7.30am – Give up on sleep.  To bathroom and start adjusting the contrast between my eyebrows and my hair.  As ever difficult to decide where to use more black or less white – really just like fiscal policy.

8.05am – Finish contrast adjustment.  Switch on Today programme to learn what Gordon thinks I should be doing today.

9.00am – Into office at No. 11.  (Very handy for No. 10 as I can readily walk around for direction and belief insertion.)

9.30am – Group of wild-eyed nervous types arrive from the UK Debt Management Office.  At first they are incoherent but I give them the usual reassuring talk about the ease with which the Government are handling the crisis.  Their eyes gradually lose the sparkle and seem to glaze over and then their leader, an older man clearly within range of his index-linked pension, stumbles into communication.  It seems that after all the money we have lobbed into the banking system, the growing inability of the failing private sector to pay taxes, combined with the accelerating cash needed to fund the public sector (especially the new  riot police) means we’ve run out of money.

There are two options – either we get foreigners to buy some Government debt, and quickly, or print the money.  Apparently the foreigners won’t buy our debt because they are scared we will print a lot more money and the inflation will leave them with some of Zimbabwe’s finest notes – unless we jack interest rates through the roof and kill the economy.

11.00am – Walk round to No. 10 to see Gordon to ask if we can print a lot more money.  He’s busy so I wait.  Chat to some of his PR people and a fellow who runs an interesting sounding body called the FSA.

1.30pm – Gordon asks me in.  I explain the problem.  Gordon seems disinterested – he sits at right angles to me and finally speaks in his Nelsonian way, “I see no problem” says he.  Then he turns to me and smiles oddly as he says, “Now I see the problem”.

Anyway joy!  We can print as much money as we like.

5.00pm – Finished meeting with printers.  Go home having rescued the country again.  Must remember to tell Robert Peston.

8.30pm – Hells teeth – sleep time approaching again.  How can I sleep!

My Day As Chancellor is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

You’ll mostly be cheered to know that it is bleak mid-winter in the private equity world.

Portfolio companies are struggling with weak markets and, in a lot of cases, a lot of debt and ratty bankers.  Losses in the big buy-outs of 2005-7 now look likely to be enormous.

Investors are giving private equity less cash to play with and debt to finance deals is very difficult to extract.  Woe is us.

But there is opportunity for the bolder souls – a weak competitor is a great opportunity, acquisitions will look amazingly cheap in a few years and the good managers will do relatively much better in these times.

Cash will be central and its control imperative.  A strong finance function will never be more critical – now is the time to listen to finance and for finance to make its voice heard.  Conservative, accurate and rapid reporting and forecasting will never be more important – if you haven’t got these attributes you probably have little remaining opportunity to get them.

The economy has not bottomed – we all still need to plan for worse.

Keep conserving the cash, cutting the costs and generally surviving.  Spring will follow – only the year is uncertain.”

Regards

Jon

In the Bleak Mid-Winter…….. is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Jon Moulton talks about the current state of private equity funding and how it needs to invest for the long term.

Jon Moulton – Alchemy Partners speaking at SuperReturn 2008 is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

In this 5 minute clip from YouTube, Jon Moulton gives his latest views (speaking at SuperInvestor 2008) to Josh Learner, Professor of Investment Banking at the Harvard Business School about private equity and the economy.

