The WSJ commented that this was a record low rate for the fast food giants $750 million bond. The full article is available at http://online.wsj.com/article/SB10001424052748703940904575395743979270242.html?mod=googlenews_wsj

Think about this in terms of both refinancing financially and strategically in your life or business. 

The easiest comments are to refinance in your business. After all, on a numbers issue, some of the key factors for you to decide upon are projecting future cash needs, estimating what the market will be like when your existing long term debt comes due, and opportunities you see now and project logically will occur in the next few years.  Don’t borrow debt just because you can.  Somehow those type funds get wasted or invested less than optimally. 

Think harder about refinancing strategically in your life or business model.  In any of these areas, what are you doing today that you would NOT do if you made that decision today?

If you would not be pursuing some customer, line of business or strategy if you had the choice on this as a new decision, why not cut your losses as soon as you prudently can and redeploy those resources for the great opportunities that are becoming available for those who have resources and react.  After all, what is the difference in this strategy and deciding which accounts receivable are collectible?  If a debt is uncollectible or just gives you a bad feeling about the customer, you would do something to correct that situation.

Now let’s get even more realistic. Stick out your personal balance sheet and cough. What relationship, civic group, social activity would you not start if you were making that decision today? Again, why not end those time commitments as soon as you prudently can and redeploy that time for your family, friends, business, or another cause that you believe and are passionate about?

        

A key issue in economic turbulence is always the balance between hunkering down too much (being too conservative) versus growing too much (being too optimistic). And when times are really turbulent like they are this year, the stakes for guessing wrong go up dramatically. 

For instance, take too big a risk for growth and guess wrong or there is a double dip in the comply, and the company and your job are at risk. And the other side of the coin is not any better. Be too conservative and miss out on sales opportunities or potential acquisitions and you start losing customers, deals AND your best people.  The grass does not have to be much greener on the other side of the fence, when times are turbulent.

The Wall Street Journal weighed in on this issue in Monday July 26^th in the Money & Investing section. Markets Say No to Expansionist Companies. http://online.wsj.com/article/SB20001424052748704719104575389172070900184.html

Take some zeros off the discussion about Texas Instruments, Delta, Ford and UAL to apply the article and discussion to your business, project or job.  Where are you too conservative or too aggressive now?  What changes should you make?

In essence this thought process and the insights you gain are the key aspects of risk management.  Call it enterprise risk management, ERM, operations risk management, ORM, contingency planning, strategic planning, risk assessment, operational review, due diligence, or even simpler versions like cash planning, performance management, conservative leadership or a business model review .  No matter how sophisticated the phrase you want to use, the process starts with regular and consistent common sense applications balancing current and future risks with current and future rewards.  It is very easy to underestimate how much risk you are taking and overestimate the realistic rewards.

        

I received a flyer for what is an interesting event for those of you like me you are involved in risk management. This August 19th seminar is called “ SecureWorld Spotlight - How to Complete a Risk Assessment in 5 Days.”

The sponsor SecureWorld Expo website describes in more detail their focus to bring together the security leaders, experts, senior executives, and policy makers who are shaping the very face of security. SecureWorld is at the intersection of Information Security, Physical Security, Compliance, IT Audit, Computer Forensics, Enterprise Risk Management, Business Continuity and Security Management.  http://www.secureworldexpo.com/events/index.php?id=291

 To make this post more authoritative for you, I briefly interviewed the speaker to ask what three key takeaways participants will receive.  Tom Peltier told me to expect these three benefits:
1.   An overview of risk management, particularly 3 key confusing issues.
2.   A working knowledge of a facilitated risk assessment process.
3.   An actual action plan and a working template to use.

The short version of his impressive background is:
Tom Peltier has been an information security professional for over thirty years.  During this time he has shared his experiences with follow professionals and because of his work has been given the 1993 Computer Security Institute’s (CSI) Lifetime Achievement Award.  In 1999 the Information Systems Security Association (ISSA) bestowed its Individual Contribution to the Profession Award and in 2001 he was inducted into the ISSA Hall of Fame.  Tom was also awarded the CSI Lifetime Emeritus Membership Award.  Over the past decade, Tom has averaged 4 articles published a year on various computer and information security issues, including developing policies and procedures, disaster recovery planning, copyright compliance, virus management and security controls. He has had six books published on policy development and risk assessment.  He co-authored four other information security books.  He continues to speak and teach information security courses throughout the world.

