What Shape is Your Recovery?

u-recoveryWhat has struck me about this recession are the predictions about how we come out of it. Just about every talking head on every cable channel seems to be playing from the same sheet of music. Almost all are predicting an ugly recovery—an “L” shaped recovery. It would obviously look like this:


That’s a bad way to come out of any downturn because it means the economy and the financial markets will go straight down—and stay down—for quite some time,  as we limp along the bottom for as long as several years.  I have seen a dozen “experts” predict that scenario.

I have not heard anyone predict a “V” shaped recovery. That would obviously look like this:

This would mean that we would snap right back as the letter suggests. I think this is hardly likely. That’s because we know unemployment is going to get worse before it gets better, so the economy would have a hard time pulling this trick off.

I am hoping—and yes, predicting, what few have predicted: a “U” shaped recovery, although it might be a slow one:


This recovery suggests that we will come down (as we have), will stay on the bottom for a bit but then slowly but surely come out of it. Will we regain, say, the highs in the stock market—14,000 on the Dow? Yes, eventually, but it will take years, not months. Since fear is such a powerful factor in the markets, they go down faster than they go up. But we will regain our former strength, and once again be respected as having the world’s greatest economy. But in order for this to happen we will all have to be patient. There are many smart people working on the problem(s), but we are in uncharted waters. So much of what has happened is simply unprecedented.

However, I remain cautiously optimistic. We have seen some recovery in the Dow and we know the financial markets always look ahead. I try to do the same thing. That’s because constantly looking backward or dwelling on what has been lost will not help the current situation.

So “U” is my shaped recovery.  Please weigh in. I would love to hear what your recovery shape is!

Economy still Hurting, says Cab Drivers

taxisI have always thought that New Yorkers who drive cabs or “town” cars [for company clients] know as much as anyone about the economy.  In fact, because they are on the “front lines,”  I would put them up against our best of economists.

Last week I spent several days in NY City and got more bad news from those front lines. The drivers who drive town cars for companies are in dire shape.  Several drivers told me they waited five or six hours before their first fare of the day! When I asked them how that compared to say,  September 11th, 2001, they said that today is much worse. Even though the stock market had jumped more than 1,500 points in a month, these drivers were not feeling one bit of it. Most drivers knew that the stock market had improved, but since most companies had cut down on their services, these drivers shrugged it off as a temporary blip. Yellow car companies echoed their sentiments, but did not say it was as bad as the town car drivers. However, there were many more vacant yellow cabs as usual: I never waited more than 10 seconds after putting my hand in the air for a cab.  

There were two other key signs of a hurting economy:  I took one plane ride on American Airlines in which there were only 39 people (on a plane that held 250). I haven’t seen that on a flight between NY and Chicago in years. Also, the best hotels are charging a little more than half of their rates of a year ago.

So if the Big Apple is in trouble, then we have to assume that we have a ways to go before we are out of the woods.  But, take heart. To risk an overused cliche— I always feel it is darkest before the dawn.

Completing the Production Process

Red BookOnce a manuscript is finally in production—meaning that the author has submitted the book to his or her editor, and has made final changes based on the editor’s recommendations, it is not the last time that you will “see” the manuscript.

In most situations, an author will have to go through at least two more iterations as a book project moves from an imperfect manuscript to a polished and completed book, ready to be printed.

The first step is the copy edit process. That’s when a professional editor will review every line of the manuscript to make sure that the grammar and spelling are correct, that the right word is used in ambiguous passages, to make sure that the art (e.g. graphs, charts, photos) is where it is supposed to be, that it is correctly labelled, etc. This layer of editing is now usually done electronically, and takes place on top of the earlier layer that is completed by the acquisitions editor in conjunction with the author.

Once the copy editing is complete, it is sent to the author for his or her review and approval of the changes, to make sure that the copy editor did not alter the meaning of any part of the manuscript by mistake.

