Spencer
Wolfe

At AINEO, we know a lot about security because companies are relying on our engineers to keep things secure. We have given advice on how to keep individual computers save and secure. However we wanted to take a few moments to talk about the overall network.

Occasionally, I send out an email to a list of friends and a few acquaintances of various funny commercials and jokes that I receive on the personal side. About a year ago, I received and email from an ‘IT consultant’ saying, ‘I don’t share your sense of humor. Your attachments could have a threat, so I have deleted everyone one of them.’ Being a person of reason the first thing I thought how could someone know if they share someone else’s sense of humor if the humor was completely in the form of video attachments to emails? In actuality, every incoming and outgoing email at AINEO is scanned by four separate engines for all threats. The chance of getting some type of nasty attack through AINEO servers is zero.

That was a reminder that some people are a bit behind in their security. Even people who say they are supposed to experts in the field. Clearly the above mentioned consultant should have been running full security tools on his mail server. Clearly in our opinion, GFI Software has the best tools available. Every exchange server should be running GFI Mail Security and GFI Mail Essentials to protect their system. Many enterprises run Symantec on Exchange Mail servers which we highly recommend against as we have seen many problems generated by this software on a mail server.

If you are running solid tools on your mail server, spam, viruses, and phishing emails should be a thing of the past. Attacks via email are declining because people know their game. You have to keep on top of it, however email based breaches have become more difficult for the hacker. Therefore, these computer thieves have changed their tactics.

The new horrible attacks are actually coming through websites. The important thing to secure in the organization is actually port 80. Port 80 is the incoming port that brings internet access to your users. Through port 80 of your router, your organization views websites of customers, partners, and vendors. But through this same port you can get compromised sites loaded with keylogging software (self-installing software that logs all your key strokes) trying to pick up important passwords or any other financial information. These sites are not just clearly compromised shady sites on the net.

Samsung USA was famous for having their hacked by someone. When a visitor would view their site, the compromised site would try to install software onto the web vistor’s PC. Samsung was notified, but very slow to remove the threat from their corporate site.

So how do you secure port 80 of your network, PCs and people from the threats? The first step is have good virus protection on your workstations (PCs). AINEO does actually recommend Symantec on the desktop side. We have found McAfee and Trend Micro behind the times.

In this world of so many types of business, we see a lot of people moving from job to job. A large percentage of the people changing jobs are the ones who cannot do the job they are leaving. Last year, I remember a president of a large Canadian technology firm saying how appreciative he was that his American competition hired two slackers (employees) that had been in his organization.

Clearly, there are some good folks to hire out there. However, the chances of recruiting ineffective and/or trouble-making employees is a high probability. You never know what you are going to get, especially since you cannot reference the current employer for performance feedback.
If you are working for someone, as most of us are. The true way to success is to be consistent. Consistency is the key to success. If you want to be successful in business you need have to be doing the right things every day. One of the first things you can do is get along with your boss. Learn how to impress him or her so that they know they can trust you. Let us give some suggestions on how to do just that.

1) Demonstrate that you are honorable.
Honor is doing the right thing when no one is looking. There is a saying, ‘when the cat is away the mice play’. There are many offices out there that when the boss is in everyone looks so busy and works so hard. When the boss is out, people start slacking off. Show that you honor the boss’ investment in yourself.

2) If you are asked to do something, do it.
If you don’t agree, a good boss will have an open ear and mind to suggestions. However, keep in mind that in most cases the boss was entrusted with management responsibility because they are competent. Too much questioning is a good way to hurt your standing with the boss.

3) Give the job 110% effort.
So many times we do our jobs halfway and send our resumes out there hoping for another job opportunity with pop up. Managers are not stupid. If they are any good, they are connected to the market and know a lot of people. Before you could imagine, they will know when someone starts putting out that resume (CV) and stop entrusting you with any new things. Work hard. But also, don’t forget to work smart.

4) Be sincere.
Good bosses are always founded on experience. A good technical service manager is good because they know both technology and how to deal with people. If one of their staff is having trouble, there is no doubt they will read that from customer results, other player feedback, or judging other factors that they have been dealing with in the business for years. If you have issues that you are not sure how to deal with, be sincere with your boss. They will respect you for it.

