bizRichard

And sure as hell, all those ‘adviser’ type guys with their fancy crystal balls don’t either.

“Credit Crunch!” - the current financial ‘buzz word’ – is nothing more than an euphemism (to disguise and to deliberately and politically shift the blame) for the expected downward trend of the traditional business cycle – see my blog post dated 15th April 2008.

Here’s the story in a nutshell. Lots of people (and not just those on low incomes) ran up lots of debts. Then the ‘credit crunch’ happened. Now some of those people can’t pay their debts.

And who is to blame - not the banks who encouraged reckless borrowing, nor the governments who did nothing because it increased the national ‘feel good factor’ during their regime? No! It’s clearly the ‘credit crunch’ that is to blame.

This story sort of makes sense… up to a point. But let’s not ignore the bit that happened before the credit crunch. The bit when lots of people were sucked into euphorically signing forms that said ‘Give me a loan’ - ignoring the small print - the bit about paying it back!

But it does astound me how quickly the credit crunch bogeyman has become a handy, off-the-peg blame shield. If a business is slow in paying its debts, or has to issue a ‘profit warning’, then it happened “because of the credit crunch”.

Never mind that other factors may be at work — bad management. . . a flawed business model. . . failure to keep up with a changing market. Or plain bad luck.

The ‘crunch’ is merely the mechanism by which common sense has returned to the credit market. But in so doing, it marks the cyclical slowdown in the economy, the reduction in consumer demand, unemployment, a tightening of belts, mounting bad debts, crashing house prices, etc, etc? It’s happened before! . . . and more than likely it will happen again.

And for some this might be what is happening right now!

Credit is tight (for some) and economists are still predicting falls in house prices of about 10 percent this year. Bank of England policymaker David Blanchflower has warned prices could dive by about a third unless aggressive, immediate action is taken.

BUT . . . . The property website ‘Rightmove’ now tells us that average asking prices for property in England and Wales rose to a record high in May - 2.2 percent (on a year ago between April 13 and May 10) to hit an average £242,500, compared with a 1.3 percent annual rise in the month before – and expectations are for house price inflation to accelerate despite ‘a much weaker housing market this year’.

BUT . . . . Interest rates are unlikely to come down fast given worries over inflation and, after a decade in which house prices nearly trebled, Bank Governor Mervyn King has indicated a moderation in prices is probably needed. (Has somebody just woken up?)

BUT . . . . On the stock market the FTSE 100 is ‘climbing strongly’, recently heading for 6400+ (only 300 points off its all time high of 6700 last July) having recovered from 5300 (several months back) despite the financial press’s very best efforts at predicting doom and gloom over the past 18 months. (Note, the FTSE is an averaging index and does not segregate the better performing ‘out of the ground’ type shares from the lesser performing ’high street selling’ type shares.)

So, is it really true then, what we’ve always thought, that “recession exists only between the ears”?  Maybe it is!

Or are we in a ‘different’ world where people either don’t understand, or don’t know what to do if they do understand, or are just not interested and don’t care anyway?

Perhaps the following quote sums it up?

“Drive-in banks were established so most of the cars today could see their real owners”. (E Joseph Cossman)

Everyone seems to ‘be on credit’ – so what!

Except, being positive because I know you and I can, there remain some big opportunities out there still - if the ’so-what’ consumers are still ‘spending’ money like water it must mean that we can still keep ‘earning’ volumes of cash!!

So banish the thoughts of ‘recession’, seize the opportunity and get out there . . . make volumes more  money the SMART way

Richard C

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One of the UK’s less admirable gifts to world culture is the “chav”.

For those lucky to be confined to the sleepy lanes of Hampstead (or, even better, resident overseas), I should perhaps explain that the “chav” is a particularly loathsome breed of local youth, whose semi-illiteracy is matched only by the predictability of their clothing (cheap, derivative), diet (cheap, fast, chemical) and cars (cheap, rusty, excessively noisy). They also shout incoherently a lot, even in normal conversation, in a dialect which is part stolen from elements of US rap culture, part made up, and part absolute drivel.

Undeterred, Martin Baum, with the aid of his 13 year old son, has re-written 15 of the Immortal Bard’s (our William Shakespeare’s) greatest works into ‘chav-speak’. Quite what the point of his doing all this is, evades me somewhat. Anyway, if you fancy sampling the revised works, you will find them on Mr. Baum’s web site (and can buy the complete 15 works for anyone you really dislike). I note one of the masterpieces duly mutilated is “Romeo and his Fit Bitch Jools”       (My thanks to Ewen Cameron for the above) 

However, despite the humorous element of the above, there is a very serious point to be made here – and that is the importance of ‘effective communication’.

We all know that languages, dialects and accents do change and evolve over time due to a number of reasons (none of which there is any point in touching on here). But, do take 10 minutes out from your heavy schedule to look, objectively, at the way you write your letters, your reports, and your advertising material.

Does your communication look old fashioned, the same as it did when you left school? Is it too flat, too serious, too light, too technical, etc etc? Or is it more modern, daring, and grammatically challenging? Does it reflect YOU, as a character, your role in society, or your position the business community?

And, most importantly, does it resonate with your audience – your customers, clients or patients?

If you can’t communicate with your customer - and in using the term ‘you’ I include all of your team members in your business - then what hope do you have of generating that ‘wow’ factor needed to keep your customers. You need your customers to keep talking about you, to keep coming back to buy more and more, and they will only do this if they like you, get on with you, and enjoy communicating with you?

So go out there – be smart, speak the right language to your customers, and keep them for ever!

Richard C

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“As far as the laws of mathematics refer to reality, they are not certain, and as far as they are certain, they do not refer to reality”
Albert Einstein

Clearly I can’t let the week go by without joining in with a ‘topical’ comment of some sort!  After all, those who know me will understand, although I’m not anything of a political animal, how irresistible I find the opportunity.

In this increasingly bizarre fiscal scene, occupied (controlled) by Gordon Brown, even the numbers seem to work differently, depending on where you stand. In Prime Minister’s Question time, accused of the highest taxes in British history, GB said that the current tax take was only “around 37% of GDP”.

But the Office for National Statistics reckon it’s 39%! 

And the IMF, who have probably got it more accurate still, say it’s 42.5%.

Oh well, what’s 5% of GDP between friends.

But, as proof there’s still some justice in the world, the week ended, of course, with Labour’s most comprehensive drubbing in the local elections in forty years. Gordo, unsurprisingly, said he was “disappointed”.  Not for the few, but the many, naturally.  (Perhaps someone ought to let him into a ’secret’ and tell him that we, as an inteligent nation, are able to think and do work things out for ourselves sometimes!)

PS.  If anyone can get a copy of the week’s most notable P45, I (and a few others too) would love a copy.  It’s easy to identify - the employee’s name “K Livingstone” will be the giveaway.

Now, go out there and make some money – the SMART way – which includes minimising taxes – It’s what you keep that matters most!

Richard C

If you enjoy these ‘posts’, don’t forget to sign up (top right) to be notified immediately they are released.  Your email address will not be divulged to anyone else – I hate ‘spam’ as much as you do.