Financial crisis explained

Two great articles in the Sunday New York Times explaining the origins of the current financial crisis in clear terms.

The End of the Financial World As We Know It

Michael (Liar’s Poker) Lewis and David Eindhorn lay bare the regulatory failings at the S.E.C. and Treasury Secretary Paulson’s secretive maneuvering with the $700B TARP fund which included guaranteeing $306B to Citigroup:

“Three hundred billion dollars is still a lot of money. It’s almost 2 percent of gross domestic product, and about what we spend annually on the departments of Agriculture, Education, Energy, Homeland Security, Housing and Urban Development and Transportation combined. Had Mr. Paulson executed his initial plan, and bought Citigroup’s pile of troubled assets at market prices, there would have been a limit to our exposure, as the money would have counted against the $700 billion Mr. Paulson had been given to dispense. Instead, he in effect granted himself the power to dispense unlimited sums of money without Congressional oversight.”

Lewis and Eindhorn recommend a short list of practical steps that can be taken to prevent a re-occurrence of these series of unfortunate events – most telling is to close the revolving door between Wall St and the S.E.C. which puts future fox’s in charge of the chicken coop.

Risk Mis-Management

Joe Nocera explains the complexities of the statistical ‘Value at Risk’ or VaR model managed by the beautiful minds of PhD statistician ‘quants’ whose complex algorithms justified the trading excesses of the bubble era. By using only tame historical data in their models they were unable to anticipate the ‘black swan’ event of the 1% chance of catastrophic risk:

“One reason nobody seems to know how to deal with this kind of crisis is because nobody envisioned it.”

Both articles shed light on the dynamics of executive communications when group-think rules. Thinking outside the box before the box imploded was not encouraged or rewarded. Pity.

The advantage of being a professional speaker in this economy

Note from the International Federation for Professional Speakers Newsletter:

“When the Economy is on a downswing, it is great to be a professional speaker. If your business drops 20%, you still have 80%. If you worked for a large corporation, you could go from a paycheck to zero and the unemployment line.”

–Dan Poynter

Guest Posting: We Won’t Be Fueled Again! Or, An Inconvenient Arrogance

An open letter to GM, Ford and Chrysler (Mostly GM!)

By Betsy Rosenberg
Creator, Host – EcoTalk Radio
Founder – Don’t Be Fueled! Mothers For Clean and Safe Vehicles

Betsy Rosenberg
Dear Big Three Automakers;

So there you are in Washington DC with your hands outstretched and your hats out, speaking truth to power. “We’re in trouble Mr. Treasury.” “Please bail us out Uncle Sam.” “Please don’t let us die, don’chya know we’re too big to fail?”

Those are the plaintive cries echoing in the nation’s capitol chambers from the mouths of once powerful and almighty Titans of the SUV Age. And just like their gas-guzzling former darlings on wheels, these men – and they ARE mostly men – suddenly seem old, tired and of a bygone era. Good riddance gentlemen, your vehicles were just too big to succeed!

Somewhere in the depths of your gas-filled gut, you must have known judgment day was coming. All those years you made 10 to15 thousand dollars profit on each giant guzzler you sold, such a large mark-up that your sales teams were trained to push the biggest and the baddest models onto unsuspecting consumers. Car buyers looking for a 2 or 4 door sedan would drive off the lots feeling high and mighty about the great deal they got, until they filled up at a gas station. That’s when the gloating went into idle.

While there is some smug satisfaction to be felt by environmental activists and gasroots groups like the one I co-founded in 2002 called Don’t Be Fueled! Mothers for Clean and Safe Vehicles, the “we told you so’s” wont last long. They cannot because there’s so much work to be done to get our economy and environment out of the ditch, and darkness is fast approaching. That’s why there will be little reveling and no joy in Motown’s demise. If if the Big 3 go down, the negative ripples will be felt all the way to both coasts. That’s why we can no longer tolerate the dragging of wheels.