5) Always respect the time of others.
When you are supposed to be at meeting, always be at the site, at least 5 minutes before commencement. Always be to work on time. It is wrong for one person to be habitually late to a 9AM office start when everyone else is there drinking coffee 15 minutes before.

6) Be positive and proactive.
“Oh, that customer is this, that supplier is that. Why do you want me to do that? The boss is not a good such and such. I don’t want to learn about that.” No one likes to be around pessimists. The world is full of critics and no office needs negative voices. You were hired to do a job. No matter what happens, see ‘trouble’ as challenges. See ‘change’s as opportunities. As things happen throughout the week, be always open-minded. Bring ideas not dark words to a situation. If you help your boss resolve issues (especially ones that he has no exact experience or time to handle), you will prove your contribution to the team. Positive people are winners. Everyone loves to be around winners, not losers and quitters.

7) Be a good communicator.
It sounds amazing, but wars can be started by not communicating well with others. Good communicators are lacking in pretty much every company.
- People show up to do work and can be frustrated by sales people who haven’t told them the whole story about the site.
- Someone goes on vacation and neglects to give their manager or coworker information on what the consumer wanted from the shop. Both coworker and consumer get frustrated when the consumer comes back into the store.
- The logistics person ignores the email and sends the site foreman the wrong building materials in spite of the request. The customer care representative receives no new product information for something that was hit the retailers’ shelves a few days ago.
At AINEO, in our new player indoctrination (employee orientations) we always teach our incoming new team members to ‘set expectations’. If you are asked to do something, let people know when you anticipate you will be done. Think ahead. If you can’t do something, let the boss know and get some additional help.

In Closing
These seven steps are the most important ways to impress your boss. We’ve found if you can work well with people at the office, chances are you are going to be getting along well with people at home as well. Most divorces are caused by financial worries but more often than not, miscommunication. If you make an effort to apply these words of wisdom to your corporate life, you will find that these good things will spill over into your personal live as well. Life will be so much easier because you will be easier to work with, and even easier to live with.

(c)2007

Originally posted at
http://www.aineo.com/insights/entry/seven-ways-to-impress-your-boss/

Dell Computer's direct sales model destroyed many computer sales stores locally in the US. The model was ground breaking. However, when you are doing business you have to be thinking ahead and thinking about the possible results of your actions. With the failure of many businesses due to Dell's cheap, direct sales model Dell was very successful in building its business. Unfortunately, while Dell was selling direct, HP, eMachines, and many other firms were still taking care of their sales channels. That has paid off. HP has recently surpassed Dell in market share. Dell is struggling. Dell is beginning to rethink their sales model according to an article in the New York times.

Is this the end of Dell? Probably not. However it is a strong reminder that we should always make an effort to do business with others with win-win in mind. Dell upset a lot of business people on the retail level. On the enterprize level, I know our company prefers to avoid the use of Dell servers just because HP makes them so much better.
-Our engineers have commented that they don't like Dell's hardware because you can see "cheap" in the manufacturing.
-The mother boards are sub-standard and flimsy.
-Even the number of screws are barely enough to mount servers in their Dell OEM racks, while other manufacturers give you plenty to spare.
-Sales staff (account managers) change quicker than the weather in Seattle.

It looks like Dell has hit its plateau. Will they actually provide better service to woo back the people that they alienated by undercutting and skimping on the parts? We'll see. In Japan, once you burn your bridge in business it is pretty hard to rebuild it. Tumbleweed is working to do that right now in a market they abandoned with the dot com bubble bursting. In Japan, Dell Computer lost a number of their staff to work at Lenovo Japan in recent months. It seems to be a coup of sorts.

As for Dell, I think it really comes down to what you do when no one is looking. Many retailers don't want to stock Dell products on their shelves because they feel that Dell was busy stealing business instead of helping their shops sell computers and peripherials. Dell has proven to be competitor in business and not a partner as the other computer companies have been. Congratulations to HP who has made an effort to do win-win business all around. They have won the marketshare wars for now. Good business is win-win business. What you do behind the scenes is just as important as what you do in front of everyone.

Let's watch and see how things turn out. However, this is a clear example of short-sighted, sales number focused, American company. This is a good model to avoid. These days, technology and communications have made things so transparent that we need to be thinking long-term about the consequences of our actions. You can't slap the person by selling direct to the customer and then go back expecting him or her to receive you with open arms.

