Some general feedback on the brand projects

 Obstacles overcome: well done 

This course was about having you learn through experiences and exercises. It works best when we are all in the same room. We couldn't do that, but maybe next year.

Some things I saw you accomplish:

• Your research was very thorough and impressive, and the experience should serve you well in future courses. 
  
• You managed to do an in-depth assessment of a brand in four minutes, a significant challenge.
  
• You analyzed technical business documents, which should also serve you well in future courses.
  
• You coordinated work as teams across distances and time zones.
  
• You showed patience in dealing with the technical difficulties associated with Zoom classes, for which I thank you.
  

Suggestions for future presentations

• Practice your oral presentations. And then practice them again. And again. They become smoother and more conversational the more that you practice. You gain confidence. You don't trip over difficult words. Your message becomes more persuasive.
  
• Present with conviction and enthusiasm as though you have discovered something interesting (which you have) and are excited to share your discovery with others.
• Make sure that you understand every technical term you use, such as "negative net cash flow and negative net liquidity". Look them up so that you do understand them, and then use them with confidence.
• Start making a portfolio of your best work for future internship and job applications.  

Be an influencer 

Marketing is about knowing who your customers are, identifying their needs and wants, and satisfying those needs and wants. Be the kinds of marketers who influence people with creativity, humor, powerful language, compelling images, and, above all, honesty and integrity. In a world full of disinformation, people value credible, trustworthy brands. My hope for you all is that you will be those kinds of influencers.

Week 13, Nov. 23, 27: The Global financial Crisis of 2008

 Week 13, Nov. 23, 27, First readings of Global financial crisis of 2008

1. Three years after the crash, in 2011, there was still a worldwide financial crisis. This 11-minute video explains how it happened, The Credit Crisis. 

 1. 

2. The Giant Pool of Money, a one-hour radio report, with transcript available. This walks you through the step-by-step process of how lots of people fooled themselves, and others, in a greedy money grab that led to a global financial crisis. It shows how radio can cover a complex financial topic in an easily understandable way.

3. In preparation for Monday's class, I am sharing the slides for the class here


4. And here are four short clips of 30 seconds each that tell some of the story of how the crisis occurred.

Glen Pizzolorusso, the mortgage broker, making $60,000 a month 
Glen lived the high life, champagne at $1,000 a bottle
The chain or irresponsibility: everyone passed the problem to the next guy
The experts fooled themselves; they were using the wrong data
 
For Friday's class

The Crisis goes Hollywood in the movie "The Big Short" with Ryan Gosling, Christian Bale, Brad Pitt, Steve Carell, and a cameo of Margot Robbie. Here is an explanation of some of the technical aspects of the film clips from the movie. 

How four men saw the financial crisis coming
Christian Bale´s character outsmarts the Wall Street Banks, who think he is a fool
Ryan Gosling, The Jenga clip, he talks about credit default swaps
The Big Short ratings agencies, a conflict of interest

Even more clips from The Big Short:
Michael Burry (Christian Bale) discovers the housing market is propped up by bad loans, Margot Robbie helps  
Michael Burry closes out his investment fund with 489% return, 2.7 billion dollars 
As always, the big bankers and politicians say the crisis was the fault of poor people and immigrants

If you want to dive deeper,  two Wikipedia articles explain more background on how the crisis occurred.
How government policies contributed to the crisis.
Explanations for innacurate credit ratings agencies and the subprime crisis.

Grading standards, la rúbrica, for brand projects

 These are the main criteria I take into account when I grade projects. 

1. Quality of Research

• Depth of the inquiry
• Quality of sources consulted
• Innovation if sources are scarce or unavailable
• Initiative in finding solutions

2. Quality of Analysis

• Description of the issue is complete, accurate
• Analysis considers the "why" or the "how" of the issue
• Analysis proposes solutions to problems uncovered
• Innovation in approach to solutions
• Initiative in finding solutions

3. Quality of Communication

• Writing: Clear, precise language; correct spelling, grammar
• Writing: Eloquence in communication, skilled use of rhetoric
• Graphics, charts, images that eloquently help communicate
• Oral presentation engages audience
• Oral presentation makes effective use of visual elements

Week 11, Nov. 9, 13: Financial Markets (replaces labor markets) and preparation for Week 12, final project presentations

 For Monday, Nov. 9:

1. A CHANGE: Read Mandel Chapter 13 on Financial Markets, in ADI-Contents-Mandel Chapters  (I believe the Financial Markets chapter will be more useful to you on your final projects than Labor Markets).

 

Important concepts in Financial Markets:

• Why businesses borrow and lend money
• How businesses raise money--they issue bonds (debt) or sell shares 
• The stock market and the bond market (intermediaries)
• The risk-return principle
• Diversification of investments
  

Week 12: Final Project Presentations

The presentation order is listed below.   

