Putradinar | Malaysia

As define by Professor Dr. Muhammad Yunus, social business is a non loss and non dividend kind of businesses with the social objective. It means that, in social business, the investors and the owners can slowly earned back the money that they invested but without taking any dividend beyond that point. The major purpose of the investment is mainly to achieve the social objectives with no personal gain through the operation of the company. Other than that, by practicing the social business, the company has to cover the cost which incurred and also simultaneously achieving the social objectives such as housing for the poor, healthcare for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water in a business way. In order to measures the success of social business, is firstly to observe the impact of the business on the people or environment rather than focuses on the total profit that have been made in a given period. The company’s objective must mainly focuses to achieve social goals.

According to Muhammad Yunus, there is one kind of business that we know about as we study in the economic theory which called business of profit maximization. To him this statement is very narrowing of interpretation which presents human being as money making machine or more or less like a robot in which they have no other thoughts than maximizing money. In real life, human being is much bigger than that, they want to make money, to be good to people, to make significant differences to the world or solve the problem that they see around them. But all this are not included in the business world. What he is trying to clarify is that, in order to justify the totality of human being, somehow he needs to create one more kind of business besides the existing type of business of making money. The other business is business making good to people without any idea of benefiting yourself.

As we know that, the first type of business is profit maximizing business in which that business is all about you and you want money to come to you in other words you are the center of the business activities. The second type of business is in which you are not the feature of the business and everything is about others and to help others who somebody other than yourself. Human being is multidimensional being not single dimensional being, likes to make money and that’s all they can do. This is what missing in the theoretical framework of capitalism that cause problem such as poverty, health, environment, disease and also the nutrition of the people which all this need have been ignore because the type of business that they are using right now by its nature do not pay attention to this. So, there is the need of other type business which will address these issues. Social business has two type of business, the non loss and non dividend business which has been explained and the profit maximizing business which is similar to other regular profit maximizing business but the business is own by the poor people because it is directly benefiting the poor people which also a social business because it helps them to get out from poverty. There is one of the questions that have been directed to Muhammad Yunus which is why would someone invest in social business? he replied that if people compare by giving money to charity with investing in social business, probably they will be attracted with the features of social business because with charity, if somebody donate some amount of money, they can only use it once to achieve the goal they desire but if you can design it as social business with the same purpose, that money can be work again and again because business money recycles, it comes back to you, you recover your cost, you create an institutions, it has its own life, it continues forever and ever.

Muhammad Yunus became involved in the poverty issue not as a policymaker or a researcher. He became involved because poverty was all around him, and he could not miss it for just one second. In 1974, with the backdrop of a terrible food shortage in Bangladesh, he found it difficult to teach elegant theories of economics in the university classroom because he suddenly felt the emptiness of those theories in the face of crushing hunger and poverty. He really wanted to do something instant to help people around him even though if it was just one human being in order to make them get through another day with a little more ease. Moreover, this depressing situation had brought him face to face with the poor people’s struggle to find the smallest amounts of money to support their efforts to lengthen out a living. There is this one day, he was shocked to discover a woman in the village who borrowed less than a dollar from the money lender with one condition that the money lender would have the exclusive right to buy all she produces at the price he decides. This, to Muhammad Yunus was a way of recruiting slave labor.

Therefore, from here he decides to make a list of the victims of this money lending “business” in the village and it had the names of 42 victims who borrowed a total amount of US $27. When Muhammad Yunus offered US $27 from his own pocket to these victims, he saw an excitement from the face of all these people by this small action and got him to further involve in it. So, he said that, if he could make so many people so happy with such a tiny amount of money, why not do more of it? the first thing that he did was to persuade the bank located in the campus to lend the money to poor but sadly it doesn’t work because the bank said that the poor were not creditworthy until after failed for several months, he offered himself to become a guarantor for the loans to the poor and was shocked by result because the poor paid back their loans, on time, everytime! But still he kept facing with difficulties in expanding the program through the existing banks. That was when he decided to create a separate bank for the poor, and in 1983, he finally succeeded in doing that. He named it Grameen Bank or Village Bank.
The key features of a social business are to achieve specific social goals by solving social and environmental problems. Other than that, the organizational structure has the same basic as profit maximizing business such as employs workers, creating goods and services and the prices are consistent with objectives except that objectives are social benefits. Furthermore, it is a cause driven rather than profit driven which means that they form a business for the purpose of social benefit. Profits may be earned but it can’t be taken out of the company by the investors who support it beyond recouping an amount equivalent to the amount originally invested. Lastly, full cost recovery while achieving social and environmental benefits and it is not charity or non profit.

