I LOVE MY APPLE

Apple was nearly bust a decade ago. And then Steve Jobs who'd founded the company and had been ousted returned. He diagnosed the problems.

Apple had a long, dull product line, terrible logistics and was a challenger brand whose biggest enemy was itself. Michael Dell actually tough Apple should shut down, it was that bad. Jobs shortened the line radically, insisted the products become "sexy", launched the living poster sites of Apple Store and went on a crazy crusade of rentless improvement. As an astute marketer who never used research to tell him what people would like, Jobs understood that he was in the costumer appliance business, not the computer business. 

He made people around him do simple things brilliantly. Apple is a legend as a leader of markets that never stops trying to do it better, or faster, or lighter or brighter. When Jobs said to Jonh Scuelley (then  a Pepsico) " Do you want to spend your life selling sugared water or do you
want to try and change the world?" he was showing himself to be a great salesman and a visionary. Apple actually has changed the world.

BUILDING SOCIETES

Building societies are lending and saving institutions, and they compete with Banks. They are mutual institutions that are run by boards of directors, and whose investors, borrowers and account holders have a right to vote, receive information and attend and speak at meetings. Banks, in contrast, are companies owned by, and run for, their shareholders.

There are 59 building societies in the UK, with total assets of £360 billion. They also exist in Ireland, as well in New Zeland and Australia.

One of the defining features of a building society is that not allowed to raise more than 50 per cent of its funds from the wholesale markets. On average, it raises 30 per cent of its funds this way. This is one reason why building societies were less exposed to the credit crunch than banks.

Building societies have the sole task of meeting customer’s needs, but the banks must make a profit from their customers. Some building societies have been undercapitalized and a needed to grow fast. Between 1989 and 2000, 10 UK building societies decided to become banks.

In 2000, Barclays bought Woolwich, and in 2001, Halifax merged with bank of Scotland to form HBOS. In 2004, Abbey was bought by Banco Santander. Others sold themselves directly to banks.  Cheltenham & Gloucester is now owned by Lloyd`s TSB, and National & Provincial by Santander.

THE CREDIT CRUNCH

The global credit crunch that started in August 2007 has demonstrated that London can no longer be seen in isolation from financial markets in New York, continental Europe or elsewhere. Some economies were not hit immediately by the US sub-prime mortgage problems, the freezing of the money markets and the subsequent confirmed recession. By the end of 2008, however, the impact was far more widespread than a year earlier. Switzerland, Japan and some emerging markets such as India were among those who took a later hit.

The collapse of the US housing market was the initial cause. Lending criteria had slackened for borrowers and many mortgages sold were sub-prime, which means they were granted to borrowers with a bad credit history.

Back in 2007, even borrowers with a solid credit rating were a risk, given that the properties they bought had in many cases slipped into negative equity, a proven catalyst for repossession.

Financial markets exposed to sub-prime mortgages felt the impact and this eventually froze the lending market. Banks were exposed to complex structured derivatives, known as collateralized debt obligations, which were backed by packaged slices of exposure to levels of risk in US sub-prime mortgages

The credit crunch exposed the huge risks that financial institutions had taken, typically off balance and using heavy leverage. In good time it seemed clever and made many of them a fortune. Let me borrow from the words of Chuck Prince, the former of Citygroup, in July 2007, in saying that so long as the music went on, everybody danced. As was inevitable, the music stopped.

The US played the biggest part in triggering the global credit crisis but, given the State of some Western economies, and the reckless state of UK and Europe particularly had been exposed to sub-prime mortgages. In think that central banks play a crucial role in restoring financial stability. There are some observers, such a Jim Rogers, who think that central banks should not interfere with the workings of the market and should let failed companies go under.

 In the 2007-09 credit crisis, central banks have intervened with an unprecedented speed, innovation and coordination. They will have to face a lot more yet.

 The Federal Reserve and European central banks have led the way. In general, the approach has been to pump extra money into financial markets and, increasingly, into the real economy. So far, this has prevented more major financial institutions from collapsing. It has not yet restored public confidence.

AGE OF COMPETITIVE DEVALUATIONS

In periods of prolonged economic pain international cooperation gives way to an every-nation-for-itself attitude. This manifests itself in protectionist measures, specifically competitive devaluations that are seen as a way to spur exports and to retard imports.

Trouble is, if all nations devalue their currencies at the same time, foreign trade is disrupted and economic growth is depressed.