SOCIALISM
You have 2 cows.
You give one to your neighbour.

COMMUNISM
You have 2 cows.
The State takes both and gives you some milk.

FASCISM
You have 2 cows.
The State takes both and sells you some milk.

NAZISM
You have 2 cows.
The State takes both and shoots you.

BUREAUCRATISM
You have 2 cows.
The State takes both, shoots one, milks the other, and then throws the
milk away...

TRADITIONAL CAPITALISM
You have two cows.
You sell one and buy a bull.
Your herd multiplies, and the economy grows.
You sell them and retire on the income.

SURREALISM
You have two giraffes.
The government requires you to take harmonica lessons

AN AMERICAN CORPORATION
You have two cows.
You sell one, and force the other to produce the milk of four cows.
Later, you hire a consultant to analyse why the cow has dropped dead.

ENRON VENTURE CAPITALISM
You have two cows.
You sell three of them to your publicly listed company, using letters of
credit opened by your brother-in-law at the bank, then execute a
debt/equity swap with an associated general offer so that you get all
four cows back, with a tax exemption for five cows.
The milk rights of the six cows are transferred via an intermediary to a
Cayman Island Company secretly owned by the majority shareholder who
sells the rights to all seven cows back to your listed company.
The annual report says the company owns eight cows, with an option on
one more.
You sell one cow to buy a new president of the United States, leaving
youwith nine cows.
No balance sheet provided with the release.
The public then buys your bull.

THE ANDERSEN MODEL
You have two cows.
You shred them.

A FRENCH CORPORATION
You have two cows.
You go on strike, organise a riot, and block the roads, because you want
three cows.

A JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and
produce twenty times the milk.
You then create a clever cow cartoon image called 'Cowkimon' and market
it worldwide.

A GERMAN CORPORATION
You have two cows.
You re-engineer them so they live for 100 years, eat once a month, and
milk themselves.

AN ITALIAN CORPORATION
You have two cows, but you don't know where they are.
You decide to have lunch.

A RUSSIAN CORPORATION
You have two cows.
You count them and learn you have five cows.
You count them again and learn you have 42 cows.
You count them again and learn you have 2 cows.
You stop counting cows and open another bottle of vodka.

A SWISS CORPORATION
You have 5000 cows. None of them belong to you.
You charge the owners for storing them.

A CHINESE CORPORATION
You have two cows.
You have 300 people milking them.
You claim that you have full employment, and high bovine productivity.
You arrest the newsman who reported the real situation.

AN INDIAN CORPORATION
You have two cows.
You worship them.

A BRITISH CORPORATION
You have two cows.
Both are mad.

AN IRAQI CORPORATION
Everyone thinks you have lots of cows.
You tell them that you have none.
No-one believes you, so they bomb the **** out of you and invade your
country.
You still have no cows, but at least now you are part of a Democracy....

A NEW ZEALAND CORPORATION
You have two cows.
The one on the left looks very attractive.

AN AUSTRALIAN CORPORATION
You have two cows.
Business seems pretty good.
You close the office and go for a few beers to celebrate.

The opening of Spring is marked in Japan by the blooming of the cherry blossoms (Sakura). Japanese love the Sakura or what is known as ‘hanami’. Hanami is cherry blossom viewing. Usually when the cherry blossoms bloom it is just between winter and spring. The Japanese usually pack up ‘bento’ (box lunches) and gather under the Sakura to eat, drink (some to great excess), and chat. The weather is usually a bit cold still in the Kanto plain (Tokyo area) so people usually need to bundle up a bit. Other folks go out for a walk with their husband or wife and children, while older folks also enjoy walking along the rivers lined with Sakura trees.

It is truly a beautiful season as we see the blossoms spring to life we know that the trees are coming out of the winter time. With the blooming also comes other kinds of life… insects, flowers, myriads of other trees, and plant life. It is truly a beautiful time in Japan when people begin to come out of their houses and do things outdoors again.

