Switch Hitter

Watching Cricketer Kevin Pietersen the other day switching from a right-hander to a left-hander in the blink of an eye reminded me of the beleaguered boss of the Bank of England, Mervyn King.

Really? Well maybe not right then and there! But the unsuspecting bowler certainly got a shock when he was hit for six by the cross-hitting batsman.

No sooner had the ink dried on King's warnings of an imminent slowdown in the economy and the implication of Interest Rate cuts, than the switch hitting banker was warning us that rates may rise because of runaway inflation.

"So don't you all be asking for big pay rises this year" admonished School Master King. "They are bad and will lead to wage and price inflation. And if you let that happen you will be sorry."

Except for tanker drivers.

"No...No.. Don't look at the tanker drivers deal" says King. "They're different"

What, different to Nurses and Teachers? Nurses and Teachers don't deliver tanker loads of Opium to addicted drivers ever day do they?

We've been here before, and to the best of my memory, we didn't like it. It was grey and bleak and miserable and it was called the Seventies. Competitive pay bargaining with any deal being done under the rate of inflation being regarded as a defeat for the workers. An antagonistic, gladiatorial contest played out on our television screens nightly. No, please....not the Seventies again.

Maybe the seventies nightmare is our just deserts for the go-go Eighties, the bang-on Nineties and the debt-drenched Noughties.

But what to do? The fact is that it is low paid workers who can least afford the spiralling increase in food and fuel prices. It is this group, the backbone of the work force in small business that will feel the pain of the squeeze first. And it is this group that will expect to be looked after by their employer by at least keeping pace with inflation. These workers are rarely members of powerful unions like the tanker drivers, they have only the threat of withdrawing their labour as a weapon. And that, as any employee of a small business knows, is not an option.

Let's hope that Mervyn King can be as dexterous as Kevin Pietersen at maneuvering through this sticky wicket.

Say it ain't so!

Headline from the Weekend FT

"Banks make customers pay for lost profit"

Well, we saw that one coming! Banks have grown used to their super-sized profits and more importantly the executives have grown used to the super-sized bonuses, so they were never going to let their shocking investment decisions get in the way of their shockingly fat pay cheques.

We are hearing some interesting stuff on the street at present. Banks have started to mimic one of the other truly horrifically managed industries, the airlines. The airlines, almost without exception, have a customer service manifesto that reads like the Mafia code of Omerta. In almost all circumstances airline staff are coached to give away only the barest minimum of information. Nada. Name, rank, serial number. These people are taught to remain useless in the face of torrents of abuse from hard done by passengers.

Their constant repetition of the word sorry renders it useless (in fact, said enough times it starts to sound like "screw you")

Now it is becoming clear that on the street Banks (in spite of the deluge of credit crunch stories in the media) have adopted a standard message to clients of "with us, it is business as usual". The front line managers have been coached to admit nothing. The other guy might be squeezed, but we (the next bit is code for "they messed up but we didn't")have a solid capital base and continue to look for lending opportunities.

Only, it isn't quite like that. We are now hearing of many occasions where seemingly routine lending is getting all the way to the offer stage and then mysteriously falling over. "Nothing to do with the credit situation" borrowers are told....hmmm.

It's suspiciously like the airlines. You sit for five hours in a smelly, congested airport being told next to nothing and then all of a sudden they cancel the flight. Couldn't they have told you that five hours ago? You might have checked in to a hotel, enjoyed a refreshing shower, a cold beer at the bar and be settling into an excellent dinner. But no. You find yourself shouting at a bored looking Air Crud staff member (they always have that passive aggressive face on) who says "Sorry" every time you pause for breath.

And with the Banks. Leading you down the path thinking that you will be getting the loan, telling you that it is business as usual, only to be denied at the last moment. No hint on the way. No heads up or early warning that this isn't going to plan.

The trouble is that with a cancelled flight you might miss your dinner. With a cancelled loan you might lose your business.

