THE ENTERPRISE--The Complexity Crisis featured in IBD ... and other news!
IBD'S "10 SECRETS TO SUCCESS COLUMN" QUOTES "THE COMPLEXITY CRISIS"
The Dec. 17 issue OF INVESTOR'S BUSINESS DAILY (out on Sat. at newsstands) and its column by Cord Cooper, (a regular IBD feature), is almost entirely drawn from my new book, THE COMPLEXITY CRISIS. That makes me grin. I am attaching a link for those who either don't get IBD or don't rush out to the newsstand to buy one (I understand!). http://news.yahoo.com/s/ibd/20071214/bs_ibd_ibd/20071214lands01
SOME AWFUL NEWS--A PASTA PROBLEM A little "tongue in cheek" humor: The cost of pasta (Italian pasta--the good stuff) is up by 60%. There are investigations about price fixing and speculation and even strikes. Now many of you will not think that is a problem, but for those of Italian heritage--pasta is a staple of our diet. Worldwide demand is strong, and the use of crops for fuel instead of food is worsening the problem. I think I'll stock up on some linguini.
POLITICAL CORRECTNESS RUN AMOK--AGAIN--TWICE
The city of San Francisco has decided to omit gender from ID cards so it will not offend the transgender community. NO KIDDING! The new ID cards will be given to anyone who requests one, and include name, birth date, photo, but not "gender." Will the next thing be restrooms marked, MEN, WOMEN, and "NOT SURE WHICH?"
The New York Department of Motor Vehicles has recalled a license plate that reads "GET OSAMA" on the grounds that it may offend "someone." They seem to violate a ban on plates "that are derogatory to a particular ethnic or other group." The person who ordered the plates, a retired NYC cop, said that the only group he could imagine being offended was al Qaeda, and "this is unbelievable." It is.
WHEN YOU'RE HOT, YOU'RE HOT; AND WHEN YOU'RE NOT, YOU'RE NOT
Let's see, about 5-6 years ago, everything I read (and a lot that I wrote) extolled the virtues of Wal-Mart as the leading retailer, Dell as the leading computer maker and Toyota as the leading auto maker. That was then, and this is now. Wal-Mart is getting its proverbial butt kicked by Target, although it is still, by far the biggest global retailer. Dell is now trailing HP and losing ground, but still No. 2, while Apple gains on both of them. Toyota is in the process of dethroning GM as the world's biggest auto maker, and in many minds, is still the best. But even the vaunted Toyota Production System is showing the strain of its growth and (could it be?) INCREASED COMPLEXITY of expansion in models, places to make them, and option/model variations. It just goes to show you that being on top is a dangerous place--there's only one way to go from there--down.
ENRON PROVED IT ONCE; THE SUB-PRIME CRISIS PROVES IT AGAIN
The laws of physics are immutable. You cannot make something from nothing. No matter how cleverly packaged or in what business, sooner or later, this impossible proposition collapses. When it does, itt takes all those foolish enough to try it, down with it. This time is it the largest banks and investors in the US. What on earth were they thinking? Make big loans to people who cannot afford them, but let them start with cheap (or free) interest to get them hooked. (Like drug dealers do.) Then bundle these with a few OK loans into SIVs (Structured Investment Vehicles) and sell them to the next sucker down the line--with the endorsement of the "reputable" rating agencies that these are OK. What a joke.
FIRE THEM AND TAKE THE ILLICIT EARNINGS BACK
Of course the CEOs of these foolish companies should be fired or resign--but they should forfeit most of their golden parachutes as they leave. They'd probably prefer that to the fate of the Enron, WorldCom, et. al. gang who got jail time as well. It's not just the CEOs that are to blame either. They are just the ones at the top who are ultimately responsible. Many others are hiding, laying low, hoping to avoid the notice that they were the architects and perpetrators of this (nearly?) criminal fraud. The Mafia loan sharks at least admit that they are doing illegal stuff.
A
RECESSION IS NOW A 50-50 BET
The ripple effects of astronomical oil prices, ridiculous financing practices, and a sliding dollar, fueling inflation are going to combine to make 2008 a very "flat" year. I mean flat like a bottle of Coke, opened 3 days ago, where all the "fizz" is allowed to escape. How do you manage through a recession? Very carefully, and using the best business practices. A good first step: (you guessed it) REDUCE COMPLEXITY--getting rid of the "fat" --products that cost more to keep than you make on them; customers that cost more to serve than they add to your profits; locations you never should have opened in the first place (close them); and so forth. Yes, some people will lose their jobs--because when you cut the complexity-driven waste--and work--you have to cut the overhead you added to do it--and that is mostly people. Sorry--that's what happens in a downturn.
GET THROUGH THE DOWNTURN IN THE ECONOMY AND COME OUT STRONGER
I'll cover more on this topic, including some specific ideas on "how to," in future editions.
For now, it's time to stop the doom and gloom. You can enjoy the holiday season with loved ones and don't have to break the bank on what you spend for gifts. Make the time together a gift for everyone. Enjoy it, laugh, go to church, sing carols, and just be together. That can be a very special gift to everyone. Finish by taking 10 amazing minutes, fire up your web browser and watch the videos noted below.
SOME "FEEL-GOOD" ENTERTAINMENT
This is incredible!
www.youtube.com/v/QZFkZiwMLZ4>
The first one, "Hero," is 6 minutes long so wait until you have ten minutes to watch both. The second one to watch is titled "Patriotic 2-1/2 minutes"--2-1/2 min. long. (Wait until the frames show at the bottom after the first one finishes and move to the right arrow.) Enjoy, and pass it on. The artist's name is Michael Israel. I guarantee you will watch spell-bound until the last drop of paint is put in place. Make sure your sound is turned up. And you will be proud to be an American.
All the best of the season, John
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