I remember I was still in Indonesia trip when the Lehman brothers case suddenly happened. Just weeks before everyone was reporting good news all over… then suddenly the entire worlds outlook seems to screw up.

I was reading Wikipedias entry and a website on the economic crisis. But I must say that’s very complicated for everyone to understand. So I try to summaries

1. It started out with homeowners trying to mortgage their house, there are many money lenders who are willing to provide a high volume of cash for the mortgage. So if the mortgage is not paid, they can seize the house easily

2. Such excessive buying and selling allow the housing prices to fly much above the prices (Similar to speculation), Which in turn allow bigger mortgages to be given

2. Unfortunately, when the mortgage people were unable to repay their mortgage, these make companies like Lehman brothers who provides such loans to fall. This also clause AIG, which insured the mortgages to be in trouble.

3.  The government started to bail the mortgage lenders out..

Then the stories continue that hell alot of index falling, and the international momentary funds started alot of a bleak outlook, and everyone started to end up losing their jobs. And the article got so numerous that usually no one would be able to read it.

As the days go by, we see many stock market indexes dropping and everyone had a bearish outlook in the whole issue.. and Government whose economy depended on the stock exchange frantically trying to fix the problem.

Sometimes I wonder how much truth is in that? what is the real clause of the crisis? Sometimes as I am reading the many comments on wikipedia about it, as well as the many news, and reports that are floating around.

Remember i once shared on a blog article of a world of fakes, as well as the truth that the stock market index and prices are base on sellers and buyers supply and demand.

I wonder what actually really attributes to a good economy? Actually I guess the answer should be pretty simple

Good Company = Profit making company
Many Profitable companies = Good Economy
Many companies with loss = Bad economy
Putting people on the wrong job = companies with loss

As we discuss earlier, there are many companies who are engaging in the business of fault finding, business of deception rather than business of money making. And the fact that many companies do not use operations to generate profit. Rather take part in highly speculative activities….

Banks started to loan out money to companies and credit risk actually isnt really well checked. All the wealth is thrown into a volatile stock market that clauses alot of business leaders to commit seppuku after the stock market crashes….

Perheps its time to rethink what we need to do in order to survive.

Maybe businesses should concentrate more on profit making operations and generate revenues there slowly. Expanding the business only when necessary or when the type of operations needed to churn out the profit is being defined clearly.

Maybe its time for businesses to reconsider this old quote from Tokugawa Ieyasu, the founder of the Tokugawa shogunate.
During the Sengoku period in Japan, Ieyasu is famous for taking side with the right guys, Nobunaga, Hideyoshi…. before he started to face Mitsunari at the battle of Sekigahara.

He once had 2 quotes Extracted from Wikipedia

“Life is like unto a long journey with a heavy burden. Let thy step be slow and steady, that thou stumble not. Persuade thyself that imperfection and inconvenience are the natural lot of mortals, and there will be no room for discontent, neither for despair. When ambitious desires arise in thy heart, recall the days of extremity thou has passed through. Forbearance is the root of quietness and assurance forever. Look upon the wrath of the enemy. If thou knowest only what it is to conquer, and knowest not what it is like to be defeated, woe unto thee; it will fare ill with thee. Find fault with thyself rather than with others.”

“The strong manly ones in life are those who understand the meaning of the word patience. Patience means restraining one’s inclinations. There are seven emotions: joy, anger, anxiety, adoration, grief, fear, and hate, and if a man does not give way to these he can be called patient. I am not as strong as I might be, but I have long known and practiced patience. And if my descendants wish to be as I am, they must study patience.”

In short, business must remember
1. It is better to make money slowly, (A step at a time) rather then depending on Bank loans and mortgages to grow a business

2. Remember that it is basic business operations that are really in your control, and for you to decide how the cash flow within the company is like. Achieve efficiency in the operations, allow simple business decisions to be made without meetings.

3. Instead of engaging in the business of fault finding… concentrate on building the right business relation and build up a partnership that is mutual benefiting

4. Employ able man to perform the operations, look out for manager who are promoted by accident or because of the Sukhomlinov Effect. These are potential leeches to your organization capital, and usually the cause for corporate inefficiency

5. Finally, consider this old Internet joke that I have seen, perhaps its time to move business to the most ancient method to make money

2000 BC – Here, eat this root.
1000 AD – That root is heathen. Here, say this prayer.
1850 AD – That prayer is superstition. Here, drink this potion.
1940 AD – That potion is snake oil. Here, swallow this pill.
1985 AD – That pill is ineffective. Here, take this antibiotic.
2000 AD – That antibiotic is artificial. Here, eat this root.

Maybe we have made all business process so complex, that we have forgotten how to make money 😉