Free Lunch (cancelled)

Well, it didn't take long. No sooner did we speculate about the end of free banking and hey presto, it's gone.

RBS broke ranks first with a rather confusing (read: deliberately misleading)series of comments introducing a new raft of small business fees starting with phrases like "this has nothing to do with the current credit crisis" and "this will only affect customers with legacy deals".

Legacy. What a great word. Until it was hijacked recently it meant anything handed down from the past, or a gift from a will. But in the modern way (read: American way)the word has been subtley disfigured. The deliberate use of the word "legacy" now implies that the old, inadequate or deficient proceedure no longer works in the current circumstance. Somehow, someway it is your fault.

A new computer system that doesn't work with old data performs poorly because of "legacy" issues (read: "your spanking new £150,000 system won't function properly because your last IT Twit built this using spit and chewing gum". "But...but.. it has worked OK for the last 10 years?" "duh....but you don't have the new DX50 super xenox gigachip with no-leak wings do you?...no you've got major legacy issues".)

Oh.

Always the not-so-subtle implication being that whatever came before is inadequate or flawed and that the inability of the present solution to function correctly is simply the fault of the previous buffoon.

And that brings us back to RBS. Now no longer prepared to offer their small business customers a small crumb of comfort in their banking relationship. Not good enough that the business man and woman is already under significant cost pressure in the market place. No, through no fault of their own (and significant fault from the bank in their indescribably cavalier investment strategies) long suffering small business is expected to take it on the chin yet again.

"I'd like to move my business account to you Mr. New Bank"

"And why have you decided to move from the Royal Bank of Scotland Mr. Businessman?"

"Legacy issues".

Banks need a holiday

This has been a difficult time to be a bank. Having had to fess up to losing bucket loads of cash they are now rebuilding their balance sheets by issuing more shares and thus diluting the poor saps who have continued to hold on to their piece of the pie. The sensible thing to do? Maybe, maybe not. The point is that they don't have many options. The investors who take up these new shares will of course be hoping that this will all go away quickly and that the banks will soon return to harvesting their "jabba the hut" sized profits.

Profits that, as any small business owner will tell you, are normally shaved from the client by way of fees, charges, excesses, overages, facilities, and assorted flim flammery.

But what now the banks have lost the first round in the fight against all these charges? How robust will the banks profits be going forward if they are forced to repatriate their clients with their cash. Well, it is a pretty safe bet the banks will react in a robust and mature manner, by taking their ball home.

Yes, although for all these years we have charged you thirty pounds to bounce a cheque, or charged you usurious interest for exceeding your overdraft facility, we are going to withdraw free banking options and not lend you any money. Nah nah nah nah nah.

Well, hello! If you were bouncing checks and going over your limit you weren't getting free banking anyway. So the only people to suffer are the goody goody customers. Go on. Punish them. That'll go down well.

Yes, the banks are definitely caught, to coin a phrase, between a rock and a hard place. This must be very trying times to be a bank, very stressful. A good time to take a holiday.

Flash Gordon

Every now and again there are truly "cringe-worthy" moments. Episodes that are so awful and embarrassing that they go beyond the mere horrific and find a deep, dark place of shuddering discomfort.

We just had one.

It was bad enough for poor beleaguered Gordon Brown to be paraded up and down a highly decorated hallway with the three presidential hopefuls. Each one of them looking confident and elegant and Brown along side, lumpish and graceless. It reminded me of the scene in the film "About a boy" when the young lad is warned that his attachment to the punk girlfriend looks "more like owner and pet".

No, the real moment of horror was saved for the surreal press conference in the Rose Garden. The two unpopular leaders, trapped in the civility and grandeur that holding positions of state require were forced into an exchange of platitudes.

George Bush, with presumably nothing better to say, offered to cook supper that night. Nothing special in this manifestation of the peculiar idiocy for which Bush is justly celebrated. And with that entree, Brown could have simply thanked him and offered to do the washing up.

But no. Brown opened his mouth and then in the full view of the world's press thanked Bush...."for his leadership."

