Goldman Sachs reports big profit plunge
Earnings sink 70% but beat analyst projections. Stock falls, but CEO insists that firm is ‘well positioned’ and CFO rules out a merger with a bank for now. (Headline from 9-16-08 news article)
Whew! Just when you think the economy couldn’t get any worse, it does. Seismic financial industry shock waves are rippling ripping through the business world, causing fear and trembling among leaders of Fortune 100 companies down to single-shingle entrepreneurs like me and many Word Sell readers. I don’t know if talking about it does any good, but can it do any harm?
Here are a few thoughts at large about our shared economic woes. What do you think about all this? How are you coping?
… Greed got us into the first mess. Greed got us into the second mess. The home mortgage crisis was caused by, or at least exacerbated by, greedy lenders pandering to acquisitive borrowers. More recently, the plummeting stock values of lending institutions are in large part the result of short sighted short sellers who are milking the situation for fat short term profits.
… Some value greater than greed must rule if are to recover from this horror show and prevent a repeat performance.
… Have we made business so complex it’s gone beyond our ability to manage it? Mortgage loans used to be simple and stable. Today, banking executives and regulators can’t determine who owns what part of the debt for a given class of mortgage loans. Can we untangle the knots in our regulatory system, tax code, etc., even if we really, really want to? I wonder …
… On a positive note, crises come and go. Business is cyclical. Problem is, downturns seem to last forever and boom periods seem to come and go in an instant. In marketing, it’s widely accepted that people are more interested in avoiding pain than in obtaining gain. So when we’re hurting, we dwell on it. That’s why I think investing pros are correct when they advise people to switch off the news and watch Gomer Pyle reruns. What you do know can hurt you. Is now the time to bury your head in the sand?
(Photo – Ostrich – Struthio Camelus by redsea 2006 on Flickr)