Tuesday, March 31, 2009
I just read a great article by Bill Gross on how the future of investing will depend on the future of the global economy. The global economy will be defined by three things: deleveraging, deglobalization and re-regulation. These characteristics will lead to “slowing global growth, a heightened risk aversion, a distrust of conventional investment model portfolios, and a greater emphasis on surviving as opposed to thriving.“ His view is that the bull markets we had become accustomed to are over and that investing in this climate is “no longer child’s play”. Read here.
Tuesday, March 24, 2009
Yesterday, we finally got some clarity on the Treasury’s toxic asset plan and the market appeared to like it – but the devil is in the details. I am going to attempt to simplify it – for my readers as well as for myself!!
So, let’s start with an overview of what has been clogging the credit markets: the biggest problem has been the legacy (toxic) assets which are complicated parts of home mortgages - many of which have gone bad, and many more of which are likely to go bad in the near future. For simplicty, suppose a bank has $100 million (face value) of these assets on its books. But due to the increased bad debts associated with these assets and mark to market accounting, the banks have had to mark the assets down to $80 million, and in the process have had to take huge losses (in this case $20 million). Most of the banks would like to get these assets off its books, but claim there is no market for them or in other words that there is a liquidity issue.
In reality it might not be a liquidity issue since there are people out there who might be willing to buy those assets for say $10 million. That, however, would require the bank to write-off an additional $70 million and if it did so, it would be bankrupt. However, let’s just say this bank is in the class that has been deemed “too big to fail.” So in comes the NEW PLAN.
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Tuesday, March 17, 2009
Last week, I sat in a crowded room listening to Joanna Barsh, Director at McKinsey & Co talk about “Centered Leadership: How Talented Women Thrive”. While listening to this very accomplished women, I wondered if this economic crisis would have been any different had there been more women at the table (see FT article which refutes this theory). I don’t know the answer and I don’t want to turn this into a gender debate but I do wonder why so many women start off after college with just as much drive, intelligence and education as men but only a few ends up reaching the top echelons - in business, education and government. We never seem to have a majority of women at the top. Yes, I know there are a few women at the top levels – but are there enough of them to make a difference? How can we, as mothers and mentors, help more women succeed? How can we help our daughters succeed? What are the characteristics of successful women leaders? Can women LEARN how to be more successful? Joanna Barsh thinks so and spoke to us about the findings of a McKinsey initiative, called the McKinsey Leadership Project. The initiative was driven in part to learn what “drives and sustains successful women leaders” and to impart this knowledge to young women to help them navigate the sometimes difficult path to leadership. So what did Mc Kinsey find out in this study?
First, McKinsey found that there were several pre-conditions to successful leadership: intelligence, desire to lead, communication skills and tolerance for change. If a person already possessed these skills, McKinsey found that successful women leaders also had five “broad and interrelated” dimensions: meaning, framing, connecting, engaging and maintaining energy – all of which can be learned.
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I am going to the LIVE blog party in NYC next week on March 25 - please let me know if you might want to come.
Monday, March 16, 2009
Based solely on being in the top 1% of math ABILITY, women would comprise 33% of all the math-intensive fields but currently women only account for less than 10% of these fields. Why? Women with advanced math abilities feel they must choose a career that will give them the flexibility they need - if and when they decide to start a family. Or if they do choose a scientific field (either math or physical sciences) they tend to drop out at much higher rates than men because of the greater need for flexibility during the high demand times of early childhood. These choices do not typically have to be made by men. Maybe work has to change, not women. Find the study here.
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