The website with full information on the event, location, registration etc is http://www.secureworldexpo.com/events/index.php?id=291

        

Asks WSJ today “Our Pro-Business Pesident”  with reasons why business is hunkered down.  What should you do? After all be too optimistic and you are at risk.  Be too pessimistic and you could be equally at risk.

Should your capital go on strike? The full WSJ article is available at
online.wsj.com/article/SB10001424052748704111704575355413601768820.html?mod=googlenews_wsj />
Excerpting one paragraph for you. "The big political news out of Washington yesterday is that the White House wants you to know that President Obama is not antibusiness. That reassuring word comes in a dispatch from Politico.com quoting senior White House aides that they have launched "a coordinated campaign to push back against the perception" that its agenda is hostile to business."

WSJ says” How in the world did anyone get that idea? Perhaps the feeling set in sometime between the President's public trashing of the Chrysler bond holders and his use of the insurer Wellpoint as a piñata to pass ObamaCare. Or maybe it was sometime after his Administration's fifth or sixth tax increase proposal, its disdain until recently for trade promotion, and its unleashing of new regulations across any industry you want to name.”

Regardless of your political persuasion and possibly the industry you are in, it is so easy to be concerned, even worried.  After all, for the vast bulk of us, what can you do and what should you do with your capital? Use that question as part of your ongoing monitoring to balance risk and reward.

        

 rather than facing up to foreseeable current and future?  The WSJ front page article asks if the banks are doing this on loans for real estate deals which have “gone sour.” (For those wanting to see the full artilce -http://online.wsj.com/article/SB10001424052748704764404575286882690834088.html )

Basically the practice is to extend the maturity, and reduce principal payment amounts and interest rates.  Think of this as a more sophisticated version of home loans with little or no payment on principal and teaser interest rates.  The argument is that giving borrowers more time to pay the debt will be less costly than what would happen if the banks took over the real estate and ran the business. Skeptics call the practice “extend and pretend”.  

Where in your life or business are you extending and pretending?  Where are you putting off tough decisions or even facing up to reality?

Where could you solve something today, versus extending and pretending and use those resources of time, people and money to take advantage of the opportunities that are beginning to show up for opportunity seekers?   

Why not do a risk assessment combined with reviewing growth opportunities that are stalled for lack of cash?

        

US News just releases this article on 10 states where taxes are rising the most.

Some of these states are no surprise and others may surprise you.  The full article is available on this US News link.  Since you need to evaluate the accuracy and dependability of sources where you get data, you will pleased to hear that US News data is more reliable and fact centered than some of the other media sources.

I trust this heads up will let you plan more now rather than be surprised in April.

money.usnews.com/money/blogs/flowchart/2010/06/30/10-states-where-taxes-are-rising-the-most    

        

how will that impact you or your business?

Extracts below come from the WSJ June 16th column entitled The Bad News About ObamaCare Keeps Piling Up : It's now obvious that many millions will lose the coverage they have.

How can you protect yourself from this risk OR find a way to make lemonade from the lemon situation?

“In his brilliant exposition of why sweeping policy changes often have unintended consequences, the late sociologist Robert K. Merton wrote that leaders get things wrong when their "paramount concern with the foreseen immediate consequences excludes the consideration of further or other consequences" of their proposals. This leads policy makers to assert things that are false, wishing them to be true. Perverse incentives in his new law will cause most Americans to lose their existing insurance.”

“Health plans would no longer be grandfathered if a business changes insurance companies (a common practice when employers shop for lower prices), raises deductibles more than 5%, drops any existing benefits, or even increases co-pays by as little as $5.”

“Complying with these new rules would raise costs for companies who provide coverage, reduce competition among health insurance companies, and discourage efforts to make employees more price conscious. The Obama administration itself estimates that these draft rules could cost up to 80% of small employers and 64% of large employers their grandfathered status. This translates to between 87 million and 115 million Americans losing their current coverage. “

http://online.wsj.com/article/SB10001424052748704198004575310773636609374.html?mod=WSJ_hp_mostpop_read

Whether your business uses off-site facilitated sessions, contingency planning, enterprise risk management or other tools to control your financial destiny, how will you plan for both dramatically increased costs and probable unhappy employees as you are forced to pass on dramatically increased costs or dump them in the Government medical system?  What else can you do to capitalize on hidden high return opportunities, while limiting exposure to risk to offset near term looming heath care cost risks..

