www.FiscalDoctor.com
Cooking the books Govt style – Where and how much does your govt cook books? Impact on your biz is & will be?
The front page of the Wall Street Journal on March 3rd has an article “Europe’s Original Sin”. The subtitle of National Leaders ignored Greece’s soaring debt for years leads a discussion of how governments ignored sticking out their balance sheet and coughing about Greece and possibly themselves.
The gentler version on the other countries in the article describes this as Fuzzy Numbers and restatements of prior years.
Some of you are thinking why should you care. After all expectations of politicians are pretty low and government bureaucrats who report to politicians may be lower.
To the extent that this allows politicians to avoid making hard choices on overspending, this also increases the amount of debts they run up and look around someday for you to pay. After all, it appears that someday is getting here sooner than most people thought.
Also how much harder is it to create the economic framework you use for making your business decisions when you are not sure which economic data from the government can be trusted. After all if they only fudge the numbers or cook the books on some indexes, that should mean most of the indexes are truthful. Unless they fudge a little on everything or cook the books on the numbers that are relevant to you. How do you know which ones are accurate and which ones have become Fuzzy?
For those with low opinions of politicians who may be feeling a little proud, think about these two points in closing: 1. When you cook the books even as “little” as they are now admitting they did, you get sued or go to jail. 2. Where are over optimistic assumptions or cutting the corners fudging your books that you have not faced up to?
How could anyone do a worse job w customers of converting a system than att.NET is doing?
Starting yesterday I got a message telling me to do what the email about service change said or they will cut off my service the second week of March and to call an 800 number.
After an hour hold, I am told to re-enter all my data for the system and change from 7.95 plus some fees to 15.95 a month. To get a smaller version plan like I had is another hold. I asked the person who put me on the other line, why they did not send the email a second time to people.
My response then was to setup the vacation responder to say “this will be ending.”
Maybe someone can find a way to propose a project to ATT. NET to salvage their computer conversion and customer satisfaction department. You may laugh at this. While holding etc, I was told some version of how valued a customer I as.
Which cities will go chapter 9 bankruptcy and how will it impact you?
A Wall Street Journal article today section C1 names 4 municipal groups in bankruptcy or on the edge. Some experts are saying that almost every city and state is insolvent or bankrupt if they were truthful about promises and guarantees they have made on their employee retirement and health care plans.
It is scary when you research how many are insolvent even with the limited disclosures made. My suggestion is that you have some process to watch your exposure to this sector. Or you can wake up some day and have some large write offs.
If There Is No Inflation, Why Did the Cost of My Lunch Just Go up 25 Cents?
If we have no inflation and deflation is the risk, why are people seeing things like this?
Last year’s bailouts put trillions of cash into the system, supposedly until our experts decide it is safe to take the extra liquidity out. As the time drags on to reduce the liquidity overhang, experts raise the question of WHEN, not if inflation will start raging.
The last time this process happened and our politicians were helping us, they publicized a misery index. Last month, it was 12.72 for December 2009. The all time low was 2.97 in 1953. The high was 22 in 1980. You can learn more than you really wanted about this at a website on topic at www.miseryindex.com.
“The misery index was initiated by economist Arthur Okun, an adviser to President Lyndon Johnson in the 1960's. It is simply the unemployment rate added to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation both create economic and social costs for a country. A combination of rising inflation and more people out of work implies deterioration in economic performance and a rise in the misery index.”
A number of experts suggest the index is manipulated by the party in power to reduce both the level of unemployment shown and inflation. The most comments in that area say the unemployment rate is artificially low since people who drop out of looking for a job until the economy improves stop showing up in unemployment numbers. Think about the artificial levels that interest rates on CDs and money markets are being held to help banks and financial institutions restore their battered equity and slowly bleed off losses in their loans and investments over time.
How should you look at the misery index and its impact over the next year in your business and personal life?
Are You Hunkering Down too Much?
“Firms Poach Top Talent From Recession – Weary Rivals” says February 8th Wall Street Journal on page B6.
Risks are what really go wrong when you are not looking: stupid things like bounced checks, losing your best customers or best people when you are blindsided. Some firms took a lot more risk than they thought. After all, top talent now has been lost to a more nimble, more opportunistic competitor.
You need to create peripheral vision in your business so you are not blindsided.
When you get real and look at a 3-3-3 method regularly, every three months you employ the J Paul Getty approach of the top 3 risks which could reasonably happen. Then you look at reasonable efforts to prevent those things from happening.
When you decide to get real, what are the three key risks you are ignoring?
And for the third part of the 3-3-3 process, what three opportunities does you business plan count on occurring next year, which will NOT happen based on the resources you are investing in those areas?
