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What were they thinking! (or not)

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It’s the end of the year and the decade and I’m facinated with all of the “top ten” lists coming at me. I now know the top ten medical stories, the top ten vacation spots, the top ten movies, the top ten songs, and on and on and on.

I’d like to compile a list of the top ten individual or collective lapses in good thinking from the past decade. Here are a couple of my nominees.

  • What were the mortgage companies thinking when they gave NINJA (no income, no job, no asset) loans for mega-houses?
  • What was Merck thinking when it kept Vioxx on the market after it’s own studies showed it to increase risk of heart failure?
  • What was management at Pontiac thinking when they introduced the Aztek? (See if that doesn’t bring a smile to your face?)

Please add to the list. What were they thinking?

Date: December 30th, 2009 @ 09:48

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Categories: Prepared Mind

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AndrewNo Gravatar

in February 16th, 2010 @ 18:34

Bill,

I suppose I would ask what on earth fund managers were thinking when they handed so much of their clients’ money over to Bernard Madoff when there were so many warning signs that things were not right?

[There were warning signs all over the place, like the fact that: (1) the firm which audited his accounts had something like only three staff (2) he cleared his own trades (apparently an unusual practice in the industry); (3) his fund somehow managed to produce miraculously returns of around ten per cent each year, regardless of whether or not the market had had a good year; (4) other firms who tried to replicate the strategy which he claimed to be using concluded that the market was too small to support those strategies by a fund of the size in which Madoff was managing; and (5) Madoff was so defensive when his strategy was challenged (those who dared ask questions were apparently frequently ejected from meetings)]
.-= Andrew´s last blog ..Blackmail is criminal, not capitalist =-.

Bill WelterNo Gravatar

in March 6th, 2010 @ 07:07

Andrew,
First, let me apologize for taking so long to respond. I’ve been consumed with an assignment and everything else went by the wayside.
That said, your example regarding those who saw but could not validate the “Madoff miracle” is right on the money. Unfortunately, that will not be the last example we’ll see in the coming years.
Bill

AndrewNo Gravatar

in April 13th, 2010 @ 06:16

No problem Bill, you’ve got to focus 100% on those big projects – often, of course, at the expense of lesser priorities.

Unfortunately, as you say, we will see more examples of that kind of thing as lessons get forgotten and complacency sets in.
.-= Andrew´s last blog ..Kraft’s broken promise =-.

Sandra ByronNo Gravatar

in March 21st, 2011 @ 22:08

What was the SEC (Securities and Exchange Commission) thinking when they gave AAA ratings to bundles of F-rated subprime mortgage loans? They are supposed to be the watchdogs of Wall Street but instead they became the enablers. Their investment-grade, “money safe” ratings for subprime mortgage loans enabled these funds to be traded globally. Economist Joseph Stiglitz stated: “I view the rating agencies as one of the key culprits…They were the party that performed the alchemy that converted the securities from F-rated to A-rated. The banks could not have done what they did without the complicity of the rating agencies.” Without the AAA ratings , demand for these securities would have been considerably less.