Risk Rap

Rapping About a World at Risk

Sum2 to Exhibit at Everything Jersey Conference

Sum2 will be exhibiting at the Everything Jersey Conference & Expo.

Sum2 will showcase the Profit|Optimizer product series. Current economic conditions are creating an unprecedented demand for this timely small business risk management tool. The Profit|Optimizer can be ordered and downloaded through our e-commerce site.

Sum2 will also demonstrate its award winning AML product PACO™. PACO and related AML compliance products can be ordered through our e-commerce site.

We hope to see you at the show.

Visit www.sum2.com today.Music Video:  Jerry Lewis  The Typewriter Song

Risk: missing the show.



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October 25, 2008 Posted by | commerce, soundtrack, Sum2 | , , , , , , | Leave a comment

Managing SME Macro-Economic Risks

Macroeconomic risks are quickly becoming one of the greatest class of risk factors for small and mid-size businesses. Credit availability, customer buying power, inflation, cyclical and market sector risks are growing in significance and threaten the profitability and financial health of businesses. Unfortunately, some businesses will not be able to surmount the acute challenges posed by the economic risk factors and will not be able to continue as a going concern.

Sum2 offers small and mid-size businesses risk assessment tools to help better manage business threats and seize opportunities that fluctuating market conditions produce. A difficult economy presents challenges for all businesses. Executives that effectively engage to manage threats will profit from the opportunities severe market conditions produce.

Sum2 provides a free macroeconomic risk template to help small and mid-size businesses better manage these threats. The macro-economic risk template is one of twenty risk assessment modules offered in the Profit|Optimizer. The Profit|Optimizer empowers business owners and managers with tools to assess current business conditions, make adjustments and initiate actions to overcome difficulties and seize opportunities.

Click here for free macro-economic risk test.

Music: Bob Dylan, Everything is Broken

Risk: credit, inflation, market, buying power, customer risk, supply chain


September 30, 2008 Posted by | economics, pop, risk management, Sum2 | Leave a comment

The Hamilton Plan: Reindustrialization of America

Photograph By Anthony Augustine



Sum2 Announces

The Hamilton Plan:

A Ten Point Program to Develop

Small and Mid-Size Enterprise (SME) Manufactures

Great Falls Festival

Paterson NJ, Labor Day 2008

Sum2 is proud to be participating again in this year’s historic Great Falls Festival and is pleased to announce The Hamilton Plan, a ten point program to develop small and mid-size enterprise (SME) manufactures. The Paterson Great Falls Festival is the perfect opportunity for Sum2 to invite business owners and executives, industry associations, chambers of commerce, banks, capital market participants, labor unions, academia, non-profit organizations and governmental institutions to join forces in a concerted effort to support the reestablishment of the manufacturing infrastructure of the United States.

“Many of the economic, political and cultural challenges confronting the United States can be traced back to the dismantling of our industrial and manufacturing base” stated James McCallum President of Sum2. “Since the 1980’s America’s economic infrastructure has dramatically changed. The evolution of our economy to service oriented businesses has seriously eroded the manufacturing capabilities and industrial capacity of our country. This has produced a decline of higher wage paying jobs, the disincentive to develop innovative manufacturing methods and practices, deteriorating support infrastructure and the impairment of ancillary support businesses.

It’s in the vital national interest for institutions representing business, labor, communities and government cooperate to foster optimal conditions to incubate and develop SME manufactures. The SME segment is the largest most vibrant sector of our economy and by combining the entrepreneurial drive and creative energy of SME’s with our pressing need for innovative manufactures; America can reestablish its ascendancy as a preeminent power in the global economy. Sum2’s Hamilton Plan is designed to encourage the formation of support clusters to develop SME manufacturing.