Hamizah Azmi

What is Subprime Crisis?

It's an ongoing financial crisis triggered by a dramatic rise in mortgage delinquencies and foreclosures in the U.S, with major adverse consequences for banks and financial markets around the globe, e.g Europe, Asia and Latin America. Began with the bursting of the US housing bubble and high default rates on 'Subprime' and adjustable rate mortgages (ARM), beginning in approximately 2005-2006. Subprime Crisis affected the financial sector in Feb 2007, when HSBC, world largest(2008) bank, wrote down its holdings of subprime related MBS by $10.5 billion, the first major subprime related loss reported. In 2007, atleast 100 mortgage companies either shutdown, suspended operation or were sold.

Subprime crisis caused panic in financial markets and encouraged investor to take their money out of risky mortgage bonds and shaky equities and put it into commodities as "store of value". Financial speculation on commodity futures following the collapse of the financial derivatives markets has contributed to the world food price crisis and oil price increases due to a 'commodities super-cycle'. Financial speculators seeking quick returns have removed trillions of dollars from equities and mortgage bonds, some of which has been invested into food and raw materials. Lehman Brothers declared bankruptcy on 15 September 2008, after the secretary of the Treasury Henry Paulson, citing moral hazard, refused to bail it out.

How Subprime Crisis Lead to Global Economic Crisis?

Tired of writing, I show to you in sequence....

• 1. High oil prices -> high food prices & global inflation.



• 2. Subprime Crisis -> substantial credit + liquidity crisis leading to the bankruptcy of large and well established investment banks as well as commercial banks in various nations around the world



• 3. Increased unemployment -> global recession 2008/2009.

• # Housing market bubbles


• # Investment Speculation


• # High-risk mortgage loans and lending practices


• # Securitizations practices


• # Slow central banks responses


• # Financial institution debt levels incentives


• # Credit default swaps

Sejak kebelakangan ini saya kerap diajukan dengan soalan "Adam, saya nak beli emas... mana satu yang OK emas 916 ke 999?". Jawapan saya hanya ASALKAN EMAS. Buatlah calculation sendiri berdasarkan budget masing-masing. Sekarang pun dah banyak syarikat yang bawa produk-produk seperti gold bar, dinar, barang kemas dan arca emas. Rasanya tak perlu saya perkenalkan satu-satu sebab terlalu banyak.




Ok berbalik kepada persoalan kita tentang 916 atau 999, sudah sedia maklum 916 mengandungi 91.6% emas dan 999 pula hampir tulen sepenuhnya. Secara jujur saya sendiri menyimpan emas 999 dan saya tak kisah pun jenis apa ASALKAN 999. Masalahnya disini emas 999 susah untuk didapati dlm kuantiti yang kecil, kalau ada pun 1/4 kijang emas dari Bank Negara. Tapi baru-baru ini ada syarikat yang menawarkan gold bar 999 dalam kuantiti yang menarik (5g,10g,20g)dan harganya pun OK sebab premium yang rendah.

Untuk 916 pula, saya ada macam-macam jenis dinar..... Dinar Kelantan, Dinar Public Gold dan Dinar Nubex. tetapi semuanya hanya sebagai koleksi kerana emas 916 saya banyak dalam bentuk barang kemas sebab saya boleh beli dengan harga lebih rendah. Semakin anda menyaelam anda akan faham. :)

Saya harap tulisan ringkas ini dapat menjawab persoalan customer yang kerap ajukan soalan ini. Dan buatlah calculation sebelum membeli emas, apa-apa pun kuasa membeli di tangan anda.

