simplistic, primer: “a concise,
constructive, jargon- and ­acronym-free, nontechnical, unsen­sational,
light-on-anecdote, analytical examination of the major facets of the
biggest U.S. economic disaster in my lifetime and that of most people
living today.” See also In “Catastrophe: Risk and Response” (2004), in
which Posner took up the problem of low-probability, high-impact events.

346 pp. Harvard University Press. $23.95
book_reviews  recessions  Richard_A._Posner  capitalism  politicaleconomy  economic_downturn  low_probability  catastrophic_risk  primers  high-impact 
may 2009 by jerryking
How to be wise before the event
March 9 2009 | Financial Times | By Stefan Stern.

Restraint is back in fashion in these recessionary times. People have lost their appetite for risk.

But hang on a minute. No risk will mean no reward. You need new markets and customers to grow, and that means taking steps into the unknown. I doubt that anyone will be suggesting, in this newspaper’s new series of articles on the future of capitalism, that risk-taking should be abolished.

Bad risk-management helped get us into the current mess. It is vital that we learn the right lessons about risk from the crisis. What are they?

The new edition of Harvard Business Review contains a lucid piece of analysis from René Stulz, professor of banking and monetary economics at Ohio State University’s Fisher College of Business. While his principal focus is on the financial sector, the diagnosis will be helpful to managers in any business or organisation.

Prof Stulz describes six ways in which risk has been mismanaged. First, there has been too much reliance on historical data among today’s decision-makers. Extrapolating from the past can provide, at best, only partial guidance for the future. Financial innovation has created a new world. No wonder some managers were unprepared for the calamitous fall in asset prices and demand. This collapse was unimaginable to anyone basing their thinking on post-war performance alone.

Second, narrow daily measures – in banking these are known as “value at risk” measures – have underestimated the risks that are being run. The assumption behind a daily measure of risk is that action can be taken quickly (through an asset sale) to remove that risk. But, as the current crisis has shown, such rapid moves become impossible when markets seize up.

Third, knowable risks have been overlooked. Managers who work in silos may appreciate the risks that they personally are exposed to. But they may not see how risks being run elsewhere in the business could affect them too. Someone – a chief risk officer? – needs to track them all.

Fourth, concealed risks have been overlooked. Incentives have proved to be particularly dangerous in this regard. Some traders and lenders may have enjoyed taking risky decisions that in the short term appeared to be delivering well for them and their organisations. But they had no incentive to report any downside risk. And unreported risks tend to expand.

Fifth, there has been a failure to communicate effectively. It is dangerous, Prof Stulz says, when risk managers are so expert in their field that they lose the ability to explain in simple terms what they are doing. The board may develop a false sense of security by failing to appreciate the complexity of the risks being managed.

Last, risks have not been managed in real time. Organisations have to be able to monitor fast-changing markets and where necessary respond to them without delay.

Prof Stulz offers a useful technical analysis. But a true understanding of risk also requires a maturity of outlook, an ability to see the big picture, and deep experience. This last is a rare commodity: impossible to fake and acquired only over time.

In a new McKinsey publication called What Matters, the 90-year-old investment manager and author Peter Bernstein offers some sober insights. “What is risk management all about anyway?” he writes. “We use the words as though everybody understands what we are talking about. But life is not that simple. Risk means more things can happen than will happen – which is a fancy way of saying we do not know what is going to happen.”

Mr Bernstein’s central point – not revolutionary, but unarguable – is that downside risks must be assessed rigorously. Someone old enough to remember the Wall Street crash is probably worth listening to right now.[JCK: elder wisdom]

“Nothing is 100 per cent sure,” Mr Bernstein says. “While a 95 per cent probability is statistically significant, that still leaves us in the dark about the remaining 5 per cent; we may decide to accept that uncertainty and bet on the 95 per cent sure thing, but there is still a possibility of being wrong.

