but you leave out price and margins. if everyone in your product sphere is moving and kicks your butt on price or margin, than in the short term, if you want to keep your job as CEO, you better move too, or get all of your in place people to take a massive pay cut, etc etc etc.
that's the real cascade. and the market demanded it, and didn't give a twit about long term planning, extended outlooks, or long term viability.
nor did the boardrooms who granted these guys untold riches for taking the short term approach, juggling the books with only the next quarter earnings report in view, versus 5 and ten year thoughtfulness, let alone say NO to their competitors solutions. quality of product is a secondary phenomenon in this equation.....with the above being the first order of priority. (japanese auto makers are one of the few places you can find the opposite of this thinking).
let's say Citi's CEO Prince had kept the bank sound and refused to participate in the CDO markets. For at least three years or longer every other money center bank would have eaten Citi's lunch, quarter after quarter. He would have been lucky to survive the first year by doing the right thing. Having done the wrong thing, he didn't survive anyway.
Let's talk about S&P ratings agency. internal emails show, rating analysts complained the now toxic paper was not rate-able. and they all prayed they'd be retired by the time the poison killed the market. but they were team players, they wanted to keep their jobs, they made money on the numbers of deals they could give market passing ratings without which, the crap could not be sold to you, me, pension funds, sovereign wealth funds etc etc etc. and everyone turned a blind eye while they bought junk on behalf of their clients and their citizens. Why? because performance mattered over substance, all in the short term. Now everybody pays.
the market got what it wanted, and now it will pay peter for robbing paul, and both will go down on the same ship together.
cascade? avalanche would be a better term.
end of story. |
