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.