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Competing in a Chaotic EconomyCompeting in a Chaotic EconomyTodd BuchholzTodd Buchholz
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Who’s Faster? Who’s Bigger?Who’s Faster? Who’s Bigger?
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Hyper-CompetitionHyper-Competition
SpeedSpeed ScissorsScissors
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New Silk RoutesNew Silk Routes
RANK 1999RANK 1999 20052005
SinopecSinopec 50 750 7
SabicSabic 32 1032 10
Formosa PlFormosa Pl 47 11 47 11
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Middle East Chemical Plantsquadruple 1990-2005
GCC $35b trade with AsiaGCC FTA deals with China, India, NZ
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Free Trade Backlash:Free Trade Backlash:
Colombia, Panama FTAColombia, Panama FTA Sovereign Wealth FearsSovereign Wealth Fears ““Buy America?”Buy America?” India v. Steel; Russia v. India v. Steel; Russia v.
Cars and Chickens; Cars and Chickens; Argentina v. auto parts; Argentina v. auto parts;
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Beyond the Safety Net?
Pensions: Defined Benefit The Golden Age of Unions is gone The Nanny State is broke and broken
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The High Price of a Free The High Price of a Free Lunch? Lunch?
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A.P. Giannini: Gladiator of A.P. Giannini: Gladiator of FinanceFinance
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Compete on Expertise and Compete on Expertise and ServiceService
How many live in How many live in Arizona?Arizona?
Two languagesTwo languages Non-banker hoursNon-banker hours ““women’s women’s
department” 3 of first department” 3 of first 11 loans to women11 loans to women
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Solutions, Not SlicesSolutions, Not Slices
Must supply complete Must supply complete solutions – from solutions – from concept thru the life concept thru the life of the service or of the service or productproduct
Fedex: not just Fedex: not just envelopes. The plane envelopes. The plane is is youryour warehouse. warehouse. Inventory/Sales fallsInventory/Sales falls
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We Can Beat Our FOE’s
• Federal Reserve Hiked Rates Too Much
• OPEC Tightened the Noose
• Euro Fell Too Far
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Does China Save Capitalism?Does China Save Capitalism?
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@Rushbook@Rushbook
The Race for IQ PointsThe Race for IQ Points1992-20021992-2002
StevedoresStevedores -17%-17% TimberTimber -32%-32% Farm Farm -20%-20% Sewing Sewing -50%-50% TypesettersTypesetters -62%-62%
Elect. EngineersElect. Engineers +28% +28% Med. ScientistsMed. Scientists +33% +33% ArchitectsArchitects +44% +44% Legal AssistantsLegal Assistants +66% +66% Fin. ServicesFin. Services +78% +78%
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Peak Oil or Peak People?Peak Oil or Peak People? Petroleum Petroleum
engineering students engineering students fall 90% since 1981fall 90% since 1981
Agricultural scientists Agricultural scientists stagnant for 20 yearsstagnant for 20 years
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Icebergs or Snowcones?
Inflation Oil Spikes vs. Oil Crashes China Spikes vs. Crashes Commercial R.E. Government Debt
Cash is still king. If you can offer better financing, do it
Provide “solutions,” not just slices Don’t assume runaway energy prices Stalling growth in Europe keeps prices down Lookout for the “Obama Rally” Stay in touch with your customers!
• And with me @Rushbook and www.toddbuchholz.com
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Goodbye Eden, Hello RUSH
Twitter: Rushbook
Amazing Race
Can developing countries get rich before getting old?
Can they get rich enough to get clean?
Back to the Future?
India used to account for 33% of the world's GDP; then fell to 3%; now may rise to 25%
India’s Promise and Challenges Up to 25% of the world's new
workers will be Indian (2015)
A bigger movie market than America and Canada combined, 3.2 billion tickets
Average Indian nearly 20 years younger than average Japanese (26 vs 45)
In recent decades, 500,000 female births have gone missing each year due to (illegal) sex selection
Sparks Flying
42% of the world's poor ; 44% rural w/o electricity
GDP per capita will quadruple from 2007 to 2020 (Goldman Sachs)
Tech capital Bangalore increases office supply 6x since 2006; more Grade-A offices than Singapore
Losing outsource biz with higher wages
Inflation and GDP 8.5%; C/A 4%
Second largest arms importer; $50 billion on defense purchases in the last decade
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Budget VigilantesBudget Vigilantes
(c)Todd G. Buchholz 2010 52
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Pigou vs. KeynesPigou vs. Keynes
____ __________ ______ ________ ________
____________________
Money supplyMoney supply Discounts everywhereDiscounts everywhere
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The New Faces
12%
71%
12%
1%
4%
13%
53%
24%
1%
9%
Black
Asian
Non-Hispanic White
Hispanic
Other
2000 2050
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““I don’t know Lauder well but she keeps I don’t know Lauder well but she keeps sending me things” Princess Gracesending me things” Princess Grace
Holy NY Landmarks; Neiman Holy NY Landmarks; Neiman MarcusMarcus
Galleries LafayetteGalleries Lafayette Youth Dew, Patagonia Youth Dew, Patagonia
ToothfishToothfish Shampoo; RinseShampoo; Rinse
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Pickup Trucks Trounce CarsPickup Trucks Trounce Cars
+16.7 vs. 5.3% for cars+16.7 vs. 5.3% for cars
Brazil Rising GDP is the size of
Mexico + Venezuela + Argentina
Exports to China (15%), US (10%)
Brazilian oil discoveries accounted for 50% of those made in 2010
Too Much Hype?
In 10 years, 10% of Brazil's population rescued from poverty, more than population of NY state
“Hot money” Real +40% since 2006, commodity speculation, high rates, inflation
Imports +100%/exports +5% Household income/debt 25% GDP growth 4%, from 7.5%
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Budget VigilantesBudget Vigilantes
(c)Todd G. Buchholz 2010 62
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No “Skin in the Game”No “Skin in the Game”
““trust me” papertrust me” paper Avoid Basel – new Avoid Basel – new
paper after LTCMpaper after LTCM Avalanche of defaults, Avalanche of defaults,
downgrades, CDS, downgrades, CDS, mark-to-market, mark-to-market, pension exitspension exits
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World Trade Pumps UpWorld Trade Pumps Up
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Avoid Commodity HellAvoid Commodity Hell
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New MarketsInnovationService Branding Cost Control
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Five Missions
Understand your members!
Identify your most profitable products
Cross-sell and up-sell products that fit your client/members best
Reduce the “cost-to-serve” and “hassle factors”
Adopt technology that makes clients and employees more productive, and happier
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Customer FocusCustomer Focus
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cross-selling concierge
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Who’s Supporting Whom?Who’s Supporting Whom?
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Real Estate Looking for BottomReal Estate Looking for Bottom
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