The Hamilton Plan

1. WBC Standards for Sustainable Business Model
2. Establish Incubators for Targeted Growth Industries
3. Adopt Sound Governance, Risk, Compliance Practices (GRC)
4. Form SME Development Bank / Private Equity Capital Formation Initiatives
5. Partnership Lyceums for Government / Business / Academic Institutions
6. Labor Unions as Preferred Stakeholder / Association Syndication Unions
7. Establish Cooperatives for Technology / Licensing / Commodity / Energy
8. Superfund for Progressive Tax Code / Universal Health & Benefits /
Infrastructure / Brownfield Remediation and Reclamation
9. Expand Public Education Funding & SME COOP Program
10. Support Millennium Development Goals

Historical Significance of Paterson’s Great Falls

Paterson’s Great Falls Festival is an ideal venue to announce the Hamilton Plan. The Friends of the Great Falls website writes that in 1791, Alexander Hamilton and a group of investors created the S.U.M., the Society for Establishing Useful Manufactures, to harness the tremendous power of the Passaic Great Falls. It was the boldest private enterprise ever conceived in the early days of the United States. Hamilton envisioned an industrialized America and the creation of this raceway system was his ambitious example of how corporations could be organized to develop manufacturing on a large scale. With this enterprise, along with the law, finance and incentives he put in place as the nation’s first Secretary of the Treasurer, Hamilton forged the basis of American capitalism. The planned industrialization of this historic place is the realization of the Hamiltonian vision of an industrialized America. This is truly a founding father’s site.

Sum2 Sound Practice Thought Leader

Sum2’s announcement of the Hamilton Plan is in response to the compounding economic and political crisis that is confronting the United States. The credit and energy crisis, inflation pressures, trade deficits, geo-political instabilities, global warming and ecological degradation are the result of long term systemic problems that government and industry has failed to address effectively. Sum2 advocates the adoption of the program to squarely address these pressing issues with the full understanding that it will require the concerted cooperation of all stakeholders to assure the continued development, security and prosperity of America.

Sum2 offers a series of products and services to help SME’s effectively manage risk, improve stakeholder communication, implement effective corporate governance that create sustainable business practices to assure long term profitability and growth.

At last years Great Falls Festival, Sum2 announced its new product series the SMB|360°. Since that announcement the series has expended to include, the Profit|Optimizer and a soon to be announced premium product that that will expand the breath and depth of the SMB|360° product series.

The Profit|Optimizer is a qualitative risk assessment and opportunity discover tool. It assists SME’s to identify and score business vulnerabilities and opportunities. The Profit|Optimizer conducts over 200 assessments encompassing products and markets, business functions and critical success factors. The Profit|Optimizer aggregates assessment scores and presents initiatives on a series of dashboards that allows business managers to decide what action items mitigates the greatest risk and produces the greatest return. Managers can make informed capital allocation decisions to build profitability and maintain business growth.

The Profit|Optimizer demonstrates to shareholders, bankers and other stakeholders that company management are effective risk managers that are committed to practicing corporate governance excellence.

Sum2 also offers the award winning PACO™ (Patriot Act Compliance Officer). PACO™ helps financial services companies comply with the anti-money laundering provision of the Patriot Act.

About Sum2

Sum2 was founded in 2002 to promote the commercial application of sound practice programs. Sum2’s sound practice program addresses risk management, corporate governance, shareholder communications and regulatory compliance. Sum2’s objective is to assist businesses and industries to implement corporate sound practices that add exponential value for stakeholders, employees, customers and to be exemplary citizens within the communities in which they operate and serve.

Sum2 manufactures, aggregates, packages and distributes innovative digital data content products to selected channels and markets.

Music: Billy Joels Allentown

Risk: unemployment, urban decay, global competitiveness, national security, protection of middle class

August 30, 2008 Posted by | Hamilton Plan, manufacturing, pop, recession, SME, Sum2 | , , , , , , , , , , , | 4 Comments

Hamilton Mortally Wounded in Weehawken Duel

We would be greatly remiss if we failed to mark this day, the 204th anniversary of the famous duel that mortally wounded Alexander Hamilton – our inspiration and the founder of the original SUM. Alexander Hamilton was an important visionary whose actions and ideas played a pivotal role in creating America. Alexander Hamilton was a forward looking progressive force, considered the father of industrial capitalism and an author of Federalism in the United States.

