I remembered one session during my Management of Technology Executive Program with the McIntire school where I had a pretty heated debate with one of my classmates. We were discussing the changing landscape of Higher Education worldwide and were asked to discuss how the McIntire school could only survive but more importantly thrive. We discussed many threats including one from the trends of rising enrollments from the likes of University of Phoenix, considered to be one of the first movers of “virtual” or online universities.
While the Commerce program has been nationally highly ranked, almost on par with the Wharton School of the University of Pensylvania, the Executive program was and is still relatively new. While some previous participants have come as far away as the West Coast, my teammates in the program hailed mostly from VA,DC,and MD area. Some came from the Federal Sector. I recalled one fellow from the US Dept of Justice. We actually had someone with the “Deputy Director” title in her belt. Others were associated with a Financial entity with heavy presence in the neighboring area. I myself came to the program after the ill-fated $9-Million Risk Assessment contract with the Federal Railway Administration got cancelled.
As amazing and rich as the backgrounds of my classmates, I could not help but feel that one thing the program lacks is the International dimension. Yes, it was interesting to know how Enterprise Architecture has helped Delta airlines streamlining its key business processes. Perhaps, more importantly how the Technology Architecture could have a strategic impact on the Business Architecture and ultimately drives the bottom line.
But the International dimension took center stage as there is a “strong” push to widen the program overseas, particularly in Europe and Asia. The Director of the program whom I had a very strong working relationship actually made overseas trips during duration of my residences. And on that particular Saturday afternoon, I brought up the issue that we may have discounted ourselves short by lacking the International dimension. While others may not agree with me, I strongly believe that program should not only help to prepares us for challenges in 21st century where business & technology are closely intertwined but also ready to assume the challenges of globalization.
For a while, the permeating belief has always been that as the sole world superpower, the US needs no advice from anyone. The strong unitary policy of George W in many aspects, domestic and especially international, almost treated the rest of the world like a pariah. Back in 2006, Enron collapse of $90B of market capitalization was also the hot topic for our Governance class and so did SarBox. Housing had been a strong pillar that almost solely support the entire US economy. So not to my surprise, my argument fell to many deaf ears in that Saturday afternoon.
Now fast forward to 2008, 2+ years after graduation of the program, we are witnesses to events that made the Enron tragedy seemed like an uneventful breeze. Years if not decades of easy credits began to take its tolls despite continued denials from so many involved parties, the Real Estate industry including the government. The financial tsunami started with the foreclosures that began almost innocently enough by the Adjustable Rate Mortgages, making loans to those with higher risk.
My final project on the program was to study the Mortgage industry and consult for a client in the mortgage lending business. My teammates and I focused on Fanny Mae as one of the GSEs (Government Sponsored Enterprises), and the intricate process of securitization of those loans. My understanding was that in the beginning, both Fannie Mae & Freddy Mac backed by the US government were the key players in the secondary mortgage market. Over time the large Wall St banks also crowded the marketplace. While securitization brings the benefit of liquidity and credits to the “American Dream”, home ownership, I have some uneasy feelings about the complex financial derivatives as a key part of the scheme. Even more bothersome the fact that demand for these products had increased international dimensions. Why should anyone invest in the US Treasury if they can get better return with Mortgage Backed Securities?!
Surprised and shocked were not even adequate adjectives the day the financial tsunami claimed its “high profile” victims, particularly the demise of the Lehman Brothers bank. Soon the world reported subprime-mortgage linked losses from the overseas banks in Europe and Asia. My heart sank when I read about so many investors in Hong Kong and Singapore whose live savings were virtually obliterated when they found out their “safe” investments were “tied” or “backed” by these complex, financial derivatives.
With the fall of housing, the US economy lost its steams and contracted, unemployment rose and foreclosures now even spread to the traditional, 30-yr Fixed Rate Mortgage. I have seen longer and crowded lines everyday on my way to work as I pass the Workforce Center of Employment Commissions in the 1st floor.
