For the lack a better explanation...

... my MBA adventure is now complete.

Final day, for real

Final presentation of our LNG project is about to happen within hours. Ergo, hours away from being MBA 09. Soon, several years of planning and preparing will come to an end, and it feels good.

Final day

Today, the fifth of july, 2009, I am taking the bus to my final day of ordinary MBA studies. It feels weird, but so good. The weather has also shifted heavily here in Oslo, from fantastic +32 centigrades to +15 and rain. Well, I have also decided that I in the end of next week will upload a couple of videos where I will describe my adventure in more detail and so on. A couple of minutes of video. I have also decided that those postings are going to be my last on my MBA blog. The reason for this is because I feel that when I get out of this bubble and start working, I dont think I have the energy nor the time to keep up with postings that are interesting and relevant, and since this blog has been about school and actually taking a MBA, Im closing it. This has been an incredible journey that I believe that a lot of more people should try. Over and out, on to the LNG propulsion.

3 more days

I now have 3 more days of studies, then this MBA-adventure is over. It feels f a n t a s t i c.

... the night

We are now concluding the night at Egils.. i didnt have any nice stuff to put on the grill, some really lame hot dogs and some potato sallad.. we also managed to conclude some interesting issues on the financial analysis today... which was nice. I cannot believe that Im going to move back to Stockholm in a couple of days. It also feels good that Bernie Madoff got 150 years in prison.

PBS Frontline has a great piece on Bernie here, and here is a story from AP.

BBQ at Bernies (Egil's place)

Today, we are going to have a BBQ at Egil's place. I have bought some sausages and we are currently sitting in Egils garden working on our LNG project.

Back in Oslo

I am now back in Oslo after a nice weekend in Stockholm; well deserved I think. What else? Finishing off my DCF model today.. Filipe has made some modeling to a route made by a ship and I will plug that information into our financial forecast. Will be very interesting - next monday; we're done

Back in Stockholm

The sun is shining and I am feeling a lot of emotions about the future.. the uncertainty is overwhelming, not only for me but for all my classmates. I think that some of them are sitting in school and doing their last piece of work. Mazel tov to Trond, Christian, Thomas B and Karthik wo presented for their company during last friday.

A pocket full of mixed emotions

Since I have one more week of studies left. Congratulations to Erlend, Kalle, Anders, Waldemar and Thomas L.O who turned in their final MBA-report today. The word "envy" cannot even start to describe how I feel.

Anyway.. I also have to say that I am feeling some separation anxiety of leaving the class.. It feels very weird to soon not be defined as a MBA-student anymore. I never thought that these feelings would be so strong though.

Working at Tavli's

Tavli's is a small bar/café located very close to the school. Since the school was closed today, Im sitting here and working together with Filipe.. going through some reports and trying to incorporating the data into my DCF model. Hopefully, i will only need three pieces of information to get done - going to look into that tomorrow.

Hope all the readers are having a great weekend.

News from the mark

Hello readers.. I guess there are some out there. I realize that I have not posted any messages on my blog for a very long time, so I think I have to do so. We are now definitely in the end of the program - feels like something that I have been thinking about for a long time, but now we are definitely there. Me - together with the group - are working on our final project/thesis which is slowly coming along. I also got this article about Ivy-league MBA's from David - who sent it to me. Quite interesting to read how the economic crisis has hit the US schools.

Well, what am I going to do today then? Well.. finish off my model, and then im going to work on something else I guess.. I have to send a couple of emails as well.

Back from Stockholm

I am now back in Oslo after spending the last couple of days in Stockholm doing interviews for a school project. It was very interesting. Now Im sitting in my small room in Slemdal and writing on negotiation project. We are going to hand it in tomorrow afternoon - I think.

Listening to some Chaka Khan gets me in the mood (listen here). I also managed to see the final at Roland Garros today - between Federer and Söderling. It was absolutely amazing for two reasons. (1) I never actually thought that Söderling had a chance, Federer is perhaps the best tennis player in the history of the sport, (2) the way the match went on, and how good Federer were - brilliant, stunning - a true champion. Well, now on to the hand-in.

Update from Christmas past

Well, he he.. im no Charles Dickens but i like to write meaningless shit on a blog.. I guess that qualifies me to become some kind of media focal point.. well, no. I came home after some beers with Christian, Ranajay and Rafa today. I had a very very productive day working with a finance assignment. Tomorrow, Ill be finishing it off, preparing for the trip and the interviews with our customers the following week.. but first, I have to see the game in the french open between Söderling and Davydenko.. what a match it will be. Saw that Federer was down with 0-2 sets against Haas, and then managed to fight his way back with 6-0, 6-2 in the two final sets. Huuuuh, he is scary.. But, tomorrow.. i hope for Söderling.
> Roland Garros

I cannot believe it

Robin Söderling managed to outplay Rafael Nadal (the worlds #1 tennis player) and is now on to the next stage in the French Open, I cannot believe it!
> The Times
> Svenska Dagbladet

Going to dinner at Anders place

I have been invited to Anders today - a friend from my years in Copenhagen. Its going to be a very nice to see him after bot being able to see him over the last couple of months. So, drink some beers and take it easy. I havent really been able to do some school work today, unfortunately. What I have done is that I have talked to my sister in Paris.

Going to Stockholm next week for market research purposes for our gas-project. Interesting to see how that will work out. Now i have to run to the metro.

The weather..

The weather is getting better and better in Oslo, and the program is slowly coming to an absolute end. It feels weird but good at the same time.. I handed in my last individual hand-in 30 minutes ago, which feels great. Hope that the grade i receive will be 'ok'. Over and out from Oslo.

Sunday evening.

I am currently in Stockholm taking it easy (well). I am writing on my final thesis on Management Control System and it is definitely a task not to underestimate. I have chosen to write about something called "RAMP UK", which basically is to assess the riskiness of a music festival. It feels as if the case has a lot of nice small "tricks" in it. The models that I am using are the following:

• Strategy map (example)
  
• Top 7 risk matrix
• Risk response matrix

And then I have write approx 5 pages of text regarding the risks.. I have read it.. but quite not finished with choosing the risks. Hopefully, Ill have a draft tomorrow.

A funny Dilbert

I got an email from a colleague of mine - Dilbert short.. i think its quite funny and i think you have to click on the picture to actually read it..

