Power Sheet readers will recall that yesterday we examined how leaders should respond to the global stock market panic. Today we get to see who responded well and who didn’t.
The outstanding leader so far is Apple chief Tim Cook, who emailed CNBC’s Jim Cramer just before yesterday’s market open in the U.S. In calm, direct language he told Cramer – and CNBC’s influential viewers worldwide – that “we have continued to experience strong growth for our business in China through July and August.” He supported the statement not with rhetoric but with facts. Then, knowing that stock markets operate on expectations, not history, he added:
“Obviously I can’t predict the future, but our performance so far this quarter is reassuring. Additionally, I continue to believe that China represents an unprecedented opportunity over the long term as LTE penetration is very low and most importantly the growth of the middle class over the next several years will be huge.”
That’s how it’s done, folks – the leader of the world’s most valuable company using his unique position to exude fearlessness. He calmed Apple investors – the stock dropped only 2.5% yesterday, much less than the overall market – and likely helped calm markets generally.
And by the way, for all the adulation rightly heaped on Apple founder Steve Jobs, he probably would never have done what Cook did, as Fortune’s Phil Elmer-DeWitt points out.
The most egregious leadership losers so far have been Chinese President Xi Jinping, Chinese central bank chief Zhou Xiaochuan, and whoever else may be running the economic show; exactly who they might be is never entirely clear. Their policy stance is mostly opaque, and to the extent it’s visible, it’s contradictory. After trying to support China’s falling stock markets earlier this summer, they pointedly did not intervene Friday, yesterday, or today as stocks plunged. Then, after markets closed today, they cut interest rates.
But who’s in charge? One official publication, Securities Daily, today defended government intervention in the markets, calling the market crash “profoundly serious.” But another official outlet, The Economic Information Daily, said the opposite: “The domestic policy focus should be on steadily retreating from stock market bailout policies. Government bailouts are meant to avert financial risks, not to prop up stock prices.”
Conflicting signals, unpredictable actions – these are terrible mistakes for leaders in crisis. They’ll haunt China’s leaders for years to come.
What We're Reading Today
China reacts to plunge with interest rate cuts
After another 7% fall in the market today, China's central bank dropped interest rates by one quarter of a percentage point. The world has heard little from President Xi Jinping, while the state news agency People's Daily focused on manhole fixes in the news. European stocks rebounded, recovering nearly all of yesterday's losses by early afternoon. South China Morning Post
Tim Cook reassures Apple investors
In email to CNBC's Jim Cramer, Cook says that Apple continues to grow in China, calling the performance this quarter "reassuring." While the email may have violated SEC rules, Cook acknowledged he wrote it because many investors worry about Apple's performance in China. CNBC
President Obama's pitch on climate change...
...will include a push for an additional $1 billion to a clean energy loan guarantee program, which Tesla used to much success but which famously failed to save Solyndra. Fortune
FTC has power over cybersecurity breaches
An appeals court ruled that the agency can pursue a lawsuit against Wyndham Worldwide for not properly protecting its data from hackers during three breaches it suffered in 2008 and 2009. MarketWatch
North and South Korea agree to reduce tensions
After marathon meetings, the two countries reached an agreement that avoids more fighting. South Korean national security adviser Kim Kwan-jin, who led the negotiations, says the two sides will continue conversations to discuss improving ties. BBC
Monsanto sweetens offer for Syngenta
Seed maker Monsanto has tried to get the Swiss-run pesticide and seed company to negotiate a merger. With Monsanto now valuing Syngenta at $47 billion, its chances may improve. Business Insider
Building a Better Leader
IBM's solution for the tech diversity gap
The P-TECH school graduated its inaugural class of students - all six were offered full-time jobs at IBM. The school prepares high school students for careers in the technology sector, with 40 schools across the country mimicking its design this fall. Wired
Inside John Mackey's plans for 'conscious capitalism'
It seeks to serve not just Wall Street, but all stakeholders, including employees, customers, the community, and shareholders. Mackey may have found the right time for his ideas. Fortune
Millennials shunning government jobs
People under age 30 account for the lowest percentage of federal government employees since 2005, making up just 6.6% of the federal workforce. Washington Post
Reacting to Market Turmoil
RainDance withdraws IPO following market fall
The genomics research tool maker pulled back the IPO set for this month because of the sharp declines in the market. It will likely pursue a private offering. MarketWatch
Starbucks baristas understand your pain
Starbucks CEO Howard Schultz asked baristas to act extra friendly on Monday, since many customers may be in a bad mood as a result of the market's fall. Fortune
Startups could face the biggest early hit
Those that need to raise capital in the near future could struggle if venture capitalists begin to worry about their own portfolios. NYT
Up or Out
Jig Patel has been named chief information officer at UMB Financial. WSJ
Fortune Reads and Videos
124 deaths linked to faulty GM ignition switches
General Motors knew of only 13. Fortune
John McAfee thinks he found the Ashley Madison hacker
The eccentric creator of McAfee software claims it was an ex-employee of the dating site. Still no word if he can collect on the $500,000 bounty the site has offered for finding the culprit. Fortune
Your next apartment rental could come with smart technology
Although the smart door locks or connected lights could also increase the price. Fortune
Taking stock of the economy
It's only slightly related to the stock market, but it could suffer from China's fall. Fortune
Today's Quote
"If you’re going to wreck your company or values just because you’re being attacked, then you’re not very deep." - John Mackey, Whole Foods CEO Fortune
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