Reading about GM chief Rick Wagoner’s impassioned pleas for government intervention, I had to do a double take – almost gave me whiplash! Is this the same executive and company that has fought, with tens of millions in advertising dollars, to stave off government regulations that would tighten fuel economy standards and restrict tailpipe emissions in California and beyond? Is this the same Robert Lutz who proclaimed the dip in SUV sales a year ago was just a blip, and predicted gas would fall below two dollars per gallon again? (Well he was right about that one but surely cheaper gas is just a blip). Please excuse me Mr. Lutz, but with each passing day, you are looking more and more, like a putz!

I wonder what you’ve all been drinking – leaded gasoline perhaps? The u-turn in your change of tune, and fortunes, is staggering and surreal. And yet…this is precisely the scenario that a small group of Bay Area mothers predicted six years ago, and took that warning to GM!

I recall the meeting held with two of us from Don’t Be Fueled! and Dave Barthmuss, Group Manager for General Motors’ Western Region, Environment & Energy Communications team, who was in San Francisco in 2004 to meet with “stakeholders” to discuss GM’s green future. After thanking Bill Shireman (Global Futures) for arranging the intimate gathering, we proceeded to tell Mr. Barthmuss – in very plain Mom’s English – that the company was wasting its time and money talking to school kids about the hydrogen future. Presumably they were trying to get a jump on brand loyalty from the next generation of American drivers, but they were also carefully crafting a greener image than the Hummer was providing in those high-on-gas-fumes salad days.

We mothers, backed by thousands of other outraged moms – or so we said – were demanding U.S. carmakers give us more fuel efficient family-friendly vehicles, like hybrid minivans and SUVs. We were soccer moms, not anarchists, and we spoke in calm but firm tones. To his credit, Mr. Barthmuss listened intently when we told him they would be seen as greenwashers if GM, and other automakers (absent Honda which took the high road on this), continued to litigate, rather than innovate. We also scolded him, in our firm but gentle motherly manner, for ignoring hybrid technology available today, in favor of a hydrogen future that may or may not ever materialize. We told them if they didn’t get on the hybrid bandwagon they’d become dinosaurs and die an untimely death.

Several years later, at a future green car expo, Dave Barthmuss conceded to me, in hushed tones, that our conversation in that downtown SF conference room, had indeed, made an impact on him, but clearly he doesn’t run the company. The next time we spoke was on my national radio program, EcoTalk, a few years later when GM was rounding up the last of its EV-1 electric cars – to the great upset of many of its lessees who loved the groundbreaking vehicle.

At that time, General Motors was forcibly removing cars and trucking the new age wheels to the desert in Mesa, Arizona where they were crushed to death in the darkness of night. This was fall of 2005, during the same week Hurricane Rita was bearing down on Galveston, Texas stranding hundreds of SUV drivers who had run out of fuel along the shoulder of freeways as they fled for higher ground. Adding to the absurdity, GM announced that they would not be crushing all the EV-1’s. Instead they would donate a few to car museums so future generations (if there are any) could marvel at the late great electric car that supposedly nobody wanted. In fact, there were about 5,000 people on a waiting list for EV-1’s at the time, according to Chelsea Sexton, who, along with actress and activist Alexandra Paul, organized a week long protest outside the GM facility in Southern California, and who starred in the seminal documentary, “Who Killed The Electric Car?”.

So now you say we should bail you out; the government you fought, and the public you duped into thinking we “needed” these behemoths of the road? What do you take us for, fossil fools? No, you lived off those axles of evil, laughing all the way to the bank. Now we should save you from bankruptcy and self destruction?

Some of us would like to see you go away. At the very least go into a corner and have a “time out”. Think about all the bad car-ma you have wrought, all in the name of greed. Take ten minutes…or ten years…to feel appropriate remorse for letting down your children, your country and your sacred shareholders in the quest for short term profits, putting your special interests over public interest.

