Oracle of NY

Happy Halloween

 
  
 
 

Be Patient and Don't Take it Personally

My 8th article in the efinancialcareers.com series. This one is about being patient and not taking rejection personally:

It’s difficult to be patient when you are standing in the cold rain without an umbrella. I know, because I’ve been there. Keep in mind that the storm will pass and the sun will come out. Even more important, remember that the sun is always shining above the clouds.

http://news.efinancialcareers.com/newsandviews_item/newsItemId-22077

Best Practice Pricing and Valuation

Attending the ABS East Conference in Miami was a wonderful experience. I learned much and made many new contacts.

Everyone was amazed by how far the markets had recovered in the past six months and seemed to agree that the worst was over - yet there was still plenty of concern about the shocks to come as banks may eventually have to write down loan reserves as loan losses.

Valuation and pricing seemed to be on everyone's mind and was the focus of more than several sessions and vendors. There were lively discussions about mark-to-market pricing versus modeling and analytics - and a consensus that the best practice is to use multiple valuation methods while providing transparency concerning methodology, data and assumptions.

Highlights of my visit included spending time on John Devaney's yacht, a wonderful dinner at the Fontainebleau's Scarpetta restaurant hosted by The Seaport Group (while Pres. Obama was dining in the hotel at a fund-raiser) and occasional glimpses of beautiful Miami bay and beach.

Valuations and Pricing of Asset Backed Securities (ABS)

I will be attending ABS East in Miami, Oct. 25-27, to assess the potential of the asset backed securities (ABS) valuation and pricing market.

The demise of Bear Stearns and Lehman Brothers and the restructuring of other investment banks not only created a dislocation in the trading market for ABS but also a dislocation in the pricing and valuation of ABS for investors such hedge funds, banks and pension funds who had depended on those investment banks and market-makers for their monthly net asset value (NAV) pricing.

http://secure.imn.org/web_confe/index.cfm?sc=20091001_SF_0006

New York Society of Security Analysts (NYSSA)

Paloma Bowland and I spoke at the NYSSA Career Development Breakfast about standing out and promoting your uniqueness without resorting to guerrilla marketing. The tried and true still works the best for most people, but you have got to reveal your personality and passion, point out you versatility, highlight your transferable skills and tell your potential employers how you will make them money, save them money and solve their problems.

When a recruiter comes across hundreds of black and white resumes that all look a like and all are more or less qualified for the position, how do they make a selection? They look for something that stands out: the color, the passion and the clarity of purpose.

To find your passion, personality and uniqueness, produce a non-chronological transferable skills (functional, transformational) resume.

Even with all my sign-board publicity, I had a difficult time finding a position as a valuations professional, but as soon as I created a transformational resume which highlighted that I was a both a valuations professional and a comfortable writer, I was offered a job.

Lower Your Expenses and Save Money

My 7th article in the efinancialcareers.com series. This one is about lowering expenses after losing a job:

If I had to give only one piece of financial advice based on my job-hunting experience, I would say, don't wait to lower your expenses. Do it as soon as you possibly can. Instead of waiting until I was forced to make tough decisions, I wish I had made them on my own several months earlier. When you lose your job, you've got to cut expenses, preserve cash and minimize debts.

http://news.efinancialcareers.com/Guest_ITEM/newsItemId-21730

Household Unemployment

From the Bureau of Labor Statistics:

Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8 percent.

Unemployment rates for the major worker groups--adult men (10.3 percent), adult women (7.8 percent), teenagers (25.9 percent), whites (9.0 percent), blacks (15.4 percent), and Hispanics (12.7 percent)--showed little change in September. The unemployment rate for Asians was 7.4 percent, not seasonally adjusted. The rates for all major worker groups are much higher than at the start of the recession.

Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 603,000 to 10.4 million in September. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 450,000 to 5.4 million. In September, 35.6 percent of unemployed persons were jobless for 27 weeks or more.

The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007.

In September, the number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 9.2 million. The number of such workers rose sharply throughout most of the fall and winter but has been little changed since March. 

About 2.2 million persons were marginally attached to the labor force in September, an increase of 615,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12
months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 706,000 discouraged workers in September, up by 239,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.5 million persons marginally attached to the labor force in September had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

World Business Forum (cont.) - Change is Changing

Dennis Nally Chairman of PriceWaterhouseCoopers International Ltd. spoke of the need to restore trust in government, business and among countries. He called for more transparency: "Only when there is transparency can investors understand the risks and rewards." He called for convergence of global standards and regulations, such as the International Financial Reporting Standards (IFRS). 

Francisco Gonzalez Chairman and CEO of BBVA, the 2nd largest bank in Spain and the 7th in the world, said that his bank was not impaired by the Global Recession because they base their business on principals (legal and ethical operations), people (customers and community) and innovation (transformational technology). He is in the midst of combining the physical and virtual relationships with his customers.

Peter Voser CEO of Royal Dutch Shell, the largest oil company in the world, pointed out that we will have 3 billion new energy users in the coming years, so there is an urgent need for carbon capture and storage. Natural gas should replace coal for electrical generation at it has half the carbon emissions. We should implement a global cap on carbon emissions.

Morris Chang founding Chairman of Taiwan Semiconductor was upbeat, admitting that his company was almost back at pre-crisis levels. He agreed that solar energy is a semi-conductor industry.

Roger Agnelli CEO Vale (not the ski resort but the Brazilian iron ore and nickle mining gorilla) was also upbeat because of infrastructure building in China and probably soon in the USA.