Then the copy edited manuscript is returned to the publisher so that it can be typeset.  That first draft of  typeset pages, usually called “first pass” pages,  will still have some typos, but it is still the document used by the publisher to create the bound galleys for the book . The galleys are what the publicist sends to the press  to hopefully secure reviews of the book that will be appear much closer to the book’s publication (galleys are usually done for all but the most technical books, depending on the publisher’s marketing budgets and priorities ).  Because most print publications—from Publisher’s Weekly to Fortune Magazine—require long lead time, the publisher sends the galleys to the press three to four months prior to the official publication date of the book. That’s one of the key reasons an average business book production schedule requires at least seven months (although books are sometimes  “crashed” with far shorter schedules). 

Once galleys are corrected, they may be shown to the author a final time to make sure that all of the typos have been incorporated into the manuscript. It is in galley stage that we ask the author to make the fewest changes, mostly to correct typos. We do not want the author to make extensive changes that would warrant either additional copy editing, or much worse, repagination of the book (a very expensive proposition).

Once all of the pages have been corrected, then a book can be prepared for the printing/publication of the book . Not to complicate the matter, but while all of the above is taking place, the publisher is also working on finalizing the book jacket mechanical (and the copy that appears on the jacket “flaps”). That jacket process usually goes on for months as well, which is why the publisher gets that part of the process underway fairly early on in the process. 

So an author “completes” the book many times throughout the process, as each step takes the manuscript closer to final book. As an author, I can tell you that there is no better feeling than sending the manuscript to your editor for the final time, after it has been typeset, corrected, etc.,  Then the printed book is right around the corner and the real fun begins!

The Publishing Process—Step-by Step



As an author and editorial director, I am frequently asked about the publishing process. What happens after we sign a contract?  Will I have another chance to make changes to my manuscript after I turn it in? Then what happens? These are all perfectly legitimate questions for someone who has not written a book before.  I will try to describe, in detail, the publishing process in this posting.

It all starts with a great idea and a well constructed book proposal. If the publisher likes that, chances are that we will offer the author a publishing contract for the book. It spells out the terms of the agreement, like the length of the manuscript, the due date, etc. Once that is signed by both author and publisher, the work really begins in earnest.

It is imperatuve that the author develop a strong working relationship with the editor, and vice versa. The duo (or trio if there are two authors) need to decide how they will work together. Will the author simply work on the manuscript solo and then turn it in? Or will she seek the advice of her editor far more frequently, say, chapter-by-chapter? There is no one right way to do this as it all comes down to maximizing productivity and determining what works best for the author.

Let’s say that the six months have passed and the author turns in the manuscript to the publisher. Does that complete the author’s responsibility? Hardly! There are still several more steps and tasks that the author must complete before the manuscript is officially “accepted” by ther publisher.  That term—“accepted”—is key because it is the time that the publisher usually makes some advance payment to the author.  But we are getting ahead of ourselves, because there is a vital, often iterative, review process that involves both the author and his editor.

Once I receive the manuscript from the author, I read it, edit it,  offering suggestions throughout the book in the margins of the manuscript using the Microsoft edit program. That’s how I work, but other editors may work differently. They may use a blue pencil, as was done for decades in the 1960s, 70s, and 80s. 

When I finish editing the program, I send it back to the author for his or her review of my edit, accepting those changes they agree with, making the requested changes to the manuscript. All of this assumes that the manuscript is in “decent” shape when I get it. If the book is a disaster, which happens infrequently if the editor is working closely with the author, then a whole different process is necessary (I will save that scenario for a future posting if people want to hear about that). When the author gets back the manuscript from the editor and makes all of the key changes/improvements to the manuscript, he returns it to the editor via email  for a final review. Once that is complete, the book goes into “production.” But the publisher cannot literally “produce” the book until the following has been submitted:

* The complete art program: that could include charts, graphs, photographs, cartoons, etc. If you cannot “draw”  it with a typewriter, then it is considered art (at least that was the definition for my first two decades in publishing).

* All permissions:  art that is taken from a third party requires permission. So do lengthy excerpts from articles or books, as well as signed permission forms for any person that you interviewed for the book. This is a key part of the process and should not be left until the end, but it is by 90 percent of authors. If you want to use something that requires permission, apply for it early and you will be way ahead of the game.   

* In some cases, a legal read and response:  some books require legal reads to minimize the chances for a libel suit, as well as a review for any items that may require permission (per the conditions described above). Authors must sometimes make changes to the manuscript per the recommendations of an attorney.

