I’ve recently been on a business/leadership book binge.  It helps that I listen to audiobooks to and from work.  Check out audible.com, I love their service.  However, I thought I would quickly blog about a few that I have recently completed, some for the second, third, or even fifth time.

First,  Leadership and Self-deception by The Arbinger Institute.  This book is one of the most impacting leadership book I’ve ever read.  It speaks to not what you do but why you do it.  The focus of the book is changing your motives and way of being toward people…recognizing how we are driven and how to improve.  It is an easy read, as the book is written in the story/parable format. I highly recommend the book to anyone looking to improve in their professional or personal life.

The Four Obsessions of an Extraordinary Executive by Patrick Lencioni.  I really enjoy Lencioni’s work and have read almost everything he has written.  This book, however, is one of his most impactful.  Again, the book is written in the story/parable format, but the latter fourth of the text is actually instructions on implementing the four obsessions, which are:

1. Build and maintain a cohesive leadership team
2. Create organizational clarity
3. Over-communicate organizational clarity
4. Reinforce organizational clarity through human systems

This book is a “must read”, in my humble opinion, for anyone in an executive position or striving to be an executive.  The first time I read this book I was a project manager for a large financial institution with no direct reports.  Many of the principles didn’t really hit home at the time, but it started the foundation.  I’m now a Vice President of an organization with a reasonably sized team and I see the obsessions in a bit of a different light. 

Pick up these books and check them out.  It won’t be a waste of your time.

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I didn’t vote for the current president.  I don’t like his policies, or economic mentality.  With that said, however, I do hope and pray for him and his administration that they can help this country out of the economic mess that we are in.  However, I don’t think he is going in the right direction.  Articles like this confirm that.  Why would Larry Summers still be in such an influential role when his loyalties obviously lie elsewhere, or at least he is conflicted.  Check this out…

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This article states pretty clearly the insanity that these bailouts with the Troubled Asset Relief Program.  Why do we keep companies and their incompetent managers in business.  This crap about systemic risk and that we can’t afford to let business fail is ridiculous.  I’m not saying that a failure of a company like Citi or B of A wouldn’t cause issues, however aren’t we just pushing out the inevitable.  If the CEOs and board of directors can’t run the company now why will they be able to in the future.  This circumvention of capitalism drives me nuts.  Liquidate the assets to people who can manage them and let’s move on.  Click here to read the article.

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I’ve always wanted to be a pilot and fly my own plane.  This really sparks my interest…

Check it out

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I just came across this article in the NYT.  Great thoughts about what the Government should do with GM.  Sorkin does a great job summarizing the situation with GM and why Chapter 11 is a better job.  Check it out.

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So I’ve been reading on CNBC about the big three automakers and their visit to Congress in an attempt to get a $25 billion bailout.  Next, they are talking about the Homebuilders potentially looking for a bailout.  The government has bailed out financial institutions, mortgage companies, everyone.  This is infuriating and ridiculous.  I have gradually watched as individuals in society abdicate more and more of their responsibility to other, to the government, to anyone but where it belongs…with themselves.  They do this through lawsuits (What?  My coffee was hot?  it could burn me?  I’m suing) to looking to the government to bail them out of bad choices.  However, I really didn’t expect to see businesses start to go to the government and expect money because they made bad choices.  Business has been and always will be about spending as little money has possible while planting and cultivating an idea, and then turning around and selling that idea for as much money as possible.  That requires sound decision making, intelligent choices, sometimes doing without…in fine, WORK.  Now, we see these CEOs who make way too much money for the hole they have dug, begging the government for a handout and threatening that the auto industry will never be the same.

Well, I can’t help but wonder if that isn’t the idea.  Yes, it would suck for all those people to lose their jobs, and yes, it would suck for the economy for a time.  However, doesn’t anyone believe in innovation and business cycles any longer.  The industry for the cotton gin dried up eventually.  I don’t see much of a demand for typewriters any longer.  When was the last time you saw a commercial for a new and innovative VCR?  Come on…get real!  I’m not saying that cars and trucks are past us, rather that you either innovate or die.  How can these companies expect that the same thing they were doing 10 or 20 years ago still works today.  Make cuts, change marketing, develop better product, stay in front of the curve rather than riding the back side.  And for heaven’s sake, grow a set and face the fact that you made wrong decisions and fix it.