Gary Hamel, business strategy guru, stated that the greatest invention of the past century was management but said that not much has changed since the heyday of management innovation many decades ago. We need a mental revolution, a revolution in management. Change is changing (faster pace, exponential change). The world is more turbulent, but firms are not more resilient. How do you build a company where innovation is each employee's job? He seems to be embracing the Internet, social networking, transparency and peer pressure as the solution. Leaders should be selected from below, not from above. He implied and suggested that crowd sourcing and predictive software, respectively, are the waves of the future.

Irene Rosenfeld CEO of Kraft Foods lectured on how she transformed Kraft into a decentralized sustainable growth company by spending her first hundred days in office listening carefully to her employees, customers and suppliers.

Prof. Paul Krugman, Nobel Prize winning economist, praised "Bernanke banking" for saving us from a full blown depression. He pointed out that growth has resumed but the damage is severe. Unemployment continues to increase, and it may take many years to decrease significantly. International trade has taken a bigger hit than during the Great Depression and may not resume as before due to higher energy costs and most of the progress in transportation - containerization and communication - has already been realized.

Former President Bill Clinton said that the "world is crying out" not about what to do or how much it will cost but concerning how to make the most of what you plan to do to have a positive impact on peoples' lives. Still a politician, he said that the answer to "Is the recession over?" is "yes," "no" and "maybe." Yes, we have resumed growth. No, people are not better off (we have lost 7 million jobs). Maybe, people remain spooked. He prefers the term "interdependence" over "globalization" because the latter is an economic term, while the former is holistic. He described how the world is too unequal, unstable and unsustainable. We have to produce more jobs! His ultimate message, using Mexico as an example, seemed to be, "Be kind to your neighbors."

World Business Forum and Lovemarks

I attended the World Business Forum at Radio City Music Hall, invited by the organizers not to speak but to be in the audience.

Professor Bill George of Harvard Business School and a director at Goldman Sachs and ExxonMobil gave the opening lecture. He praised Federal Reserve Chairman Bernanke and Treasury Secretary Paulson as great leaders who stepped up in a time of crisis. He also mentioned unemployment as our most pressing problem, citing 25 million people or 17% of the workforce as unemployed. He said that Goldman decided to get out of the sub-prime market in Q1 2007 due to $70 million in losses.

Jack Welch former CEO of GE could not make the forum due to illness but Bill Conaty who spent 40 years in Human Resources at GE said that great leaders develop great succession plans and are not intimidated by star underlings.

Patrick Lencioni, teamwork guru, said that management, like parenting, is simple conceptually. The challenge is to repeat it day after day. He insisted that to be successful, companies have to be smart as well as healthy (i.e. not dysfunctional).

David Rubenstein co-founder of The Carlyle Group, one of the world's largest Private Equity funds, said that we should get used to knowing our children better as they will likely move in with us after college. He compared our financial environment to the aftermath of a severe hurricane. We now have a mess consisting of debt, deficit, impending inflation, taxes, unemployment, declining dollar and energy concerns. We should expect 7-8% unemployment as as opposed to 4-5% and 1-2% GDP growth as opposed to 3-4%.

Economist Jeffery Sachs Director of the Earth Institute gave a painful lecture about global economics, pointing out that the "world is bursting at the seems." With 7 billion people in the world and a $70 trillion world economy, we are living in an unsustainable situation. major problems include carbon emissions, water resources, energy (oil) and land usage. He said that unfortunately policy is still being formed behind closed doors by special interest groups.

T. Boone Pickens gave his pitch for energy independence by using natural gas for automobiles.

Kevin Roberts CEO of Saatchi & Saatchi spoke about the death of brands and the birth of "lovemarks" which call for "loyalty beyond reason." We are moving in a "participation economy" (word of mouth turbo-charged by social networking) where the only two questions that count are:
1) Do I want to see it again? 
2) Do I want to share it?

George Lucas said that in his youth he was and wanted to be a race car driver and fell into movie-making accidentally after a car accident. He defined art as an emotional connection always involving technology (where voice and dance involve the least technology while movie-making involves the most) and said that our goal is to create knowledge and pass it to the next generation.

Middle Class Task Force

Remarks by Vice President Biden on the unemployment numbers:

Today's tough news is a reminder though that -- as if anybody would need it -- how critical this work is in making the Recovery Act work and why. As I told the Cabinet assembled yesterday, those efforts need to be redoubled in the weeks ahead. Let me be clear about one thing: Today's bad news does not change my confidence in the fact that we are going to recover. We will be producing jobs. The American economy and the job engine is going to be created and moving once again. 

And I believe we're doing the right things to move things in the right direction. And the determination and creativity of the American people, combined with our determination to stay the course on this recovery, are what is going to produce the ultimate result of a thrilling, vibrant economy, which brings me to the meeting that we're having today.

We're working with the task force to lay a new foundation for economic growth, a future predicated on good education, high-quality health care, and clean energy innovation; and that future that doesn't leave the middle class behind. And we're up against -- we are committed, as we go through, there will be peaks and valleys in this process. This is not a straight line to recovery, but we are recovering.  We will recover. And we're determined that when we do, the middle class is in a better position coming out of this than when it went into this Great Recession.

http://www.whitehouse.gov/StrongMiddleClass/about/

Reevaluate and Recycle Yourself

My 6th article in the efinancialcareers.com series. This one is about discovering your passions and bringing out your true colors:

While unemployed and searching for a job, you have a great opportunity to reevaluate your experiences, skills and passions. It is the perfect time for self-assessment and taking personal inventory. In a difficult economic environment, especially if you are in a hard-hit industry like finance, stepping out of your own box might even be a necessity.

http://news.efinancialcareers.com/newsandviews_item/newsItemId-21595