A vote for common sense on ERM, ORM and risk management
http://commander-eon.blogspot.com/2010/02/thoughts-on-risking-enterprise-by.html
Thoughts on Risking the Enterprise by Cavanaugh - Earl Malvar - or to save you some time, he said --
Enterprise Risk Management, if to prove successful for an organization’s sake, must encompass and permeate through a company’s culture. As what was mentioned in the article, the big Wall Street names that tanked amid the mounting pressure during the financial crisis were not short of documentation and conceptual design on risk management systems, but they were lacking in execution. Risk management, especially in the insurance industry, can be tricky because risk factors can sometimes be unquantifiable.
The very nature of risk as an unanticipated loss or liability further highlights the need for a firm’s workforce to understand and practice ERM. Risk management, though a relatively new function in organizations, has now been given greater attention by higher management after the debacle of 2008. It may still have a long way to go though before uniformity and formalities are established as different industries and companies possess unique attributes and business needs that make effective Enterprise Risk Management elusive to practitioners.
Interview on the Cost of What You Don't Know?
http://www.imagingexec.com/index.php?post_id=550701#
The Imaging Executive Podcast, from the Association of Imaging Executives(AIE), offers leadership insights and a glimpse at the future of imaging. Hosted by Paul Worthington, editor of The Future Image Report, the weekly podcast offers interviews with leading experts, as well as the editors of PMA magazine and The Future Image Report, to provide imaging industry executives with insight into management practices and relevant discussions about innovative technology. http://www.pmai.org/aie/
Money Matters Radio Interview January 18 on Risk, Quick Cash, and Passing the Embarrasment Quiz
Because “What You Don’t Know About Your Business Can Cost You Your Business.” Sticking out your balance sheet and coughing gets you what you need to know in time for needed procedures which can mean the difference between life and death, in your product, business, department, life or job.
During the interview, we discussed risk, cash tips, ERM and how quickly the world can change, as the Chavez devaluation and follow-up closure of a foreign owned retail chain showed.
The shows website includes background information, educational resources, financial calculators, newsletters and an article of the day section. www.moneymattersradio.net/index.cfm
Click below for my January 18 interview for comments on risk in the first section
Let's Hope These 4 Things Don't Happen
The article was titled Let's Hope These 4 Things Don't Happen
By Rick Newman , On Wednesday January 13, 2010, 5:43 pm EST
The 4 Things he suggest you consider are:
Housing tanks all over again.
Stocks crash.
There's a U.S. debt crisis.
Consumers become rational.
The original article is available at
http://finance.yahoo.com/news/Lets-Hope-These-4-Things-Dont-usnews-2604707770.html?x=0&.v=1
Revealed Secrets - How to Jump Start Your First Quarter With Crucial Best Practices
As I see it (and you may too), the economic downturn is a transformative game changer, whereby the winners (real survivors) will be those business leaders who will pay attention to tomorrow and thoughtfully pursue the golden opportunities that are waiting to be discovered.
Here are 9 paths to CYA that you can follow in order to achieve a head start on making next year a surprisingly great year.
1. Review the 3 best opportunities you could create longer term, and assess in great detail what you need to do to pursue them.
2. Examine the 3 top longer-term risk areas of your business today, and focus on how you will respond when those concerns materialize. Since J P Getty, one of the richest people in the world used this approach, it can benefit you too.
3. Assess your short-term risk tolerance and develop a contingency plan to stop Murphys Law in its tracks -- include as much detail as necessary to establish a clear picture in your mind.
4. Evaluate the 3 most crucial infrastructure issues you will face over the next 2 years (key people or skill set needs, financing, or system and process upgrades).
5. Analyze your staffing levels and determine whether you should staff on a "green field" basis. Ask yourself these questions: "If I were starting a new company, would I hire the same employees I have today? If I were to hire them, would I have them in the positions they are in today?" You may be surprised at your answers!
6. Learn which products are losing money and get rid of them immediately, or raise prices on these products/services.
7. Determine the cost of the risks you do not know, such as potential inventory mismanagement, product defect or service quality problems, and inaccurate or unrealistic financial projection and statements.
8. Ascertain your company 10 top customers not only in revenue but in terms of profitability. Ask yourself what complimentary or add-on products and services you can sell them to balloon your profits.
9. Evaluate and improve the speed and quality of your cash flow and key metrics monitoring in order to prepare for a challenging and choppy, turbulent year.
Bonus Tip: Pull this list out every six months to see how you can better manage company operations and resultant cash flow. Feel free to add notes or comments and change any words to "make it your own". After all, you gain when you internalize information. And in this case, you stand to reap some tangible benefits. Cash!
Note - I originally published this on December 31 on Ezine Artilces and a friend suggested I also post it on my blog, for you.
