Monthly Archives: July 2010

What does “practically no-debt” mean?

As I have made an announcement in June, a payday of the bonus was in last week. As I told on notification, it may not be enough for you. That is because we were having a tough time as an economic environment for this year and a half. I think this period will be unforgettable for many of you in your life. There was no any particular failure in financial management for us. But out of the blue, the Lehman Shock flew over the world.

However, thanks to your patience, we have kept the “practically no-debt management” in this term as well. With a market recovering from the shock, the article of Nikkei newspaper on June 26th said that 47% of listed companies on a stock market have the same tendency. Managing under the state of “practically no-debt” is, according to the definition of Nikkei newspaper, to have more total floating assets than total interest-bearing debt. In that sense, management of a company is generally not different from that of households.

The Lehman Shock was caused directly by scattering of Credit Default Swap. However, it was originally by insuring a low-income group: referred as the subprime borrowers who couldn’t afford to buy houses, to make loan for them with almost no examination. Then they made people change the contents of loan after the rising of an estate value.

The subprime loan starts with rather gradual interests, but its payment goes up suddenly at some stage. If you manage to change the contract before reaching to that stage, you can go through with it-this is how to set up. We all want to buy a house; it’s a common interest. However, needless to say, you cannot afford to pay back loan more than you earn.

Anyway, the bankruptcy was brought by the way of financing with making use of the weak and the poor. Additionally, prime borrowers, a middle-income group engaged in regular jobs with fixed salary, seemed to be devaluated in U.S. A wealthy group does not need to contract loan. They would do it without having any practical debts even if they need, I suppose. After all, whether corporates or privates, we all have to manage finance within the income.

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The knowledge in the period of deflation

Dear all the prospective companies, I hope you are doing fine in these hot summer days.

Last month I have gave out a book, “People study well and People don’t”, written by Hideki Wada. How did you like it? I suppose that you all have studied history in schools, and then Berlin Wall collapsed in 1989. As you may know, the 20th century was the era of wars and revolutions, and in 1991, by the fall of the Soviet Union, the Cold War finally ended.

This historical fact points out that economically we can no longer exhaust ourselves in a war. In short, in the 21st century, the world necessarily shifted to deflation from inflation. An economic surrounding in the 21st century, when you make a debut as a member of society, is in deflation. This state will continue for long periods.

Furthermore, in September 2008, Lehman shock ran through the whole world. Global economy had shrunk rapidly and fallen into the severe environment: deflation was accelerated, consumption decreased, salary would not go up, and employment was not created.

I am sure you understand this situation most. It is “difficulty of finding work”, but I stop talking about that generalization, for you will join our company. However, because this will not change the deflation state in Japan and the world, you need to prepare yourself for the situation.

To make matters worse, schools no longer teach students the situation of the real world. The media also do not report everything. You will be put in the society without knowing anything when you start working, and then overwhelmed by the difference between what you know and the reality. That should not happen to you. This is why I let you know the truth of the world in advance, because obstacles can be avoided if you knew them in advance.

First thing I would like to refer to is a gap in knowledge of software skills. No matter how good professional school you go, it is not useful in an actual work. Universities in Japan are the same because no practical education is made at all. Without giving any practical lessons to the students such as how to report to your clients or to the office, it is no wonder you will be lost in the business world to where you are thrown.

To avoid this, it requires your studying. The workshops we have for the trainees are prepared for you, and my blog can also be made use of as a backup shooting. There is a critic for economy and military, Keitaro Hasegawa, who points out good stuff. Here is a part of it, “Please listen.”

“So, what did you think?” I myself also feel that my wisdom, memory, and judgment are better and keep on advancing since 20’s, not fading away. This is because I keep studying. Of course, I take studying as a wonderful thing, not as a suffering one. Hope you all keep challenging for yourself.

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