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A mixed bag
Michael Alan Hamlin
Outsource2Philippines (O2P) and the Business Processing Association of the Philippines (BPA/P) announced the results of a survey of business process outsourcing (BPO) industry executives at the beginning of the week. The survey was conducted to assess the potential impact of the global financial crisis on the industry, one of the few bright spots in the Philippine economy. As expected, a majority of the respondents said the impact of the crisis on their Philippine operations would be neutral or positive.
But unexpectedly, many respondents also expressed caution. Almost 40% said they are decreasing capital spending in response to the crisis, and nearly 30% said they are postponing expansion plans. Less than 10% of the executives polled said they are increasing capital spending. Still, almost a quarter said they are accelerating expansion plans in response to the financial crisis. What accounts for this mixed bag of results? (Disclosure: I am a director of O2P and BPA/P is a client of my firm, TeamAsia, which administered the survey.)
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Posted
10/29/2008 11:54:31 AM |
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And now, for the good news?
Michael Alan Hamlin
Poor Jim Cramer. CNBC’s star stock-picker is as desperate to figure out what happens next as the rest of us. “It’s a completely humbling market,” the host of “Mad Money” told The New York Times’ David Carr in an interview. Cramer, a wild-eyed equities cheerleader, has been pummeled by critics after predicting that Bear Stearns “is not in trouble” in March, and that Wachovia was a bargain at $10.71 two weeks before it sunk to $1.84.
Some viewers blame Crammer for starting a stampede out of equities the dark week of October 6 when he advised viewers on the “Today” show to take “whatever money you may need for the next five years out of the stock market. Right now. This week.” Investors that did so were briefly incensed when the market rocketed up 936 points the following Monday, before giving up most of those gains the next day.
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Posted
10/22/2008 1:06:35 PM |
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The scenario darkens
Michael Alan Hamlin
Acknowledging, understanding the crisis is the first step
No one doubts that the week of October 6 - 10 will go down in history, but no one is certain exactly why. Will it be remembered as the week the financial crisis went global with markets from the U.S. to the EU to Japan to China, India and Russia falling steeply? Or the week the crisis bottomed out? Or, will it be remembered as the week that global recession began in earnest?
Executives around the world polled in a McKinsey Quarterly survey taken October 3 - 6 would likely forecast the third possibility. Even before the extent of the global meltdown became clearer in the following days, a majority of respondents signified significantly darkened expectations for their economies. That was the week analysts were expecting the Dow to reach bottom at 9600. But by last Friday, it had fallen below 8500, and the S&P had recorded its biggest weekly decline since 1953.
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Posted
10/18/2008 11:37:24 AM |
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Winning in a financial crisis
Michael Alan Hamlin
And pursuing opportunity
By now, it should be clear that anyone outside the Philippines' business process outsourcing industry claiming that the global financial meltdown won’t negatively impact the Philippine economy is in a dangerous state of denial. The collapse of the U.S. investment banking sector and the forced consolidation of major financial institutions with direct and indirect exposure to the subprime mortgage market is fundamentally changing how companies do business and consumers finance their lifestyles everywhere. It will take at least two years and more than the $700 billion taxpayer-funded bailout to stabilize the U.S. economy and the global economies it supports.
The meltdown extended last week and over the weekend to Europe and now, Asia. Following on the heels of the British government rescue of mortgage-lender Bradford and Bingley late last month and HBOS’s sale to Lloyds TSB last week, the Belgian government announced that it will pay $23 billion to assume control of Fortis ’ Dutch operations, which includes the recently acquired ABN Amro. Fortis Luxembourg is also set to be fully nationalized. And Swiss banking giant UBS admitted it has been hit hard by the mortgage crisis. Over the weekend, Europe’s four major powers vowed to help banks access funds they desperately need to cover debt obligations.
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Posted
10/11/2008 11:05:40 AM |
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A new generation of warfare
Brett M. Decker
Militaries learn while the battle space evolves
The appropriate posture for deployed U.S. military forces is a hot topic of debate in America's presidential election. To deflect attention from the fact that he opposed a surge strategy that successfully pacified Iraq, Democrat Barack Obama repeatedly is insisting that the strategy that worked in Iraq will not work in Afghanistan as well. Republican John McCain counters that counterinsurgency operations are never cookie-cutter endeavors and that flexibility and ability to adapt to the specific situation on the ground are universal counterinsurgency principles that certainly can be applied in Afghanistan. Despite what Obama likes to believe is true, the contemporary way of war is winnable for a superpower--it simply can take some time for militaries to recognize and adjust as warfare evolves.