This obstinacy was especially heinous in the wake of 9/11, when you lobbied hard against strengthening CAFÉ standards, when it was not supposed to be “business as usual”. The NY Times was still running daily obituaries for those who perished when the Senate believed Trent-Lies-A-Lot as he held up a picture of a SMART car and said “if this legislation passes, it will be the death of SUVs and we’ll all be forced to drive purple-people eaters”.

You had the backing of President Bush who threatened that imposing stronger CAFÉ standards on American-made vehicles would “hurt the economy and cost jobs”. So nothing changed and look what happened; tens of thousands of jobs have been lost, the economy is in the tank, SUVs are sitting on car lots gathering dust and there are waiting lists for SMART cars more than a year long! And now that we are in the driver’s seat, and you are a deer caught in the headlights, let us, the American people, ponder your future.

I, for one, have already made up my mind. You sealed your fate several years ago when you put the brakes on progress. Otherwise we’d all be getting 35 miles per gallon, or higher, today. As we moms see it, the only way you can exorcise the Detroit Devil, and come out of your corner, is to have a total car-ma conversion, become a true leader and corporate steward of the environment. That’s right, if you want to survive, then we want change we can believe in. Begin with sweeping change at the very top of management – give walking papers to those executives arrogant enough to inconveniently come begging in personal corporate jets.

We mothers demand that green strings – no – make that green ropes, be firmly attached to any bailout package and that General Motors fully recycle itself into Green Motors – and not just in name, though you won’t even have to change your logo. After replacing the obscenely overpaid executives who drove you deep into the sea of red ink plow full steam ahead into a more sustainable future and retool those assembly plants to churn out hybrid vehicles in every model, and not just hybrid light; nothing that gets less than 30 mph will pass inspection. And while you’re at it, dust off that dormant electric car assembly line, crank those factories up to full gear, and accelerate America into a brighter, greener tomorrow. Give a jolt to the plug-in Chevy Volt you plan to debut in a year and make that prototype electric car your bread and butter. And last, but not least, you must agree to not spend one red cent on lobbying to defeat green legislation!

Then, after you’ve had your “come-to-what-would-Jesus-drive” eco-epiphanies, and your inconvenient arrogance is extracted in rehab, go on Larry King, Oprah and Ellen to beg forgiveness for your sins and to assure America that your overhaul will have traction. Then, and only then, can you get back to work and remember that we will be watching you. Nothing short of a total green makeover will satisfy us. If that sounds too radical and technologically challenging, consider that the Toyota Prius I’m driving gets over 45 miles per gallon and so did the first and second Prius’ I’ve leased since 2002. And consider the choice before you…either use those green ropes to pull yourselves through to the other side, or use them to hang yourselves.

Now, we ask you; doesn’t a big, bold commitment toward a greener future, through “re-in-car-nation”, sound a bit brighter? What’s that? Sorry, we couldn’t hear you due to the sound of another ice shelf crashing into the sea.

Betsy Rosenberg: Green Radio Host, Public Speaker

YouTube profile

Betsy “The Queen of Green” Rosenberg and National Speakers Association 2007 Pro-Track graduate has created a nice promo piece on YouTube.

While not all speakers can access a media library that includes getting the last word in on Fox News (no mean achievement!) many of us can make much better use of video and post the results to YouTube. Don’t have professional footage? Get a Flip

Interview: Catherine Athans – Manifesting Dreams

Dr. Catherine Atherns Catherine Athans, Doctor of Clinical Psychology, is the author of several well-received books. She is a frequent guest lecturer on topics, which enable people to improve the quality of their lives. The recipient of several humanitarian awards, she is the founder of the Morgan Manor Foundation. Morgan manor donates to and supports the working poor in Santa Clara County, California. Dr. Athans wrote Make Your Dreams Come True Now! to supplement her series of lecturers entitled, How to Manifest Your Wishes, Dreams and Desires

Make Your Dreams Come True Now!  Book CoverMake Your Dreams Come True Now! supports our journey of discovery in terms of:

  • Let go the lies – distinguish face from fiction.
  • Get back on the path to love.
  • Benefit from great teachers’ principles.
  • Learn universal principles that operate just under the surface of life.
  • Grow in your family relationships and have more satisfying social relationships.
  • Find the healing power in your words.
  • Re-establish hope for your life.
  • Gain the life that God – the Source – meant for you to have.