With 2007, AINEO Networks is celebrating our 10^th year in technology. We could not be doing this without our great customers. The airlines, telcos, banks, food companies, web search companies, cellular phone makers, recruiters, insurance companies, software manufacturers, IP companies, law firms, hardware manufacturers, consumer products and so many other companies that rely on us for bright, quick, and flexible know-how and support. We thank them for their business. We have seen a interesting thing in these past 10 years. The companies that use AINEO are all doing very well in their business. We believe this is because the AINEO team knows and promotes their products as well.

With Spring, we are reminded of the growth AINEO is seeing this year. In 2007, AINEO

1) Has transformed from a pure engineering firm, to a consulting firm

2) Has honed our skills and has the best team of engineers, consultants, account managers, and customer service reps (CSRs) that we have ever had.

3) Is moving into new Tokyo offices that will equal the size of our Saitama facility.

We are excited about the great things that are coming!

Sakura At University Of Washington In Seattle

You wonder how the youth of Japan are doing these days. According to this article from the Sankei Shimbun there are challenges ahead. Are the Japanese losing the edge? I hope not, but the youth of any country is the future of that country.

【溶けゆく日本人】シュガー社員　ツケを払うのは会社

「叱り方」や「ほめ方」を指南する上司本の棚は徐々に広がっている＝東京都千代田区の丸善丸の内本店（撮影・海老沢類）
　「シュガー社員」−。札幌市の社会保険労務士事務所所長、田北百樹子（ゆきこ）さんは、過保護に育てられ自立心に乏しい社員をそう呼ぶ。「甘い＝砂糖」の意味を込めたネーミングだ。きっかけは、労務相談で耳にした人事担当者らの悲鳴だった。

　「繁忙期に残業すると、『なぜ残業させるのか』と親から電話がくる。中小企業では、親が会社に文句をつけてくるのも驚くべきことではないのかもしれません」

　ある機械販売会社に勤める２０代の女性社員は、あまりに仕事の進みが遅く、ミスも多かったため、上司から時間の使い方を注意された。

　「親にさえ叱（しか）られたことがない」

　女性社員は急に怒り出し、翌日から出社しなくなった。

　「本人が辞めたいと言っていますので…」。数日後、会社に電話してきたのは母親だった。「学校を休むのと勘違いしている」（田北さん）。結局、本人からは何の挨拶（あいさつ）もなく、備品の返却や必要な退職手続きは、すべて母親が“代行”した。その姿は、自立した社会人像とはほど遠い。

　こんな事例もある。

　「資格を取るために勉強できるか」と聞かれ、「親に相談します」と答えた▽「娘の労働条件をすべて把握したい」と社外持ち出し禁止の就業規則をほしがる親と、それに従おうとする娘▽仕事で壁にぶつかるたびに、「やりがいがない」「自分に向いていない」と転職を繰り返す４０歳近い男性社員と、そのたびに生活費を援助する母親…。一昨年夏、田北さんが常識外れの社員の言動を「実践マナー講座」としてＤＶＤにまとめると、「社員教育に使いたい」と、地元企業からの問い合わせが殺到した。

　「自分の言うことが何でも通るような家庭環境で育ったからでしょう、権利ばかりを主張し、周りへの配慮に欠ける社員がここ数年増えています」と田北さん。そして、こう“指弾”した。

　「『かわいがる』と『甘やかす』の区別ができない親が多い」

　大手企業の関係者も、“過保護社会”の影を感じ取っている。

　「御社は私をどう育ててくれるのですか」

　人事コンサルタントの田代英治さんは、ここ２、３年、大手企業の採用面接で、学生からそんな質問が続出していることに違和感を抱く。

　「今まで周りから与えられ続けて、自分で道を切り開く経験が不足しているのでしょうか。言われるまでただ待っている受け身の人は確かに増えました」。売り手市場のなか、「内定者に入社してもらう決め手は親あての手紙」（中堅企業）という声までも聞こえてくる。

　がぜん、社員教育の比重は増す。しかし、指導する立場の上司も問題を抱えており、事はすんなりと運ばない。

　３月上旬、東京都足立区の研修センターに、主に中小企業で働く２０代から５０代の管理職や管理職候補１６人が集まった。社員教育を手がける「アイウィル」（東京）が行う２泊３日の「管理者能力養成コース」。参加者たちが熱心に耳を傾けていたのは「叱ること」と「ほめること」についての講義だ。