Hamilton along with James Madison and John Jay wrote the Federalist Papers to outline the form, function and philosophy of a strong central government and the necessity of Federalism to assure the survival of our yet to be born republic. Arguing against Federalism was Thomas Jefferson who advocated a more decentralized government that favored state sovereignty.

Sum2 takes its name from the Society for Establishing Useful Manufactures (S.U.M.), S.U.M. was founded by Alexander Hamilton in 1793. The purpose of S.U.M was to promote useful manufacturing by using the water power generated by the Great Falls. S.U.M was the first planned industrial city in North America and should rightly be considered the cradle of industrial capitalism in North America. The area of S.U.M.’s founding was later incorporated as the City of Paterson New Jersey, which would grow to become a major industrial center from the 1800’s through World War 2. Paterson was a key munitions, textile and locomotive manufacturing center during the Civil War and thus played a pivotal role in helping preserve Alexander Hamilton’s conception of a Federalist Union of States.

Though the landscape of industrial capitalism has changed, Sum2 was founded to continue the useful and visionary work of the original S.U.M. Sum2 recognizes the strategic importance of manufacturing and will seek to build our business by creating proprietary content, innovative delivery capabilities and mission critical products to implement corporate sound practices for our clients.

How about some dueling banjos.

Risk: Federalism

July 11, 2008 Posted by | Federalism, folk, history, Sum2 | , , , , | Leave a comment

Buffalo Bob vs. Zbigniew Brzezinski

Today I woke late and loitered in bed a bit. I was flipping back and forth between Zbigniew Brzezinski on Morning Joe and Buffalo Bob on Good Morning America. Under normal circumstances I would not have flinched from my attention to ZB. He was-as usual- great this morning and spot on concerning the precarious world situation. But I caught wind that GMA was airing a tease for this evening’s 20/20 show. They were interviewing a Millennialist Buffalo Bob from the House of Yahweh Compound in Texas. This prophet was prophesying that nuclear war will break out in 6 days! Now that’s a tease. A must see. Sorry ZB.

After this great news and a quick review of this morning’s local paper, I wanted to rush to my computer to blog on a few news items. But pressing matters of commerce took precedence and I would have to pass on my daily pontification and as the day progressed the economic and political news seemed to deteriorate as the heat and humidity began to rise to uncomfortable levels.

The Record (the paper of record for Northern New Jersey) led with a headline about Continental Airlines rising financial difficulties and it’s need to cutback on flights, fleet and jobs. The slow economy and rising fuel costs are blamed. This is hardly a shock to anyone who follows business news. Ever since I can remember the airline industry has been in perpetual difficulty. It is really incomprehensible to me how a business straining its capacity to accommodate customers has never been able to create an industry that is consistently profitable. Not even close. What’s even more incredible is why investors put their capital at risk in a business that has proven its inability to make a profit. That includes legendary capitalists like Carl Icahn and Julian Robertson. The later the iconic founder of the Tiger Management hedge fund had to close the doors to this storied fund due to his oversize position in US AIR.

Does anyone remember, Braniff, Eastern Airlines, TWA and PAN AM? Great bands all now happily camped at the top of the corporate scrapheap.

Can anyone say sustainability? The airline industry as now constituted is a non-sustainable industry. As its contribution to the global carbon footprint needs to be accounted for as a cost of doing business and remediation funded through carbon credits or cap and trade futures it will become more so.

The next story from this morning’s paper to catch our attention was the reminder that the State of New Jersey’s unfunded pension liability is approximately $25,000,000,000. Though some might consider the sum a rounding error in the federal budget deficit or a small accounting oversight in a procurement over billing for Mr. Bush’s War, the deficit will need to be addressed through some hard measures and demonstrates the absolute fallacy of the wonderful effects of the pandering Republican mantra of tax cuts. Baloney! The bill comes due sooner or later and I suspect that I’ll be getting a dunning message very soon.

Maybe we can sell the NJ Turnpike, Rt. 80 and the Garden State Parkway to a group of Chinese Private Equity Funds. And while we’re at it, let’s throw in our public school system, township libraries and local police forces. I would feel very comfortable having the Red Army police the streets of my community and enforce the law for all ez pass violators.