I looked around to see if anyone else heard it. The Labrador continued to snooze blissfully.

Maybe, I wondered, was Brown being disrespectfully sarcastic? Maybe, by his choice of the word "leadership" he was implying that we all ( including the majority of the US public) can't wait to see the back of him?

Bush and Brown share a strikingly similar world view for two politicians that appear to be poles apart on the political spectrum, and where better to illustrate this than their approach to small business. Neither like small business as they are generally run by independently minded individuals operating in the "true" market place. Small business leaders want real action on real problems, the type of action that politicians are unable to provide. You know, decisions and stuff like that.

Large corporations love these types of politicians because large business doesn't really exist in a free market world. We have proof of this now. Big companies, especially big financial companies are considered too big to fail. Wouldn't it make life easier for all of us if that overdraft we had was actually underwritten by the Government!

And then there are taxes. Browns approach to this provides even more illustration. Remove the 10p tax band from the least well off and tax the Billionaire Non-Doms £30,000. Thirty grand off a billion is a few hours of interest payments. And let's not even go there on the subject of business taper relief.....

No, none of it makes much sense. But then Gordon Brown praising George Bush for his leadership is a bit of science fiction anyhow.

Confidence Trick

Confidence is an awkward emotion to describe. Having confidence in another person implies a kind of trust that, if tainted, makes us look a fool. We may have been "too trusting". It is as if our cynical self is always just a step behind our trusting self waiting to smugly point out our gullibility.

However, confidence is vital. I don't know about you but I wouldn't get on an airplane if I didn't have confidence in the capability of Airbus to produce a decent product and confidence in the Pilot and his ability to fly the thing.

I don't go to the Doctor very much, but I certainly would go to see him if I thought there was something wrong. I have confidence in his judgement and skill. I trust his judgement.

But what if the confidence that we have in an institution turns out to have been misplaced? What if the trust we have placed in a whole system ends up being wrong. How should we feel then? Let down? Betrayed? Just plain angry?

I think that this is the situation that we are all in right now. Some of the very pillars of our economic system appear to be shaky. The people we trusted to be intelligent and insightful with our money appear to have been wrong. Our confidence in these systems and these people is severely compromised. Our trust has been shown to have been injudicious.

From the top down, the Chancellor of the Exchequer, the Investment Bankers, the Regulators, the traders, the fund managers and bank managers have all held our collective confidence and it now appears to have been imprudently handled.

And yet there is no little voice gloating that we have been fooled, that we were "too trusting". No, these people and these institutions were above that threshold. In fact they have had our confidence unreservedly. In looking after themselves, so the wisdom went, they would look after us. Go on. Pay yourself a fortune as long as you make me a pile.

How wrong we were. It has been the ultimate Confidence Trick.

Wait and see pie.

As we fast approach the 2008 Beijing Olympics the whole subject of China and its place on the world stage come into sharp focus. I can't help feeling that the whole "China Story" is a little oversold.

There is no doubt that the Chinese Government has successfully exploited its massive population of under-paid workers to drive a nail into the coffin of Western manufacturers, but how long can this last? The seeds of the end of this cost advantage are already being sown. We hear almost daily of the new Chinese middle class. Last time I looked the middle class don't work for 50p a day.

And then there is the fact that China (careful you mustn't say this out loud) is a Communist Military Dictatorship. I thought we didn't like CMD's?

And then there is the thorny issue of Tibet. There have been well organised protests around the globe for the past fifteen years calling for an end to Chinese occupation of the mountain nation. I wonder if all those activists have spotted that the Olympics are going to be held in Beijing this summer....hmmm....maybe they'll not bother to organise some massive disruption in front of the world's media. No, they'll pass on this one. Not.

And then there is Rice. Hunger is one of the sure ways to guarantee a restless populace. The Chinese consume a lot of Rice. In fact with Rice shortages around the globe occurring, we can assume that the Chinese are going to be in the market paying whatever is necessary to keep their population fed. The price of Rice escalating further leading to a double whammy. Less Rice per person and more expensive to boot.