　講座では、叱るときの注意点や心構えなども学んだが、そのなかで参加者に求めた自己採点の結果は、軒並み合格点以下だった。「叱れない」管理職たち−そんな現実を再認識するものとなってしまったのだ。

　叱られた経験が少ない人が上司になるケースも増えており、年間の修了者数は１０年前の約３倍に上る。最近では「叱り方」を教える本も書店に並び、人気を集める。

　「部下に仕事を指示しても、『半分にしてください』『ほかの人に回してください』なんて言われてしまう。その直後に叱るべきだが、『厳しく言うと辞めてしまう』という思いや、諦（あきら）めから、結局、大抵の上司は指導すべきときにできないし、しなくなる。それが今の“普通の会社”の状況です」

　アイウィルの染谷和巳社長の嘆きは深い。

　親と子、教師と生徒の関係が対等に近いものに変質していく一方で、「利益を上げるための組織である企業には、多かれ少なかれ上下関係や守るべきルールが存在する」（田代さん）。このギャップにつまずき、入社直後に辞める若者が後を絶たない。

　「失敗してもねばり強く取り組む力」「チームで働く力」−。経済産業省の研究会が昨年初めて定義した「社会人基礎力」だ。産業界からの「学力に表れない力」の低下を懸念する声を受けたもので、そこには、「これまでは、子供から大人になる過程で『自然に』身に付けられるとされてきた」（同省）ような文言が並ぶ。

　アイウィルの染谷社長は言う。

　「いまや家庭も学校も本当に必要なしつけはすべて先送り。そして、会社がお金を出してうちのような研修に参加する。過保護のツケを企業が払わされているのです」（海老沢類）

　■独立行政法人労働政策研究・研修機構が平成１７年、全国の従業員１００人以上の企業１２３７社に、若年社員（３４歳以下、非正規従業員も含む）の問題点（複数回答）を聞いたところ、「コミュニケーションが下手」が２７．６％と多く、「定着しない」（１８．４％）、「あいさつできない／電話での応対が下手」（１７．５％）が続いた。また、若年社員の定着のために工夫していることでは「人事部や上司による面接」（３６．９％）、「成果の賃金への反映」（３４．４％）などが多かったが、「何もしていない」という回答も２２．２％に上った。

http://www.sankei.co.jp/seikatsu/seikatsu/070314/skt070314000.htm

In Japan, it seems like many businesses are outsourcing their work.  They make the sale but all the delivery is outsourced to other companies.

A friend is currently building a house in Tokyo.  He selected a company called Tokyu Home to do the work.  The company seems to be a great company.  Once the work began on the house, there wasn't a Tokyu employee to be seen.  The foundation was demolition of the existing house was done by one company, the foundation installed by another, the electricity by another company and so forth.  This type of outsourcing, which really is subcontracting, seems to be very common.

Within every corporation, there are many departments.  One department that is common to all is IT.  Check out whether or not it makes sense to have your own IT department, or get professionals to help in this area at the AINEO website.

Happy New Year!

After 4 months of work, I am very pleased to announced that AINEO has entered the Web 2.0 era. We have finally migrated our website to a content management system (CMS). No more fiddling around with over-priced html editors like Dreamweaver and no more concern about things going out of wack when our webmaster adds content. Hallelujah!

Special thanks to Oliver, Luke, Andrew, and the rest of team for reviewing it in the various stages of development.
Check us out at www.aineo.com and let us know what you think of the new site. We have a new look, new logo, and a new website to match the high caliber of our team.

The whole team at AINEO wishes you a healthy and prosperous 2007! We are pleased to be able to work with you

The year of 2006 has been a great year for us! We have seen such growith in our team both in what we do technical and in physical numbers. As we look back over the year, we find that it has been an eventful year. A friend of mine has put together an good summary of what happened in Japanese business in 2006. You can find it here.  As time is limited for all of us, it is good to look back at what we have been through.  But more importantly, it is important to look to the future.
Information tends to disappear off websites, we will copy and paste a shortened version below.

2006 has been an eventful and productive year for business
in Japan. This was the year that we marked the longest
period of business expansion since War II, longer even, than
the Izanagi boom in the mid-1960's. Being immersed in the
noise and bustle which is Tokyo, it is easy to forget that
these are the good times that we'll
be reflecting upon over the next few years. Hereunder we
list a number of seminal events that we think will let
readers take the pulse of the economy and opportunities
that have punctuated the year.

