Veteran insolvency expert Nick Hood gave the restructuring summit a sobering reminder of the shortcomings of corporate finance.

“Every time we have a recession I sit down with the head of workout for bank clients and ask what banks are going to learn,” said Hood, who first qualified as an accountant in 1970.

“Absolutely nothing” was their response when asked during the last recession in the early 1990s, Hood said.

“Within three years, they said, there will be high loan to value (ratios) on commercial property, covenants will be loosened and lo and behold it happened … the odds are against any learning,” he said.

He explained: “What happens is when the cycle turns, everybody’s gone — they are rich, retired and gone.”

To make things worse, Hood told the summit, there is a global shortage of turnaround specialists.

The global paper industry has struggled for more than six years to claw its way out of a slump, as soft demand and overcapacity have kept prices down, leading to poor earnings, production curtailments and layoffs.

The current global downturn has further eroded demand for basic materials, including paper, as print advertising has dropped steeply in the crisis. Companies have been forced to run just to stand still, temporarily or permanently shutting mills and axing staff.

The sector is now at a crossroads. Will businesses after the recession look roughly the same, only smaller? Will demand ever return when electronic books and newspapers are surging? With many forestry companies big producers of biomass, what role will green energy play in the future?

So, what did we learn from executives in the hard-hit luxury and main street retail sectors this week at the Reuters summits?

The idea of a “new normal” age of lower consumerism was in vogue, with many executives expecting consumers to continue to be thrifty for some time. Conspicuous consumption may be dead, they say.

Heck, even Tiffany’s is attracting hagglers.

Even the Saks CEO is “Staycationing” in the downturn.

Of course, not everyone is cutting back, so Hermes still needs supplies of crocodile hides to make $35,000 handbags. The company’s solution? Breed its own.

The word “bottom” was also bandied about. Executives were hesitant to say the economy had definitely hit bottom. But many did see some leveling off. EBay CEO John Donahoe, for example, said he has seen some stabilization in demand, as did VF Corp CEO Eric Wiseman.

Taittinger chief Pierre-Emmanuel Taittinger isn’t even concerned about the bottom line. Just bottoms up.

And about those young American women with the word “Juicy” on their sweatpants bottom? We may not be seeing that as much, said Juicy Couture President Edgar Huber.

Oh, and designer Jonathan Adler, who is hoping to make his store a “crack den of adorableness” during the holidays has his own way of generating sales: a $48 banana bud vase that he says is “so wrong.”

When this is recession number seven for you, the state of the economy begins to drop into perspective — even if the pain is still real.

The chief financial officer of Corning glass, James Flaws, told the Reuters Global Technology Summit in New York that he read from the 158-year-old company’s official history and drew on his own experience to explain to younger managers what these downturns mean.

The first lesson is that economic predictions are hard.

“We don’t have an economist. We used to have one and he predicted eight out of the last four recessions,” Flaws said with dry humor.

The second lesson is that — at least at Corning — things have been tough before. This year, all merit increases were frozen.

“I actually worked here in the ’80s when we cut everybody’s pay,” he said. And during the recession of 1975, shortly after he joined the company, the company fired 25 percent of its management.

“Unfortunately they did that on a Friday night. It was really bad,” he said.

He touched on recessions in the 1990s and the tech crash of 2001, but said that this recession seems most to him like that of the early 1980s — which until now was always described as the worst downturn since the Great Depression of the 1930s.

“That was a classic W,” he said in reference to the use of a letter to describe the roller coaster economy of the early 1980s.

“It was like this and then about six months later you had the second one. It was very widespread. Unemployment climbed above 10 percent and affected a lot of different industries.”

Flaws said that he is not predicting that this will be a double-dip recession — but his company is preparing, just in case.

It’s not just traditional western banks that are hurting — the recession is hitting Islamic finance hard, too.

The industry, which operates according to Islamic law and hence has an in-built conservative investment strategy, is seen as relatively insulated from the financial crisis. But some executives at the Reuters Islamic Banking and Finance Summit are not so sure.

Islamic finance should still be able to combat the crisis better than conventional banks but big problems loom if liquidity remains tight. In fact Sohail Zubairi, head of consultancy Dar Al Sharia, reckons they’re facing up to a crisis scenario that could include forced consolidation and layoffs.

“There is a real threat to the business of Islamic banking,” Zubairi told Reuters reporters at the summit in Dubai. “If the liquidity does not return, we will not be able to continue doing our business.”

Yousif Khalaf, head of Ajman Bank, thinks the situation is so bad that growth and profitability are off the menu for this year.