Over the years our manufacturing base has been eroded by cheaper goods from the East. We have tried to compensate by finding niches in the demand chain. Higher spec, quicker delivery, better payment options, whatever the market requires. It has made us a little cleverer, a little more fleet of foot. Maybe a little more able to respond to our customer's needs.

Of course, we are going to have our problems, possible recession, house price falls etc. but don't think the Chinese are immune from their own problems. Inflation, commodity price increases, wage increases, social unrest and more.

It is not clear how this is all going to play out this summer, but we are certainly living in interesting times.

A Crisis for the MTV Generation

So that was that. Crisis over. Phew.

Like the rapid fire editing on a music video we move from one situation to another. Boom this week, bust next. You would be excused for getting a headache if you read the papers regularly. If house prices aren't just about to collapse, they are just about to take off again. If the stock market isn't about to fall through the floor, it's just about to go through the roof.

This type of schizophrenic "wolf-crying" tends to dull the reality of the situation. Getting a clear picture of the nature of an event becomes harder and harder. Are we meant to batten down the hatches or throw open the widows?

For business owners planning for the future just gets a little more difficult.

I was talking to a lifelong Bank Manager to other day and asked him if there was one piece of advice that he would give to business clients what would it be.

Communication was his reply. Keep in touch with the bank and don't ignore the situation. "In difficult times" he recalled, " we would always look more favourably on clients who communicated regularly with us, gave us up to date information and didn't try to gloss over any problems".

Good advice in any weather.

Carry On Regardless

One of the nice things about these long holiday weekends is that it gives the chance for the TV networks to show some of the old "Carry On" Films. They don't really age well, but the simple, saucy humour is always good for a chuckle.

But the best laugh around this weekend was from the world of high finance. It was the plaintive bleating sound of free-market-advocating Investment Bankers pleading with Central Banks to preserve their fortunes by intervening in the credit markets.

This really is a tough one to understand.

In business around the globe the rules seem to be pretty straightforward. You do something or make something and sell it. If you make a profit you stay in business and if you don't, you don't.
If you want to borrow money from a bank then as long as you have a pound of security the bank will probably lend you 50p.

In the world of high finance however, the rules appear to be a little different. For a start that £1 of security you have, well that allows you to borrow up to £30. (To fool us all they don't call this borrowing, they call it leverage). Now it gets even better than this. The £1 of security that you pledged to borrow your £30 is probably actually only worth 20p! What a deal.

For the borrower it is a real win-win. You get to bet with the £30 and if it all goes horribly wrong you have to put your hand in your pocket and give over your 20p. Of course if you are the lender and it all goes horribly wrong then you have a real disaster on your hands.

Or maybe not.

And this is where the free-market goes into free-fall. These guys really don't want to lose all their money. No, they were making it on the way up and they are certainly not going to let go of it on the way down. So they have come up with an even better plan.

Why not spread the misery around and let the tax payer into the party? OK, your average punter didn't make £75 million last year but there are an awful lot of them and if they each cough up a few hundred quid then we get to keep the yacht.

What a carry on.

Collars and Cuffs

You know I tried as hard as I could, but as Alistair Darling steamrollered through this years incomprehensible budget I just couldn't take my eyes off his snowy white hair and his two jet black eyebrows.

Try as I might to absorb the contents of his speech, unravel the complexities of his presentation, I just couldn't help wondering which of the two elements was real and which was dyed.

Both look pretty realistic, and yet something tells us that this can't be. One of these hairy features is fake. Does this tell us anything about our Chancellor of the Exchequer?

I don't know, but maybe the theory is that if enough people are concentrating on his thatch then they will be too preoccupied to listen to the detail. Just maybe Gordon Brown is not losing the plot. Alistair Campbell replaced by Vidal Sassoon. Spin Doctors replaced by Stylists. We will all be too mesmerised to worry about the detail.