Wine tasting turns into MBA accident

We had a nice wine "tasting" event with the class.. after a glass of wine everyone turned (well, including your truly) into drunks.. so nice to let of some steam [Bennet]

The end is close

I went to bed at around 4 o clock, AM today.. finishing up an assignment in multinational finance. This is actually the final hand-in for this week, which really marks an end of an insane period in school.. we have had three weeks of constant hand-in's which has made life here very rough and hard. It is therefore nice to get a weekend where I dont have to be up until 2-3 in the morning hammering on cases. Im so so tired, and I need to do some nice laundry.

Additional postings to my blog

The reason why I havent really posted anything the last couple of days is because of the pressure in school.. it has simply been too much to handle while blogging. Soon, after this week is done, ill have more time.

In the mean time: Alex Tabarrok and how the current crisis resemble the crisis back in 1929

Seeing the actual end of an era

Well, I think I am a bit overdramatic, but we are definitely seeing the end of the fourth module in our MBA program. It feels good, and weird.. Soon, we are done, and I have yet another degree that hopefully will help me in my day-to-day activities in my work-place. We had a great discussion with Mark Kriger today - about Porsche, and the introduction of the 928 and the 944. It was a fairly old case, and it was used as a base of discussion rather than analysis. We also received feedback from our solution of Google, which was very very nice, especially the Exhibit. Well, Im thinking about going to a friends house, grab a couple of beers perhaps and then head home and watch some tv, my mother is coming tomorrow - which means that I have to be in good shape.

Old video with Malcolm Gladwell

I found this great video with Malcolm where he discuss the notion of spaghetti sauce tastes - its very interlinked with Blink.

Visit from Google

We had a visitor in todays class, the Norwegian CEO of Google came to class and we had a discussion about how Google managed their international business. It was very very interesting and I asked a question about how they perceive a lot of the critisism that they have taken - foremost in the Swedish press - about their alleged cannibalization on news sources. I got an answer that said that the reason why they often are accused of that is because they often choose to link their news back to the original source. The example that Jan (the CEO of Google Norway) came up with, was that if VG (a Norwegian tabloid) write about some obscure occurrance in Northern Norway, then Google News often generates a lead to the original story, often depicted in a local newspaper. Hence, many of the smaller news providers around in Norway has increased the traffic to their web pages to their websites. I cannot judge if this is "fair" or "not fair", but I use Google News all the time, and I think its a great tool.

Breakthrough with Google

We have finally been able to get a break through with Google and it feels fantastic. Im heading out to get some food with Laura, Filipe and Rafa, and then Im heading home to Slemdal to finish off the Exhibit. Hopefully, Ill be able to finish off the hand-in in "Negotiations". Saw a documentary about Ebbe Carlsson on SVT yesterday - it was good.

The final count down

Its now friday night and tomorrrow - hopefully - we can start finish off the case on Google and start our collaboration on the new case in Management control systems. When I say "we" I mean the group.. well, it feels weird to soon end the program... now its off to bed.

Looking at Google with fresh eyes.

So, tomorrow is labour day here in Scandinavia, its approximately 00.50 in the night (and its officially labour day). I have now finished preparing for a case discussion tomorrow about Google, which is a very hard case to "crack" so tomorrow ill meet up with my group mates and discuss. Me and Laura also received some very good feedback on our hand-in with Apple.. which felt really nice. Soon off to bed.

Connect through e-mail

Its quite funny, sometimes i receive e-mail regarding this site, often from Asia and the Baltics about the MBA program here in Norway and about Copenhagen Business School.. Well, this is the first time i receive "commercial" email; this time it was about the top 50 applications for MBA students from Apple Inc and their iPhone. I dont own an iPhone and wont do so in the near future either - but, anyways, here is the link... Its now less than 2 months until the program is over. It feels funny and weird, and very nice.

Our solution

Well, Laura and I decided to post our "solution" to the Apple case (Apple Inc., 2008, 9-708-408, HBS) we had with Dr Mark Kriger.. The "solution" encompass models from Schein, Kriger (a developed co-alignment model), Malcolm Gladwell, and VRIO framework by Barney. We get the grades tomorrow, if its good then ill post it.. if not, well.. then please write a nice comment and you would make me and Laura very happy.

One thing that I find amazing is that so many people from the US are visiting my blog. I wonder why.. but its great.

As Kalle said earlier last week: "Turning Apple into a family business would mean a heck of a lot more Jobs"

Out of diaspora

I came back from Stockholm to Oslo, and that felt weird yesterday.. Only three and a half more weeks of actual classes - well, I have to verify that with someone in school, but I think that is the case. Its a lot of mixed emotions, of course.. but most of all, im so tired.. I can most definitely say that I nerver - never - expected the amount of work to gradually increase in this way that it has. Egil was up until five writing on the hand-in while we could sleep, respect to that.

Friday, thank you very much

Ok, so this insane week is coming to an end, and will be followed by yet another insane week of studies. Im currently working on a hand-in in corporate finance about dividend policy, and it will hopefully be done in a couple of hours. I havent had time to look through the news in several days (besides that i noticed that Apple did better than everyone thought). So, what happened today:

• Came to school, we had a corporate meeting
• The corporate meeting got cancelled
• I slept on a couple of office chairs, put together in a row in the class room (this was the second time i did this, this week - i slept for almost 45 minutes)
• After that; corporate finance

Now, all i want is to get this done, and send it off to Geir.

What a day for a daydream

Got out of bed at 7.20 today.. managed to check my email and had approximately 3 hours of sleep.. well, its most definitely not sufficient, which means that I am completely wasted at the moment. Im currently in class, going through a hedging strategy. I cannot say that I am actually contributing, sitting like a vegetable in the MBA-trenches..

Well, we are having a hand-in in Corporate Finance (about div. policy) and a hand-in in leadership on monday. Ill see if i can post the things that I and Laura did on the Apple case.

3:58 AM

... and its a new record for me.. it was a long long time ago since I studied like this.. now, im tired.. oh so tired. Cant wait to go to Stockholm this weekend.