Next story in today’s Record led the Local section. The Essex Street Bridge that spans Rt. 17 has been closed for some time. It has choked off access to local businesses and they may be forced to close. This is a story about eminent domain, crumbling infrastructure and the pressing need for business people to be mindful of facilities risk and to practice risk management to mitigate the negative effects of these events. Fortunately our firm offers small business managers the Profit | Optimizer which helps to anticipate and plan mitigation initiatives if these events occur.

The Labor Department employment report was released and indicated that unemployment was now 5.25%; the highest in many years. This slowdown is speeding up and I don’t perceive any sector leadership emerging that can begin to lead us out of this recession. This one could get ugly.

I had an appointment with a small manufacturer this afternoon. As I was returning from the call I learned that the DOW sunk 400 points as crude oil futures went limit up at $11 on the remarks of an Israeli transportation minister who hinted that an air strike on Iranian nuclear facilities by the Israeli Defense Forces may be unavoidable. I shook my head.

Maybe Buffalo Bob knew something that Zbigniew did not. Or maybe the GMA marketing department is really a kick ass organization.

Maybe we are on the eve of destruction?

Do you think we’ll make it to the year 2525?

Risk: airlines, facilities, market, nuclear war, religion, serenity, pension funds, labor

June 6, 2008 Posted by | Bush, commodities, community, faith, nuclear, pop, Sum2, sustainability, war | , , , , , , , , , , , , , , , , , , , | Leave a comment

National Small Business Summit and the Credit Crisis

Sum2 will be participating in this year National Small Business Summit in Washington DC.

The summit sponsored by the National Federation of Independent Businesses, calls together NFIB members and friends to examine and discuss pressing issues and concerns that affect small businesses.

Sum2 will voice a shared concern of many of its clients about the necessity of small businesses to be assured that access to capital during this credit crisis not be threatened. Community banks have an important role to play and government representatives need to be aware of their significance as a primary credit channel for small and mid-size businesses.

Leaders from the world of business and government will be brought together so that a concerted voice that represents the interests of small business can be heard by our elected representatives in the congress and senate.

This years conference will feature key note addresses by, Senator John McCain, Senator John Kerrey, former Press Secretary Tony Snow, former ebay CEO Meg Whitman and Hall of Fame Quarterback and business person Rodger Staubach.

The full summit’s agenda can be viewed here.

Sum2 is a recognized leader in providing risk management innovative solutions to small and mid-size businesses. We are very pleased to be participating in this event and look forward to voicing the concerns of our clients, partners and friends to the elected officials of our representative democracy.

If you have any ideas or suggestions that you would like us to raise please send us a note.

We look forward to hearing from you.

And we’ll keep working for you and our shared interests.

You Tube Video: Vanessa Williams, Work To Do

Risk: small business, political, credit, community banking, representation

June 5, 2008 Posted by | commerce, credit crisis, risk management, SME, Sum2 | , , , , , , | Leave a comment

Macroeconomic Risk Impacts SMEs

Small and mid-size enterprises (SME) are acutely susceptible to the negative impact of macroeconomic risk factors. Macroeconomic risk factors such as inflation, interest rates, market cycles, market regionalism, credit and labor availability, and fuel costs conspire to drain profitability and financial health of small and mid-size businesses.

Though issues of scale are principal culprits that enhance the negative impact of macroeconomic factors on SME’s, other factors such as risk concentration in product markets, clients, and supply chain; silo business functions and lack of specialized treasury functions to hedge risk and maximize capital allocation returns also contribute to enhanced macroeconomic risk profile of SME’s.

To help SME’s to better understand and manage the impact of macroeconomic risk factors on their business; Sum2 is providing the Profit|Optimizer Macroeconomic Test to small business owners and managers at no charge. The test is a module from the Profit|Optimizer product which provides a thorough risk assessment and opportunity discovery review of a small business enterprise.

The test can be accessed by clicking this Profit|Optimizer hyper link.

We hope to be of service. Take the test.

