These are hard to predict, large impact events that are rare beyond the realms of normal expectation. Some people believe that all significant consequential events in history originated as Black Swans!
Who would have expected a series of what appeared to be unrelated events such as the Sub-Prime mortgage lending exposures, Northern Rock and concerns re long-term oil availability would give rise to such far reaching economic issues. It does remind us all that financial markets are based largely on a foundation of faith rather than something a bit more substantial.
Who would have expected a series of what appeared to be unrelated events such as the Sub-Prime mortgage lending exposures, Northern Rock and concerns re long-term oil availability would give rise to such far reaching economic issues. It does remind us all that financial markets are based largely on a foundation of faith rather than something a bit more substantial.
It is, however, a bit encouraging that we appear to have avoided the degree of panic that devastated the markets in 1987. Whatever we feel about the current state of UK politics, the government and Bank Of England didn't just stare into the headlights of the car crash heading their way and were able to take some measures to take some of the initial sting out of this large market correction.
However, many businesses that built on the back of a long bull market came crashing down. Silverjet became the latest airline to collapse when oil prices hit $130, levels that simply wouldn't have been factored into it's business plan and banking arrangements. It joins six other airlines that have gone into receivership in the past 6 months. The only remaining dedicated business-class airline is France's L'Avion.
I used the term correction earlier rather than recession. If you believe that global marketplaces are self-correcting this is a much more logical term to apply. It also lets you look a bit deeper into the opportunities rather than just getting depressed about the state of the economy and possibly taking a course of events that just make things worse.
Before we feel real sorry for all those highly paid derivatives dealers who built careers around Sub-Prime loans and oil prices it's worth noting that they are already generating a lot of new wealth by changing the nature of those instruments to bet on the direction the market is now moving. Perhaps we need to look at things a bit differently.
We have had many years of very cheap airflights. I seem to remember that you could get a flight into Europe for as little as £10 if you booked at the right time. All of us enjoy travelling, seeing new places and burning a bit of business expenses but it is hard to reconcile the sense when we look at the real costs, efficiencies and inevitable contribution to global warming. I was really encouraged when Heather McGregor, principle shareholder of head hunter Taylor Bennet, who had booked a £1,000 seat on Silverjet, was interviewed. She commented to the journalist that "video-conferencing is looking good".
I remember early in my career with IBM having to go into a large video conferencing room for a global meeting. The camera was sound activated and slowly swung round on a turret when it detected a sound. The image quality was truly awful and out of sync. Aside from the huge amounts of fun to be had by the occasional clearing of ones throat it was a pretty useless communications tool.
Since then the quality and ease of use of video solutions has been getting really good. It's never going to replace the benefits of a firm handshake or 1to1 lunch but it is pretty damn effective for most business meetings and significantly reduces operational costs. Many companies now have the networking infrastructure to support these technologies but have still not taken that first step. I'm guessing that with cheap air travel and low key environmental drivers we all lacked enough motivation to embrace these opportunities.
Perhaps the Black Swan has helped us all to now see a bit of sense here.....
However, many businesses that built on the back of a long bull market came crashing down. Silverjet became the latest airline to collapse when oil prices hit $130, levels that simply wouldn't have been factored into it's business plan and banking arrangements. It joins six other airlines that have gone into receivership in the past 6 months. The only remaining dedicated business-class airline is France's L'Avion.
I used the term correction earlier rather than recession. If you believe that global marketplaces are self-correcting this is a much more logical term to apply. It also lets you look a bit deeper into the opportunities rather than just getting depressed about the state of the economy and possibly taking a course of events that just make things worse.
Before we feel real sorry for all those highly paid derivatives dealers who built careers around Sub-Prime loans and oil prices it's worth noting that they are already generating a lot of new wealth by changing the nature of those instruments to bet on the direction the market is now moving. Perhaps we need to look at things a bit differently.
We have had many years of very cheap airflights. I seem to remember that you could get a flight into Europe for as little as £10 if you booked at the right time. All of us enjoy travelling, seeing new places and burning a bit of business expenses but it is hard to reconcile the sense when we look at the real costs, efficiencies and inevitable contribution to global warming. I was really encouraged when Heather McGregor, principle shareholder of head hunter Taylor Bennet, who had booked a £1,000 seat on Silverjet, was interviewed. She commented to the journalist that "video-conferencing is looking good".
I remember early in my career with IBM having to go into a large video conferencing room for a global meeting. The camera was sound activated and slowly swung round on a turret when it detected a sound. The image quality was truly awful and out of sync. Aside from the huge amounts of fun to be had by the occasional clearing of ones throat it was a pretty useless communications tool.
Since then the quality and ease of use of video solutions has been getting really good. It's never going to replace the benefits of a firm handshake or 1to1 lunch but it is pretty damn effective for most business meetings and significantly reduces operational costs. Many companies now have the networking infrastructure to support these technologies but have still not taken that first step. I'm guessing that with cheap air travel and low key environmental drivers we all lacked enough motivation to embrace these opportunities.
Perhaps the Black Swan has helped us all to now see a bit of sense here.....
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2 comments:
I tend to agree, the rapidly increasing oil price will help to encourage many businesses to adopt alternative solutions such as video conferencing.
Great article, lets hope UK businesses wake up before it is too late!
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