“What is more important is survival and, to some extent, continuity,” he said. “People want to make sure they survive.”

PHOTO CREDIT: A labourer walks inside Sheikh Zayed mosque in Abu Dhabi April 7, 2009. The mosque, one of the world’s largest, is named after Sheikh Zayed bin Sultan al-Nahayan the founder and first president of the UAE who is also buried there. REUTERS/Ahmed Jadallah

Tired of paying high prices for everything from soup to cereal? See your butcher.

While food makers like Kellogg and Campbell Soup have yet to take back price hikes on boxes of cereal and cans of soup spurred by last year's spike in commodity costs, beef companies have to move their premium, perishable product in a environment where restaurants aren't buying and consumers are pinching pennies. 

"You are seeing some of the best value in grocery stores for steaks than what you have seen in
an awfully long time," Gregg Doud, the National Cattlemen's Beef Association's chief economist said at the Reuters Food and Agriculture Summit in Chicago.

"You are seeing a lot of features for rib-eyes and T-bones at below $5 a pound. That is some of the best featuring we have seen in many many years," Doud said.

In April 2008, the retail price for boneless rib-eye steaks averaged $9.49 per pound and T-bones averaged $6.88 a pound, according to data from the U.S. Department of Agriculture.

(Photo\Reuters)

The recession has hit U.S. consumers, yet Reckitt Benckiser has not felt as much of a pinch.  The maker of Lysol disinfectants and Air Wick air fresheners said shoppers did not shy away from its products even as the overall household products industry felt the impact of pantry destocking, or consumers using up what they had at home rather than buying more products.
   
Rob De Groot, head of the group’s North America and Australia region, told the Reuters Food and Agriculture Summit in Chicago that he did not see a massive consumer destocking.  Click here to hear his comments. 

De Groot expects Reckitt’s U.S. market share to rise this year, even as the overall market remains flat.

He added that the group had not seen any effect of the U.S. recession hitting its results.  Click here for De Groot’s thoughts.

Throughout the current recession, many of the companies’ executives at this week’s Reuters Manufacturing and Transportation Summit have found an opportunity to review, pare back and possibly add on to their existing business mixes.

Such is the case for Edward Campbell, chief executive of Nordson Corp, which has a uniquely diversified set of businesses under its umbrella and is looking at what makes sense for them going forward.

Campbell makes the clear point that if something isn’t working for Nordson long term, the company has a responsibility to really consider whether that is a business they should be in.

Nordson makes a wide range of precision dispensing, testing and inspection, surface preparation and curing products. Its products can be found in everything from appliances to autos to bookbinding to furniture. It operates in three segments: adhesive dispensing systems, advanced technology systems and industrial coating and automotive systems.

Campbell said all of its businesses were subject to review, but did mention a couple that might be pared back in the attached audio clip.

Campbell was one of the featured speakers for the third day of the annual Manufacturing and Transportation Summit, which continues through Thursday in our Chicago offices. The Summit program is in its fifth year, and in 2009 will include top-level executives from  industries and sectors including everything from Infrastructure; to Mining; to Investing in India, China, Japan and Russia; to Food and Beverages.

The U.S. is more than a year into the current recession, but things are still looking nasty. At least that’s what Bill Zollars, chief executive of trucking company YRC, believes.

The trucking industry has been in pain since late 2006, due in part to the flagging auto and housing industries. It could also be expected that the sector should see a pick-up before the broader economy, but the environment has remained difficult, Zollars said at the annual Reuters Manufacturing and Transportation Summit held in Chicago.

So what’s a trucker to do? Zollars said folks in the industry are hunkering down, in hopes that they can operate through the downturn, and be ready to roll as conditions start to improve.

Sure thing, kids LOVE the bubbles. The blowing, the running around, the popping.

All the things that gives real estate investors and developers fits.

Any simple search on “real estate” in a news story for the past two years would more than likely also mention the word “bubble”. In fact, a quick Google search of “real estate” and “bubble” turned up 998 news stories — in the past month!

At the Reuters Global Real Estate Summit, the problems that have plagued — and continue to plague — the real estate market has been much on the minds of all our guests, including Scott Schwartz, managing director of Marathon Asset Management.

Recognizing the breadth and depth of this real estate trough is critical for Schwartz’s business, but it is also equally key for him to see what’s coming at him down the road.

That is, “What’s next?”

Schwartz wonders about the expansion currently happening in Dubai and also sends up warning flares on another non-US economy — which he mentions in the attached audio clip.

Schwartz was one of the featured guests on the first day of the U.S. arm of this global summit — which has guests in New York, London, Dubai and Singapore and runs through Thursday.