Skip to main content

2008 - Year the icons fell

"Uneasy lies the head that wears the crown"

Icons, Kings, Ideals, Idols, Stars, and Models call them what you will, but they have had tough time holding on to their position on top of the influence-pyramid. Many vanished, some fell apart and some brutally torn apart. It has been a tumultuous year for the establishment. Seems the natural cyclical forces that clean the environment decided to take up matters into own hands and cleared a significant portion of Top 100 influentials' of 2007.

The corporate sectors' 2008 diary is littered with the epithets of once great and mighty corporations that are no more. The billion dollar corporations that were on the Top10 lists of their industry simply vanished under the perfect storm that hit 2008.

Factually, the fall of the companies started out some in 2006 itself, but it was not indistinguishable from the normal M&A activity, nothing that will raise red flags on the radar. The seminal event that perhaps triggered the fear psychosis in 2008 was the collapse of Bear Sterns. Once mighty firm was sold off over the weekend and for the fraction of the price it traded few months before. If there was an event that instilled the fear and alerted the financial world of the risks that lay ahead, it was this.

Experts had warned of the industry being hit by the sub-prime crisis and they were proven true. But the collapse of Bear Sterns started the domino effect that would crumple dozen or more biggies over next few months. Bear Sterns overnight became the poster boy of the sub-prime insanity and its collapse; this lead to steep fall in the prices of these bonds and derivatives which triggered several other corporate wipe-outs.

Several giants like Wachovia, Washington Mutual, Freddie Mac, and Fannie Mae etc were in endless trouble. Giants like Merrill Lynch and Lehman Brothers and many more dint survive in the 2008. Automakers too.

The year also ended the reign of many people who were considered indisputable in their professions. Miller, Maddoff, and even India's Raju and countless others fell from their high perch. Its nature way of saying no matter how great the people are they are still mortals.

There are many icons that gained and established in this crisis like Warren Buffet, JP Morgan, Goldman Sachs, Jamie Dimon etc. It's not the end of the world, just a leveling of it. Peter Grandich said it well; that 2008 made him realize that no matter what his stature was he still wore his pants one leg at a time, just like everybody else. The year was a great leveler.

Many great institutions fell down and many more will be created in coming years. 2008 was the year when old icons gave way to the new ones.

Comments

Post a Comment

Popular posts from this blog

Cognitive rules of business presentations

In his recent book, Clear and to the Point, Kosslyn explained that the four rules of PowerPoint are: The Goldilocks Rule, The Rudolph Rule, The Rule of Four, and the Birds of a Feather Rule. Here's how they work. The Goldilocks Rule refers to presenting the "just right" amount of data. Never include more information than your audience needs in a visual image. As an example, Kosslyn showed two graphs of real estate prices over time. One included ten different numbers, one for each year. The other included two numbers: a peak price, and the current price. For the purposes of a presentation about today's prices relative to peak price, those numbers were the only ones necessary. The Rudolph Rule refers to simple ways you can make information stand out and guide your audience to important details -- the way Rudolph the reindeer's red nose stood out from the other reindeers' and led them. If you're presenting a piece of relevant data in a list, why not mak...
Post a Comment
Read more

Monetary inflation, Spiritual devaluation

Its been sometime I have been trying to make some special people understand the evils of inflation. Inflation is an abstract subject most of us dont know about, let alone understand the technicalities amidst jargons. I have in my previous post have briefly touched the social part of inflation but never in a concentrated way. I understand what my friends mean when they say "tell me in layman’s language." It is not a heartening sign, that they avoid technicalities. But it could well be that knowing where they stand, their role and understanding the social changes in the light of inflation may motivate them to understand the term "inflation." This is just to highlight the brief points. First and the foremost, is there any link between inflation numbers and society. Yes. The relation is same as the relation between society and money. What is money? Money is an easy means of exchange. If I am selling my horses to a pig-farmer and I am not interested in taking pigs in ret...
2 comments
Read more

Unprecedented External Demand Shock Underway

India’s export growth averaged 24.8% over the last three years, driven by strong global growth. However, over the last three months, export growth has decelerated sharply. While until recently the strong demand from emerging markets including Latin America, Emerging Europe, the Middle East and Africa ensured that export growth remained healthy, over the last three months disruptions in the macro environment of these economies have been evident. Apart from weakening demand, exports have also been affected by the lack of availability of foreign trade credit and inventory liquidation. India’s exports declined by 12.1%Y in October 2008 compared with 10.4% in September and 26.9% in August. While we expect some improvement in the second half of 2009, exports are likely to be unusually weak over the next six months. We now expect exports to decline by 5.3%Y in 2009 compared with 12.7% in 2008 (estimated) and 23.1% in 2007 Excerpt source
Post a Comment
Read more