"Only you can decide the best place for your money"

Adam...

Last few days I read back my old notes given by Mr. Halim and I feel like sharing it. This article is written by Omar Javaid, Sr. Editor from Critic Magazine. Please read it with an open mind..... and it is not about gold or other precious metal, its just a food for your brain.

Do you have an urge to understand Economics? If not then you better should think otherwise, as this guarantees an insight into the modern Pandora box of problems, even related to your personal life. Study of economics can help you understand and do something about the issues which leave you wondering or clueless, such as: why satisfaction is gradually being drained out of your life? Why you have started to feel more insecure for yourself and for your family? Why our lives are gradually being filled with items offering temporary pleasures, from video games, to iPods, or even sex, but are getting increasingly void of anything offering a more lasting effect? Why threat of being laid off has increased many folds today? Etc... comprehension of the problem and its actual root cause means half of it has solved; understanding the forces driving the economics engine today ensures just this.

THE INVISIBLE HAND

Think about it … present day economic practices i.e. free market philosophy more commonly known as capitalism with laissez fair characteristics, with interventions of "cooperate sponsored government" acting as a catalyst in the process; has gone too free, astray I would say, with no reins to guide or tame, rather driven by a crazy lust to have more over most of what is earned, and has made "invisible hand" (term from Adam Smith), an invisible hand of devil instead; the soul driving force behind the contemporary economic engine, indeed.

Invisible it is for those, who are frantically immersed in routines, working for corporations, earning their living and paying their debts, and spending the remaining time to release the stress accumulated, by even more distraction of glamorous facade of ever higher standard of living, a plethora of material pleasures, sex at best? Doesn’t this make almost all of us? And most marvel it openly, but also subconsciously suppress the void it leaves behind … but some don't as for them the opportunity cost of this void, this gap, this gasp, this empty feeling, makes the contemporary proposition of so called materialistic modernity, truly unfeasible.

Humans are different from Animals. A part from higher of IQs, ability to communicate, and freedom to make a choice, "Lust" (with a capital L) is another notorious differentiator. Animals, ironic it may seem, has a natural tendency to create a harmony with their surroundings, they consume only what they need, thus creates a balance with the ecosystem keeping its sustainability intact. The ecosystem encompassing the entire world has been surviving and thriving since millions of years just because all elements has kept this balance in place, by only consuming what is needed. There has been events of "Creative Destructions" (a term more related with capitalistic system) when one sub-ecosystem gets destroyed through earth quakes, storms, floods, hurricanes but this infect serves the very purpose of maintaining the balance, the equilibrium at the macro level. Humans can chose to maintain this balance with nature also, only if they consume and do what’s needed for survival and healthy growth of their body, minds and souls, however that’s seldom the case, lust to have more of what’s needed is the underline motivating factor of most human actions today, sufficient to disturb the balance maintained in the ecosystem.


Adam Smith’s theory of “Self Interest” being the driving force of lassie fare, as he called it, actually turned out to be “Lust”; when his theories were put into practice. More commonly it’s called as “Wants” by marketers, whose satisfaction has become the motto of everyone’s life today. All the efforts of higher standard of living, at least, and higher level of power, without considering the social and economic consequences, at most, prove just this.

Think about what’s causing global warming? Think about $14 cents / Kg paid to the coffee bean farmer in Uganda against $26.4 price tag in the market with a FAMOUS brand name?

Think about what has caused the world experience two world wars already? Think about Income disparity leading to a hike in crime rate?

Think about exponential increase of suicides particularly farmers who takes loan from a bank?

Think about hundreds of billions of dollars spent of cosmetics, cigarettes, health care of animal pets, alcoholic drinks, and pornographic material (totaling $350 billion) but cannot extract around $80 billion to alleviate poverty?

If it’s not Lust then what is it?

Please think about it.......