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!