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Regardless of who you plan to vote for today, just get out and do it.  It isn’t just a right, it is a responsibility to step up and voice your opinion of who you think best will lead our country, state, community.  The more the citizens neglect their duty, the more we move to a country run by special interest groups who have their own agenda.  Get out an vote!

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I’m typically not an angry or cynical person.  However, this economic crisis is really starting to piss me off.  The most recent set of events that angers me is the idea that we need to save the mortgages of people who got into homes they never should have, and that they can’t afford.  Now, I’m not advocating that people get kicked out of their homes and onto the street, but the fact that they and their mortgage broker got into a home they couldn’t afford after their ARM kicked in shouldn’t turn into my tax burden. 

The reality is that the housing market is still overpriced in many areas.  And that for the median housing price to come in line with the median household income, prices still need to fall in many areas.  This, as painful as it is, comes about by foreclosures and flooding the market with available homes and a lack of buyers.  Simple supply and demand. 

Here are two interesting articles about this.  First, Diana Olick on CNBC.com states in her piece here
the following:

“Let’s say you take all the people who claim to be in trouble on their mortgages. Take those mortgages away, lower the value of the house to the current market price, and calculate the monthly payment based on the current interest rate on the 30-year fixed (and I mean conforming, not jumbo) which is around 6.35 percent. Oh, and by the way the historical average on the 30-year fixed over the last 25 years happens to be 7.89 percent, so I’m offering a deal. How many of those folks could still afford the home? My guess is that some could, but many more could not.

What I’m getting at here is that no matter how far we go in modifying, restructuring, writing down principal on loans in order to stop foreclosures, the bottom line is that most of the borrowers in trouble had no business being in the homes they bought in the first place. You can modify their loans for five years, but they will probably lose the home anyway.”

Very true statement.  Buy rushing in to save these mortgages that shouldn’t be saved you are simply delaying the inevitable as well as hurting me, the taxpayer, that didn’t jump into a home when I shouldn’t have or that I couldn’t afford.

The other interesting article is written by Barry Ritholtz on his blog The Big Picture.  He talks about the Moral Hazard of the Coming Mortgage Bailout.  Check it out here. He leads with this quote:

“Why am I being punished for having bought a house I could afford? I am beginning to think I would have rocks in my head if I keep paying my mortgage.”

-Todd Lawrence, Norwich, CT homeowner with a traditional 30-year mortgage

I love that quote.  He has a great chart showing how the price of homes is still elevated.  He also calls that you only want to save the homes where there is a reasonable justification for a mortgage workout. 

These are two excellent articles and really show why the mad scramble to save mortgages could actually hurt the economy and extend this recession more than help.  The US needs to understand that we are going to be in for some pain, and that it is necessary.  We did a lot of stupid things, but delaying the pain only delays the inevitable.’

Just my thoughts…

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So I’m not close to an economic or accounting expert.  However, I’ve been in business for a while and the current request by financial firms on Wall Street that FASB 157 be suspended is ludicrous.  I won’t even attempt to articulate all the reasons why…I’ll leave that up to Barry Ritholtz in this post.  However, the thought that a company can hide the true value of their asset simply because it has dropped in value below what they are willing to bear is insane.

Amidst this entire credit/financial crisis, the underlying theme seems to be people abdicating their responsibility to another.  Wall Street blaming Washington for not keeping them in check.  Investors/companies seeking “get rich quick” schemes to create new trading mechanisms for which the existing rules don’t work.  Bankers and Lenders greedy to get rich quick by throwing money at consumers to buy homes they couldn’t afford or qualify for.  And Consumers buying homes they knew they couldn’t afford, but banking on the increasing home value to save them down the road.  The worst part here, is that no one is willing to say “We got it wrong, let’s get it fixed.”  Rather they are doing all they can to hide their errors (which everyone knows about) and hoping this blows over.  Insanity…

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