Indo-Brazilian Associates LLC: March 2018

Thursday, March 8, 2018

Why Companies Should Be Like Billions’ Axe Capital

Bobby Axelrod plays Damian Lewis, founder and CEO of Axe Capital locate din Westport, CT, the fictitious hedge fund company in the popular TV series “Billions. As the uber alpha male, Axelrod is the 21^st century Gordon Gekko in many respects in that “it’s all about the bucks kid. The rest is conversation.”

Like Gekko he came from humble backgrounds. Gekko was a CUNY grad while Axelrod grew up in a blue collar family in Yonkers, NY and graduated from Hofstra University. Both universities are highly regarded in academic circles yet they’re not perceived at or even near the same level as Ivy League or other prestigious private universities. For this reason, despite their respective tremendous successes their Ivy League competition still slight them in a subtle disparagingly way at their so-called inferior educational pedigree. This is why both men are obsessively driven to not only win but completely crush and humiliate their lofty educated competition.

But getting back to Axe Capital, the architectural design of the building is an oxymoron. Axe Capital’s interior is light and airy – practically a large white canvas with few visual distractions to foster greater collaboration, creativity, cross-fertilization and encouragement for a free-flow of energy & information with endless possibilities. Except for the firm’s in-house psychologist whose office justifiably has a solid door for complete privacy, the work spaces are open cubicles. Even Axelrod’s and upper-management’s offices are floor-to-ceiling glass enclosures with floor-to-ceiling glass doors.

However externally the building itself is isolated from everything else – hidden in plain sight, a standalone structure, a gated community within a gated community, essentially an open air corporate inner-sanctum. In other words the only transparency is strictly within the firm, not with the outside world that creates an odd transparent exclusivity.

With respect to Axe Capital personnel, Bobby Axelrod hires whoever gives him the best bang for the buck regardless of race, religion, ethnic background or even gender including non-binary gender as portrayed by actor Asia Kate Dillon Asia Taylor who, by the way, actually is a non-binary gender individual. It goes without saying that Axelrod treats all of them equally ruthlessly, well, because it’s a ruthless business.

In fact he’s attracted to these unconventional types because he himself is an outsider and contrarian, not with a chip on his shoulder, rather a mountain range, another subconscious snub at the establishment and traditional way of doing things in the finance world, even in the cowboy world of hedge funds.

This makes Axelrod the pure capitalist beast by hiring and firing personnel specifically on performance - their performance. One could interpret his humanity when he fired an analyst because of his recommendation to sell a high-risk investment. But when Axelrod decided to hold the investment resulting in a massive loss, he went directly to the analyst and “re-hired” him because it was Axelrod’s final decision, not the analyst’s, that resulted in the loss. This wasn’t an act of humanity rather responsibility which Axelrod accepted immediately and publicly which is what you really want in a leader.

I certainly abhor and vigorously condemn Axelrod’s amoral, illegal and other innumerable transgressions and irregular activities for monetary gains. Notwithstanding individuals and firms can certainly gain enormously with respect to Axelrod’s hiring process which is to not only select, rather uncompromisingly and enthusiastically embrace the absolute best which often doesn’t come in standard packaging. To put it bluntly, personnel diversification not only works, it succeeds spectacularly.

Indo-Brazilian Associates LLC is a NYC-based global advisory service and think tank with connections at the highest levels specializing in international investment, political and security risk assessments. International business is increasingly complex featuring a highly mobile professional class in all corners of the globe. We provide you the tools to successfully negotiate cross-culturally in your global business endeavors. Tell us about your challenges.

We provide executive coaching, speaking engagements, speechwriting and workshops. Contact us at www.indobrazilian.com

Wednesday, March 7, 2018

China’s President Xi: One Man, One Rule

China’s surprise proposal to eliminate presidential term limits represents a savvy political endgame of President Xi’s efforts to consolidate power. The astute timing in announcing this proposal just prior to Xi formally assuming his second 5-year term makes it a fait accompli with minimal pushback.

President Xi’s swift ascension by securing the ultimate political high ground is Communist Party’s foresight to reinforce political, economic and civil stability as a protective measure in order to successfully face the challenges of the inevitable global recession and exploding debt. These factors will soon threaten China’s long period of successful unprecedented growth. For this reason the leadership believes a unified government policy with a One Man, One Rule leadership is best equipped to contain the economic downturn – specifically the nasty business of “crowd control” – civil unrest in a country with a population of 1.3 billion.

Xi’s increasing influence and control in all sectors of military and economy make each major sector a monolithic machine whose leadership profess unquestioned loyalty and carry out suppression of the slightest, even perceived, dissent.

With respect to the latter, because China does not face invasion threats, they are streamlining the People’s Liberation Army with shorter and stronger chains of command based on personal loyalty to the party and Xi himself. Finally, China is bolstering their blue water navy to protect their energy imports.

Additionally China has unfinished business such as the construction and completion of the One Belt, One Road initiative, an economic and political mega-project. Not only does this mega-project serve China’s economic needs, it also serves their long-term politically needs by linking numerous pro-China countries along the route. Interestingly many of these same countries are so economically indebted to China through loans, China, in lieu of payment, may have the right to secure the rights to critical infrastructure such as ports. Because this project is Xi’s cornerstone policy, a one-man rule can insure its continued, unencumbered progress.

