Be Excellent To Each Other

Looks like our relations with Iceland are still frosty:

In the olden days, we'd have sat a battleship squadron outside Reykjavik and demanded our money back, and to heck with this "international court" nonsense.

* grumbles about the God Old Days *

You mean the good old days when we tried protecting our fishermen with Royal Navy vessels and were told to back the hell off by the entire international community? Yeah.

I'm pretty torn about the whole Iceland thing, because it's very complex. Little is being done to pursue the people who caused the problem, many of which remain extremely wealthy and could therefore pay most of the money within relatively little time. Also, while the mooted post-Landsbanki sale means most UK sources keep banging on about the cost therefore 'only' being £168m, that's effectively every single Icelandic citizen saddled with a £500,000 debt, but in a country that would have no means to make that money back. (By contrast, the UK's banking sector is rapidly strengthening again, and so it will only be a lack of political will if the British taxpayer doesn't in the medium term make a fairly hefty profit from the banking collapse.) Furthermore, the UK overpaid its savers, by reimbursing them in full, which is over and above requirements in international law.

On the flip side, those in control in Iceland lied to pretty much everyone. They said no-one had offered help, when lots of help had been offered. They said they'd honour the EU banking laws they'd signed up to, and then when everything went wrong it was Icelanders that were prioritised for payments. Jónsdóttir says she was against the Icesave deal because "Neither Holland nor the UK were willing to share the risk [if the Landsbanki sale didn't cover 90%+ of the debt] with us", but why the hell should the UK and Netherlands share that risk? Also, importantly, Iceland's banking sector signed up to international banking legislation that states very clearly that assets must be guaranteed by government; the Iceland government is, like everywhere else, funded by taxation; and since Icelanders actually have PR, they at least elected the government that failed to regulate the banks and caused this entire mess. (The argument against here is "we didn't know", but then it strikes me as a little like not looking the gift-horse in the mouth when your tiny country is rapidly rocketing up the quality-of-life tables, despite having only 330,000 people and—internationally speaking—a tiny industry.)

The one thing that is very clear here, though, is that while it's a huge risk to Iceland that this goes to court (Iceland might win, but it could very much end up with worse terms than those on offer), that's what should have happened in the first place. It's also pretty clear that what Jónsdóttir refers to as the "socialisation of private debt" is something that needs to be dealt with by Western governments before the memory of the banking collapse fades—otherwise we're going to go through this exact shit again within the next 20 to 40 years.

I'm glad I got my money back. 8 years of savings. I'm was surprised I got the interest paid though.

Titpant and fanny-hammock vendors La Senza look to be in trouble. The Wife used to like shopping there until it suddenly turned into the underwear equivalent of Claire's Accessories.

That's gone well, then. I wonder if it's been used as a place to store debt, like the sports club owners do.

Argos in trouble again. "9% drop in like-for-like sales and a near 60% plunge in operating profits"

Doesn't surprise me, they have been papering over the cracks for ages.

The staff will be gutted. I'll buy a sympathy card from... oh.

'Roses are red
Violets are blue
Here's a P45
Made just for you'

My workload could decrease slightly, anyway.
Also, from BBC comments:



Yes, you'd think, wouldn't you.

Stating the obvious, but it seems to me that the likes of Clintons were doomed by Moonpig and Funky Pigeon. It's all very well selling bits of cardboard for 2500% margin, but if that actually amounts to £1.50, and you've got a shop to run, rent, rates and salaries to pay, stock to buy and hold, coupled with a diminishing customer base and an inferior, expensive generic product range (i.e. you can't produce instant, cheap, personalised cards with people's photos on them), coupled with crippling debt/interest payments - you've got problems. Either enter the same market, playing on the same terms, or die.

At this rate, the traditional High Street will be decimated by the web and do-everything out of town hypermarkets.

I very much doubt they were running at those sorts of margins.

(Mrs P does handmade cards, but very rarely, because the likes of Clintons (and to be far, hobby crafters) knock together a card for ridiculously cheap. The market is skewered and the concept of quality* has gone out of the window.)




* And copyright, but that is another rant.

As far as I'm aware, Clintons don't make the vast majority of their cards. And the margins are way out.

Clintons are the worst of the card shops. The store on Fenchurch Street is massive, but mostly full of:

1) Space
2) Cuddly toys
3) Chocolate
4) Calendars
5) Rubbish cards

Is that another Beex market stall?

Who makes the best cards?

I wish to know more, as the licencing department is busy.

Standard "we'll give you 500 quid for your design and print millions of copies, and if you refuse, then we'll take it anyway, print millions of copies and good luck suing us."

Sorry to hear that.

There is a Clintons in Canary wharf, also a couple of branches of 'Just Cards' (or something similar) and a place called Scribbler, 3 doors down from Clintons. Clintons is full of generic shite cards and cuddly toys and a huge shop, which is nearly always empty, and even was the day before valentines day. Conversely, on 13th Feb, Scribbler had to run a one-in one-out policy (they do have a tiny shop though). Scribbler is acebest.

Also, I have my doubts that Clintons is actually run by Bill and Hilary.

A little known fact, Clinton Cards was actually started by psychadelic funk master George Clinton.

