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

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

The expected ‘slash and burn’ tactics were referred to throughout the day, but evidence was presented throughout to suggest this generally is a risky policy (protect and nurture the brand at all times), although one should always review and flex marketing budgets to suit current economic conditions.

The day was introduced and hosted by the marketing guru and Emeritus Professor Malcolm McDonald.  His main theme was one of customer segmentation, which is vital anyway, but especially in a downturn.

Other takeaways for me included:

• Listen to your customers (and respond to what they say!).  Nurture existing customers before chasing after new ones
• Remember, customers buy value, not products
• The best sales people are your customers
• Seek to reduce risk for your customers
• Measure customer profitability (and understand why you might sell to unprofitable ones)
• In a downturn, changes in marketing and sales strategy should be subservient to and driven by changes in business strategy, which should be driven from the top.  Reprioritise marketing spend based on this new strategy and measure effectiveness based on hard facts.

A final thought from Professor McDonald was to go on the offensive in a downturn – generally rates are cheaper and competitors may be engaged elsewhere (panicking). 

Which brings us back nicely to the theme of the COA Solutions briefing later in September – ‘How to prosper in a downturn’.

Marketing and sales in a recession – stick to the knitting! 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