When we asked whether banks have become too huge, reader Greg Zerovnik wrote in to say not only are they too huge—they’re way too huge. He wrote:
One way to know when a firm is too large is when its CEO has no idea how to run a particular division. That is clearly the case with Bank of America right now. It had no idea what it was getting into when it agreed to take on Countrywide, and it has no idea what to do with Merrill Lynch. Clearly, the current environment of ever more massive banks that are, de facto, less able than ever to respond effectively to changing economic conditions is a precursor to a financial shock the likes of which will make our “Great Recession” look like the dot-com bubble pop.
[EXPAND More]The markets also took a wild ride when the U.S. got a credit downgrade from S&P. What did it all mean? Reader George L. Williams had a grim take on the matter:
In the mid-80’s Peter observed that we now have the computing power to move a nation’s entire liquid wealth beyond its borders within 24 hours time. Take into account also that today’s “trust babies” are actively “day-trading” and holding stocks for shorter and shorter periods of time. The markets have become a global casino.
Other news events of the month included the surprise that Hewlett-Packard would probably spin off its PC business. We asked: Smart strategic abandonment? Reader James Hinkler had this to say.
The growth in electronics is with hand held devices, (i.e., smart-phones and tablets.) So I agree with HP’s decision to spin off their PC operations. Great long-term view!
Not so fast, said reader Mike Grayson:
Simply dropping the PC business might be a very foolish decision when they could retool it so that it can offer innovative products – after all, they have spent decades building manufacturing, distribution and support organizations.
A decision to experiment with new products and treat them as independent “new ventures” that would pave the way to the future would be a much better approach. It might also secure them valuable patents that would insure a foothold in the future. Systematic innovation is the key to success. Abandonment without innovation is the beginning of the end. [/EXPAND]