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Global Advisors is a leader in defining quantified strategies, decreasing uncertainty, improving decisions and achieving measureable results.

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Global Advisors’ Thoughts: Is insecurity behind that dysfunction?

Global Advisors’ Thoughts: Is insecurity behind that dysfunction?

By Marc Wilson
Marc is a partner at Global Advisors and based in Johannesburg, South Africa

Download this article at http://www.globaladvisors.biz/inc-feed/20170907/thoughts-is-insecurity-behind-that-dysfunction

We tend to characterise insecurity as what we see in overtly fragile, shy and awkward people. We think that their insecurity presents as lack of confidence. And often we associate it with under-achievement.

Sometimes we might be aware that insecurities can lie behind the -ias, -isms and the phobias. Body dysmorphia? Insecurity about attractiveness. Racism? Often the need to find security by claiming superiority, belonging to group with power, a group you understand and whose acceptance you want. Homophobia? Often insecurity about one’s own sexuality or masculinity / feminity.

So it is often counter-intuitive when we discover that often behind incredible success lies – insecurity! In fact, an article I once read described the successful elite of strategy consulting firms as typically “insecure over-achievers.”

Insecurity must be one of the most misunderstood drivers of dysfunction. Instead we see its related symptoms and react to those. “That woman is so overbearing. That guy is so aggressive! That girl is so self-absorbed. That guy is so competitive.” Even, “That guy is so arrogant.”

How is it that someone we might perceive as competitive, arrogant or overconfident might be insecure? Sometimes people overcompensate to hide a weakness or insecurity. Sometimes in an effort to avoid feeling defensive of a perceived shortcoming, they might go on the offensive – telling people they are the opposite or even faking security.

Do we even know what insecurity is? The very need to…

Read the rest of “Power, Control and Space” at http://www.globaladvisors.biz/inc-feed/20170907/thoughts-is-insecurity-behind-that-dysfunction

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Strategy Tools

Your due diligence is most likely wrong

Your due diligence is most likely wrong

As many as 70 – 90% of deals fail to create value for acquirers. The majority of these deals were the subject of commercial or strategic due diligences (DDs). Many DDs are rubber stamps – designed to motivate an investment to shareholders. Yet the requirements for a value-adding DD go beyond this.

Strategic due diligence must test investees against uncertainty via a variety of methods that include scenarios, probabilised forecasts and stress tests to ensure that investees are value accretive.

Firms that invest during downturns outperform those who don’t. DDs undertaken during downturns have a particularly difficult task – how to assess the future prospects of an investee when the future is so uncertain.

There is clearly an integrated approach to successful due diligence – despite the challenges posed by uncertainty.

Read more…

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Fast Facts

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

Non-conformance costs can distort pricing decisions The use of full absorption or average costing in asset-intensive industries with under-utilisation can lead to self-defeating pricing strategies

  • The use of full absorption or average costing in a manufacturing environment with under-utilisation can lead to self-defeating pricing strategies
  • The increase in price to cover costs results in volume decreases – lowering factory utilisation and increasing unit production costs. This is the start of the utilisation-pricing “death spiral”
  • Costing according to factory utilisation – partial absorption costing – offers the opportunity to be more strategic about costing and utilisation
  • “Unabsorbed” costs can be targeted through OEE and volume improvements. At the same time, the “disadvantage” of having a large factory is normalised and pricing can compete with more fully-utilised factories
  • A recent manufacturing client saw 60% of unit costs arise from factory under-utilisation – sub-optimal OEE levels (non-conformance), low volumes and work-centre bottlenecks contributed to the utilisation gap
  • These principles can apply to any asset-intensive business – for example banking
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Selected News

Quote: Jamie Dimon – JP Morgan Chase CEO

Quote: Jamie Dimon – JP Morgan Chase CEO

“I see a couple people doing some dumb things. They’re just doing dumb things to create NII.” – Jamie Dimon – JP Morgan Chase CEO

In a candid assessment delivered at JPMorgan Chase’s 2026 company update on 23 February, CEO Jamie Dimon voiced profound concerns about the financial landscape, drawing direct parallels to the reckless lending practices that precipitated the 2008 global financial crisis. He observed competitors engaging in imprudent strategies purely to inflate net interest income (NII), a key profitability metric derived from lending spreads and investments1,3. This remark underscores Dimon’s longstanding vigilance amid buoyant markets, where high asset prices and surging volumes foster complacency1,2.

