All 3 entries tagged Gbe

More learning from the PMA, Credit crunch, Financial Services and Globalization

Continuing from the previous post. Some thoughts that came to me while writing the PMA. I wrote about financial services. The connection between globalisation (and I`m not crazy about that word, because the world has always been globalised, I think we should use something like Hyper-Globalisation to make explicit that we are talking about the increase, the strengthening of something that has always been there) and financial services is clear. And by understanding it it gives us a different vision of the current crisis.

The moment now is very similar to the burst of the bubble that happened on 1929 (even though its being treated in a very different way and hopefully it will also end in a very different way, but only time will tell). After a moment of irrational exuberance (fantastic expression created by the former president of the American Central Bank, the FED, Alan Greenspan to describe the dot ".com"  bubble of the 1990's/early 2000's) the markets went burst and so it was decided that they should be much more regulated. Exactly the same as know. Well, we all know economical growth does not follows a clear pattern. It is made (pretty much as life itself) of moments of quick growth, that generates bubbles, that burst, theres some learning, some pain, that will be followed by growth in new ways, resulting in new bubbles, new burst, pain, and so forth. That`s the way it goes, and that`s the way it will go again know. When we are under pain, it looks eternal, but usually the growing years, the pleasure ones are longer and more significative over time. But we just realise it from an outside look.

That brings me to another point. We are now complaining, throwing stones, shouting, crying and screaming over credit decisions, greed, high salaries, etc etc. Of course no one likes the idea of going through the stress, the worries of a crisis like that because a few VERY WELL paid guys committed mistakes. But looking back, this crisis was built along many, many years of very cheap credit, of innovative financial products that allowed lot`s of people buying houses, cars, trips, ipods, laptops, etc etc. By doing so they also generated lot`s of jobs. What I`m trying to say is that for many many years, all the world gained from the schemes, the ideas of that same people. I don`t think anyone complained when we had the lowest  long term interest rates for for many years, or when we found very easy credit to buy a car that we always wanted, or when a company got a nice loan, built a factory and got us a job. It`s a bit about complaining that the car broke in the middle of the road after we`ve been using it for 100.000 Km! Well, happiness is not forever, every system, every process, every cycle needs to be constantly changed and improved and in such a complex system as the global economy it`s very hard not to have some problems once ina while.

What I`m trying to say is not that we should do nothing and accept it the way it came, but that we should try to look at it from the outside and understand that this is how things work. That same system that brought as the problem was the one who gave us plenty of solutions, that we were also benefited in the good years (and we had quite a lot of good years , the global economy has been through one of its best moments in the last decades). And the guys who created, as bad or greedy as hey can be, were also responsible to it. Is a certain sense, is a bit like creating a revolutionary car. If one creates a car that runs on water, and that by taking one litre of water will go for 100 Km and it looks wonderful on theory everyone will want one. If after a few years we find this car just stops working in the middle of nowhere after a while we are going to be pissed, but we should remember how good this car was. every new product is a bit avant-garde and has inherent problems in it that will be fixed along the way. And when you are talking about financial products is even worse, because there are no labs, traditional scientific methods that would allow experimentations, you can not experiment on social sciences...

Of course a better regulatory system, perhaps and more concious managenemtn, a system that payd more attention to variations and the long term (Ok, thaks Deming!) would have been usefull, but it is important to look all that came with that experience, and not only a few people and a especific moment of it.

: 14 Nov 2008 15:46 |  Tags: Credit Crunch Financial Gbe Mbe Services |  Comments (6) |  Close comments |  Report a problem

Global Business Environment – PMA – Part one

Long time no writing. Shame on me.

Well, just like everyone else busy with my PMA`s. I`ve finished the GBE one and did a bit of work on the CBE one. But I`d like to talk about two things that came out of the GBE PMA writing experience.

1st thing is processual. I think I did a nice job and even though I care about the marks that I`ll get for it I can porudly say that I did work hard for it as it was a enriching experience. However it was not an easy one. I know we were supposed to spend only 40 hours on it but I`m pretty sure that all of us spent much more then only 40 hours on it. For myself I`d say I spent almost 80 hours on it I take two conclusions out of this fact:

- We went too deep, we did much more them it was expected from us. If that`s true we should have a indication of it in the marks.

