All GLG News Analyses Filed Under: Economics

IMF approves third tranche of the loan to Ukraine

August 7, 2009

Analysis by: GLG Expert Contributor

Analysis of:IMF Completes Second Review Under Stand-By Arrangement with Ukraine and Approves US$3.3 Billion Disbursement | www.imf.org

According to the International Monetary Fund (IMF), the Executive Board of the fund completed the second review of Ukraine’s economic performance under the two-year Stand-By Arrangement (SBA) on July 28, and approved the immediate release of the third tranche under the arrangement equivalent to about USD 3.3 billion. This brings total disbursements under the SBA to about USD 10.9 billion out of negotiated USD 16.4 billion.

Diran MajarianManaging DirectorAmalia Tankers Inc

Is Wall Street optimism over reaching rational expectations?

July 31, 2009

Analysis of:PIMCO - Investment Outlook August 2009 Gross Investment Potion | www.pimco.com

PIMCO's Bill Gross argues that median GDP and capital stock returns have been based on 5% PA whereas the government policy efforts to re-inflate the economy have hidden costs and restraints that will reduce median GDP and capital stock returns to 3% PA. This means a new period of sluggish growth and high unemployment where people will have less disposable income.  

The real question should be when will the economy turn positive?

July 20, 2009

Analysis by: GLG Expert Contributor

Analysis of:Fed: Unemployment rate could top 10% in 2009 | www.bizjournals.com

Will employment levels recover quickly once the economy turns positive? The best simple answer is a simple question: Why should they? After the last great downfall in Wall Street, employers will be very cautious hiring new people and they should indeed. Although history repeats itself things a never the same no matter how close the resemblance.

Slow Build-out After Recovery without Changes in Free Trade Policies

July 18, 2009

Analysis by: GLG Expert Contributor

Analysis of:Fed: Unemployment rate could top 10% in 2009 | www.bizjournals.com

The QueERI-International model of the global economy integrates international trade effects at the industry level of detail with production and employment through an interrelated system for 72 countries comprising 90% or more of world output. Employment growth is measured at an industry level. The recovery of the American economy, when combined with the open markets leads to a continued decline in American-based manufacturing jobs.

Jack LiftonManaging DirectorJack Lifton, LLC

G.E. Follows Toyota and Nissan to Expoit Michigan's Strengths and Expose Michigan's Glaring Weakness

June 29, 2009

Analysis of:GE Picks Michigan for R&D Center | www.adnkronos.com

General Electric has decided to come to Michigan to employ out of work automotive manufacturing engineers and researchers at bargain prices. "GE said it is looking for specialists in developing composites, machining, inspection, casting and coating technologies for its aviation and energy businesses. The auto industry employed many engineers with expertise in these areas." The Michigan mainstream media seems to believe this will bring jobs for the daily growing army of unemployed low skilled automotive workers who haunt Michigan's I-75 corridor between Detroit and Bay city; there are 100s of thousands of such workers with at most a high school education. Michigan has no aviation and little energy business. GE's products would clearly be intended for other states and other countries, and few such businesses can be expected to come to Michigan to recruit low skilled workers. Will GE pledge to only hire Americans and to build manufacturing plants in Michigan also???

Instead, CEOs Need to Come Up with Smart Questions

May 26, 2009

Analysis by: GLG Expert Contributor

Analysis of:CEOs starting to run out of answers | www.vimay-group.com

Crises are acid tests for CEOs expected capabilities. Anglo-Saxon capitalism has created a governance and management model that has put excessive weight on the CEO figure. Under pressure, people tend to alter their reactions to stimuli and tend to develop different interpretations of reality. CEOs need to be aware that "bounded rationality" is a fact and their decisions will always be based on a limited, manageable piece of information. They will use intuition and a knowledge base with all its accumulated bias. That's why they need to listen to smart people, and instead of prompting answers to broad and unstructured questions, they need to ask the right and smart questions. They also need to manage complexity, and not try to reduce it by simply ignoring what doesn't fit their mental models. 

Unusual times - unusual actions

May 14, 2009

Analysis by: GLG Expert Contributor

Analysis of:Financial Times FT.com | www.ft.com

It seems like a full circle - now more and more government action is getting recommended in the all important financial sector in countries where capitalism was born and thrived.  Surely, the situation has to be absolutely desperate for even such a recommendation to be made.  The fact that it is being welcomed means that it is total u-turn in thinking, perhaps dictated by survival instinct.  So, the message remains there - it is a short-term measure adopted in an emergency and it must stay this way.  If adhered to, we should not see more bail-outs in the coming days.

Diran MajarianManaging DirectorAmalia Tankers Inc

The Liquidationists vs Big Government: mounting public concern

May 7, 2009

Analysis of:Financial Times FT.com | www.ft.com

There is a growing debate that the deadwood has be cleared in the US economy for a meaningful recovery to take place.  So far the Beltway has avoided and short-circuited normal bankruptcy procedures preferring back-room deals without much transparency like the Bear Sterns -JP Morgan shotgun marriage or complicated schemes like the Chrysler restructuring where FIAT puts up no money and is taxpayer funded. Concern is mounting that this is not a sustainable or viable strategy.

CEOs Never Had All The Answers

May 4, 2009

Analysis by: GLG Expert Contributor

Analysis of:CEOs starting to run out of answers | www.vimay-group.com

It is a widely-held misconception that a single person can comprehend an increasingly complex world and effectively direct the strategy and structure of a complex social system to ensure sustainable profits. The essential error lies in assuming that the socio-economic context within which business operates is a system much like a mechanical clock that operates in accordance with immutable laws and is almost entirely predictable. Once it is believed that the future can be forecast with reasonable accuracy, it is reasonable to assume that future profits can be assured if only the right person is hired as CEO. A leader who knows how the world works can guide the corporation successfully. But if the socio-economic context is complex, it is without clear cause effect linkages, has no consistent rules predicting assuring consistent outcomes from actions, and is essentially unpredictable. In this stochastic world CEOs may be occasionally lucky but can never have all the answers.

CEOs Need To Make Business Decisions

April 22, 2009

Analysis by: GLG Expert Contributor

Analysis of:CEOs starting to run out of answers | www.vimay-group.com

The article sounds an alarm.  In response to the economic crisis, CEOs have largely failed to take bold action or propose new ideas.  CEOs must develop new business models and ways of doing business.

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