I have found life

Well, the workload continues to increase at a weird, slow, ever increasing rate. It is truly weird how much you can actually take in and produce in 24 hours. I have finished listening to the Tipping Point by earlier mentioned Malcolm Gladwell, which was good but nowhere near Outliers or Blink (even though Outliers was more interesting). Tipping Point takes up concepts like word of mouth theory and social epidemics.. I incorporated that information in tomorrows presentation on Apple Inc., so well see how that goes. Im now going to listen to Snowball, the story about Warren Buffet. It will be interesting to see how easy it is to get through, its on over 30 CDs!

The tech sector

I am currently doing some number crunching of Apples numbers, going back as late as 1981. We are having a fairly new case on the retail tech giant which is very very interesting. I have been a very loud Mac supporter for several years (the only reason why I didnt get new Mac was because of compatability problems and price differentiation strategy that I of course didnt like).

WSJ also reports that Google managed to increase their sales.. which is impressive. Apparently, the growth of sales is stagnating.. well, there is something that wouldnt come as a surprise since we currently are in a horrible recession. Now, its off to bed.

At eleven!

Ok, so time is now running by like usual, and it feels quite "ok". I received a link from Laura with some interesting videos with Niall Ferguson. He has especially one speech about the current financial crisis which is interesting, but the take on the US election was quite dull (i only managed until 6.57 or something like that). You find the link here.

Extra, extra, read all about it!

I just read on Swedish Statistical Page SCB that the Swedish consumer prices only were 1,9% on a full year basis. This is very interesting since stabilizing the rate of inflation will cause the Swedish currency to be fairly non-volatile as well as well as keeping interest rates (and the cost of capital) low. On the other hand, it could be seen as a double edged sword since low inflation could turn into deflation and Sweden would turn into Japan. I dont think that this actually could happen, but.. you never know. It would be nice if the Swedish society could ride out the storm and increase savings and see a gradual adjustment of the balance sheets and keep the cost of interest down. Read the report from SCB here, from what I have read on Swedish newspapers the information is more or less only paraphrased from this material. It is also fair to say that SCB does not spend their money in the Excel graph department...

Reflection on times passed

Since my blog has been "down" for a couple of days - due to easter and passover, I feel I have to comment on the recent events in the world economy that might affect all of us. Before easter, we saw a G20 meeting in London where rioters attacked a couple of bank offices and one person died. I guess this was very sad mostly because lives where lost and the fact that grown up people shouldnt smash windows that does not belong to them. Anyway, another issue, far more important than these two issues was the fact that no real steps were taken to tackle the the ongoing financial crisis (read more here from Brookings institute). Of course, we heard a lot of talk but no official plans were laid out that stipulated collaborative action against the ongoing lack of liquidity, demand and financial turmoil (even though some 750 bn USD where going to be allocated to the IMF - read the official statement here). I recently read it through, and it has some nice plans and words, not much else.

Some might say "well, they met, a new Nato chief was elected and all was good.. so we are good, right?". Well, no.. not really in my opinion. What we might see is that a few states (such as the US) are taking huge measures to counter the growing resession (I no longer think we are seeing a DEpression). These countries lower their interest rates and increase their quantitative easing (i.e. print more money) and buy bonds. If only a handful of states does this and if not everyone is on the wagon, we might see drainage from these progressive countries, and the effects of increased liquidity is diminished and we remain in a state similar to status quo. It is therefore absolutely vital that the G20 now collaborate and strike together and fast towards the evil of less liquidity. This reasoning is in line with some kind of Keynes theory, who had a thesis that more or less said (this is a great article):
"When times are good, save. When times are bad, spend"
...and this usually works fine - if you are a tightly knit and entirely closed economy with little or no leakages. The last time I took a look at the world economy and the worlds financial markets, it was like an imprenetable global web of nodes, interactions and trades. Could therefore one single actor, like the US government carry the burdon of all our greed and lust for cash? No, we all have to pitch in.

The reasoning is therefore that we all have to spend now, and spend like crazy to scare of the demons called recession, deflation and job scarcity. Hopefully we will see increased efficiency, products that the public actually want to buy and better and more efficient financial markets, where we are not reliant on a few to provide us with so much (I think of big banks). We simply have to lower the systemic risk, i.e. the statement "too big to fail" and face the fact that nothing in the future can be too big to fail and trying to get to that position should be punished, both by regulatory measures and by the stock market. How, in practice, this should happen - i do not know.

Even though its easy to think "lack of liquid markets does not affect me", it does. It is the common man that pays - not high flying CEOs of multinational corporations.

Easter break is now over...

... and I am heading back to the salt mine (even though passover continues)... oops, sorry, I meant to write school. Over the last week and a half, I have been in Stockholm and relaxed.. It has been an absolute treat even though I found it hard to wind down after the massive work load that we had over the last three weeks of school. We also received some grades in Organizational Design, where we wrote a theoretical paper about IBM, which was very well received. Hmmm, what am I going to do today? Well, might go to IKEA and get a new duvet and a pillow. And then Im off to Oslo again.. for the last "leg" of the MBA program. I have to say that it feels quite weird to soon be ready for the job market again, and see this journey come to an end.. after working towards a goal for several years.. and then.. see it through, it feels weird. Well, thats it.

Some reading that I have gone through over the last 10 days:

• Krugman (Article 1, Article 2)
• The Economist (Article 1, Aticle 2)
• Harvard Business Review (Article 1, Article 2)
• HBR Classic! (Must read)

Finally.

Finally, it is now officially easter/passover depending on your choice of religion. I am also free from school which feels absolutely fantastic. I am going to leave for Stockholm and I am definitely not going to do anythingi that isnt necessary.. I feel that I need a hot shower, a couple of beers and some nice chicken salad, prepared with some light sauce.

I have also been online and tried to read up on Gladwell and the New Yorker, seems like a very read-worthy piece of material.. Along with the Economist and HBR i guess. I have found a great article written by David Remnick, the editor of chief of the New Yorker... It is called "Kid Dynamite Blows Up", a very interesting piece on Mike Tyson and the world which he saw when he got out of jail back in 1997. Very interesting!

Enjoy the video!

Half-way through the week

I have now managed to get some really heavy assignment done.. Its around two o clock in the night.. And Im off to bed. I have listened to an audiobook called Blink by Malcolm Gladwell.. Im listening to Outliers as I go to school every morning. I like his voice, and its interesting to listen to very specific topics that he has chosen. I am not familiar with the New Yorker Magazine, other than I remember a guy at Brandeis who constantly read it.. Well, Gladwell is good. And Im off to bed.. soon holidays.