- We were too uneficient. We wasted too much time researching, writing or reviewing in a non-eficient way.

I think both reasons are right. All along the work Lila`s post "how much research is enough" kept banging in my head. Lila got the very exact point of our problems in here.  We all wanted to do a very nice job, and since the opened possibilities were too big was hard too say " now I have enough!". So I think we overworked, we committed that mistake. But in the other hand we also probably wasted a lot of time in things we could have done much quicker, in learning how to use the library, how to work, what are our best productive moments, etc etc. So, from my learning experience some things I learned that might be helpful to others:

- Read as many times as you can the question, be sure you understood it, discuss it with a colleague, and STICK TO IT!. Don`t go further.   

- Know yourself. I, for instance, work better in the end of the afternoon and late at night. So I tried to keep these moments free and work on them. The rest of the time was used to sleep, exercise, socialise...

- Look for papers, and when you find a good reference look the references in it. Sometimes you find great material in a referece referece`s (was that confusing?)

- Keep an eye on magazines and newspapers. Some of the information was very updated on my PMA because I found news that related to it on newspapers and magazines.

- Use endnote to manage your references. It`s woth it.

-It it helps you use a mind map. I like drawing, messy drawings with scattered ideas, it looks confusing to others but it helps me a lot. I go reading and making this maps...that`s hoe I organise it.

I hope that hints might help someone (because they sure helped me!)

: 13 Nov 2008 14:01 |  Tags: Financial Gbe Mbe Services Studying |  Comments (2) |  Close comments |  Report a problem

Some real examples of greed.

Writing about Greed from Kang's blog

I was reading Kang`s (Louis) entry on his blog about greed. I`m sure he was inspired by the lecture we  attended on Friday about the credit crunch (by the way, great lecture this time the tutor spent quite sometime explaining some basic economy concepts that are fundamental to the understanding of the whole thing). I have my personal opinion about the CC, but I wanna talk about two things I`ve seen in my life, real stuff, real experience that will help illustrate both what the professor and Kang said.

1st. I`ve been working in banks for quite some years now. I`ve always worked on international Banks from different countries. I`ve worked in several different areas and projects. I`ve worked in some different cities as well. All these things change people. For example, working for a British bank is very different from working in an North-American one. Several differences in recognition policies, pace, style, priorities, etc etc. But there`s something that is ABSOLUTELY the same in every bank (and from my experience it is the same all over the world). The traders (these are the guys who really decide what to make with the banks money, were to lend, from whom to borrow, what rates to pay, what rates to accept, etc etc ) are young, addicted to gambling and taken risks, self-confident and VERYYYYYYYYYYY well paid. I`ve seen people with 28, 29 years old, little experience and no managing of people getting paid as much as people with a 25-30 years career, managing structures with hundreds of people, etc etc. They usually don`t have a high paycheck, but they`re bonuses.....It`s funny because most of them don`t stay that long as traders. They usually make a lot of money in a few years and them go to open they`re own business, go to work in other areas of the financial industry with a different profile (Mergers & Acquisitions, counselling, etc etc). I `ve asked many people (and human resource professionals as well!) why there was such a difference. The logical explanation is that it`s hard to find appropriate and qualified people from the job, and there are only very few spots. I think that explanation is not complete. It sure has it`s logic, but I don`t think it fully explains this because even though a certain profile (personality wise) is needed, the technical knowledge itself can be learned by anyone with a reasonable background in maths. The rest is pretty much a consequence. There`s another interesting explanation. It says that people are paid not for the amount of the money they bring to the organisation, but by the amount of money they can make the company loose. In the light of the credit crunch recent facts, that second explanation does make a lot of sense, doesn`t it?

: 20 Oct 2008 17:52 |  Tags: Bankig Banks Credit Crises Crunch Economy Finance Gbe Greed |  Comments (8) |  Close comments |  Report a problem