“The crucial question to ask is, ‘What would be the consequence if that 5 per cent chance comes to pass?’ ”

Welcome to the less exciting but more soundly based era of calculated risks. For the foreseeable future, business leaders will be trying to be wise before rather than after the event.
beforemath  business  communicating_risks  downside_risks  elder_wisdom  false_sense_of_security  fast-changing  financial_innovation  hidden  historical_data  management  McKinsey  overreliance  Peter_Bernstein  recessions  real-time  risks  risk-assessment  risk-management  Stefan_Stern  the_big_picture  VaR  what_really_matters  wisdom 
may 2009 by jerryking
Bailouts Don't Create Jobs: Startups Do - BusinessWeek
April 22, 2009 | Business Week | by Vivek Wadhwa

What we learned was that most people simply don't know how to start
companies. They have ideas and industry knowledge, but are afraid of the
risk, lack certain skills, and need financing. With the recession
causing millions to face unemployment, risk isn't much of a factor any
more. We have a unique opportunity to start educating these workers on
the basics of starting a profitable business.
start_ups  job_creation  Vivek_Wadhwa  howto  bailouts  economic_downturn  recessions  unemployment  Carpe_diem  kairos  seminal_moments 
april 2009 by jerryking
Sales of Start-Ups Plummet, Along With Prices - Bits Blog - NYTimes.com
April 1, 2009 | NYTimes.com| blog post By Claire Cain Miller

Corporate acquirers are becoming more selective, waiting to get the best price possible.
Claire_Cain_Miller  corporate_investors  economic_downturn  exits  investors  price-cutting  recessions  selectivity  start_ups  strategic_buyers  vc  venture_capital 
april 2009 by jerryking
Weary of Looking for Work, Some Create Their Own
Published: March 13, 2009 | New York Times | By MATT RICHTEL
and JENNA WORTHAM

Plenty of laid-off workers across the country, burned out by a merciless
job market, are building business plans instead of sending out résumés.
For these people, recession has become the mother of invention.......[JCK: “Forced
Entrepreneurship.” Possible idea for Canadian community colleges?]
career  economic_downturn  entrepreneur  entrepreneurship  Jenna_Wortham  layoffs  recessions  start_ups  mercilessness 
march 2009 by jerryking
Venture Capital and Startups Feel More Pain, Study Says - BusinessWeek
February 26, 2009, 12:01AM EST | Business Week | By Spencer E.
Ante
Startup valuations are falling and venture capitalists are driving
harder bargains, according to a survey by California law firm Fenwick
& West
economic_downturn  recessions  Spencer_Ante  start_ups  valuations  vc  venture_capital 
march 2009 by jerryking
Need to Find a Job? Stop Looking So Hard
1:59 PM Friday February 6, 2009 | blogs.harvardbusiness.org | by Peter Bregman
Managing_Your_Career  job_search  networking  economic_downturn  recessions 
march 2009 by jerryking
As Growth Slows, Ex-Allies Square Off in a Tech Turf War - WSJ.com
MARCH 16, 2009 | Wall Street Journal | by BEN WORTHEN and
JUSTIN SCHECK

Maturing tech industry is setting companies on a collision course, as
once-disparate technologies take on new capabilities in a "convergence"
of computers, software and networking. With the recession expected to
shrink sales across the industry, tech companies are turning on each
other in their search for growth.
Cisco  growth  competitive_landscape  HP  servers  Ben_Worthen  recessions  slow_growth  mature_industries 
march 2009 by jerryking
'There will be blood'
February 24, 2009 G&M interview by HEATHER SCOFFIELD of
Harvard financial guru Niall Ferguson who predicts prolonged financial
hardship, even civil war, before the 'Great Recession' ends
gurus  History  financial  crisis  economics  politicaleconomy  globalization  Niall_Ferguson  financial_history  recessions  economists  hardships 
february 2009 by jerryking
Why is McGuinty allowing NW Ontario to be powered down?
February 21, 2009 G&M column by MURRAY CAMPBELL The focus
now is on the cost of electricity, which the industry says is too high
to allow it to be profitable.

