How much do you need? $700 billion. OK, what will you use it for? I'm not sure. Is $700 billion enough to solve the problem? I can't say.

Did you hear we had the largest bank failure in US history?

Sounds surreal doesn't it. This stuff is actually happening. What is it telling us?

$700 billion is not enough. More banks will fail. If history is any indication, things will get worse before they get better. How should purchasing professionals prepare themselves?

Now it is more important than ever to have deep visibility into your supply chain. In How Much are You Betting and What are the Chances of Losing, we discussed a methodology to determine the likelihood that one of your suppliers is in danger of failure. As the financial crisis spills over into an economic crisis, some of your suppliers will not have the financial capability to survive. The news will come as sudden as the bank failures. The word is that WaMu executives were on a plane when the government sold their company to JPM. Insiders didn't even know it was happening.

Don't wait to react, like the government and banks did. Know your suppliers. Know your supply chain. You know what's coming. Prepare for it during the 3 month window that is left. Even if the government passes the bailout this weekend, this is not the bottom.

What do you see in the tea leaves? How are you preparing?
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Steve Belli

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