ECONALYPSE

1. Thoughts On The ECONALYPSE Doug Curling Managing Principal New Kent Capital

2. 1 thought You Can’t Manufacture An Economy

3. 1 thought It’s Still Ugly Out There! 22% of US children now live in poverty Sept2013 Bank of America to Eliminate up to 4,200 Jobs Oct 24, 2013 Pandemic of Pension Woes Plagues Nation Aug 5, 2013 Dominick’s Layoffs Could Exceed 5,600 Nov 7, 2013

4. 1 thought Consumers Under Duress • 47 million Americans are on Food Stamps (USDA) • Record number of US homeless school children (ED.gov) • 44 million Americans have no health insurance, another 38 million are under insured (PBS) • Number of Americans on disability increases for the 195th straight month (SSA) • “Lost Decade for Family Income” (WSJ)

5. 1 thought Unemployment Source: BLS

6. 1 thought Understanding Unemployment • Unemployment Rate drops as labor participation rate slumps – 66.2% (3/07) to 64.2% (3/11) to 62.8% (10/13) • We need to add 150,000 – 175,000 jobs per month just to stay even ! • If we add 300,000 jobs per month we will not return to 2007 unemployment levels until 2017.

7. 1 thought Consumers Are Not Alone • U.S. Commercial Mortgage-Backed security (CMBS) delinquencies jump to record high 9.65% (Trepp) • FDIC seized 118 banks in 2010 – 40 in 2011, 51 in 2012 and 23 YTD in 2013 (FDIC) • White House projects federal deficit would spike to $1.65 trillion in current fiscal year(WSJ) • States face $555 billion in unfunded pension costs (WSJ) • Muni default risk greater than ever (CNBC)

8. 1 thought It’s Ugly Overseas Too! China Faces Years of Slowing GDP Growth Aug 8, 2013 Italy’s Unemployment Soars to Record High Oct 31, 2013 BAE to Cut 1,775 Jobs in 4 UK Shipyards Nov 6, 2013 ALITALIA SAID TO Propose 2,000 Job Cuts Nov 11, 2013 Thomson Reuters to trim 4,500 jobs by end of 2014 Oct 29, 2013

9. 2 thought Things Suck – And Only The Delusional Believe It’s Going To Be “All Good” Anytime Soon So What Do We Do?

10. 3 thought Cash is King ! • When Times Get Tough Hold Cash • Hire Better, Buy Cheaper, Negotiate Harder • Ability To Hunker Down Until “It” Passes • The Worst Crisis Is A Liquidity Crisis !

11. 4 thought Few Companies Become Great When Times Are Easy There’s Limited Survival Supplies In The Bunker – And Eventually You Have To Get Back To Job #1 “This Is Too Good A Recession To Waste”– Dr. Kincaid

12. Final Thoughts: Leadership In The Storm “But Mr. Chairman – I can’t eat an iPad.”

13. Leadership 101: The Primary Task Of Every Leader Is To Define Reality

14. Leadership 101: Define Reality • “Facts Are Stubborn Things”– John Adams • Defining Reality Is NOT Fun: • - It Means Recognizing Weaknesses • - It Means Admitting Failures • - ItMeans“Guesstimating” What We’re In For – And For How Long • Unless You Explicitly Define Reality, Everyone Will Start Guessing … And They’ll Guess The Glass Is Half Empty Instead Of Half Full “Let's work the problem, people. Let's not make things worse by guessing”– Apollo 13

15. Leadership 201: The Secondary Task Of A Leader Is To Lay Out A Plan For Success

16. Leadership 201: Lay Out The Plan • It’s Not About The Cuts We Made, It’s About Where We Need To Spend Our Money • If You Need To Make Reductions – Make Them QUICKLY and Make Them ONCE • Quietly – But Consistently – Create and Play Up “Momentum Metrics”: • - Newly Launched Products • - Customers Committed To Trials • - Data Records Added “Any Neanderthal Can Cut Costs – Give Me Someone Who Knows How To Spend Money” – F. Ross Johnson

17. Leadership 301: Reinforce Belief Across The Organization ThatBy Working Together OUR Plan Will Succeed

18. Leadership 301: Reinforce Belief • Communicate In Terms Of The Larger Group – • “WE Were Not Able To Achieve The Financial Results WE Had Planned”. • Develop A Culture Of Candor To Eliminate The “But You Don’t Understand”Factor • Be Very VISIBLE And Very ACCESSIBLE “If You Do What I Say – Then I Will Stand With You”– Coach John Thompson, Jr.

19. PS: “This Is Not Who I Am, This Is What I Do.”