Jacqui Smith in Vivienne Westwood. Harriet Harman in Gaultier.

The budget itself was a study in "Neroism". With the Northern Rock debacle still fresh in our memories, the American banking system in disarray, the worlds credit markets frozen solid and a general sense of foreboding in the air, Darling stepped up to the dispatch box with a series of daring and dramatic proposals to help bail us out from this predicament.

4p on a pint of beer.

3p on a litre of cider.

Did I hear correctly? Could he possibly have been this decisive in the face of world collapse?

I don't know. I just couldn't take my eyes off those eyebrows.....

The Thinking Chair

The other day I sat down and listened to a series of questions being posed to the great investor, Warren Buffett. He is a wonderfully colourful character, full of the slightly hokey wisdom that you would expect from a man from Omaha, Nebraska. And he plays the part to the full. He really gets you thinking.

Buffett's annual letter to the shareholders of his investment company, Berkshire Hathaway, is always worth studying. He fills it with broad brush analysis of his businesses and general comments on the world as he sees it. He has been pretty successful over the years amassing a personal fortune in excess of $50 Billion and Berkshire Hathaway boasts a share price of around $150,000 a share.

In this last letter he took a swipe at Wall Street and slapped the Investment Banks. Not claiming the quote for himself he wondered why " the banks have created complicated, new ways to lose money when the old ways worked perfectly well"!

He also noted that if some of these people had IQ's any lower "they'd have to be watered twice a day".

But of most importance were his comments on the real economy. Bluntly he noted that although there may be technical reasons why the US is not in recession, when a person's home has dropped in value by 20% or more, food and petrol have risen sharply and there is no pay raise in sight then, my friend, you are in a recession.

So, are 3,600 miles of Atlantic Ocean enough to keep this state of affairs from our doors?

Buffet doesn't specifically address this but he does make a very important observation. We are experiencing a global phenomenon that is wooing us again with its "new paradigm" siren call. Driven by the growth in the Middle and Far East, the story goes, Commodity prices can only go one way. Up.

Beware, says Buffett. There is always a fool looking to be parted from his money. As investors around the globe chase the type of returns on their money they have had for the last few years, so money has poured into Metals, Agricultural Products, Oil, Gold in fact anything that this never ending demand from the developing countries. Many of these commodities are now heavily overpriced according to historic valuations. A correction here it can be argued, is overdue.

As Buffett himself might say, with institutions chasing liquidity by offering juicy savings rates, cash looks a pretty good place to be right now.

Safe as houses....

We just can't help it. As a nation we are property obsessed.

We have a faith in property that exists in few other corners of the globe. Hong Kong? That's speculative. Dubai? Silly money. But student accommodation in Reading.....now that's something to get excited about.

Napoleon derisively referred to us as a nation of shopkeepers. He was close. What we would really like to be is a nation of shop owners. Running the shop seems like hard work, but having the premises in our pension portfolio is a "no brainer".

Over the last year we have had one story after another in the press about massive losses caused by clever people investing unspeakably large amounts of our money (yes, it is our money we found out because we end up guaranteeing these losses) in pursuit of unthinkable returns so that they can pay themselves unimaginable bonuses.

All of this seems pretty remote but it does have an impact. Somebody has to pay for this in the long run and I'm guessing (call me a cynic) that it is not going to be the guys on the seven figure bonuses. No, in time these losses will be recovered by increases in taxation, price rises and borrowing rates.

All of which create a drag on investment, a weakness in the real economy and an overall loss of confidence. And that's where it gets personal.

So what to do with your hard earned cash? Give it to the whizz kids in the City to chase the next big thing?

No wonder we all like property. We understand it. It has doors and windows and heating systems and conservatories and damp and maybe a downstairs loo. We can strip it, paint it and renovate it. We hope that it will appreciate in value but we understand that it might not. But in the long run we have a national gut instinct that tells us that it is a good thing to own.

All of a sudden that bedsit in Reading looks pretty darn good.

Life on Mars?