You Tube Video: Charley Brown

Risk: SME, Macroeconomic Risk, Inflation, CRG, Risk Management

May 31, 2008 Posted by | risk management, SME, Sum2 | , , , , , , , , | Leave a comment

Rebuilding America’s Manufacturing with Better Process

Sum2 recently participated in a Podcast sponsored by Better Process Podcast. The subject of the podcast was GRC for SMEs.

Better Process Podcast discusses news and market events that address manufacturing issues. The topics range from US manufacturing, China competition, RFID, lean manufacturing, and manufacturing technology.

Better Process podcasts was founded by Ken Rayment. Ken is a Black Belt Six Sigma guy who has a passion for his work and is deeply commited to the development and revitalization of manufacturing in the United States.

Sum2 caught Ken’s attention through a press release we issued offering free access to the Profit|Optimizers macroeconomic risk module. Though Sum2’s market focus is small and midsize businesses we are heartened and honored to participate in the Bettter Process podcast series.

Sum2 takes its name from the Society for Establishing Useful Manufactures (S.U.M.), S.U.M. was founded by Alexander Hamilton in 1793. The purpose of S.U.M was to promote useful manufacturing by using the waterpower generated by the Great Falls. S.U.M was the first planned industrial city in North America and should rightly be considered the cradle of industrial capitalism in North America. The area of S.U.M.’s founding was later incorporated as the City of Paterson New Jersey, which would grow to become a major industrial center from the 1800’s through World War 2. Paterson was a key munitions, textile and locomotive manufacture center during the Civil War and thus played a pivotal role in helping preserve Alexander Hamilton’s conception of a Federalist Union of States.

Though the landscape of industrial capitalism has changed during the Information Age, Sum2 was founded to continue the useful and visionary work of the original S.U.M. Sum2 recognizes the strategic importance of manufacturing and will seek to build our business by creating proprietary content, ASP delivery capabilities and mission critical software to implement corporate sound practices for our clients as they seek to create value in the digital economy.

Podcast: Better Process, Sum2 GRC

Risk: Manufacturing, Capital Formation, Podcasting, Profit|Optimizer, Sum2, Six Sigma, SMB Risk Management

May 13, 2008 Posted by | commerce, manufacturing, SME, Sum2 | , , , , , , , , | Leave a comment

Corporate Credit Markets Redux

This morning I attended a Standard and Poors presentation on Emerging Issues in Fixed Income Market. It was extremely well done. The presenters offered some interesting data and insights concerning the health of the corporate bond markets.

Key Takeaways:

  • Tighter lending conditions spell heightened risk of defaults
  • Two-Thirds (66%) of Non-Financial US Corporate Bonds are Speculative Grade
  • A spike in lower grade new issues from 2004 through 2007 will feed default supply
  • Consumer Discretionary Market Sector is weakest (media/entertainment, consumer products, retail)
  • Corporate defaults will escalate in late 2008 through 2009 and will trough in 2010.
  • This year’s baseline default rate forecast is 4.7%, with a high of 8.5% and a low of 3.7%

What interests me is the degree to which these prognostications may reflect similar default and business distress rates in the small and mid-size business market (SMB). My initial guess is that SMB’s will not experience a similar level of default. I don’t believe that SMB’s are as leveraged as public companies. But credit risk remains a pressing problem for SMB’s and the dramatic curtailment of bank lending heightens default risk.

SMB’s that sell to public companies should take time to study the financial condition of these corporate accounts. Defaults are painful for investors and creditors. Having a large unmet receivable exposure can seriously damage the financial health of an SMB.

I do believe that the forecast for the consumer discretionary sector is very relevant for SMB’s. SMB’s in this sector will not escape the pressures of the economic downturn. High fuel costs, consumer spending capability and inflation will dramatically hurt this sector and may result in increased defaults as the economic slowdown takes hold.

We highly recommend that SMB’s purchase the Profit|Optimizer to mitigate the effects of these risks.

You Tube Video: Louis Jordan, Let the Good Times Roll

Risk: Credit Risk, Corporate Defaults, Consumer Product Market, Small Mid-Size Businesses

May 2, 2008 Posted by | banking, blues, credit crisis, recession, SME, Sum2 | , , , , , , , , | Leave a comment