Anther beautiful lies from one of my favorites book Traders Guns & Money:
The management of the firms is a succession of fads during trouble times, just like the recent and ongoing crisis. The Fads become a mixture of homely common Rusk package as science and in comprehensible.
||Lets do several things that we don’t know anything about badly
|Sticking to the knitting or focus
||Lets get back to doing what we once did if any body can remember what it is and how to do it J
||Massive duplication, confusion and creation of thousand of petty empires
||Every body reports to every body, no body knows who they work for & there is no accountability
||Managers who can not manage now manage tens of direct reports.
|Business Process reorganization
||A process by which cut everything that is essential, leaving only every thing that you don’t need.
Not to forget lot of buzz words like CRM/KPI/TQM/B2B/B2C/Transformation/best of breed/competitive advantage/reinvention/templates.
I am bit late in congratulating Mr Obama for selected as a 44th US president. He has created history as he will be the first black president of the Worlds biggest superpower. The Indian politics/corporates all became gung-ho and congratulated by showing a great confidence in him. Many insane Indians are expecting too much from him but let me make it very clear expectations are always good but pre-expectations are not at all good.
The outsourcing companies of India basically the BPO/KPO/LPO and the IT enabled services companies too conveyed there greetings to him but they are on the verge which could be severely impacted.
Going in the history of the demo-crates US presidents policies they have never been too much benefit for the India. Glancing through the policies of Mr Obama they too are more concentrated on US and the sub-prime mess attracted more attention. The US data for unemployment is out on 31st Oct and its been the highest in the history of US. So it could be predicted that outsourcing industry could slow down. Even in the pre-election speeches Mr Obama gave more emphasis on the health, education sector of the US.
The Finance regulatory system could be tightened which is good for the US that may result in less leveraging and that will result in the less capital inflow for the country like India. So instead of pre-expecting things India should adopt the policy of wait and watch.
This week economist covered a special report on the world economy, the present crisis have been compared with the crisis of October 1929, which took 3 years for America’s government to launch a series of dramatic efforts to end the Depression, like declaration of 4 day bank holiday in 1933.During that time thousands of Bank failed, devastation deflation tear a part the US economy and the unemployment rose to 25%.
This time again US started with nationalization of the 2 mortgage giants Fannie Mae and Freddie Mac , saved AIG the worlds largest insurance company, temporary banned short selling in over 900 mostly financial stocks and the most dramatic of them all is pledged to take up to $700 billion of the toxic mortgages on its books. Another dramatic incidence which is lately taken by US govt. is ordering Fannie and Freddie to take the toxic mortgage on there balance sheet this is an exception to that $700 billion.
The anatomy of the collapse is that IMF recons that world wide losses on debt originated in America will reach $1.4 trillion which is double from the earlier estimation of $945 billion in April. Globally the credit crunch has already arrived and IMF predicts that credit could shrink by 7.3% in USA, 6.3% in Britain and 4.5% in rest of the Europe.
The action taken by the central banks is from the history that big banking crisis are ultimately solved by throwing in large dollops of public money, and that early and decisive government action, weather to recapitalize banks or take on trouble debts can minimize the cost to tax payer and damage to the economy.
US have proposed a TARP Troubled Asset Relief Programme which is still unclear how it will progress. The trouble is that because of its large current account deficit US is heavily reliant on foreign funding. It has edge that the dollar is the world’s reserve currency and as a financial turmoil has spread the dollar has strengthened. But today’s crisis is testing many of the foundations on which foreigner’s faith in dollar is based.
What will be the long term effect of these decisions, only the time will tell once the world stabilize again to normal.