Will Lesson of Black Monday 2008 Teach Businesses Better Risk Management? »
Posted By Varadinum 9 months, 2 weeks ago in Business & FinanceAccording to Michael Welles of EdWel, a risk management training corporation, businesses should take home the lesson of risk management from Black Monday, September 15, 2008 to avoid their own meltdown by understanding that risk does not go away if it' s ignored. If the most sophisticated financial companies in the world are prone to failure can regular businesses guard against a similar downfall? Comments made by New York Times editor David Leonhardt indicate that we' re more focused on putting out fires than preventing new ones, “ The Bush administration, the Fed and Congress, meanwhile, continue to focus on the immediate crises, with little attention paid to the underlying reasons that economy has gotten into this mess … ” (NY Times September 17, 2008).
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quackpot9 months, 2 weeks ago
The problem is the entire U.S. business model is heavily weighted toward SHORT TERM PROFIT.
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If a CEO makes a good short term profit, he/she is very well rewarded.
If a CEO makes a bad decision, he/she is also rewarded via the golden parachute.
In the current system, companies such as FannieMae/FreddieMac provides profits for good decisions, while the U.S. tax payer pays the cost of bad decisions.
With this system, there is NO incentive for risk management. Indeed, a CEO who plays a conservative game will be quickly left behind by the aggressive players.
Golden parachute plans should be rejected by stock holders, if not made out-right illegal.
Government guarantees should be TOTALLY rejected as a normal business model. In times of crisis such as this one, the Government MUST, of course step in with as stabilizing hand.-
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mark-stevens9 months, 2 weeks ago
Houses were being sold to anyone, illegals, unemployed, criminals. I saw local TV ads $300,000 homes $475 a month the first 5 years. No social security number, or proof of employment, or anything.
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How many people were swinging hammers during the housing boom. Add
making lumber, concrete, roofing, sales of houses, and so on. A nice smoke screen for outsourcing.
How many jobs were shipped overseas and nobody noticed.
Watch the current unemployment skyrocket.
If we get another four years of rewarding companies that outsource we are all heading to Mexico for work.
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simonsez9 months, 2 weeks ago
Government can't and shouldn't attempt to control salary packages in corporations. It will turn out badly as does all their other attempts to control such as Sarbanes/Oxley.
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anitak9 months, 2 weeks ago
Sarbanes Oxley is a great example of a big government turning ugly. Amen to that.
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miklkit9 months, 2 weeks ago
I agree quackpot. Business has no morals. "Don't take this personally, it's just business." For big business risk management is an oxymoron. If they can do it, they will. McSame has been a leader in deregulation, until this latest meltdown and corporate socialism made him change his tune. For one sentence.....
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Tango579 months, 2 weeks ago
There are numerous problems in business models. One could argue the extinction of mom and pop businesses versus corporate structure. ( could write a thesis on that one) In a mom and pop organization there were no lobyist, in corporations the objectives are totally against the fundamentals of what once was about a true "win, win" to prosperity. Years ago a 3% yearly growth was a sign of a great business. Today those trends are up to 25% to 150% which may or may not be a true statement, depending on the data represented. What I learned in Economics 101 is the bottom line to growth, throwing out all the other data is GDP. It has been dropping every year for the last 10 years. In the end, all we are doing is delaying a serious financial situation, dare I say depression? To me, it is inevitable. Personally, I blame wall street for this debacle. Until Congress steps in and is commited to holding them to decpetive practices, it will continue.
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Another major problem, we have too many CEO's who don't have a clue as to what they are doing. They're flat out stupid, corrupt and make every decision based upon greed, self greed.
What does Congress do? They reward corporate criminals with a blank check, with out congressional hearings, no charges filed against them.
We are in a serious, bad way, with no long term solution. Maybe that's why Greenspan retired. He saw the inevitable without a plan to support a failing system. -
Republicrat1844Comment removed: User banned.
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nilimaa4 days, 5 hours ago
Sarbanes Oxley is a great example of a big government turning ugly. Amen to that. http://eluhealthcare.blogspot.com/
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