        

Despite what the health care advocates said about our keeping our health care plan and motivating business to keep those plans in place, experts say the opposite is already happening, in the article linked below. Being proactive in your business suggest leaders look at whether or when you should move toward ending existing plans. Individuals should look into the likelihood that your business will effectively be forced to dump your coverage.

Today's new rules from the federal government on ‘grandfathering,’ which were crafted without any opportunity for public input, are just more proof that despite all the promises made by the president and other supporters, you actually can't keep what you like under the new partisan health reform law,” Senate Finance Committee ranking member Charles Grassley (R-Iowa) said in a statement. “Change is coming for a lot of people, whether they want it or not,” he said.

Health insurance plans that existed March 23 will not be able to significantly raise co-payments or deductibles, or significantly reduce benefits, without having to meet all the new requirements of the health care reform law under proposed and interim final regulations issued June 14.

For fuller comments and details, the original article link is
www.bnasoftware.com/News_Articles/News/Grandfathered_Health_Plan_Rules_Forbid_Big_Copayment_Increases.asp  

        

"Compare the BP fiasco to the classic example of how well Johnson & Johnson handled its Tylenol nightmare years ago.  Part of Johnson & Johnson's success in dealing with the crisis was the result of a well-thought-out contingency plan, superb execution, and taking immediate responsibility.  The public’s approval of the company's action was expressed through its increased market share.  This is a far cry from the negative impact on the BP brand, as well as the entire oil industry," .

Patterson recommends that companies adopt the following seven-step emergency plan for dealing with potential risks:
1.    Commit to contingency planning
2.    Establish a risk tolerance framework
3.    Identify potential risks that your company may be up against
4.    Highlight worst-case catastrophic and critical risks
5.    Identify the top 5 to 10 risks that are not included in your financial statements
6.    Develop a coherent action plan that is approved by your executive team
7.    Establish a proactive media policy

"After all, the goal is to control your company's financial destiny with adequate procedures and timely information.  Capitalize on hidden high return opportunities, while limiting exposure to risk.  Otherwise, the cost of what you don’t know can be your company.  This blowout may not cost BP employees, executives, suppliers and shareholders their company.  It has definitely demolished the value of the stock that individual investors hold."

"Companies with far less shareholders' equity than BP should be concerned.  Much smaller companies that are part of the oil industry, or sell to the oil industry, will be decimated. While BP will get bailed out and survive this catastrophe, no one will come to the rescue of a smaller company that doesn’t have a BP global status."

        

Google Elizabeth MacDonald May 17 subprime, or click the link below.  Makes you wonder who you can trust, because you have to trust someone to run your business and life.  

Her article begins
“ The Securities and Exchange  Commission is missing a bigger fraud while it chases the banks. Even though it knew about this massive, plain old fashioned accounting fraud back in 1998.  
Instead, the market cops are probing simpler disclosure cases that could charge bank and Wall Street with not telling investors about their conflicts of interest in selling securities they knew were damaged while making bets against those same securities behind the scenes, via credit default swaps.
Those probes have gotten headlines, but there aren’t too many signs that this will lead to anything close to massive settlements or fines.
For instance, the SEC doesn’t appear to be investigating how banks frontloaded their profits via channel stuffing -- securitizing loans and shoving paper securitizations onto investors, while booking those revenues immediately, even though the mortgage payments underlying those paper daisy chains were coming in the door years, even decades, later. Those moves helped lead to $2.4 trillion in writedowns worldwide.
The agency said it  believed banks were committing subprime securitization accounting frauds back in 1998 and claimed to be 'probing' them.”

Just when we thought British Petroleum, (BP), Greece etc where under control, we are told to look at the lack of using transparency from the two presidents back.   

http://emac.blogs.foxbusiness.com/2010/05/17/sec-knew-about-suprime-accounting-fraud-decade-ago?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogs%2Femac+%28Blogs+-+EMac%27s+Stock+Watch%29