A darker perspective to XI’s power grab is that the inner circle leadership is aware of the gravity of a forthcoming global economic crisis that could rip China apart internally. China is a massive country with many ethnic groups who feel discriminated against. Some have aggressively challenged China’s internal security specifically in the non-Han western regions. For this reason, Xi as de facto dictator and his far-reaching power consolidations as previously mentioned represent an omnipotent leadership with few political challenges in order that he can carry out his policies rapidly and ruthlessly.

Interestingly the historical dictatorship game encourages creativity by creating rivalries amongst competing government departments without endangering its own position. These party-loyal departments compete against one another for the purposes of gaining the most influence and preferential treatment from the leader.

Counter-intuitively China’s forthcoming the one man leadership role is more effective in controlling extreme political (nationalistic) elements that creates a more stable political environment. Government members vetted and chosen by Xi himself insures that they represent his policies.

This political consolidation represents a “one-stop business/diplomatic shopping” that benefits the west because any and all Chinese government and private representatives in their respective fields are on the same page as President Xi which removes ambiguities. This creates greater short-term political and economica stability which reduces risk, but simultaneously sows the seeds of his demise down the road. In sum Xi will soon be held directly accountable for all of China’s policies, or in other words, “The yuan stops here.”

We provide executive coaching, speaking engagements, speechwriting and workshops. Contact us at www.indobrazilian.com

Puerto Rico: The 21st Century Economic Tuskegee Experiment

Mother Nature unleashed her most powerful and cruelest assaults in the Caribbean late last summer with back-to-back hurricanes Irma (September 6) and Maria (September 20) which devastated the region. One month after the hurricane Maria less than 20% of the almost 1.6 million customers had power. Fast forward 6 months, most Puerto Ricans still do not have electricity.

A closer look at Puerto Rico’s demographics, of a population of 3.4 million the average Puerto Rican household income is $18,000, less than half that of Mississippi, America’s poorest state which highlights how many Puerto Ricans have been reduced to subsistence living.

According to Statista, an on-line information service, PR’s power generation is located in the southern part of the island while most of the populations live in the northern part. Long distance transmission lines which cover 2,400 miles were damaged. Puerto Rico’s electrical generation relies on 47% petroleum 34% natural gas, 17% coal and 2% renewable making it a logistical nightmare to repair and restart.

The economic impact after the hurricanes has been devastating. According to 23 December 2017 NY Times article “Four Senators Seek Longer Foreclosure Delay in PR”, this has resulted in one-third of 425,000 homeowners being behind on their mortgages. Their only temporary economic relief has been a longer delay in foreclosures. The overlooked and depressing key to that headline was that only four senators were seeking relief for these American citizens under extreme economic hardship through no fault of their own.

The disturbing lack of urgency has plunged Puerto Rico from a developed and vibrant economy to one of a struggling developing country. Despite the heroic efforts by the few, Puerto Rico is rapidly becoming an American Venezuela with eerie similar parallels of massive debt, irresponsible and corrupt leadership. The root of this dire situation has been the dysfunctional political and economic policies years in the making that created an extraordinarily fragile and vulnerable power grid infrastructure.

Despite the heroic efforts of volunteers, the level of neglect and lack of urgency by the US government might be perceived as neglect, perhaps criminal which leads me to compare their plight to the infamously shameful Tuskegee experiment. This government approved experiment was a clinical study conducted by US Health Services that deliberately left identified STDs in African-American sharecroppers in the south run its course without treatment from 1932 to 1970 to observe natural progression of untreated STDs.

In the case of Puerto Rico, this is the economic Tuskegee case study: What would happen if a large island population was cut-off, shut down and became quasi-isolated? How would this large population react and behave after prolonged periods with limited assistance in both urban areas like San Juan and rural areas? What would be the social dynamics?

Puerto is in a steep descent like Venezuela with shortages of everything from power, food, and medicine. Unlike Venezuela, there’s a legal exodus of Puerto Ricans to the US who are American citizens with many having homeland support. Venezuelans’ exodus to Colombia and neighboring countries is not exactly welcomed where they are forced to live in de facto refugee camps. For the less fortunate Puerto Rico has become an island prison. Puerto Ricans have been thrust suddenly into primitive conditions with the added psychological insult as American citizens of being abandoned.

This is a distinctly American dilemma, not theory, compared to faraway sovereign governments. Deliberate or not, this crisis is serving as a de facto social and economic case study that powerful private and governmental elements that could provide assistance are letting it run its course.

Despite the appalling indignities heaped on the Puerto Rican people, reports are that they remain resolute, gutting it out and getting by without descending into violent chaos. Yet.

It’s yet another public relations and foreign policy fiasco that sends the following powerful message to its overseas allies: if the US despite all its resources cannot even assist its own citizens from Mother Nature’s aftermath, why should the US support theirs when times get tough?

We provide executive coaching, speaking engagements, speechwriting and workshops. Contact us at www.indobrazilian.com