In 2003, Catherine was a delegate to the global Peace Initiative for Women at the United Nations in Geneva, Switzerland. There she lectured on How to Teach Children Peaceful Means of Communication.

She can be reached at catherine@angelsisland.com

Pro-Track Profile

To hear her discuss her book and experience with the NSA/NC Pro-Track Program, click on the podcast icon below.

Wow! 40 inspirational speeches in 2 minutes

Guaranteed to make your spine tingle — a montage of inspirational speeches from 40 movies. Everyone from Henry V to Charlie Brown, John Belushi to Braveheart hitting the emotional and rhetorical highs. Watch it before your next Toastmasters presentation and blow the doors off the evaluations!

Thanks to FirstShowing for featuring it. An awesome job of editing by Matthew Belinkie.

Bail Out the Writers!

A fascinating essay by Paul Greenberg in the Sunday New York Times notes that there Are 185,000 people in the United States “who support themselves primarily as writers of books, plays, poetry, speeches and other literary matter.” They earn an average $38,000 a year from their employment. The industry suffers from overcapacity and for a mere $37 billion, Greenberg suggests with tongue firmly in cheek, could be bailed out with government money that would pay writers to cease production and raise the incomes of those who remain.

The counter-precedent in 1930’s was FDR’s Federal Writers Project where 6,000 unemployed writers were put to work writing guidebooks and collating oral histories.

The challenge for any bail out program aimed at reducing overcapacity, notes Greenberg, would be ensuring writers actually cease writing. Most writers, unlike auto-industry workers or Wall Street bankers, are in love with their craft and would be unlikely to take money in exchange for allowing their pages to lie fallow.

A core aspect of the written word since the dawn of the alphabet has been people’s love of creating texts for their own sake. Leonard Shlain notes in The Alphabet Versus the Goddess
that

The written word is essentially immortal. To a hyper-conscious primate who had become aware that death was inevitable, the discovery of a method to project oneself beyond a single life span seemed nothing less than miraculous.

For those of us who need to put bread on the table as well as celebrate the miraculous in our work, a nice compromise would be the Irish system where creative artists and writers do not pay tax on their earnings. More a Dáil Out than a Bail Out.

How to: Twitter

Twitter

Twitter is the 140-character messaging service which takes some getting used to. It’s confusing for new users and hard to understand much of the usefulness and appeal until you have been using it for awhile. It’s growing into a useful social networking, community building and marketing tool.

To find out about Twitter check out this newbie’s guide and also read this more complete guide.

If you’d like to connect me on Twitter with I’m @cheshirelad.

How to: Distribute a Press Release

PRWeb makes it easy. We’ve just written the Obama Victory Speech Vision Statement Movie Press Release and got it out on the wire. PRWeb has all the tutorial help you’ll need.

Long Distance Marketing

A new venture by NSA Northern California past-president Scott Q. Marcus looks interesting. Scott lives up in the redwoods in Eureka and is turning his geographical isolation to an advantage with a blog on Long Distance Marketing.

Long Distance Marketing

Scott writes of the challenge of finding and developing a customer base that is not located near your base of operations:

The question is “How?” That is one foundation on which this site is built. How do you reach potential clients and customers who live far away from you? What works? What doesn’t? In this “new” age of marketing, what are the most effective tools to find your clients? Of even more import is how do they find you?

His blog will document creative approaches to that challenge. One approach is to publish a quarterly magazine called ‘Two Words’.

For a ringside seat at the birth of a new business venture, bookmark Scott’s blog and join in the conversation as he launches himself into cyberspace – WOOOOSH!