John Nike’s column
Spring 2009
With winter almost over and the colours of spring already showing, it is a time for finding renewed energy to cope with the present economic climate and the difficulties this is bringing to the many. Right at this moment I would rather see banks of spring splendour if I have to think of banks at all. Just a year or so ago, life seemed so easy with financial wizardry allowing the community to invest in bricks and mortar; spend on household devices to make life far more comfortable; visit the pubs and restaurants weekly or more so to enjoy leisure and pleasure; but now reality has taken over. No, money doesn’t grow on trees it has to be earned within a world economy that maintains a level of common sense. Leveraging portfolios of assets on a saleable marketplace without sensible controls simply leads to an overvaluation that eventually implodes causing a weakness in the economy that awakes a volcanic eruption around the world. Did none of the financial institutions consider the historical track of a recessional period every 15 to 16 years and take account of this history. Surely, the economists were shouting their heads off with the cry of ‘beware’! Did the Government not realise that things were too good to be true? Now look at the mess!
Families are being ejected from their homes and put asunder. Homes are being boarded up at the behest of the banks and financial institutions as they ‘rot away’ rather than a coming to terms with the borrower during the difficult period. Surely, better a caring caretaker than a hoard of squatters breaking in to take over. What will be the lost value of a reclaimed property sold at auction or otherwise at greatly reduced prices because of shortsightedness? Who will eventually suffer the losses? Not the Governments who are stepping in to support the banking structure for they rely on their finance from the taxpayer. That’s right! It will be you in one way or another.
Yes, there will be losers through the loss of their investments; the loss of income from their invested savings; the loss of family businesses that have been the backbone of Britain for centuries. And why? Was it a greed that spread around the world for making easy money or was it simply a gathering that wished to ride the Merry-go-round of profitability through the investment of borrowed money? Whichever, the result has been devastating. So, who has the money? It appears that it is not the banks for they simply helped to make it disappear. It is not the Pharaohs for they buried theirs centuries ago. It is the investors, both business and individual, who have such great money wealth that knowledge of the amount will simply make most people gasp. This money wealth has been withdrawn from circulation to be no longer available on the money market – why take a greater risk – at this time. This means that there is a shortfall of money to lend forcing the banks to take such actions whereby only a crippling of the economy can result from such actions. A crippling of our communities; our charities; our businesses; and a maiming of our local authorities while waiting for a passing of the tide of liposuction. The fat of the land is being sucked out and with this the crash of so many familiar businesses. Who would have thought that Woolworth’s would disappear from our high streets? There have been many others and there will be more for the recessional times have a way to run before there is a turnaround. We will come out of it leaner and fitter so perhaps the liposuction will have worked, but only worked at the loss of so much; the fat of the land. In time these losses will be replaced with renewed energy, and times of comfort will return but will we have learned the lesson? Will we recognise the approach of the next recessional period or will doom and gloom return to hurt again?
Who will be the watchdog? Isn’t it up to all to look for the early signs of danger? Yes, I think it is, but many are more qualified than the others and it is up to those persons to alert us to a danger when it arises. The World Economists should take on this role as they did before but it needs a louder voice, a stricter regime of controls throughout the financial institutions and Government, and a greater understanding by all to protect society from foundering again in the depths of the unknown.
Of course, life goes on and a recovery will come around so lets look forward to a great summer with warmth that re-energises our zest for life. A zest that the Nike Group of Companies can help to provide, through its outlets of pleasure and leisure that you will find outlined in this edition of Connections.
John Nike OBE DL
Chairman