Teams 11-20 will present on Monday Nov. 16

Teams 1-10 will present on Friday Nov. 20. 

1. Post the link to your slides, or the PDF of your slides, in ADI-Final project. They are due at 8am on the day of your presentation. Each oral presentation will be limited to 4 minutes. 

1a. For those who wish to prepare your oral presentation in advance in video format, that video is due at 8 am on the day of your presentation. Your video should be no longer than 4 minutes.

2. Post the text report of your final project in PDF format by 8 am. on the day of your presentation. 

I expect all students to attend both sessions (Exception: those in the Americas can watch later on Zoom). We will go straight through with no breaks.

Week 10, Nov. 2: Final Project 3 and 4; Inflation

 Project 3, due Monday Nov. 2. Identify the largest competitors by number of employees, revenue or market share that compete with your brand. Upload your document to Project 3 in ADI. Be sure to include your brand's name and names of all the team members on the document. Only one person from the group needs to do this.

Project 4, due Friday Nov. 6, present a 1-page outline of your brand presentation. List the key points that you plan to make about your brand. Upload it to Project 4 in ADI. Only one person from the group needs to do this. 

 For Friday Nov. 6: Read Mandel Chapter 8, Inflation, in Contents in ADI.

Important concepts:

•   Consumer Price Index

•   How inflation is calculated

•   Real vs. nominal dollars, the money illusion

•   Hyperinflation 

Week 9, Oct. 26, 30: The role of the state in the economy

Readings from "The Economics Book", all having to do with the role of government in the economy. All these chapters are short. Page numbers and ebook locations are listed.

Readings for Monday Oct. 26

p. 64 - Make taxes fair and efficient, Location 1162
p. 76 - Borrow now, tax later, Location 1444
p. 130 - Make one person better off without hurting the others, Location 2467
p. 140 - The poor are unlucky, not bad, Location 2695

Readings for Friday Oct. 30

p. 100 - Let the ruling classes tremble at a Communist revolution, Location 1868
p. 142 -Socialism is the abolition of rational economy, Location 2739
p- 148 - Capitalism destroys the old and creates the new, Location 2839
p. 282 - The East Asian State governs the market. Location 5506

 Final project

Project 1, due Monday, Oct. 26. Each work group will pick a brand (or suggest a topic for the professor's approval). You can all enter this document and edit it to show which brand your group has chosen. Those who act sooner get first choice. If you have a different proposal, put it at the end of the document. 

Project 2, due Friday Oct. 30. Find 10 sources, you plan to use for your final project: books, company annual reports, industry-focused magazines, news articles, etc.

The sources can be in Spanish or English. Write a sentence or two in English about why this source is relevant to the study of your brand. Be sure to include your brand's name and names of all the team members on the document. Upload in Project 2 in ADI. Only one person from the group needs to do this.

Project 3, due Monday Nov. 2. Identify the largest competitors by number of employees, revenue or market share that compete with your brand. Upload your document to Project 3 in ADI. Be sure to include your brand's name and names of all the team members on the document. Only one person from the group needs to do this.

Project 4, due Friday Nov. 6, present a 1-page outline of your brand presentation. List the key points that you plan to make about your brand. Upload it to Project 4 in ADI. Only one person from the group needs to do this. 

What is an outline? It simply lays out how you plan to organize and present your information. It could look something like the image below.

Preview to Friday's class on fiscal policy vs. monetary policy

In simple terms, monetary policy describes the tools used by a central bank to control the supply of money in the economy. This increases or decreases the flow of money and thus increases or decreases economic activity.  

On the other hand, Fiscal policy describes how a government's chief executive and congress pass laws to 1) raise money (mainly through various taxes) and 2) spend money. Fiscal policy involves making decisions about what the government believes should be their spending priorities, such as national defense, public safety, public health, public education, scientific research, public welfare, social security, pensions, and so on. 

Mandel Chapter 11 (it's in ADI-Contents-Mandel Chapters) goes into great detail, but this graphic captures several key points.

National debt as a percentage of GDP

A key question for politicians and government officials to make on Fiscal Policy is: Should we borrow money to pay for programs if we don't generate enough from taxes. The risk of borrowing is that you accumulate more debt than you can pay back. Many governments have been adding debt rapidly.

Supposedly, the debt of a well managed government should not need exceed 60% of GDP (this metric is part of Exercise 4).  But look at the recent national debt figures. As you can see in the chart below, the euro zone average in December 2019, before the effects of the corona virus, was 84.1%. The U.S. was at 107% and Spain was at 95.5%. Those percentages are now much higher for all countries as they borrow and spend to reverse the financial crisis. We will talk more about this on Friday.