OMG — panic in the streets!

OMG, texting generation’s
abbreviation for “Oh, my
God,” aptly describes the near cataclysmic financial market gyrations during the infamous last weeks of September
2008. Businesses must never
forget the survival lessons that
these events teach.

During those tumultuous
days, Lehman Brothers, the venerable white-shoed investment
banking firm, folded after 158
years. Lehman’s fall followed on
the heels of the Bear Stearns
demise that rocked the investment world several months earlier. Little did we know that we
had not seen anything yet. Next
came the collapse of Fannie
Mae and Freddie Mac, along
with the rescue of AIG, the
world’s largest insurance
company. Just when we
thought the worst was over,
Washington Mutual was
seized almost in the dead of
night and sold, making this
the largest bank failure in
history. Next came the Fed’s
shotgun arranged marriage,
with Citigroup agreeing to buy
the failing Wachovia Bank only
to be usurped by Wells Fargo
that triggered a shootout
between the two rival bidders,
which was ultimately won by
Wells Fargo.

If most people hadn’t been so
scared or lost so much money,
this wild ride would have been
intellectually fascinating.

OK, what is, is. However,
have we finally learned our lesson? Only time will tell. For
common variety executives or
owners with no hope of a government bailout if they mess
up, they’d better take note if
they want to continue to play in
this risky game of business.

There are numerous lessons
to learn from the last eight to 10
years of excess and reckless
behavior that almost shattered
the foundation of our system.
So what were the biggies to
remember and etch into the
minds and hearts of your teams?

If it is too good to be
true, don’t believe it; it
will never last.

Unprecedented growth, with
little or no regard for common
sense, combined with loaning
money to someone who might
be light on the old-fashioned
requirements, such as a job and
at least a credit history that provides a 50-50 chance for repayment, is a recipe for disaster.
Call me a dreamer, but collateralizing a loan with something
that has some value near the
amount being borrowed makes
good sense, too. The harsh truth
here is a sobering case of financial reality — as in how many
zeros are in a near trillion-dollar
rescue? Here’s another novel
thought: Don’t give customers
credit when you have no clue if
they can pay you back. Moreover, once you do extend credit,
be all over them like a cheap
suit if they start paying late.

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