Not again..

Well, its now 2.59 and Im off to bed.. Im tired, but im looking forward to the holidays - they are soon coming up.. im tired.

Let's go to Holland

Well, it is now 2.35 on sunday evening and Im now shutting down my shop for the day. I have spent the last .. what is it.. 6 hours with writing an econ paper on Chile's economy. My findings so far:

• Debt/GDP=4%!!! (insanely low, the same ratio for the US is 70%)
• Chile currently produces more than 1/3 of the world total output of copper
• Chile currently has a Sovereign Wealth Fund, disconnected to the political governance, with a total net worth of 12% of national GDP

My conclusion: Could we see some dutch disease? Im not sure, but it's always a risk with countries rich of natural resources. Now, Im off to bed. It also looks like Rick Wagoner is being forced away from GM, not one minute too soon.

Hectic days..

Unfortunately, I have not really had time to sit down and ponder on my blog for the last couple of days. It has simply been to much in school, where the average sleep per day reaches somewhere around 4-5 hours. I guess this has something to do with the fact that I did take some actual time off when I was in Sweden two weeks ago, but.. well, you have to be free from school/work sometimes. What else, in Sweden, a large debate about remuneration levels might cause on the main political figures in Sweden to leave her position and in the "real" world Obama released his budget.

I think that there is some kind of hidden agenda here from "Big Ben" (a nick name i dont really like) and that is to position the US where they will see increased inflation. This is of course a scenario that the main lenders do NOT want, what would happen if China suddenly realized that their (huge) US assets suddenly started shrinking by 10-15% per cen per annum due to inflation? Then you might say that the investments that they made, the boosting of the US currency to keep up Chinese exports, was a bad bad bet. To me, it seems as though the Chinese are going to pay for their "mistake" or tampering with the market... It seems as though this is something that everyone knows, but do not want to talk about. Inlfation in USD is - to me - the remedy here, whether we like it or not. The Euro-zone? Well, deflation here we come!

Paul Krugman has written a piece about the US banks which is an interesting read. He also talks about the Swedish rescue plan in the beginning of the 1990's which I experiences first hand - even though I was a child. I like that Krugman supposes that the level of analytical brain power is somewhat limited in the US banks. On one hand, can someone who is the root of the problem, fix it? I think it has more to about culture than actual possibility to see the problem.. and from my limited experience, I find that a much harder issue to deal with than competence. (Related article: Obama on economic recovery)

Soon 30 individual hits from the US

Since I installed the "Flag-meter" on my page, it seems as if I have received nearly 30 individual hits from the US. I think this is absolutely amazing. I have not really had a clue about the amount of hits that I have received, but I could never imagine that it was this many! (and I am of course very very happy that people find my blog)

Well, since this seems to be case, I wonder what the US readers think of my "analysis" of the US election. See the posting here (Blog Retrospective: The American Election). It would be excellent to hear what some natives think about the perception that you can get through electronic channels.

Tonight Im at home working on a hand-in with Filipe and the other group members on Skype. Im pretty sure it will be a long long night.

Our demand for financial news.

One thing that I find very interesting with the ongoing financial crisis is the seemingly constant, and increaseing, demand for news concerning the financial "melt down". Every day we are bombarded with the "newest updates" on what has happened, and certainly so here in the Scandi-area. What I get frustrated about is the lack of actual analysis that comes from different Scandi newspapers, such as Swedish DN and SvD.

Let me give you a very concrete example of irrational exuberance that strikes news desks at this hour: Nothing is happening, market forces develop over time - the only thing we can do is wait and hope that large governmental offices do what they must to salvage the financial system (so we can pay our bills and transfer money in a safe and sound way). Suddenly, the financial crisis seems uninteresting and highly complicated. It is just too much "noise" in the engine to actully understand - hence; we write about bonuses and the system about variable pay. Our demand for news - in any direction - causes the suppliers (journalists and traditional media) to write about fund managers and managers who have received substantial bonuses, and that this is horrible, wrong and nearly punishable by death. Well, lets tie someone to the cross and call an angry mob. I am not so sure that we are doing a good thing by denying good people a variable pay. If payment systems are developed in a good way, that are tied to a sound strategy and you manage to control your employees in a good manner (through a balanced scorecard of some sort), then where is the corporate risk of excessive risk taking? and value damaging behavior?

The root of this problem has to be somewhere else. If Lehman Brother's was a fantastic and sound franchise, then why did it tank? Didn't they have a quant department themselves that could look at the probable risk? or was there a culture of greed and lust for excessive risk - that no one wanted to talk about - that was the cause of failure? If this was a bet, I would place mine on the latter. And this, analyzing data, going back and forth and talking to people, and analyzing variable pay agreement is hard, difficult to get ahold of and tiresome. And in my opinion, it does not make good news.

Hank Greenberg was the CEO of AIG for almost 40 years and built AIG into one of the most impressive insurance franchises in the world. Now, after some clumsy management - the corporation is dead (See the clip on the top of this post). Interesting to see that the financial stimulus plan for the EU is going absolutely nowhere and it is quite a sight to look at Lehman's homepage.. talk about meltdown with big "M". (My classmate Anja sent me this article about AIG - interesting read).

Here are some other very interesting movie-clips with Hank Greenberg (Clip 1, Clip 2)

Saturday night - 02:21

I am now off to bed after sitting with a nice hand-in in corporate finance about leasing. I have never - ever - worked with leasing at my old jobs.. I remember in school that it was one of my least favourite things to do calculations about.. Anyway, it has been a not so memorable evening. I am still very surprised by the amount of people coming to my blog from outside Scandinavia, six hits from the US in two days. Really cool.

Lost in the financial supermarket

It seems as if we have seen an interesting turn of events this week, Bernanke has green-lighted that the FED will buy bonds for USD 300 million, thereby increasing the amount of money in the US economy. Im sure that this will mean inflation, and with inflation .. lower debt in terms of purhcasing power (since salaries will increase).. and slowly erode the Debt/Equity ratio that many corporations and households see.

In Europe, we cannot see this quick response since we have to coordinate everything.. hope we can see some response, since some reports say that the Euro-zone is showing signs of Deflation, a horrible scenario that possibly could toss the EU into a zombie-like Japanesque state - Who would want that?

