7 October 2008

Daily Capital Markets Review: Markets Lock in Deep Losses for the Week; Commodities Post Biggest Decline in 50 Years

Corporate Executive Board, 3 October 2008

This five page summary includes news items from October 3 regarding global liquidity, the TED spread (negative indicator of bank willingness to lend to one another), commercial paper and T-bill rates, currencies and commodities, and corporate debt spreads. Please feel free to distribute this report internally. If you would like to receive the Review after markets close (as opposed to the next morning), please click here.

Also, we invite you to listen to the Capital Markets Week-in-Review Podcast, broadcast last Friday afternoon.

Anecdotally, US Consumer Spending Has Dramatically Fallen

The New York Times, 5 October 2008

The US government will not release third quarter consumer spending data until later this month but forecasts are anticipating a three percent decline, the worst decline since 1981.

Moody's Anticipates Further Erosion in Consumer Discretionary Credit Quality

CFO.com, 3 October 2008

Quarter-end reports from Moody’s Investor Services suggest that non-financial companies will also suffer from the liquidity shortage and weak consumer spending. Moody’s expects those industries that are more tied to discretionary spending to experience the most negative rating actions.

New Business Model Innovation for Nokia

The Economist, 2 October 2008

Nokia’s latest business model innovation, launched in the UK last week, aims to help it and the increasingly worried music industry take a bite out of Apple’s current market dominance. ‘Comes with Music’ allows customers to download as much music as they want during a one-year subscription period; Nokia aims to boost handset sales and provide competition for the music industry to Apple’s iTunes music store

Our View: Our research shows that consideration of business model innovations should form a constant part of your firm’s strategic thinking. The challenge lies in embedding this thinking in typical strategy discussions; click here to see how Owens Corning uses a forcing mechanism to do just that.