*** January:
-> Japanese and US military announce that they will connect
Japan's missile radar and command systems. The deadline for
the new system will be March 2007, and over the last 12
months, both countries have been rapidly rolling out PAC-3
missiles around Japan at a cost of JPY150bn (US$1.28bn).
The impetus for setting up the new system was the increasing
concern over North Korea and its supposed nuclear capabilities
-- fears which turned out to be well-founded with North Korea's
October underground test.
A Rodong missile can hit Japan just 10 minutes after launch.
The economic importance of the newly pledged alliance is that
Japan is expected to significantly increase its military
spending and it will start using foreign systems and
technology instead of trying to invent it all at home.

*** Feburary:
-> High-flying Livedoor president Takafumi Horie is
arrested under suspicion of breaking Japanese tax laws and
the commercial code. Along with 4 of his executive team,
he was accused of window dressing several firms in the
group, to make it appear as if Livedoor had a group pretax
profit of JPY5bn for the tax year through September 2004
when in fact the group lost JPY300m. Horie was eventually
released on bail after an extraordinary 97 days in detention
and his case only went to court in September this year. The
prosecution started out strongly, but it has turned out that
one of the key witnesses, Miyuachi, is less than saintly and
some of his testimony has been called into doubt. Horie's
trial will continue on at least into the first quarter of
2007. The business implications of this trial are that
Japan is finally getting serious about corporate ethics
and insider trading.
*** April:
-> Softbank makes the shock announcement that it will buy
out the complete wireless operations of Vodafone Japan, for
a record JPY1.7trn (US$15bn). Just months earlier, Softbank
had successfully tendered for a 3G wireless licence,
indicating that the opportunity to buy Vodafone Japan
happened very quickly. While everyone wondered if Son
could really afford the purchase price, based on both
bank and vendor finance he has so far managed both the
initial short-term payments and the first major refinancing.
17 domestic and foreign banks were involved in the overall
financing consortium, meaning that Japan is now officially
open for mega-mergers. As of writing, Son still hasn't figured
out how to stem the hemorraging of profits from the new brand,
but then neither did Vodafone. He probably has several years
before the losses signficantly impact his other businesses.

*** May:
-> It's the peak of the Japanese earnings reporting season
and the first half of 2006 has been kind to exporters, who got
so badly hammered by Chinese competition in the 1990's.
Many major companies on the Tokyo Stock Exchange reported
record earnings, and none higher than that of Toyota, which
had a 17.2% year on year increase in profit to JPY1.37trn
(US$12bn) on sales of JPY20trn (US$171bn). Toyota is the
first Japanese company to have sales of JPY20trn. Not that
the others missed out. No less than 43 Japanese companies
had profits of more than JPY100bn (US$855m) for FY2005.
The Japanese tax man is very, very happy.

*** June:
-> In a conference in Tokyo, the audience is
stunned when a Dell laptop explodes into flames. Hotel
employees flock with fire extinguishers and put the fire
out after about 5 minutes. While the conflagration is not
major, the incident was caught on cell phone video and
within days the world was talking about whether Sony
Lithium batteries are safe. The incident marked the
beginning of a hugely damaging incident for Sony.
The final accounting has not been done yet, but the company
will probably lose more than JPY51bn (US$432m) on the 9.6m
units being recalled, not to mention the losses caused by
damage to the brand.

*** July:
-> A review of M&A activity over the previous 6 months
reinforces views that companies are reinvesting their
significant profits not on employee salaries but on
acquiring more assets instead. M&A broker Recof Corporation
puts out a report stating that there were a record 1,409
deals in the first 6 months of the year, up 10% on the
same period in 2005. Half of the top ten transactions
involved overseas businesses, with such buyouts including
Softbank-Vodafone, Toshiba-Westinghouse (Toshiba paid
JPY620bn for the US nuclear power plant maker), and Daikin-OYL
(a JPY232bn takeover of the Malaysian manufacturer). A growing
number of Japanese companies are looking overseas for business
expansion. Accenture says that the trend will continue and
announces plans to increase its M&A advisory team 500% to
50 people.

