todd buchholz competing in a chaotic economy. @rushbook competing in a chaotic economy todd...

Todd BuchholzTodd Buchholz

Competing in a Chaotic Economy

www.toddbuchholz.com www.toddbuchholz.com @Rushbook@Rushbook

Competing in a Chaotic EconomyCompeting in a Chaotic EconomyTodd BuchholzTodd Buchholz

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www.toddbuchholz.com @Rushbookwww.toddbuchholz.com @Rushbook

Who’s Faster? Who’s Bigger?Who’s Faster? Who’s Bigger?

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Hyper-CompetitionHyper-Competition

SpeedSpeed ScissorsScissors

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www.toddbuchholz.com @Rushbookwww.toddbuchholz.com @Rushbook5

Age of AnxietyAge of Anxiety


New Silk RoutesNew Silk Routes

RANK 1999RANK 1999 20052005

SinopecSinopec 50 750 7

SabicSabic 32 1032 10

Formosa PlFormosa Pl 47 11 47 11

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Middle East Chemical Plantsquadruple 1990-2005

GCC $35b trade with AsiaGCC FTA deals with China, India, NZ


Free Trade Backlash:Free Trade Backlash:

Colombia, Panama FTAColombia, Panama FTA Sovereign Wealth FearsSovereign Wealth Fears ““Buy America?”Buy America?” India v. Steel; Russia v. India v. Steel; Russia v.

Cars and Chickens; Cars and Chickens; Argentina v. auto parts; Argentina v. auto parts;

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Who’s This?Who’s This?

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A Miracle of the Market?

Are We All Greek?

Beyond the Safety Net?

Pensions: Defined Benefit The Golden Age of Unions is gone The Nanny State is broke and broken

Who’s Broke Now?

Who do we work for?

“For the next 30 years, we all work for the Germans”


The High Price of a Free The High Price of a Free Lunch? Lunch?

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www.toddbuchholz.comwww.toddbuchholz.com

Taking from Peter…


A.P. Giannini: Gladiator of A.P. Giannini: Gladiator of FinanceFinance

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Compete on Expertise and Compete on Expertise and ServiceService

How many live in How many live in Arizona?Arizona?

Two languagesTwo languages Non-banker hoursNon-banker hours ““women’s women’s

department” 3 of first department” 3 of first 11 loans to women11 loans to women

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Solutions, Not SlicesSolutions, Not Slices

Must supply complete Must supply complete solutions – from solutions – from concept thru the life concept thru the life of the service or of the service or productproduct

Fedex: not just Fedex: not just envelopes. The plane envelopes. The plane is is youryour warehouse. warehouse. Inventory/Sales fallsInventory/Sales falls


No Excuses!No Excuses!

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We Can Beat Our FOE’s

• Federal Reserve Hiked Rates Too Much

• OPEC Tightened the Noose

• Euro Fell Too Far


Back to the ’70s?Back to the ’70s?

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Is Inflation Baked in the Cake?


Who’s Covered?Who’s Covered?

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Consumers Are Tired – of Not Spending

Any Job Hope?


Does China Save Capitalism?Does China Save Capitalism?

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China Aging China Aging

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New OpportunitiesNew Opportunities

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@Rushbook@Rushbook

The Race for IQ PointsThe Race for IQ Points1992-20021992-2002

StevedoresStevedores -17%-17% TimberTimber -32%-32% Farm Farm -20%-20% Sewing Sewing -50%-50% TypesettersTypesetters -62%-62%

Elect. EngineersElect. Engineers +28% +28% Med. ScientistsMed. Scientists +33% +33% ArchitectsArchitects +44% +44% Legal AssistantsLegal Assistants +66% +66% Fin. ServicesFin. Services +78% +78%

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Peak Oil or Peak People?Peak Oil or Peak People? Petroleum Petroleum

engineering students engineering students fall 90% since 1981fall 90% since 1981

Agricultural scientists Agricultural scientists stagnant for 20 yearsstagnant for 20 years

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Icebergs or Snowcones?

Inflation Oil Spikes vs. Oil Crashes China Spikes vs. Crashes Commercial R.E. Government Debt

Cash is still king. If you can offer better financing, do it

Provide “solutions,” not just slices Don’t assume runaway energy prices Stalling growth in Europe keeps prices down Lookout for the “Obama Rally” Stay in touch with your customers!

