Saturday September 26th 2009

  • The  American Fed has issued the following statement:   To provide support to mortgage lending and housing markets, and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt.”  Now we can watch the demise of the once-mighty American Dollar. Fund Managers and Investors will now start dumping dollars like confetti. A TRILLION is a million millions and in this case, it represents more Quantitative Easing or to be strictly accurate, the purchase of toxic assets with “printed”  i.e non-existent money. The sort that caused the global banking meltdown. This is a case of throwing bad money after bad.

  • President Obama has announced tough new capital requirements for banks as well as more stringent rules on bank borrowings. If you were to ask what these rules are likely to be or when they are to be implemented, the answer would probably be “We haven’t really decided but it will definitely happen later.”  They are saying that  the rules will be phased-in once financial conditions improve and recovery is “assured”. Leaders have been discussing a cap on bank bonuses for a while  but they still haven’t agreed any numbers or timescale. The only thing that they have agreed is that bonus payments should not be guaranteed for many years, should be deferred in part and should not exceed a percentage of the bank’s revenue. That is how vague it is at the moment. When the global economy has healed itself and both governments and banks return to generating profits, most of this will be forgotten because by then, the balance of power will, once again have shifted back towards the banks and the next boom-bust cycle will begin.

  • The least entrepreneurial profession of all is banking. There is a vastly different mental attitude between say, an entrepreneur such as Richard Branson and say, MervynKing, the Governor of the Bank of England. That rule works all the way down the line until we have the small local businessman and the small-town banker. Chalk and Cheeze. Incidentally, when I say “entrepreneurial” – I am referring to people who take risks with their own assets.  Just to reinforce the cultural difference – bankers will gladly take risks with other people’s money – especially in very large amounts – as evidenced by the cause of the current Global Banking crisis. However, when a local business goes to its local bank in order to borrow say £20,000 to purchase a machine, lots of fiery hoops are assembled for the business to jump through, fees are charged, personal guarantees are demanded, forms need to be filled out, cash flows and business plans are sought . So when a  small businessman goes to his bank – the MOST likely answer (especially nowadays) in “NO”.  Perhaps unknowingly, the banking profession is not-only killing itself but it is also slow-strangling the business community. The banker chose to work in a bank because he didn’t want the worry of not having a pay cheque at the end of the month, he did not want to work a 16-hour day and he didn’t want to cold-call  people in order to drive his business forward. What he needed from his life was predictability, order, neatness and a company pension. This is the paradox: The banking profession has managed to evolve itself into something which it was not designed to be and  it has managed to do it by what is known as the “Halo Effect”. There is a saying “Get them by the balls and their hearts and minds are bound to follow.”  Banks now have “business advisers”  ; mostly young people with degrees who cannot possibly have ever tasted the fears of an entrepreneurial businessman.  Bank management has developed a culture of self-importance and inaccessibility.  Remember the time when a bank manager tried to impress you in order to win your business? Now , you have to ask him to welcome you to his club so that he can look after your money. He is now doing YOU a favour – unless it’s ” I’d love to help you but the System  ( or those upstairs) say “NO”. The banking tentacles have moved further into he business community. Local Enterprise Organisations and  Business Clubs are now both Governed and heavily populated by more bankers. Entrepreneurial andmanagementadviceisbeingdispensed by a profession with little or no practical or first-hnd business experience or knowledge. That is the Halo Effect. Put simply, because the banker knows about money and has you by the balls, you assume automatically that he is able to dispense Tax Advice, Marketing Advice, Sales Advice, Organisational Advice, Training Advice, Recruitment Advice, Purchasing  Advice and any other Advice that you need.  The total power of the banking community is evidenced by the fact that Chancellors, Prime Ministers and even  Presidents are having to say “Please do something about your bonuses Mister Banker.”  Banking has developed into a multi-headed all-powerful Frankenstein. It is not a simple case of imposing a few rules. What is really needed is a massive cultural change within the banking industry and a massive perceptual change from both private and business clients. If you’re a businessman or work for yourself in any way, ask yourself – ” Am I comfortable with taking business or financial advice  and all the other captive-audience advice that they like to dish-out, from an organisation populated by people who obviously did not heed their own advice and lost billions but have no idea what really happened?”  WATCH THIS SPACE.

  •  I received a letter from a Member of Parliament today. He addressed me by my Christian Name. What’s going on? Paranoid? Moi?

  • The airlines appear to be learning from the banks. British Airways will be charging us again AFTER they have our business. We book a flight and then pay an additional fee  to get a seat. Genius! Can you bring your own seat and pay corkage?

  • There’s only one thing wrong with an Indian Summer. The Global Warming Mullahs will wake from their torpor and deliver the usual speech about our emissions. I think that 4X4 vehicles should be compulsory. Have to go now and have my dolphin steaks and light the coal fire.

  • In the last two years, 150 teachers have been sacked for sexual misconduct. A loss to the teaching profession but what a bonus for the Vatican’s recruitment team!

  • Gordon Brown has been voted World Statesman of the Year – mostly for giving away any leftover taxpayers’ money that Mervyn King has not given to the banks. Brown has been generous to Africa and quite right too. In addition, he has enjoyed many politicians’ or Pope’s ultimate wet-dream. An embrace from Bonio who , apart from being big in the dog-biscuit trade, is (apparently) some sort of Irish pop singer. He plays in a popular beat combo named after some American spy-plane. U2, I think. Crucial.

  • Remember Gordon Brown selling off the UK’s gold to China a few years ago? Who better to value, melt-down anddoitallover again with that pile of  gold Anglo-Saxon tat recently dug up in Staffordshire – wherever that is. Middle Earth?

  • There’s a very exclusive TV Club – the old dears who used to read the news and appeared on the Christmas Morecambe and Wise show in the 50s and who did high kicks andeithermarriedapolicemanorshagged Jon Snow or went to live on a farm in Scotland. Pretty soon, the pre-teens running the BBC andthecommercialchannel will be  playground-bullied into re-hiring these venerable oldsters.  Prepare for News at Ten to look like a re-run of Macbeth, Act 1 Scene 1.

  • In 1959, Typhoon Vera struck Nagoya in Japan. There was a 20 ft tsunami, 150 mph winds and 5000 people died. Did you know that they managed ALL that without Global Warming! They could do stuff like that in the 50s. We have a lot to learn.

  • TV’sDoctorGorgeousappearedtohaveeverything – but he was struck by the one affliction that even he could not cure. He lost the ability to keep it in his trousers. Marriage, Mistress, Divorce, Mistress, two-timed Mistress, Girlfriend.  Best of luck mate. The definitive case of “Surgeon heal Thyself”.

  • In an average week, I speak to 5 or 6 Chief Executives – guys I’ve either trained, coached or who I know personally. This week I had the most weird experience with a company CEO and company owner. He fancies himself as a “leader” but  is just realising that he has recently reached the upper limits of his incompetence. The stress-levels are phenomenal and I shall devote a whole article to him next week. Look out for it – it WILL be libellous!

  • Fantastic evening for crumblies. ITV is celebrating 250 years of Cliff Richard. He hasn’t changed one bit – apart from wearing Frankie Howard’s old rug. Well, it’s either that or a  very quiet ginger cat.

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