I think that these "time warp" tele-dramas must be having some weird effect on the nation. What started with Life on Mars and now Ashes to Ashes has moved into the general economy.

In the Sunday papers and on the news this morning were several references to distinctly "old fashioned" events.

Nationalisation and Strikes.

Remember these? The good old days! The 3 day week, Winter of Discontent, Beer and Sandwiches at Number 10 and price controls.

We all thought this stuff was a thing of the past. Workers now too scared to lose their jobs to strike and the socialist dream of nationally owned business dead and buried. But these relics of our recent past serve only to remind us that the "new paradigm of the economy", so often referred to, is really only a new blanket thrown over an old sofa.

There is no doubt that these are wobbly times for business but at the same time the lessons of the past are worth re-visiting.

Warren Buffet, sage of Omaha and often referred to as the greatest investor ever uses times like these as opportunities. He has recently started to acquire stakes in distressed businesses that he believes are long term winners. His philosophy? Stick to what you know. If you don't understand the business keep away from it.
This may be a little simplistic but hey, who argues with a guy worth 56 Billion dollars?

More to the point, his positive sense that a turnaround will occur and to be well placed to profit from that fact is quite inspiring.

Although the news might sound like a clip from the 1970's, chances are that we have learned enough from the past not to endure a long, grey period such as that.

Who knows, in the upside down, celebrity obsessed culture we live in, maybe the Northern Rock will become the "must have" brand for the next few years and rather than striking for pay increases the new workers will instead strike for fame.

That's fair then!

I know, it is pretty easy to moan about the banks. We all like to do it. I think that the banks even like it a little because it means that although we bitch and whine, we are never really going to do anything about it.

But it is a little much that as they are unwinding their investements in highly dubious forms of rubbish derivatives, and as they are announcing to the world that they are going to write down billions of pounds in assets leading to gigantic losses, they then turn round to us, the little guys and make us suffer for their folly.

Pretty much every day we hear from business owners that have found their bank to be a little less cooperative. Reducing an overdraft limit, requiring a bit more security, a charge over a property. Good, fiscal responsibility on the part of the bank. Keeping their ledgers tidy. Making sure they are being prudent.

So where the hell were these "prudent" bankers when some bright spark said..."I know..let's take £10 billion and bung it on some dodgy derivatives for a laugh!"

It certainly wasn't the business relationship manager in Trowbridge who would like you to reduce your overdraft by £2,000 or put up your house as security. It certainly wasn't the corporate manager from Rotherham who turns down your loan request for no apparant reason. "It's the lending committee" he whines. "I've got no say over this nowadays".

Pretty diligent lending committee. Pity they couldn't have had a bit of a think before they poured their cash (well, actually our cash as we end up paying for it) down the proverbial u-bend.

Yes, it is easy to have a go at the banks. But Man, they don't half make themselves a great target!

French Pickle

So let's see if we can get our heads around this one.

Junior staffer, lowly trader, working for large French Bank, bets the house (literally) on the movement of European Stockmarkets and gets it wrong. To enable these bets he does the equivalent of placing bets on all the other horses in this race (in the markets they call it hedging), but in this case he never actually gets around to placing the safety hedges and it is all placed "on the nose".

Only the markets don't perform as expected and the lowly trader gets into a bit of a pickle.

By the time one of his bosses has woken from his siesta and noticed that they might not be able to pay their electricity bill next month it is way to late. Not only has the stable door been left open, not only has the horse run off, but it appears he has taken all your credit cards aswell.

So what did they do? I think nowadays we can't say things like "typically French" etc. but it sure looks like it. Without letting on that this Junior trader had lost a thumping 1.5 Billion euros the bank quietly starts to sell off the entire position that the trader has created. Turns out that this sell off couldn't be on a worse day. The markets throughout the globe are tumbling and consequently the loss of 1.5 Billion euros turns into a loss of 3.7 Billion euros by days end.

C'est Magnifique!