I went into Clintons the day before valentine's day, and the queue went out the door and past Scribbler.

Hah! Caught out in a lie red handed!

<vote apod>

Oh, no, she hasn't been caught out like that. Membership of ACiD tends to put people off from trying it.

In all fairness I was there at 8am.

Actually, my example isn't entirely fair anyway, as I would expect the popularity of Clintons in Canary Wharf (where an independent competitor exists) to be somewhat lower than elsewhere. Clintons in Lewisham often seems to be busy. Mainly with shoplifters.

Mrs P, but then I would say that.

Almost relatedly, it is the 25th anniversary of the Forever Friends range. They have, I've been told, a brand new website. Which is dead exciting and just the sort of thing needed to (That's quite enough of that - Ed)

If there's one thing I do in Oxford that isn't drinking, it's wander round Scribbler laughing like a 5 year old through a megaphone.

A 5 year old who just realised how funny the words "poo" and "willy" are.

I do like it. There's one in Leeds, too. just down the road from there is a good curry place.

Having read more about it, this Clintons thing stinks, regardless as to whether they are shit or not. They had loans which had technical breaches on covenants which the banks chose not to enforce (note, technical breaches rather than default). Bank sold the loans on, to their biggest supplier. New creditor then exercises right to enforce covenant which gives right to immediate repayment, Clintons can't repay and are forced into administration, at which point supplier will be able to take control of the company for a pittance. This is predatory takeover tactics at the most extreme, and pretty fucking abhorrent.

Yeah, agreed - just another example of the apparent despicable, sharp practices of banks. But hey, that's banks for you.

Up to 8,000 people heading for the dole queue.

Not really. It wasn't the banks which forced repayment on the loans, it was the suppliers who bought the loans.

Eh?
The banks sold their loans to their customer's largest supplier (and creditor).

I don't know, obviously, and call me an old cynic by all means. I'm guessing, however, that strict enforcement of covenant by the newly assigned lender - immediate repayment of said loans - might just have crossed people's minds?

Whatever, I'm assuming that said banks think they did rather better in selling their customer's debt on to an interested party, as opposed to continuing their support of their customer at a perceived greater risk?

Nor did they force Clintons to take the loan, nor did they force Clintons to breach the covenants. Clintons marched itself to the edge of the cliff.

The banks are being forced to divest though, where in state ownership. Selling loans allows them to reduce exposure and free up capital to meet their Merlin targets for new lending.

I do get that, but call me naive - whatever happened to loyalty to their own (presumably longstanding, big) customer, as opposed to, say, saving their own miserable skins? Banks have a long and inglorious history of selling umbrellas on sunny days and being the first to pull the rug from under even perfectly good, profitable businesses, complete with full order books, with a spot of cashflow trouble, or where the going gets even slightly rough, just to be sure of getting their miserable pound of flesh back in the form of repaid loans or whatever?

Even if it is the case that such banks effectively have no choice in similar circumstances, due to an edict from their (supposed) governmental paymasters - a scenario I find almost impossible to believe anyway, given that such banks appear to act with wanton impunity as to the public wishes/bended knee pleadings from governments (such as in the case of bonuses) - one has to remember that they're only in such a situation in the first place via catastrophic errors of their own making, and are extremely fortunate that the largely unwilling taxpayer was there to bail them out in their hour of need, with an open chequebook stuffed with yours and my hard-earned money. A very great luxury that the likes of Clinton Cards, a wealth-creating business *making and selling actual stuff*, with 8,000 employees (and doubtless many more within its supply chain), does not have.

Gah.

Playing Diablo Avocado, they were in technical breach. If they had subsequently gone bust and it turns out that they hadn't either sold the debt or exercised the repayment right, then the banks would have been slated even more than now.


However, Technical breach can be bollocks, and dangerous. I had a client where one of the covenants was that year end stock days would not exceed (n). This was the only covenant that they were close to, so for the last two weeks of the financial year bought no stock to ensure that they would meet that criteria, with predictable effects on post year-end trading.

I assume the Eye will have more on it next week - they also carried a few stories where the Big Four auditing companies had developed a nice habit of declaring companies unable to pay their bills, forcing them into administration, appointing themselves administrators and then selling the business off to friendly asset strippers.

Advocatus diabolies indeed, but yes, I do see that position.

Like you say though, it's more a case of to whom they sold the debt to in this case, the circumstances and rather 'interesting' final outcome? 'Nuff said.

From my own point of view regarding future employment, it could be fucking terrible. Certainly, the boat was rocked today.

Very sorry to hear it, Mali.

I hate banks.

What's your involvement? Big position?

It isn't my account, but one I was casting an eye over. Probably end up on a debt for equity swap and stuff. I'd bet a pint on that.

"It's caused me some disquiet" is probably the best I can say.

I wouldn't be at all surprised if they were obligated to sell to the highest bidder - and even if not, it's not like you're going to deliberately turn down a high bid in favour of a lower one. Also, given that they're reasonably high risk loans, I can't imagine there were many other companies lining up to buy them.

Say what you like about banks, but they really don't seem to be the bad guy here, the supplier do.

OK Cras, whatever mate.