Sunday, January 25, 2009

Ssh don't tell anyone.....

The middle of January is when we finish looking at December's management accounts and generally bring the curtain down on the first nine months of the financial year for those clients whose year end is the 31st March. December was an extraordinary month, I can't actually remember a month like it ever, not even in the recession years of the eighties and early nineties. I can remember saying to a client just before Christmas that we seen to have taken our North European cousins working practices to heart and stopped work early - this opinion goes back to the nineties when we used to act for a transport and shipping company that found it couldn't move goods through Europe from the middle of December to the middle of January due to various public holidays and Saints days.

Anyway back to why it was extraordinary, turnover fell through the floor right across the board in terms of mix of business, you name it: manufacturing, retail, service, luxury goods - in some cases the sales figures were a third of what they had been in November, not a third down but a third! Advance orders were down and every week since we returned from the Christmas break I have spoken to at least two clients who are laying people off, this week we made one member of staff redundant. Well talking to those same clients, and others, and it seems things are getting better, slowly but surely, of course no matter how well January is it might not save some businesses but it is a start.

I get the impression from talking to a lot of people that the general feeling in business is one of annoyance, annoyance with the media for talking up a recession and lampooning anybody who dares to put their head above the parapet and say there are some 'green shoots' out there, annoyance with the banks for trying to be insurance salesmen and not being banks and annoyance with the Government for its general mishandling of the economy.

We can't help it, we are a northern European nation and happiness isn't something we do readily - mustn't grumble is the national motto, we put our heads down and hope that 'things can only get better'. People are genuinely frightened but not as much as they were in the nineties, I was reading an article yesterday that said anybody born after 1980 doesn't know how to handle this situation and is panicking. One of the great quotes of the past fortnight (and I have verified this by talking to a client who runs a holiday park) was from the Caravan Club of Great Britain (I think that's there title) who announced "that advanced bookings for 2009 were at record levels" (obviously they would be for 2009 but you know what they meant!) - see, we might have lost Woolworths, Adams, Zavvi etc but we can still party like its 2009.


Les Paul Junior said...

Nice picture, Paul.

Although many say the banks have a lot to answer for, they never actually forced anyone to borrow money from them. Am I right in thinking that Britain is the world leader when it comes to personal debt? I remember the mad rush to buy shares when Thatcher privatised the utility companied in the early eighties and I'm beginning to form the opinion that we're a nation of greedy buggers.

Paul said...

Hi Shy - unfortunately I can't take the credit for the photo - nothing is stirring in my garden yet.

We are indeed winners in the race to win the personal debt handicap. As far as greed goes I think a lot of people wanted to get rich quick via the utilities and also buy to let. I think in the case of the former the gains were small and shortlived for most individuals, in the case of the latter most people misunderstood the concept.

Where I have a personal problem with the banks is their lack of support and the switch they made from the job of banking to that of insurance sellers, factoring companies and pension providers as well as tax advisors. The old rule that banks lend only 1/8 of their reserves has clearly gone out of the window with the Blair generation.

Span Ows said...

I agree...nice picture. I don't think shy was talking about your cameramanship but more about your wit: "green shoots" etc ...maybe I'm wrong!

Read two articles in the Times naming and shaming various of those "at fault" and another re them still raking in multi-million bonuses..unfuckingbelievable.

I also read a VERY good article from July 2007 about the various economic cycles converging making for a crisis worse than the 80-82 recession and maybe worse than the 1930 one. (US etc)

here's the last line which gives a hint where it's from:

"But the boom, extended as it is, by huge dollops of credit and speculation (what Marx called 'fictititious capital') is just propagating the conditions for a global slump not seen since the early 1930s."

So good I'll have to work a post round it....of course I 'fell' into the site by accident! ;-)

or click HERE

Paul said...

I hadn't thought of it that way - thanks Shy!

Span - at least you are approaching this from various angles! Re the profit slump that's very bad news for Labour as they are on a programme of increasing Corporate Taxes over the life of this government - lower profits = well you can guess what!

Re China, last Friday on BBC4 (TV) the situation in China was discussed in some depth, I have tw clients who have dealings with China and things are going very badly out there. What was interesting, given the discussions on the 5Live boards, is that China is expelling 20 million immigrant workers because it doesn't have enough jobs for the natives - I don't think that would happen in the U.K somehow. China is going to concentrate on internal markets for the forseeable future to fuel growth.

Span Ows said...

Re China...they don't mess about. At least 2 executions due re the melamine in milk scandal (in the UK they get promotions or bonuses)

they also top the league for executions a (about 60% of the world total at least!!!...and we moan about a few in the US)

...that plus these expulsions of immigrants...well, par for the course...

...and it's like when the Russian currency collapsed a decade back...if the Chinese owe you money are you really going over there to try and get payment?!!!

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