Ontario's "all-in" price (which includes various fees) of about $72 per
megawatt-hour is the second-highest in Canada (after Alberta) and is
higher than most U.S. regions.
Ontario  northwestern  forestry  Murray_Campbell  recessions  costs  electric_power 
february 2009 by jerryking
Nouriel Roubini Says Nationalizing the Banks Is the Market-Friendly Solution - WSJ.com
FEBRUARY 21, 2009 | Wall Street Journal | Interview of Nouriel
Roubini by TUNKU VARADARAJAN. Roubini believes that "The problem is that
in the bubble years, everyone becomes a cheerleader, including the
media. This is when journalists should be asking tough questions...
there was a failure there. More financial and business journalists, in
the good years, should have asked, 'Wait a moment, if this man, or this
firm, is making a 100% return a year, how do they do it? Is it because
they're smarter than everybody else . . . or because they're taking so
much risk they'll be bankrupt two years down the line?' In the bubble
years, no one asked the hard questions. A good journalist has to be one
who, in good times, challenges the conventional wisdom. If you don't do
that, you fail in one of your duties."
===============================================
a healthy dose of reality and skepticism is always a good idea.
economics  crisis  ECONOMY  finance  skepticism  nourielroubini  banking  recessions  bailouts  journalists  journalism  nationalizations  hard_questions  financial_journalism  5_W’s  questions 
february 2009 by jerryking
Six Deadly Orthodoxies of Recessions | Articles | Homepage
Jan./Feb. 2009, article in CEO Magazine by Pierre Loewe and
Dave Jones
* Reduce costs selectively, not indiscriminately, monitor carefully the
impact of cost cuts on staff.
* Don't stop investing - seek undervalued assets and opportunities to
upend rivals who only think of retrenching.
* De-risk and lower the costs of innovation efforts by reaching outside
company and by conducting well-designed experiments.
*If your company has developed a new product or business that
significantly enhances the customer value proposition, a recession is
the time to introduce it and get a lasting advantage over more timid
competitors.
*A recession is the time to bypass incremental cost reduction efforts
and to focus employees' energy on innovation aimed at dramatic cost
reduction.
*Even if you have to curtail innovation efforts to conserve cash,
maintain a sufficient level of activity so you can ramp-up efforts
quickly, retain your key innovators, and tap the pulse of the changing
dynamics of the mkt.
innovation  rethinking  lessons_learned  recessions  Michael_McDerment  counterintuitive  CEOs  Daniel_Pink  Freshbooks  economic_downturn  orthodoxy  conventional_wisdom  breakthroughs  new_products  de-risking  cost-cutting  new_categories  undervalued  incrementalism  marginal_improvements  experimentation  moonshots 
february 2009 by jerryking
Tough Times Call For New Ideas - WSJ.com
FEBRUARY 14, 2009, WSJ column by KELLY K. SPORS. The savviest
entrepreneurs aren't hunkering down trying to wait out the financial
storm. They're rethinking their business models & strategies based
on the assumption that consumer spending won't be rebounding to
prerecession levels. People may want new types of products and services.
So entrepreneurs are finding new sales channels, trying new marketing
tactics and promotions, forming strategic partnerships, etc.
adversity  rethinking  marketing  innovation  business_development  Kelly_K._Spors  strategies  business_models  entrepreneurship  economic_downturn  recessions  new_products  hard_times  ideas  idea_generation 
february 2009 by jerryking
Don't Back Down - WSJ.com
JUNE 16, 2008 WSJ column by KELLY K. SPORS interviewing
marketing expert Stefan Tornquist of MarketingSherpa on marketing in a
faltering economy.
marketing  small_business  relationships  rethinking  Kelly_K._Spors  economic_downturn  recessions 
february 2009 by jerryking
FT.com / Columnists / Luke Johnson - Rites of passage for young entrepreneurs
Published: July 15 2008 FT column By Luke Johnson that focuses
on the fact that Gen X and Gen Y entrepreneurs have never been in
business during a recession. Worries that a lot of their companies are
fragile constructs, not built to weather severe conditions. Established
corporates have years of retained profits to fall back on but smaller,
newer businesses do not.
adversity  bouncing_back  brands  coming-of-age  entrepreneurship  Fortune_500  fragility  Generation_X  hard_times  large_companies  Luke_Johnson  recessions  resilience  retained_earnings  serial_entrepreneurship  setbacks  start_ups 
february 2009 by jerryking
The HBR List 2009 - Western Union World
Feb. 2009 HBR by Marcelo Suarez-Orozco.