Jamie Dimon’s Background and Leadership

Jamie Dimon, born in 1956 in New York to Greek immigrant parents, embodies the archetype of a battle-hardened banker. Educated at Tufts University and Harvard Business School, he ascended through the ranks at American Express and Citigroup before co-founding Bank One in 1991, where he orchestrated a remarkable turnaround. In 2004, he assumed the helm of JPMorgan Chase following its acquisition of Bank One, steering the institution through the 2008 crisis as one of the few major banks to emerge unscathed. Under his stewardship, JPMorgan has ballooned into the world’s most valuable bank by market capitalisation, with Dimon earning renown for his prescient risk management and forthright annual shareholder letters1. His tenure has been marked by navigating geopolitical tensions, regulatory scrutiny, and technological disruptions, all while prioritising capital strength over opportunistic growth.

Context of the Quote: A Market on the Brink?

Dimon’s comments arrived against a backdrop of intensifying competition in lending and private credit markets, where firms scramble to capture market share amid elevated interest rates and economic optimism. He likened the current environment to 2005-2007, when ‘the rising tide was lifting all boats’ and excessive leverage permeated the system, culminating in subprime mortgage meltdowns1,2,3. Recent indicators, such as the collapse of subprime auto lender Tricolor Holdings and debt-burdened First Brands, evoked Dimon’s ‘cockroach theory’ – spotting one signals an infestation1. Broader anxieties include artificial intelligence’s disruptive potential across sectors like software, utilities, and telecommunications, mirroring unforeseen vulnerabilities exposed in 20082,3. Despite S&P 500 highs, Dimon cautioned that credit cycles invariably turn, with surprises lurking in unexpected quarters3. JPMorgan, he affirmed, adheres strictly to underwriting standards, forgoing business rather than compromising1.

Leading Theorists on Financial Crises and Risk-Taking

Dimon’s perspective resonates with seminal theories on financial instability. Hyman Minsky, the American economist whose ‘financial instability hypothesis’ (developed in the 1970s and 1980s) posits that stability breeds complacency, prompting speculative and Ponzi financing schemes that amplify booms into busts. Minsky argued that prolonged prosperity erodes risk aversion, much as Dimon describes today’s ‘dumb things’ to chase NII1.

Complementing this, Charles Kindleberger’s Manias, Panics, and Crashes (1978, updated editions) outlines the anatomy of bubbles: displacement, boom, euphoria, profit-taking, and panic. Kindleberger, building on Kindleberger’s historical analyses, highlighted herd behaviour and leverage as crisis harbingers, echoing Dimon’s pre-2008 parallels2.

Modern extensions include Raghuram Rajan, former IMF Chief Economist and Reserve Bank of India Governor, whose 2005 Jackson Hole speech presciently warned of incentives driving financial institutions towards systemic risks. Rajan’s ‘search for yield’ concept – akin to boosting NII through lax lending – anticipated 2008 excesses3.

Nouriel Roubini, dubbed ‘Dr Doom’, forecasted the 2008 subprime debacle in 2006, emphasising global imbalances, debt overhangs, and asset bubbles. His framework aligns with Dimon’s cycle warnings, stressing confluence events like AI disruptions or policy shifts2.

These theorists collectively illuminate Dimon’s caution: markets’ euphoria masks fragility, demanding disciplined risk assessment amid competitive pressures.

Implications for Investors and Markets

  • Heightened Vigilance: Dimon’s stance signals potential volatility in private credit and lending, urging scrutiny of banks’ NII strategies.
  • Sectoral Risks: AI-driven upheavals could mirror 2008’s utility surprises, impacting software and beyond.
  • JPMorgan’s Edge: Conservative positioning may yield resilience, as proven in prior downturns.

Dimon’s words serve as a clarion call: prosperity’s siren song often precedes turbulence. Prudent navigation demands heeding history’s lessons.

References

1. https://www.businessinsider.com/jamie-dimon-banks-doing-dumb-things-2008-credit-crisis-warning-2026-2

2. https://economictimes.com/markets/stocks/news/jpmorgan-ceo-jamie-dimon-warns-ai-and-dumb-things-can-trigger-a-2008-like-crisis/articleshow/128770717.cms

3. https://www.news18.com/business/banking-finance/jpmorgan-chase-ceo-warns-of-dumb-risk-taking-by-financial-firms-sees-echoes-of-2008-crisis-ws-l-9926903.html

4. https://en.sedaily.com/international/2026/02/24/jpmorgan-ceo-dimon-warns-of-pre-2008-crisis-similarities

"I see a couple people doing some dumb things. They're just doing dumb things to create NII." - Quote: Jamie Dimon - JP Morgan Chase CEO

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