Once all of the above is settled, the book goes into production. Tune in at the end of the week to get the rest of the story on the production process.


Traffic Jam on the HighwayBarack Obama understands something that his predecessor did not: that his job is to instill confidence whenever and wherever he can. The former CEO of GE, Jack Welch, once said instilling confidence is the most important thing he does. He described his job as one in which he makes things grow by walking around with a can of fertilizer in one hand and a watering can in the other. President Obama has taken a page from the Welch playbook.

While GM teeters on bankruptcy, Obama comes out and tells the country that it is safe to wade back into the waters of the Big 3 once again. He decreed that the US government will guarantee each and every car warranty for GM, Ford, and Chrysler.   Here is how he put it: 

“If you buy a car from Chrysler or General Motors, you
will be able to get your car serviced and repaired, just like
always. Your warranty will be safe.

In fact, it will be safer than it’s ever been. Because
starting today, the United States government will stand behind
your warranty.”

While many criticize the president for “socialist” ways, I believe he continues to steer the ship just right. He decided not to allow the US car industry to disappear, ensuring its long term prospects. However, he did fire GM CEO Rick Waggoner, after reviewing what he felt was an inadequte restructuring plan.  

What are we to make of all this? What kind of leader will Obama be? I believe that he will first and foremost be a prgamatist in the era in which accountability and pragmatism have never been at a greater premium. His strength as a leader is that he understands that while Rome burns, it is his responsibility to put out the fires and search for the pyromaniacs later. That explains his multi-trilli0n-dollar budget, his continued use of the TARP budget, his vow of a trillion dollars to the IMF, etc. Former President Bush may have been our first MBA president, but Obama is our first genuine CEO-in-Chief.


What the Markets are Trying to Tell Us

crystal-ballAfter hitting a low below Dow 6,500 in early March, the stock market has rallied 1,500 points to top the 8,000 point mark. This 21 percent one-month rally has been the best since the 1930s. That caused Mad Money’s Jim Cramer to announce “the death of the depression.”  Now we are only stuck in a recession. Of course, we were never in a depression. The depression of the 1930’s had unemployment rates in excess of 25 percent while today’s unemplyment figure hovers at 8.5 percent.

Now most of the talking heads agree that the worst is over. Not in the economy, but in the stock market. Those are two different animals. That’s because the stock market is a forward-leaning institution—a forward-looking indicator. The rally in a bear market usually precedes a turnaround in the economy by something like seven to ten months.  So while we are likely to see unemployment rates rise to perhaps ten percent, there is a renewed sense of confidence that is beginning to seep not only into the financial markets, but into the overall economy as well. With mortgage rates at their lowest point ever (at around 4.85% for a 30-year fixed mortgage), there are a record number of homeowners refinancing their mortgages (including me). That’s going to put real money into the hands of millions of Americans—and serve as a “stimulus package” of its own. 

In addition, all those trillions that are being heaped into the financial and mortgage markets are beginning to make a difference, which is why the markets have rallied and why most CEOs feel that we have turned an important corner. Many feel that star-economist Nouriel Roubini’s prediction was far too pessimistic.  He had predicted that the Dow would shed thousands of additional points—to perhaps 4,000— before going into an “L” shaped, or very weak, recovery. I am no Nouriel Roubini, nor do I play an economist in the blogosphere, but on March 12th, in a post entitled Did the Media Help Sink the Stock Market , I suggested that Dow 6,500-7,000 would be a great time to invest. I stick by that statement.

So what are the markets trying to tell us? That there is a light at the end of the tunnel. That we are not going to have a depression. And that there is an end to this recession—and it is in sight. Before rising to Dow 8,000 this week, all of the aforementioned predictions were in doubt. Many economists still believe that the worst is not over. It is likely that the economy is still trying to shake off a multi-trillion-dollar drinking binge; but for the financial markets, I think that the best is ahead. This does not mean that we won’t have some bad days on Wall Street, or that we won’t sink back down into the low-to-mid 7,000s as we “back and fill” and consolidate our gains. We just might. But over the long term, the ones that will be rewarded will be those that hang in there, don’t let emotion rule the day, and buy on the dips. That’s the way it has always been…at least for the last seven decades.

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