Last week I attended a lecture in Sant Cugat Tribuna – a platform for raising business profiles through periodic discussions and lectures addressed to top executives and businessmen and women from all sectors – of the professor Mr. Leopoldo Abadía. Although I have visited many times his blog and intensively read his opinions about the economic crisis and the “subprime” loans, I was still surprised – and even more – I was perplexed and restless after listening to his vision on this so-called financial crisis.

Mr. Leopoldo’s explanations are so simple and easy to understand that it is hard to believe that what he was explaining happened in our present-day society. This has mocked those who rule important financial institutions as they all had been highly swindled.

I still remember a Spanish movie from the 50′s , “The Cheaters”, where Toni Leblanc and Antonio Ozores wisely cheat a silly but miser who accepts to pay less money for the value of a bunch of small papers resembling bank notes. At the end, the two wise guys leave with the money and the avaricious man remains with a bunch of paper notes.

In industrial companies, and I guess also in all others, when we do receive from our suppliers components or goods, we do a quality control by sampling or also using different criteria. This is to maintain or improve the quality of our products and also to maintain the prestige of our company and brands. No matter if we are using certified quality controls or we are outsourcing the quality control in origin: when the products arrive in our facilities, we must double check and do another quality control.

Those banks who accepted a bunch of papers resembling bank notes did not make any quality control. But, what was worst is that they used the money of their customers in exchange of a bunch of small papers. They were cheated, and they acted with big irresponsibility and greed using the money of their customers, customers that trusted in them.

Seems that today some small banks (the big ones are only worried on how to make up the bad results and move them to their annual profit and losses) are trying to know what relies beneath each bunch of small papers they have, and have sadly encountered that what they have is nothing else but “nothing” and that there was no property in exchange to the money they loaned to individuals and companies that had not a healthy financial situation.

Now it is time then to ask where the money from investors is, and if there is a property behind a bunch of only small papers. If this is true, then we must call it as The Big Cheat, and find out who had the malicious idea. If the banks have lost the money of their customers, if honourable investors have lost their money, therefore in which lost arch this money had been sent?.

Who has the Lost Arch? Or, where do you think it is located? That is the question.

Josep Torrents. 26.10.2008

Dedicated to all those Quality Control Managers: do not expect certain qualities and do please make your task even better. And also this is a dedication to Operation Managers, begging them to make sure that what is in their inventories has an updated value.