So, what does this stimulus package mean.. even though I actually am a trained economist, in some sense, i believe that the stimulus is good in the short term. Why you may ask? Well, the current economic system in both the EU and the US is in absolute shambles, it was on a brink of collapse. By this is I mean that we were inches away from seeing our ordinary debit cards malfunctioning, unable to pay bills through information systems and of course not being able to fund anything without 100% cash. This scenario is now, slowly being averted by taking out new loans (debt) and printing more money (a.k.a. Quantitaive measures). Of course, we are having huge debt/equity ratios, that is we are curing the pain with more future pain, but at the same time bringing out the old inflation monster from the closet and letting it eat up pensions, salaries and debt. The debt will also be a future problem or pain to cure, once markets start functioning again.. (hopefully soon). What do I mean when I say functioning? A slow recovery toward real positive GDP growth in what used to known as the "developed" world.

I therefore highlight some of the issues that I find most interesting when comparing the EU and the US:
US: Excellent education system - the best in the world, homogenous market - same language, willingness to move
EU: Larger than the US market, culturally diverse - could pose as both a threat and a possible gold mine for coming up with new ideas, becoming more integrated.

I am becoming more and more positive towards the possible signs of a slow and painful recovery, but... well, I would want to see some more hard evidence. The auto manufacturers problems are not over (Even though German VW managed to get a profit for 2008).

In school, we have started a new course that is called "Management Control System" with a professor named Norman Sheehan. So far, it looks absolutely excellent... In the class, we had some lecturing together with a couple of shorter cases that we "solved" in class. Very rewarding style of teaching.

More great material from Frontline

A new program from Frontline is coming up which seems to be great. It is called "Ten trillion and counting" and will revolve around what the US economy needs to do in order to change the amount of debt that they have. It premiers 2009.03.24 and I will definetly watch.

For those who are interested, I found this great explanation of what a CDO is on the Portfolio website. I have long thought about doing a graphical-layman-explanation of what a C.D.O is, but I have not just had the time.. Anyway.. here it is, and its much prettier than anything that I would have been able to do in Powerpoint. (Portfolio Website, C.D.O explanation)

Bernanke @ CBS 60 minutes

Here are three links to the interview with Ben Bernanke, that aired on CBS 2009.03.15.

Part 1/3, Part 2/3, Part 3/3

Variable is not variable

I have had a wonderful week in Stockholm, but tomorrow evening in going back to Oslo for the fourth leg of the MBA. A couple of my friends have also gotten back from Mannheim which will be very interesting to hear about. Well, what have happened over the last week? Well, the Nikkei index in Japan hit a 26 year low. What is going to happen with the Japanese economy? their two-tier work force seems to be very split, where the "low-class-easy-to-get-rid-off" part seems to be hit big by a negative trade balance and struggling auto-manufacturers.

In Sweden, the international bank SEB raised the fixed portion of the salary of the top management and lowered their variable part (and then reversed the salary again!). Well, to me this signals one thing: The variable part was not variable - and seen as given and absolute. Variable payment, such as stock options, is not bad - when its used in the correct way: as an incentive for management to take actions and responsibility so that the corporation grows in a manner that is best suited for their owners. This could be done in loads of ways, such as weighing the stock towards an index and look at the perfomance vis-a-vis other bank stocks in Northern Europe... for example and see if SEB manages to beat the competition. There could be loads of ways to see this through, but.. well, all that their current actions signals seems to be a corporation out of touch and with incredibly stupid media advisors. Horrible.

First spring vacation..

I am currently in Stockholm and I am definitely enjoying myself. It feels absolutely fantastic to get some time off. Traveling back sunday!

03:11

... and Im off to bed.

02:56

... and I am still awake, working..

02:21

Well, its in the middle of the night. Tomorrow we finish up our third leg of the MBA.. Im so grateful cause im so tired.

Very busy

We have been very very busy over the last couple of days and two weeks. I have, together with the group, handed in several papers over the last couple of days.. I don't really know how I feel, it feels like im back to last autumn where we sat until very late and reviewed papers on strategy and IT. Im currently listening to a Pet Shop Boys version of Dusty Springfield's "In Private" - its good, and Im tired - oh so tired. (At the same time, rumours on Volvo Cars say that Chinese Geely might buy them, and AIG made it to Guniess Book of World Records witht highest loss ever recorded in mankind - now thats quality management)

Consumer confidence in Scandinavia

It now seems that a lot of data is coming in from how Q4 2008 was. It seems as if the consumer confidence has hit a record low (Bloomberg). At the same time, the Swedish chief of the central bank, Stefan Ingves, assume that the Swedish economy will see an increase in GDP in the beginning of 2010 (DI).

I must say that I see a large differences between how the consumers feel in the EU and Scandi. Some issues that I believe will impact the Swedish economy in 2009 - which I believe will force the Swedish economy to see a long recession (unfortunately).

(1) Risk of inflation - the low interest rate allows consumers to borrow more on future income. More monetary funds are inserted in the economic system. If (more a question of when) the interest increases, in order to cap the price increases and lower the demand for money, the central bank will increase interest rates rather rapidly (to prevent what happened in 2004, 2005 and 2006).
(2) Consumer gearing - A variable that is very much interrelated with (1). When the interest rate goes up, and the demand for return-for-risk goes up, the Swedish consumers will have to cut down their consumption to manage to repay their coupon payments.
(3) Jobb losses in the service sector - Sweden has not yet seen large job losses in the same way as the US. Of course, the Swedish economy is in a better shape than that of the US; but the economy will be affected. Old business models will die (SAAB for example) which will force down the demand for labor, and in the end - services.

(This situaiton would mean a stagflation) Who are then the winners? The people who are sitting on stablie assets (whichever these are, Swedish krona not included) and people who can afford to pay their debt coupons! These will probably see their large debt positions get eaten up by inflation and sail into the future, with less debt and smaller debt burdens for studies. The loosers? everyone else and people who will get squeezed out from the housing sector.

It's not over, until it is over - well, it IS over

It now seems as though the Swedish car manufacturer SAAB is finally heading into a restructuring phase - very similar to what in the US is called Chapter 11. The Swedish government is currently arguing a couple of loans. The public perception of the upper management of SAAB is in my opinion something to laugh about. The mismanaged Swedish "world famous SAAB" is soon dead.