Col. Thomas X. Hammes’s book The Sling and the Stone: On War in the 21st Century offers an in-depth narrative on different historical stages of warfare and what the author perceives to be war’s Fourth Generation (4GW), which he says is where we are stuck now. This historical backdrop sets up his main thesis, which is that the United States military and its political leadership need to understand unconventional war because it is the wave of the future. Because the United States is so powerful in conventional military terms that its superiority cannot wisely be confronted by conventional means, enemies will increasingly seek unconventional methods to attack America and her interests and allies. To be ready for the conflicts of the future, Col. Hammes provides a comprehensive alternative for what the future of war might look like, how the military can recognize a new mode of warfare as it is implemented by enemies, and how to respond to it.
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Posted
10/9/2008 7:19:55 AM |
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The enemy that dare not speak its name
Brett M. Decker
Islamic religious fanaticism is central to terrorism
America's two presidential candidates are duking it out over who is best-suited to be commander-in-chief of the world's only superpower. At the heart of the debate is a disagreement about how to handle the conflicts in Iraq and Afghanistan. Democrat Barack Osama consistently has advocated withdrawal to avoid defeat and humiliation similar to that suffered in Vietnam. Republican John McCain, a hero of the Vietnam War, insists that there are inherent differences in America's current enemy and the enemy a generation ago. The simplest way to separate these wars is to define classical and contemporary insurgency and how it applies in the relevant cases.
The fundamental difference between classical and contemporary insurgency is based on different global contexts of the times. In the past, when the nation state or a centralized government was the major institutional guarantor of stability, insurgents sought to undermine and replace that power base. We can refer to that phenomenon as classical insurgency. Insurgents, to be able to confront and defeat superior enemies, must be flexible and adapt as times change. Thus, as governing and business institutions evolved from a largely national posture to a broader international focus, insurgent organizations adapted to keep pace with the times and assumed an identity, operational vision and battlefields less defined (and less constricted) by national boundaries. Likewise, contemporary insurgents harbor less cohesive post-insurgency plans. A more globalized but less precise philosophy of insurgency is part and parcel to what we understand to be contemporary insurgency. Modern insurgency has gone global to upset the apple cart that is our modern interconnected world.
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Posted
10/7/2008 7:09:52 AM |
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Whatever it takes
Brett M. Decker
Does the West have one hand tied behind its back in terror war?
I recently had the fortune of meeting a real hero, Navy Cross recipient and bestselling author. Lone Survivor is Navy SEAL Marcus Luttrell’s account of the June 2005 mission in Afghanistan during which his whole team and a helicopter full of SEAL reinforcements were killed fighting the Taliban in the mountains along the Pakistani border. The book gives useful insight into SEAL training and preparedness before providing a gripping narrative of the showdown against the al Qaeda-backed Afghan radicals. As Petty Officer First Class Luttrell explains it, the SEALs (as well as other U.S. combat troops, especially Special Forces) are capable and equipped to defeat any foe on the battlefield, but what limited their effectiveness in the Afghan mountains were counterproductive rules of engagement (ROE).
The view expressed by this combat veteran is relevant because it is his opinion that his comrades in arms were lost because they second-guessed and then reversed what their training and instincts recommended they do because they were afraid of legal ramifications for using force deemed unnecessary by political standards back home. Specifically, he recounts how his team came across what were certain to be Taliban scouts on a mountainside trail. The four SEALs did not have the capacity to take them prisoner in the middle of a mission in which they needed to move quickly through hostile territory, but they could not kill the scouts because they were unarmed and dressed as goat herders. The result was that U.S. forces had to let the enemy go free with the near certainty that their location would be reported by the scouts--which in this case it was, leading to the largest loss of life in one engagement in SEAL history.
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Posted
10/7/2008 4:28:33 AM |
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Transparency in crisis
Michael Alan Hamlin
Not many of us are laughing...
Like investors all over the world, I have closely followed the value of the international funds we are invested in as well as a small portfolio of equities we manage directly over the past several weeks as the subprime mortgage crisis grotesquely morphed into the largest global financial crisis in history. This has been a pretty morbidly depressing experience for most of us. As one associate told me last week, “virtually no one has been unscathed.”
It’s important to understand that most managed funds are not exposed to the toxic mortgages and derivatives that are responsible for the crisis. The funds that I am familiar with, for example, are almost exclusively invested in European, Asian, and to a substantially less degree, U.S. equities. But the crisis has universally spooked investors, and as a result no fund and no investor have gone unaffected. A colleague quipped in conversation as I prepared this column, “I told my wife I had learned how to lose a small fortune - start with a big one.” At least, I responded, we can still laugh about it.
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Posted
10/1/2008 11:00:20 AM |
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