Risky Lessons from ’87 and ’07

ICangles Investment Post…

History didn’t repeat in the 1987 stock market crash and the bear market that began in 2007, but it rhymed. Both market tops were propelled by the use of derivate security products that falsely promised to remove risk from investing, were characterized by unrealistically high valuations around an asset class and witnessed an important financial market freeze due to an ‘insurance run’. Although the general symptoms were the same however, the specifics were very different. And it is important to understand both the similarities and differences in order to spot future stock bear markets and assess the current market.

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Great Recession Over?

ICangles Investment Post…

Earlier this week the National Bureau of Economic Research, the official arbiter of the economy, declared that the so-called Great Recession ended in June 2009. Having started in December 2007 and lasting for 18 months, it represented the longest recession since the end of the Great Depression. The NBER found that a mix of economic indicators it tracks began a period of sustained growth starting last June, driving the economy as measured by gross domestic product (GDP) higher. But whether you consider the recession over depends a lot on your definition of a recession.

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Reading the Unemployment Tea Leaves

ICangles Investment Post…

Looking into and understanding the devil of the details in government employment and economic reports reveals that the job market is likely to remain poor for some time to come. This most recent report however was marginally positive. The Labor Department reported on Friday that the unemployment rate rose slightly from 9.5 percent in July to 9.6 percent in August. In the stock market everything is relative, and relatively speaking the results of a slight increase were marginally positive because economist expected an even bigger rise in unemployment. The stock market response might have been called a relief rally had it been stronger, but it was more of a relief pop with the Dow Jones Industrial Average rising a little over 100 points.

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Mugged by Reality

ICangles Communications Post…

Revised Q1 GDP was released last Friday showing anemic 1.6 percent growth. This came on top of still high unemployment rates and plummeting home sale numbers. It is safe to say that reality hasn’t just mugged the Obama administration’s recovery summer PR campaign aimed at the midterm elections, but knifed it and left it for dead in the gutter. To keep this post apolitical, spread the criticism around and also mix a few metaphors, the Bush administration itself crashed and burned when the president pulled the PR stunt of landing on a carrier deck after the invasion of Iraq under a mission accomplished banner. Both cases illustrate the dangers of trumpeting future successes before they have been realized. Credibility tends to be far easier to keep by being conservative in one’s promises then it is to get back once lost.

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BP & HP Crisis Communication Lessons

ICangles Communications Post…

It’s been a busy 2010 in the world of crisis PR with two CEO’s of major companies gone—Tony Hayward of British Petroleum because of how he handled a crisis and Mark Hurd of Hewlett Packard for being at the center of one. In the case of Hayward he delivered a public relations case study of what not to do in a crisis. Although there is a lot to chose from in the way of his gaffes let’s focus on three highlights.

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The Three Bears Economy

ICangles Investment Post…

In hindsight it’s ironic that the economy of the nineties was described as the Goldilocks economy—not too hot, not too cold, but just right for high employment and strong growth. Ironic, because the real moral of the story people should have heeded is that there is no free lunch. And, like in the Goldilocks’ fairy tale, three unfriendly bears emerged. If the nineties was the Goldilocks economy then the period we now find ourselves in of both weak growth and employment might best be described as the three bears economy. Since 2000 there was the baby bear of the dotcom bubble, the mamma bear of the residential real estate bubble and the daddy bear of the government debt bubble—corporate, consumer and now government-led bubbles of unproductive and hence unsustainable spending.

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Sometimes Say and Do Nothing

ICangles Communications Post…

Today, when I was doing a little web surfing on the latest sports news I couldn’t help but read about an ESPN article on basketball star LeBron James. I couldn’t help but come across it because LeBron’s PR team had gotten ESPN to kill the story after it was posted. As a result instead of one forgettable ESPN online article that I amongst others would never have paid any attention to, there are now a multitude of articles about the pulled article. Also, because of the age of the Internet that pulled article still lives on other websites.

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Prologue

Welcome to ICangles…

Investment & Communication Angles focuses on subjects germane to my professional experience—investments and communications consulting from investor and public relations to branding and marketing. I’m  categorizing most posts as either investment or communications related with investor relations posts getting dropped into the communications bucket. It may be a bit of an eclectic mix, but that is a fair characterization and by far not the worst that could be said about me. On a positive note some have found my musings on various subjects to be of interest, and hopefully you will also. Having previously been a magazine columnist and contributed articles to various publications I am looking forward to the freedom of blogging. I hope you will look forward to my occasional blog posts.