Read a good article about it here - in Swedish.

Witness to a game-changer

This is the finest piece of article that I have read so far about the financial melt-down, it is called "Wall Street lays another easter egg" by Niall Ferguson.

Well, no-one who hasnt been living under a rock since september 2008 can say that they have not been shaken up by the things around you. Information coming from the most inner sanctum of the worl economy says that we have been overspending, over-leveaging and buying stuff that we simply havent had collateral for. Well, this statement can definitly been said about the U.S. A normal family, living in the suburbs with "normal" jobs.. of course you take out yet anohter mortgage in order to send your kids to college/b-school/unvisity (whatever!) but ordinary consumption? Well, this has certainly been the case, but what about the Nordic countries.

Well, when I say Nordic I should say Scandinavia - see what happened to Iceland. Talk about emulating the behavior of American consumers and doubling that. What I get so confused about is that no-one stopped for a minute and asked themselves "where does this newly found wealth come from?". Well, certainly not from organic growth, taking away the effects of gearing - the US economy has only grown 1 % per annum during the last administration (according to Krugman) and this can certainly be said about Iceland too. Well, a burger at one of the ordinary restaurants in Reykavik, that will be SEK 200. What?! What is in this burger, Iceland-pony?

I cannot say that I feel any pain for the Icelandic people - what I see is that I see a total game-changer, a new order that we cannot yet define. And this new way of capitalism, is in the end going to affect all of us. In what way then? Well, lower access to capital - a focus on organic growth and less financial alchemy. Many of the hedge funds operating in Scandinavia has had this as their primer objective, pay out the cash - give this "wealth" to the owners since the owners have better use for it than the company, since they are only "sitting on it". Well, now - in retrospect, how wrong they were. However, less access to capital will definitely change the P/E market in Scandinavia. Less access to capital will mean that it will be harder to find positive NPVs out there, skill of running businesses and finding opportunities will definitely become harder and more scarce. The cost of capital is going up and so is the demand for returns. As we live with the forces of market capitalism, we cannot change the way people think about life, wealth and jobs (and I dont think it is wise to re-define the modern world).

However, what I believe this financial melt-down will do is that we in a couple of years will see new domains of power emerge from the ashes of those that once were. Should the Swedish government allow SAAB to go into bankruptcy? Of course (in hindsight, the Swedish ship yards?). Is there any value in retaining something that needs financial medicine every quarter? Of course not. From the ashes of the old corporations, new one will rise. Profitable businesses, and those companies that will survive this year of judgement will re-emerge as the powerhouses of tomorrow. What do I base this on? Well, I base this on the fact that the latter half of the last century was one of the most prominent times of the history of humanity. Krugman derives the wealth from the fact that we had a different game-changer back then, the 2nd world war. I disagree (even though my access to facts is limited), I believe that what we saw back then - disregarding the cold war - was a new way of comradery, the construction of the EU, the emergence of new technologies and a commitment of consumption that touched every soul in the "western world".

This may sound naive, but what I hope is that the rest of world, eventually will get on the wagon and see the potential in disruption. After all, in the old testament, g#d found it appropriate to rest on the 7th day - and I think we just have to understand that so will consumption during 2009, either if its financed with debt or with equity since the stakes of our future foundation of wealth are so high.

To sum up what it is i mean with this posting: In 10 years we will see that the demand for goods and services will be rising and in the long run we are all dead. This also means that a lot of old - earlier functioning - business models will die.

(Good links on this topic: Krugman 1, Krugman 2, Becker-Posner Blog, Roubini 1, Ferguson 1, Ferguson 2, Roubini and Mishkin on Charlie Rose, Washington Post)

Murder on the financial dance floor

I found a couple of articles that highlights the financial distress in the UAE. It seems as if a lot of expats are seeing a really though time paying for their debt, and if they don't? well, then they will end up in jail.

What is the evidence of this? well, apparently.. when the expats leave Dubai (according to some statistics, 1 500 expats leave the city every day) they tend to leave their car (luxury/standard) vehicle in the long-term parking lot outside the airport. The police then auction off the cars on a montly basis. When will the crisis end? Not soon.(NY Times, The Financial Times)

As if these numbers aren't scare, the officials in Dubai denied an Israeli tennis player access to their annual ladies tennis tournament. Well, now that is a sign of really bad sports. (NY Times)

Link from US PBS

I recently saw this great great program dealing with the financial crisis on US PBS. Its made by Frontline and is called "Inside the meltdown". Have a look and watch the show. Great production!

Interesting article from Krugman

Paul Krugman published this fascinating article in the NY Times. It is very very interesting and gives you a very sharp analysis of how the worlds largest economy currently is functioning. Hope this mess ends soon.

The coldest winter in 20 years

It seems as though this winter is the coldest winter in 20 years here in Norway.. I have therefore bought winter shoes as well as a new "parka-coat". I am very happy because the sale has started which meant that i got a good price.. So, bring on the cold! Im finally prepared.

I have also decided that I will go to Mannheim Business School to study some international marketing which Dr Sabine Keuster is teaching. It seems to a very interesting and everthing seems be in order for my participation.

Kalle also sent me a link with a great song; "sex on fire" by Kings of Leon, which is an awesome song.

Week coming to an end

This week has so far been very hectic and then im not counting the birthday. It has been a lot of school work and hand ins for a subject called "Value Based Decision Making" which more or less comprise of micro, game theory and quantitative valuation techniques. It is very interesting, and this week we built a simulation model in Excel. I do not know how well our team performed with the task, but I do have a positive gut feeling.

What else, yeah - tonight im off to a bar in Oslo city and tomorrow im going to go look at some stores for a paper im going to write about service marketing. I also slept more than 9 hours this night, which was a true blessing.

New class in corporate finance

On my birthday, we now started the new class in corporate finance. We are now going through the theorem by Modigliani and Miller. I have of course seen these propositions before, and if feels like I have worked with them a lot.. its just, I cant kick the fact that I still find the theory very very interesting. It also feels great to get a re-fresher in regards to the theory.. As I write, it seems like the world is "drowning" in rescue packages.

My birthday is today

... and the economic gloom continues and stocks can always loose an additional 50 %. Cheers!