• And with me @Rushbook and www.toddbuchholz.com


Goodbye Eden, Hello RUSH

Twitter: Rushbook

(c)Todd G. Buchholz 2011

U.S. and China:Rivals, Hyperpowers, Hype?

By 2025: 10 New NYC’s (McKinsey)


USA: Game NOT Over

This Kid Is Not Chinese – But 80% of His Toys Are!

Amazing Race

Can developing countries get rich before getting old?

Can they get rich enough to get clean?

(c)Todd G. Buchholz 2011 43

Sales to China

A Beijing Resident Can Afford 10sq.ft Feet of Housing

Great Empty Mall of China

2.3m, Defense Budget +12.7%

China.com or China.communism?


What Is a Denominator?

U.S. Will Be World’s 3rd Largest Economy, Citi Says

Back to the Future?

India used to account for 33% of the world's GDP; then fell to 3%; now may rise to 25%

India’s Promise and Challenges Up to 25% of the world's new

workers will be Indian (2015)

A bigger movie market than America and Canada combined, 3.2 billion tickets

Average Indian nearly 20 years younger than average Japanese (26 vs 45)

In recent decades, 500,000 female births have gone missing each year due to (illegal) sex selection

Sparks Flying

42% of the world's poor ; 44% rural w/o electricity

GDP per capita will quadruple from 2007 to 2020 (Goldman Sachs)

Tech capital Bangalore increases office supply 6x since 2006; more Grade-A offices than Singapore

Losing outsource biz with higher wages

Inflation and GDP 8.5%; C/A 4%

Second largest arms importer; $50 billion on defense purchases in the last decade


Budget VigilantesBudget Vigilantes



Pigou vs. KeynesPigou vs. Keynes

____ __________ ______ ________ ________

____________________

Money supplyMoney supply Discounts everywhereDiscounts everywhere

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The New Faces

12%

71%

12%

1%

4%

13%

53%

24%

1%

9%

Black

Asian

Non-Hispanic White

Hispanic

Other

2000 2050


New Businesses 1998-2010


““I don’t know Lauder well but she keeps I don’t know Lauder well but she keeps sending me things” Princess Gracesending me things” Princess Grace

Holy NY Landmarks; Neiman Holy NY Landmarks; Neiman MarcusMarcus

Galleries LafayetteGalleries Lafayette Youth Dew, Patagonia Youth Dew, Patagonia

ToothfishToothfish Shampoo; RinseShampoo; Rinse

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Pickup Trucks Trounce CarsPickup Trucks Trounce Cars

+16.7 vs. 5.3% for cars+16.7 vs. 5.3% for cars

2011 and Beyond


Ketchup or Salsa?

Brazil Rising GDP is the size of

Mexico + Venezuela + Argentina

Exports to China (15%), US (10%)

Brazilian oil discoveries accounted for 50% of those made in 2010

Too Much Hype?

In 10 years, 10% of Brazil's population rescued from poverty, more than population of NY state

“Hot money” Real +40% since 2006, commodity speculation, high rates, inflation

Imports +100%/exports +5% Household income/debt 25% GDP growth 4%, from 7.5%


Budget VigilantesBudget Vigilantes



AFRICA RISING


Pick Up a ClubPick Up a Club

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No “Skin in the Game”No “Skin in the Game”

““trust me” papertrust me” paper Avoid Basel – new Avoid Basel – new

paper after LTCMpaper after LTCM Avalanche of defaults, Avalanche of defaults,

downgrades, CDS, downgrades, CDS, mark-to-market, mark-to-market, pension exitspension exits

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World Trade Pumps UpWorld Trade Pumps Up

Ring of Fire: Debts and Deficits


Avoid Commodity HellAvoid Commodity Hell

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New MarketsInnovationService Branding Cost Control


At the Pump – In Your Face


Five Missions

Understand your members!

Identify your most profitable products

Cross-sell and up-sell products that fit your client/members best

Reduce the “cost-to-serve” and “hassle factors”

Adopt technology that makes clients and employees more productive, and happier


Customer FocusCustomer Focus

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cross-selling concierge


Who’s Supporting Whom?Who’s Supporting Whom?

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Real Estate Looking for BottomReal Estate Looking for Bottom

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Private Thrift vs. Gov’t PlunderPrivate Thrift vs. Gov’t Plunder

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todd buchholz competing in a chaotic economy. @rushbook competing in a chaotic economy todd...

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