So does this have anything to do with us? Can any of us imagine letting a "junior" employee have such freedom to operate in our business that they could bring the whole show down?

Have you ever considered the possibility? Are there substantial checks and balances in your business so that no one has the chance to play fast and loose? While the consequences might not mirror that of the hapless Societe Generale they could still be quite devastating.

Certainly food for thought.

Crisis? What Crisis?

With stock markets tumbling around the globe this morning you might be forgiven that the bloke on Oxford Street warning us that "the end is nigh" might have some insider knowledge. If you follow the financial press, events like this can be an adrenalin roller coaster.

But what of real business. The day to day trading around the world continues, stuff is bought and sold, insurance premiums are paid, people pay back their loans etc. Buildings will continue to be built and Tesco's will look for another field to site a supermarket. In other words, although there are certainly consequences to global stock market drops, they tend to be felt at the "Macro" level for the most part.

When do we get to feel it? When we go to the bank and ask for a loan and the manager looks long and hard and asks how many children we have. He will need at least one of them as security for the loan along with the home, the business, savings and any other thing you have had the good fortune to accumulate.

Oh, and then although interest rates appear to be on the way down, our loan will need to be repaid with an eye-watering 5 1/2% over base rate.

And of course we feel it when we look at our Pension statements. After years of being hammered by a persistent bear market, they have nicely recovered over the last three years. We will have to wait to see if yet again those large Pension provider envelopes remain unopened. When your pension is going backwards it is sometimes easier not to know.

Maybe then this is a good buying opportunity if you have some spare cash hanging around? I don't know about that. I am not sure that the fund managers (highly paid) wake up every morning and concern themselves with your welfare.

I think that this is a time for cash, investing in your own business and maybe it is now the time to take control of your pension once and for all and not leave your retirement income to the whim of the market.

Ooooh...what a giveaway!

So they've finally stuck their hands up and admitted it.

Your friendly High Street bank is really just like Comet or Debenhams or MFI. They want you to walk through their doors so that they can flog you overpriced add-ons to your banking needs.

A staggering 300,000 of us switch accounts every month and the banks are having to look to alternative ways of marketing to attract their share of this business. So they've looked to the retail sector and hey presto, you have the Bank's version of the January sales.

And of course, following the great tradition set by the big retailers, they are doing their darnedest not to actually give anything away.

The FT notes that some of these deals are really no deal at all. For instance the HSBC "25% refund on interest on their personal loans" is based on a loan rate of 8.3%! Even after the refund there are still many better deals on offer.

The reality is that you never really get the good stuff on sale. The banks know this and as a consequence their "sales" all have an emperor's-new-clothes feel to them.

But today maybe, depending on the courts, we will get a little bit of Christmas from the banks. Long frustrated by exorbitant fees for unauthorised overdrafts, bounced cheques etc. the public has finally had enough. Like parking tickets, these fees have the ability to really get under your skin.

Let's hope that the Judges have had a few bounced cheques and can feel our pain!

Careless talk......

Reading the newspapers over the New Year was a fairly dismal experience. For UK business the general feeling is that we are in for a rough ride over the next year. In fact I lost count of the amount of times the "R" word was mentioned.

On both sides of the Atlantic the effect of the slide in property values is expected to start seeping into the real economy.

And then on the business television news this morning the presenter asked a couple of guests whether they thought that we were in danger of talking ourselves into a problem. He was insinuating that it might not be all bad, but that somehow we could let our emotional reaction to all the bad news affect our day to day business decisions.

Duh!

Isn't all business emotional? The fact is that if you don't feel bullish and positive you will start to act more defensively, pull your horns in, tighten your belt and so on. It is this gut feeling that guides many business people. Understanding the prevailing economy, especially the demand from our clients is what keeps us in business.

Confidence is important, but so is paying attention to the marketplace.

Never truer is the old chestnut that the banks will only give you an umbrella when it is sunny. Making sure that you have sufficient facilities in place now, before the storm breaks, is the prudent option. If we are in for a downpour at least you are prepared.