In a recession, where can you go to find an untapped and eager customer
base? Look to the approximately 200 million migrants worldwide and
their relatives back home – a pool of about half a billion potential
customers. Immigrants who send money and products home are powerful
agents of influence in their own lands. One company that understands
this is Western Union.
marketing  globalization  remittances  Western_Union  immigrants  recessions 
february 2009 by jerryking
Can you spot a bad manager?
02-11-2008 column by Harvey Schachter relaying 10 ways that
serial entrepreneur Margaret Heffernan says she spots the incompetents.
If a manager displays any one of these behaviours, it should ring a
warning bell and more than two means you should sound the alarm.

(1) Bias against actions. There are always many reasons not to take a decision. Real leaders display a constant bias for action while the incompetents wait for more information, more options and more opinions.
(2) Secrecy.
(3) Oversensitivity.
(4) Love of procedure.
(5) Preference for weak candidates.
(6) Focus on small tasks.
(7) Allergy to deadlines.
(8) Inability to hire former employees/colleagues.
(9) Addiction to consultants.
(10) Long hours. Bad managers work long hours.
=====================================================
LEADERSHIP: WESTERN WORKPLACE CULTURE REWARDS COWBOYS

Rebels and gamblers prosper in Western society - if they're male. In the TalentSmart newsletter, Nick Tasler notes the firm's emotional intelligence studies measure impulsivity: People who tend to make quick decisions and pay less attention to the consequences of their actions - in Wild West parlance, they "shoot first and apologize later."
====================================================
MARKETING: HOW TO COUNTER THE RECESSION MINDSET

By the time a recession is declared, we're already deep into it, so now is the time to counter the recession mindset that may be gripping your customers. ...in downturns customers want answers not information; the familiar, not something new; universal truths; direction; substance, not style; a limited set of choices; and time until it passes. Focus on the features and benefits of your product that promote saving, are necessary, and offer value. Prepare to make deals, but in a way that retains the value of your product and service. Remember that overwhelmed people are not interested in more information but want structure and clear direction on where to put their limited resources. Provide reassurance and context by talking about your firm's longevity.
====================================================
Reconfirm appointments one business day in advance. If you can avoid a last-minute cancellation, you gain back time that would be wasted travelling and waiting.
====================================================
The ten most powerful two-letter words in the English vocabulary are: If it is to be, it is up to me.
====================================================
economic_downturn  Harvey_Schachter  howto  incompetence  It's_up_to_me  leadership  leading_indicators  longevity  managing_people  mindsets  overwhelmed  recessions  warning_signs 
january 2009 by jerryking
The End of Banking as We Know It
Jan. 17, 2009 NYT article by GRETCHEN MORGENSON outlining the
death of the financial supermarket concept and the unfolding makeover of
the U.S. financial services industry. The model going forward might
involve greater capital requirements, less risk-taking (leverage), less
profitability and the downsizing of the industry. For borrowers, tight
credit is here to stay.
business_models  economic_downturn  financial_services  recessions 
january 2009 by jerryking

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