Horrible news from the US

Apparently, the unemployment stats from the US are grim, in January alone they lost a total of 598 000 jobs in the US.. confirming the largest economical contraction in decades. When it will end? not tomorrow, thats one thing for sure (NY Times).

Great marketing article

I recently read a great service marketing article called "Marketing intangible products and product intangibles" by Theodore Levitt. It was published in the Harvard Business Review in 1981!

The basics in his article stems from the fact that all companies are service producers - which is a statement that many can sign off on (Honda doesnt produce cars, they produce units that enable travel?!??). Well, this is sort of the core of the article, that what makes marketing different is whether the output is intangible or tangible - here the argumentation stops (a car, is a car = tangible). And this causes problems for marketing... more on this topic later.

Case on Starbucks

We are currently reading a case on a former employer of mine, Starbucks. I used to work at Starbucks when I was 19 - which is now more or less 10 years ago. I remember it quite well. I worked at the cafe close to Liverpool St Station in London, not Old Broad Street - the other one.

Well, now Starbucks are closing several stores and selling their newly purchased corporate Jet. Well, what can you say.. a bit irrational exuberance from Mr Howard Schultz perhaps?

- When will this worldwide corporate melt down end? Now?

Two excellent quotes

Yesterday, Öystein Fjeldstad quoted this line:
"You don't have to have been a horse to be a good jockey"

- Arrigo Sacchi

Another great quote - for the same price...
"Public opinion is no substitute for thought"

- Warren Buffett

Grading my Dell.

I have now used my Dell for a couple of hours and here is what i think about it. The computer is a Dell Inspiron 1525.

• Screen: 5/5 (great, good view and clear)
• Overall size of computer: 3/5 (too big)
• Weight: 3/5 (see above)
• Price: 5/5
• Speed and storage: 4/5

Overall, a good purchase.. i think, but dont use it for work/travel.. its way to big for that.

Sunday evening.

Well, I had a great time in Stockholm. Managed to pick up my Dell computer which is very fast.. Its quite big though, which is not good... but then.. I got what I paid for. I didnt whish to have a very nice and small computer, because of the price tag.. but as for now.. it strikes me as a good computer for the purpose of listening to music and watching media (pictures and movies). I also saw a movie this weekend called "city of ember" which also stroke me as good.

Well, lets see.. on the agenda for the week is a hand-in in value based decision making and some articles for tomorrows class. Ill better go through them asap. In the news.. Ingemar Johansson - former heavy weight champion of the world - has now passed away. I found this compilation of fights on youtube, with a horrible version of the Swedish national anthem in the background. Unfortunately Ingemar spent his last years in life battling the damages that he received during his fighting years, yet another reason to ban universal health care... why should the health care system take care of people that deliberatly interact in a sport where they receive punches to the head? anyone? how do you cope with this issue? Hard nut to crack (Washington Post, Int'nl Herald Tribune, Times Online)

Stockholm

Im heading to Stockholm for a nice weekend. I cant wait, im leaving at 8.50 tomorrow morning - friday that is.. and going back to Oslo on sunday.

Against universal healt care?

I have never been totally convinced that the market can actually take care of every single need that the inhabitants need in a sociatey - such as healt care. I must say that I support the notion of it though and that it is part of a society to pay for basic medical services.

However, a student of Swedish Konstfack, an institution for higher learning, has created an installation where she has acted to be insane and been "captured" by the police. The woman has therefore spent valuable resources on what she considers art. I do not care if it is art or not art, I wonder if she would have acted in the same way if the money had come out of her own pocket or her partents medical insurane. I do not think that she had done this, pathetic and irresponsible and yet another reason why universal health care only suits people that take responsibility for their actions. (read about it here in Swedish DN.se)

Weird times!

It seems like the hard times are hitting some of the educational institutions in the US. In especially a University where I studied a couple of years ago - Brandeis University. Since the times are terrible, they have chosen to close down the very nice Rose Art Museam - a museum that houses modern art on campus. In my opinion, this is very sad since I remembered that I visited the museum and marveled over the great treasures that the relatively small Brandeis U. had. Well, I hope this hasnt anything to do with Bernard Madoff, who managed a lot of assets belonging to the Carl and Ruth Shapiro Family Foundations that has endowed a lot of money to the university and enabled some absolute first class facilities. (Read about it here)

A couple of days ago

It has now been a couple of days ago since I posted anything on this blog and that has mainly to do with the fact that I have been very busy. We - the group that is - has had 3 major hand-ins in Value Based Decision Makin, Service Marketing and Corporate Finance. Well, yesterday night wasnt that busy.. I saw Slumdog Millionaire, which was good. Hope next week will bring +15 degrees celcius, spring and a lot of sun.. But i doubt it.

US inauguration

I am currently watching history unravel before my eyes at CNN.com/live - the US inauguration... it sends chills down your spine.

Great read - for free

I have found Roger Lowensteins blog at Huffington Post.. Internet is truly a great source of inspiration.

If you have not read Greenspans book, "The age of turbulence" - do so.. it is great and gives you an excellent overview of the economic history of the United States over the 2oth century.

Trouble with Dell

I was on the chat with the Dell-people today. Since I am Swedish I want a computer that has the Swedish version of Windows Vista with a Swedish keyboard. Because I now reside in Norway I therefore want it shipped to the school... I contacted Dell.se and tried to get them to ship a computer to me, which was easier said than done. If I wanted a "Swedish" computer it had to be shipped to a Swedish address, which doesnt really work since I live in Norway.. If I wanted to have it shipped to Norway - then I had to go through the Norwegian site and then call them explicitly in order to give them the specs on the Swedish Vista and Swedish keyboard. I also had to pay Norwegian prices which was SEK 800 more. Insane! I think this is really weird, since the computers probably are being put together next to one another.. The time of delivery was also in excess of two weeks (hmmmm??).

Went to the movies.

I went to the movies and saw a great Norwegian movie, called Max Manus. It had a certain feeling to it that very few Scandi produced movies have, such as great cast and above all, a great historical feeling to it that makes you believe in the story. Well, it was great... and now im sitting and reading about Home Depot.