*** September:
-> Architect of Japan's strongest restructuring in some
decades, prime minister Junichi Koizumi, stepped down and
was replaced by conservative politician Shinzo Abe. Koizumi
was an outsider and loner before taking power in April of
2001. He ran against Ryutaro Hashimoto, who was seeking his
second term in office and who represented the "business as
usual" approach to government, despite the impending financial
disaster facing Japan. The factions representing younger
politicians knew that they had to act, and Koizumi became
the nation's poster child for reform. He went on to introduce
many legislative changes which earned him political enemies.
The privatization of Japan Post represented the peak of the
tussle, and Koizumi called a snap election on the issue.
He surprised everyone, including himself, by winning by a
landslide on September 11, 2005. The big question now is
whether Abe will continue the reforms or succumb to the
pleasures of fraternizing with the old boys in the party.
Unfortunately to date, it looks like he is leaning towards
the latter option. Already he has lost a battle with the
"Doro-zoku," politicians who favor using petrol taxes for
roads only, rather than allocating the funds to help reduce
the national debt.

-> Also in September was the listing of Social Networking
Service (SNS), Mixi, Japan's answer to MySpace.com of the
USA. A company which had barely any revenues a year earlier
IPO'd with the unbelievable market capitalization of JPY109bn
(US$947m), after which the shares continued to soar, creating
a market cap of JPY219.9bn (US$1.879bn) just
4 days later. The IPO came at a time when IPO fervor in Japan
was starting to drop off and was seen as an opportunity to
shake a moribund market into activity again.
Unfortunately, that hasn't happened, and more and more IPO
issues are trading at significantly lower prices than the
initial IPO price. Not least of these has been the Cerberus-
sponsored IPO of Aozora Bank. From an IPO price of JPY570
per share, the first trade started 13% lower at JPY495.
Cerberus was happy enough, though, having earned a profit
of JPY100bn (US$850m) on the 3-year deal. Cerberus bought
Aozora off Softbank after the IT company needed the cash
to fund such purchases as Japan Telecom.

*** October:
-> North Korea announces on October 9th that it has
conducted an underground test of a nuclear bomb, and has
thus entered the nuclear club through the back door. The
only trouble is that no one could tell if the test really
happened or not, because the seismic readings were so weak.
Later the US stated that a test probably did happen and it
was a one-kiloton plutonium device. While you might think
that the Japanese markets would go into a tizzy over the
news, but the fact that the test was so low-key led the
investing public to assume that it wasn't much of a threat.
We believe that North Korea will continue to improve its
technology and that in the near future it will conduct
other tests that will indeed spook the Japanese markets.
This could well be their intention and we wouldn't be
surprised to see some pragmatic horse-trading going on
as Japan tries to buy some peace (and quiet) from the
North Koreans. In the meantime, business is brisk for
military technology companies supplying the Japan Self
Defence Force.

*** November:
-> The government announces that Japan is now
officially in a longer period of economic expansion than the
go-go years of the 1960's -- represented by the 57-month
Izanagi boom which lasted from from 1965 to 1970.
That boom was largely driven by domestic demand, whereas
the current one, which has no name yet, has been driven by
exports. In case you don't see how this is possible, remember
that Japan's exports fall into two categories:
direct, as finished goods to consuming nations, and indirect,
through parts and tools sold to Chinese factories.

*** December:
-> The game and gadget market is alive and well, as
highlighted by the astoundingly successful release of
Nintendo's JPY25,000 (US$214) Wii video game console on
December 2. Most of the 400,000 units it stocked at major
city retailers in Japan sold out within hours. Nintendo
expects to sell 4m units worldwide by the end of December
and 6m by the end of March, 2007. The special point of the
Wii is its multi-axis motion detecting wireless controller
which lets gamers stand and play motion-oriented sports
such as golfing, tennis, bowling, and sword fights. As of
writing, Nintendo is selling every unit it can produce,
and in November in the USA was the number two selling game
console. It sold 476,000 units, just behind the 511,000
Microsoft Xboxes sold, and 197,000 Sony PS3s. Sony says that
the Wii is simply trading on novelty value and a low price.
The Wii retails for US$250, while the PS3 is US$600 and Xbox
360 is US$400. Whatever the reason, Nintendo is raking in
$100m+ a month in sales on the toy.