A country can intervene directly in markets by selling its own currency as a way to reduce its value or stop it from getting stronger. For example, in November, South Korea’s central bank sold won to buy at least $1 billion in foreign currencies to contain the steep gain in its currency.

Decreasing the value of a currency is much easier than supporting it. When a country wants to depress its own currency, it can create and sell unlimited quantities. In contrast, if it wants to support its own money, it needs to sell the limited quantities of other currencies it holds, or borrow from other central banks.

“Central banks around the world are printing money, supporting their economies and increasing exports,” Abe said recently. “America is the prime example. If it goes on like this, the yen will inevitably strengthen. It’s vital to resist this.”

It seems clear, however, that the Federal Reserve’s objective is to spur U.S. economic growth and increase job creation, not to depreciate the dollar. Furthermore, Treasuries and the dollar are the ultimate havens, regardless of Fed policy.

FOREIGN EXCHANGE RISK AVERSION

In  trading, the market tends to be "moody", meaning it follows the moods of it's participants.

These moods come in two ways, risk taking, and risk aversion.

Risk taking is when investors are not worried about any upcoming issues in the market. They generally feel that there are no surprises coming.

Risk aversion is a kind of trading behavior exhibited by the foreign exchange market when a potentially adverse event happens which may affect market conditions. This behavior is caused when risk averse traders liquidate their positions in risky assets and shift the funds to less risky assets due to uncertainty

In the context of the foreign exchange market, traders liquidate their positions in various currencies to take up positions in safe-haven currencies, such as the US Dollar.

During the financial crisis of 2008, the forex market overreacted with massive risk aversion. The people tought: t”he market is collapsing. Are my money in danger? I better shift my funds out when i can and park them in safe assets in the meanwhile” . Investors pulled their money out of anything that paid interest and focused on "safe haven" type currencies. This caused a crash on the Australian Dollar and a surge in the US Dollar.

Ironically, the center of the triggers for the financial crisis were based on the United States, but because the US Dollar is viewed as a safe haven during unpredictable times money flowed into it day after day. Sometimes, the choice of a safe haven currency is more of a choice based on prevailing sentiments rather than one of economic statistics. 

"CUCARACHAS" EXPUESTAS AL RAID DE LAS MARCAS.

A partir de 1940, se revolucionó el mercado . Las marcas pasaron de ser una mera etiqueta en el producto, a tener una identidad de marca que combina factores físicos y emocionales. El producto se rodea de un aura que la diferencia con otros productos básicamente iguales. Son las características emotivas (creadas por el hombre) , no funcionales, las que determinan el valor de una marca. Ese "valor añadido" es el que permite a una empresa justificar un precio superior a la media en un producto determinado.

Pueden fabricar productos, pero lo que los consumidores compran, son marcas. Eso les induce a hacer un estudio psicológico y antropológico de lo que significan las marcas para la gente. 

Este cambio de filosofía empresarial, trae consigo que poco a poco se apoderen de cualquier espacio libre donde las empresas pueden encontrar oxigeno para inflar sus marcas : edificos, plazas, autobuses... sin olvidar los medios de comunicación. Para mantener esa "aura" necesitan una publicidad invasora donde los especialistas en marketing siguen investigando un nuevo Raid para las "cucarachas" .

Detrás de las marcas hay una nueva especie de empresario que nos informa con orgullo que su producto es un estilo de vida, una actitud , un conjunto de valores. 

La idea de vender el mensaje de coraje que trasmite una marca, encandila a los ejecutivos, ya que les ofrece oportunidades, en apariencia, ilimitadas consiguiendo inflar el valor sus empresas y sus productos. El famoso diseñador gráfico Tibor Kalman resume: " Antes se creía que la marca consistia en la calidad, pero ahora es un distintivo estilizado del coraje" 

Las marcas no son más que un mero disfraz , creadas con cierto “arte”, con imágenes progresistas como Calvin Klein, cálidas como Ralph Lauren, innovador como absolut vozka o familiares como coca-cola. Una campaña publicitaria ingeniosa, puede ser altamente decisiva para que el consumidor pague un determinado precio por un producto.

Actualmente, la crisis y la caída del consumo, está poniendo contra las cuerdas a muchas de las grandes marcas y fabricantes. Los consumidores tenemos que avanzar, aún después de la crisis, para dejar de ser "cucarachas" expuestas al Raid de las marcas .