October, 2009

October 5, 2009

Hi and welcome to ELC,

I hope this newsletter finds you in good spirits and good health. Two excellent learning sessions occurred for me this week - the Vistage All County Economic Summit and the Technology Council of Southern California symposium on "The End of Software: The Beginning of the Cloud." I'll share a bit about that (on-line, follow the link) as well as review the excellent book - Cost Recovery by Richard Lanza. Enjoy!

Dave Kinnear
Executive Leader Coach
CEO, dbkAssociates, Inc.

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Notes on the Economy - Groan

Vistgage All County Economic Summit 9/29/09

Let's just say that this was not three hours of upbeat wonderful news. About 45 minutes into the presentation I was looking to slit my wrists. Then, we did get some good news and I was glad they took the sharp objects away from me!

If you think we're going to have a "W" or a "V" recovery, Alan Beaulieu, long time advisor to Vistage International and well known economist, would beg to differ. The Institute for Trend Research has been uncannily accurate in predicting the economic trends and Alan is now suggesting that we will see a very slow, gradual upturn off the bottom now forming. Here are some bullet points from my notes:

• Not a "W," shaped recovery nor a "V" shaped recovery. Recovery will be slow, gradual and messy.
• Industrial Production "bouncing off a bottom."
• Our economy will remind us of the 1970's. It will be a Jobless recovery. Inflation.
• Retail will continue to contract.
• The USA will not return to real growth until after 2013.
• Credit movement is just about back to "normal for a recession."
• Inflation going up so plan on reduced cash & Purchasing power.
• Property (real estate) is good investment now. Rents will slowly trend up.
• Leading into this, may need to begin leveraging again.
• Small amount of growth in USA production at this point.
• There is no way that the Health Care reform will avoid a huge economic impact.
• We are in debt up to our eyeballs. Maybe 120% of GDP in 2019. This is the crisis of our generation. China may look at this situation as being their opportunity to become "No. 1" economy in the world.
• Demographics are more positive - grow to 400-500 million: more taxpayers!
• Manufacturing in the USA is third largest in the world. Our threat is low cost providers NOT China per se.
• Stock Market: Firm, sustainable bull market. BUT slow - back to Dec. 2007 levels in 2020.
• Housing starts will turn around in 2010. Bleeding has stopped already.
• 2029 - Global Depression. Prepare yourself and your business. 100 year cycle.
• Fifteen years from now before national housing prices are back to the high of 2007.

There was, of course, much discussion around these major points. The bullet summary doesn't do justice to the depth of detail and data behind what is stated here.

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Ask the Expert

Ever wonder if you're hiring and interviewing process is going to get you in trouble? What are all the pitfalls that we need to avoid? How, in this litigious society, do we make sure we do what's expected and follow best practices? Well our reigning expert on labor issues, Jeff Wertheimer (Rutan & Tucker) and his associate, Brandon Sylvia, give us a concise and very useful overview of just what we should be thinking about. Read More . . .

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Book Review

COST RECOVERY: Turning your accounts payable department into a profit center—by Richard B. Lanza

Mr. Lanza has authored an excellent how-to book for auditing your accounts payable functions to determine how you might recover costs for your company. This 300 page textbook (not including appendices) is logically organized, clearly written and meant to be a work guide. While I read it from front to back, I can easily imagine jumping in at a chapter that addresses an issue I wish to tackle in my company. Read More . . .

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