Message #200 and books

Since things havent really come up to the pace of the last semester, I have taken up "ordinary" reading again. I am reading two books now, none of them real fiction. I was thinking about reading "The castle in the forest" by Norman Mailer, but decided to go for Alan Greenspan's "Age of Turbulence" since it was a gift from my father, some year ago... its extremely interesting to read about his career, and to understand where he draws his inspiration and the conclusion that he comes up to.. of course, his involvement in political life is what really sucks me into the book.

Another, very fascinating read is that of United Fruit company which is the main topic of the book "Bananas" by Peter Chapman - a book that I was given by a classmate (thanks Rafa).. It should be said that I am not finished with any of the books yet.

Both books are very very good, of course in different ways.

Swedish banking stocks are down

Apparently, the Swedish banking stocks are down approx 20 % during the first time of 2009. This is of course weird, I mean - the market must have known about the Baltic and Ukrainian investment for some time.. Well, a year or two ago these investments generated a lot of profit (not least for Swedbank) but the hunt for positive NPVs goes on.. Going to be interesting to see how this plays out. Even if I dont know very much about the baltic real estate sector, it must be safe to say that many properties and houses were overvalued.

The building is from Swedbanks facilities in Kaliningrad.

Unfortunate conflict

The current war between Palestine and Israel is extremely unfortunate. It is also very unfortunate that the reporting from the war is so filled with opinions and ad-hoc "facts". However, New York times has a specific page where they have both US, Israeli and Palestinian reports.

Thomas Friedman also writes about the conflict here, in a debate article from the NY Times.

Slow start picking up

We are now picking up the pace from the slow start. I read a great article by Michael Lewis in the magazine Portfolio the other day (which is a very good read). There was this great article by Michael Lewis about the end of overpaying Wall Street bankers and the end of an era (somewhat like the one he described in Liar's Poker - which I never actually read.. too many people told me about the book and its greatness which made me not read it). Well, this article is really good - After the fall, by Michael Lewis. (The picture: the bull is certainly dead.. for now.. ever heard of Bull Phoenix?)

On the other hand, Im thrilled about our consultancy project. Now back to the lecture in Macro.

New electives and corporate projects...

We are now getting information on the different electives;

The electives that we can choose between are:

• Management control
• Multinational financial management
• Negotiations
• New product development and service innovation

We can also choose between Mannheim electives, but unfortunately they only yield 4 ECTS. The electives should add up to 18 ECTS. We can also take more courses if we want that, which means that we can take three courses at BI and then ad additional courses from Mannheim. Now that we get a chance to take additional courses, Im thinking about doing that. How about that.

The corporate case that we are going to do is an analysis of the LNG market in the North Sea for a Pan-European gas company. Very interesting assignment!!

Norway, finally a new week

The past week has been a slow start on the new block of courses. The past week has been very slow with only some administrative tasks and two lectures. Tomorrow, we have a full day and we get to find out which companies we are going to consult this forthcoming semester. Its going to be very interesting.

This is also the first time I encounter some signs of fatigue or tiredness about the program. I do feel some anxiousness in getting back to work and so on. I try to keep my focus with the studies, but its hard at the moment... i really want the whole prorgram to get going. I am also very anxious to see the spring come; I am already tired of winter.

Swedish bank to get support from Swedish government?

I have written several times of the Swedish bank Swedbank and their investments in the Baltics - where they have come out as a major force in banking over the last couple of years. Well, they have seen great profitability from these investments before - but now it seems that the market has caught on and wonders; Is it reasonable that the investments in real estate have they value that the debt and investments in those real estate mandate that they have?

Well,i dont know... Therefore (its reported here in Swedish) the market is now adjusting to the notion that Swedbank probably will have to take on measures to secure some cash from these investments. SEB is currently also seeing some indications from the Baltic markets that something is not right.

New release from Microsoft

Saw that Microsoft has released a beta version of their new operating system called Windows 7. It seems to be a new update for Windows Vista. I have decided to buy a Dell 1525 computer since I feel I need a new laptop after being a Mac-fan for several years. Of course, I have been using a Wintel PC from work, but it will be interesting to try Windows Vista. The thing is that I have only heard positive feedback about the program. The reason for changing computer platform can only be credited due to the price tag of the new Mac notebooks; I am also a bit tired of the price differentiation between the MacBook and the MacBook Pro. I mean, what happened to the iBook?

Well, it will interesting to try.

He's at it again..

I am back in Norway and Jeff Skilling lost his appeal!! the former Enron boss has complained and wanted to pardoned since he apparently think that he has made up for his crimes that he committed when he was the Enron CEO. Well, I dont think that he should be let out - many million people were affected because of his and his friend Andy Fastows direct scam -and then we are not talking about the consumers of California who had to pay a hefty overprice for the their electricity in order to satisfy the Enron stock holders. Interesting how many people who think that they have made up for their crimes now that G.W Bush is leaving office. I saw this great documentary approx 1 year ago - I certainly recommend it; Enron - the smartest guys in the room.

By the way... Lowenstein - who else - wrote a great book about it (and has yet another great article out - Whats really wrong with the price of oil - Great great read).

New team mates for the new semester

I have now ended up in a new group. My former group with Erlend, Deepthi and Lars is now more or less dissolved - we have one hand-in in corporate finance left.. then, Ill be in a group together with Egil (Norwegian from DuPont), Laura (An American who were in Software sales) and Filipe (a portugese who has worked in the shipping industry). I think its going to be a great group.

Postponed trip

... my trip to Oslo has been postponed, Im going on tuesday instead...

Leaving for Oslo

I am now leaving for Oslo for Block #3 at BI. We are also getting our new groups and our corporate assignment from the Dean, which is going to be great.

Ethics case by CAT and Goodpaster

During the holidays I saved the nice task of construcing an ethics case and then analyzing this case by the use of Goodpasters CAT-scan/model. It is actually quite fun to construct your own case and it also jerks you back to reality after several days of relaxing. More information will follow...

I have recently switched over to Google Chrome on my Wintel PC.. its very very fast and thus.. good.

Happy start of the new year, Rick!

The new year has finally started and it has already had some interesting issues for GM and Rick Wagoner. They get a fresh and cheap loan from the US government of approximately 4 bn USD. In my opinion a stupid mistake, why throw good money after bad?

By the way.. Ivanhoe is such a slow and terrible moving. Since we currently are in an economic downturn, I would like us all to remember the great commercial that Gotabanken (or Götabanken) issued in the late 1980's.