Career advice in the face of a meltdown

In predictions, there is this statement when it comes to financials: give them a number or give them a date, but never give a number and date together.

I’m not going to guess a stock market number, but since this is a career management site, I think it is important to give you my predictions on what happens from here.

Quick summary of today’s events

1. The “bailout” plan fails a vote in Congress with both Republicans and Democrats not presenting a united front for the plan.
2. Wall Street fell about 777 points (DOW) and there were equally big losses on the NASDAQ and S&P 500 stocks. This was the largest single day drop in the DOW. Like one point for each billion in the bailout plan…
3. Wachovia’s bank assets were bought by Citibank. WaMu failed last week.
4. The mess has spread worldwide with Europe taking over three banks today. The Ireland (Dublin) stock market was down 13% in a day. A record.
5. The Fed is adding billions more dollars to the money markets (where are they getting them and how long before they have to print them?).
6. And we haven’t gotten to Asian markets as I write this.
7. Plus many, many more that would, on a normal day, be huge news, but today is merely more of the same.

What do these events mean for the Cubicle Warrior?

Here come the predictions:

1. Renegotiate the bailout in Congress by the Bush Administration. That will take more time. It may not happen at all. There is a large part of Congress that does not want to bail out anyone for the excesses of the past. That includes a large slice of the US population. The result of that stance is significant destruction of businesses – and jobs.
2. The liquidity issue is one where banks don’t want to lend to each other and, in turn, don’t want to lend to anyone else. This means that your checking, saving, and financial accounts backed by what your bank already has for capital. Sure, the FDIC is there, but they are doing these takeovers (like WaMu and Wachovia) based on someone else buying assets for pennies on the dollar and not using the FDIC insurance dollars. JPMorgan Chase got WaMu’s $300 billion in assets for $1.9 billion. Wachovia’s bank assets sold for $1 per share to Citigroup. Even I can do the math.
3. Business liquidity will drop. Because banks want to hold cash, there is the strong possibility that revolving business lines of credit won’t renew. If your companies credit line isn’t renewed, that significantly impacts their capacity to stay in business (think of financing 30-days of receivables or two months of inventory through credit but now you can’t).
4. Psychologically, people will pull in their spending even more than they have already. Since most the economy rests on consumer spending, the economy will tank into a recession. When you go into your local mall, look and see how many spaces are available. For the stores that are there, look how few clothes they have on the racks going into the critical holiday season and how soon the sales are already starting. They know.

But what about my job?

Here’s the advice:

1. You need to analyze the strength of your company. That means reading about your publicly held company on sites other than your own company “drink the kool-aid” internal web site. Not the discussion boards, but the financial news sites (for example, Yahoo finance – just plug-in your company’s stock symbol to get all the news).
2. You need to interpret what your management team is telling you. And I don’t mean follow them, but listen to them. If your management team is giving you corporate spin, you need to ask the hard questions: what is the company’s cash position compared with a year ago? What about revolving credit lines? What about receivables compared with a year ago? What about sales and inventory compared with a year ago? If your management team simply tells you they are in a strong position but can’t compare that with a year ago, you’re in trouble. WaMu consistently talked about how strong they were capitalized, but casually forgot to mention that since September 15^th through the day they were taken over their bank deposits dropped by over $16 billion.
3. You need to do your work. Performance counts, even in the face of a bankruptcy or other difficult times. Managers will want to keep – and other managers will want to hire – those people that continuously perform.
4. Decide your accomplishments. Your manager and other hiring managers want you know what you did – including numbers – in your last position. If you can’t state your accomplishments with the results, you need to write them down and get the numbers.
5. Continue networking. Networking with others keeps you engaged and informed on what is happening in other departments and companies. And if your only networking is in your own company, however large, start getting contacts in other companies now.
6. Manage your finances. Sure, the worst event for the economy is to have consumer spending stop. But you having a year’s take-home pay in the bank and then supporting the economy is priceless – to you.

You can only control what you can control. But that doesn’t mean you shouldn’t be watching out for yourself, family and friends. When the world is falling apart, doing what you can control — having prepared for the worst already — and watching for opportunities is black belt career management.

Scot