Jon Moulton – Alchemy Partners speaking at SuperInvestor 2008 is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

At a time when most of us are worrying about the future, it is interesting to read about a man who has amassed a fortune that is reputed to be in the region of $30 billion. Well early on in the book there is a key message for everyone involved in business. Business is essentially simple. It’s about making things and doing services. Once it starts to get complex then it probably won’t work and will all end in tears. As that other successful straight talker, Jon Moulton, the managing partner of Alchemy, said of the recent bank melt downs: “It would be amusing to hear some banks’ Boards explain a CLO Squared or, more simply, how they allowed their balance sheets to be filled with products they did not understand and their auditors cannot value”. *

So what is a normal day like for Buffett? Well, he first reads his favourite stock market writers then he gets down to his daily business intelligence. He gets the figures from the extending list of companies that Berkshire Hathaway, Warren Buffett’s investment vehicle, owns. . As Schroeder puts it he gets the numbers on:

“How many auto policies GEICO had sold last week and how many claims it had paid; how many pounds of See’s Candies had sold yesterday; how many prison-guard uniforms had been ordered from Fechheimers; how many jet time-shares NetJets was selling in Europe and the United States; and all the rest – awnings, battery chargers, kilowatt hours, air compressors, engagement rings, leased trucks, encyclopedias, pilot training, home furnishings, cardiopulmonary equipment, pig stalls, boat loans, real estate listings, ice cream sundaes, winches and windlasses, cubic feet of gas, sump pumps, vacuum cleaners, newspaper advertising, egg counters, knives, furniture rentals, nurses’ shoes, electromechanical components. All the numbers on their costs and sales poured into his office, and he knew many of them from memory.” **

Well, he is a very successful man. What sort of handle do you have on your business, on a day-by-day, week-by-week basis? It is interesting that such a man would choose so many tangible things to gauge what is going on in his businesses that he has invested in. He is not waiting for the monthly balance sheet and profit and loss nor is he running some complex mathematical model understandable only to a few initiates. No, he is looking at the daily things happening in the real world that he knows will eventually filter through into real results.

He has set the bar very high. But what Warren Buffett does we can also do. We have everything to hand in our organisations.  We just have to ask ourselves, can we have the discipline to do it?

* Moulton, Jon. October 8^th 2008. Financial Crisis:UK bail out is too little, too late. Retrieved 5^th November from Telegraph.co.uk. Web site

** Schroeder, Alice. 2008. The Snowball: Warren Buffett and the Business of Life. P28.London:Bloomsbury. My emphasis

If business intelligence is good enough for Warren Buffett it’s good enough for you is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

To hear more from Jon Moulton, visit http://www.moulton-speaks.com/

Jon Moulton on HARDtalk is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

Actually not many do – some Banks and Building Societies can get overnight money to/from the Bank of England.  That’s about it.

Clearly the market does not believe that the Bank is in full control of interest rates else the Gilt, base and LIBOR rates would be very close.

Does the Bank of England know which way to go on rates or why?  It’s supposed to use the wise men on the Monetary Policy Cttee to decide on the right rate to hold inflation at around 2%.  (Inflation shortly expected to be around 5% so they’ve missed the target so far!) but at the last meeting they could not all agree – one wanted base up, one wanted it down.  It’s messy.

Rates up; economy worsens, sterling up, imported prices down (oil, food…..), unemployment rises.

Rates down; inflation up, sterling weaker, oil and food prices up….

And then the Government needs to balance its own books.  If the economy weakens tax revenues go down and the benefits bill goes up.  And the Government already breaks the EU deficit rules.  No wonder the Chancellor appears to have lost his head on his Shetland holiday!  The problems are very big.

Which way next for interest rates?  Most likely down a bit to try to sort out the economy, but inflation is pretty frightening and it’s all very unstable.

Don’t read too much of this.  There is, probably, a future for the survivors.

BASE RATE – JUST A CON? is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment

About bloody time! Obvious as can be that the economy was doomed to blow up with too much government spending and wild spending by ever more overborrowed consumers. Both these have gone into reverse and the economy with it; worse the government deficit is still not being attacked. It may be David Cameron who has to behave like Maggie to balance the books by still further hurting the economy.

We’ve a pretty long depressing period in the UK to come!

To hear more from Jon Moulton, visit http://www.moulton-speaks.com/

Jon Moulton Discusses Recession is a post from Advanced Business Solutions - Supplier of accounting software, business intelligence and document managment