bozo's return

Asking the Wrong Question

So, Ken Costa (UBS) cleverly said

"We are asking the wrong question!"

He is right
Bozo has been asked countless times (in his capacity as guru)

How long will this crisis go on?

The question we should be asking is:

What will emerge from the crisis?

The reason people ask this is that they don't like change... because how daft is it that after a Tsunami of this nature (the Fed described it as: once in a hundred years market conditions) to think that what emerges will look like what we used to have.

Without bashing up bankers, (difficult under the circumstances) we have to accept that the total failure of ethics and all the evidence of the existence of an appalling culture of greed does surely mean that we don't WANT to revert to that.

do we?

seriously?

so, look out for the new series of thoughts on what might emerge, or in Bozospeak. What will certainly happen.

A question - for you lot (for now)

Listened to john Sentanu, the Archbishop of York last night.
What an inspired speaker. Clever, Godly, funny and incisive.

First let me share a joke of his with you

"Economists are the people God created to make weather forecasters look good!"

Love it.

But he, and ken Costa both made the point that the question being asked (and Bozo gets asked it every day) is

"How long is this going to last for?

"

the question that should be asked is

"What will emerge from the ashes?"

Because it is pretty dim to think that a crash worth TRILLIONS is a mere hiccup to a system that will go back to business as usual one day.

About six months ago I mentioned business ethics. I said that i couldnt think of a single organisation that would pay to send its top executives on Bozo's business ethics course.

I know that all sorts of training budgets have been slashed anyway, and that fuzzy touchy-feely things like ethics will be slashed first, because it is hard to see the ROI.

Well actually for the first time ever the ROI is clear, and enormous.

Ask yourself what the ROI would have been for lehmans, citi, Merril, HBOS, RBS etc etc etc etc - if they had NOT lost billions because of a culture that was riddled with greed, poor ethics, lack of accountability and a lack of understanding of right and wrong.

You don't think an ethics course could have prevented the loss of billions?

Maybe not, but a moral culture that didn't stink would have.

let's take this one step at a time.

More when i get back from istanbul

In the mean time
You tell me...what will the markets look like when the radioactive toxic dust settles?
do you really think it will look the same?
Seriously?

Provocative Stuff (not from me for a change)

Anyone who read Andy's last comment will see that he has completely out-stripped Bozo on the provocation stakes, slamming into marketeers with the same glee that Bozo slams into the bankers (Did those apologies make you feel queazy?)

Andy has managed to dismiss marketing as an activity.

I know where he is coming from, the great Geoff Burch has said (so many times) SELLING is the only activity that brings cash into your business.

But, Marketing is about deciding what you will sell, how much it will sell for, what channel you will use to sell it, and yes, evern, what colour (or colours) should it be!

You can have tjhe most accomplished sales people in the world, but, if you send them out to sell diode valves to the electronics industry, then they will fail.

You may think its common sense that you don't start a new diode valve making business, but then I think good supply chain management and negotiation is common sense too.

The fact is that a company like Unilever will spend literally MILLIONS launching a new product onto the worldwide market. and marketing, and market research, and yes, even focus groups will help them make sure this money isn't wasted on a total flop!

We sit here and benefit every day from the creation of new products. And creating them costs money, and is risky. Marketing is about making it less risky, making it more successful, and, actually, about giving customers what they want.

Now for me and Andy, selling our brains to a single customer in a meeting across a desk, marketing might seem a bit unecessary.

But, if you want to sell 10 million bottles of shampoo every year for the next five years, to 1,750,000 different customers in 11 different countries.
Some marketing might be handy.

The Path to Success

Here is an interesting news item.

Refinery strikes spread across UK (BBC).

It highlights an interesting problem, and a problem that is, as you have just read, VERY emotive, and because of the recession, increasingly obvious.

What's fair and legal about protecting your country's workforce?
More importantly, for people like Bozo's Antagonist, "what's the right long term economic solution?"

If i haven't lost the loyalty of the socialist readers by the infrequency of my blogging (house moving is a bigger pain than you;d imagine), then they will also ask: "what's the right thing for the ordinary people living here in our green and pleasant land?" (At least I hope they will!)

Here's the legal thing...

It IS illegal to protect UK firms from EC competition. (I know the French and Italians cheat and break the law, but there you go...)

Here's the economic thing...

It does NOT help UK plc's long term future to protect UK businesses from foreign competition.
Protectionism breeds inefficiency, and inefficiency is what happened to the UK car (substitute any other hard core manufacturing sector you feel like) industry.

Protected industries are NOT forced to improve daily, hourly. They do not build the skills and experiences necessary for a cutting edge company in the 21st Century. A company that operates in the sort of value chain that delivers savings and functionality to consumers. So, one day they WILL die. Protecting them can only put off the inevitable. The idea that UK PLC can be protected just until it becomes efficient is an oxymoron.

BUT

I have a theory that says the average British worker is every bit as efficient and hard working as the average Italian worker. Every bit as efficient as the average Japanese worker actually.

The problems in UK plc are not on the shop floor (although I admit pre Maggie they used to be). The problems in UK plc are in the boardrooms, and at middle management levels.

RBS (Scottish) the WORST bank in the history of banking has been bailed out by the British Government (Scottish) to the tune of more billions than anyone could count.
Was this because their bank tellers were inefficient>????

The banking system was destroyed by bad senior management.
The UK car industry was destroyed by bad senior management.

Yet, when you look at the redundancy headlines. When you look at the house repossession headlines.
It is not senior management who are paying for the mistakes is it?

I don't want to get sucked into the argument on a purely socio-political level because Andy will get cross with me, but, the bad senior management that causes UK firms to lose contracts such as the one in Lincolnshire will cause ordinary people to suffer.
Doing the right economic thing - and letting inefficient and uncompetitive UK firms die out is best in the long term, will not be the right economic thing for thousands of people being made redundant through no mistakes of their own!. But surely we need to do something to make UK firms sort themselves out?

The answer, strangely, is NOT more and more redundancies at shop floor and middle management level. The answer is better senior management.

And what are we doing about it?

Nothing.

I had three interesting conversations this week. I was back in Yorkshire and my regular squash partner Charles, told me that his marketing consultancy had lost one of their biggest contracts.
"Why?" I asked
"The client had lost two big contracts, so they decided to cut back on marketing"
TRUE!!!!
My friend Robin actually was made redundant a few years ago from HIS job as sales and marketing director by a firm responding to a slow down.
We are selling less, so let's spend less on selling!

The other conversations were with clients of mine and potential clients of mine about their budgets for this year.... I will come to that in a second.

So the problem is BAD senior management.

So what can you do to improve senior management?

Two things leap to mind.

1. Make use of decent, not over-priced consultancy support
2. Get on board as much management training as you can lay your hands on

Which brings me to my other conversations...

Have a look around and tell me which two areas of spend budgets are getting cut in most frequently?

EXACTLY!

The budgets are authorised by the same senior management that ARE the problem!!!!!
What's their incentive for educating their way out of it?
NONE
They pretend they know everything about everything, but their results speak otherwise. Its hard to sell a solution to the board when the sales pitch begins by telling them it is THEY who are the problem.
I get thrown out of sales pitches a LOT>

BUT until THEY are made to pay the price currently being paid by the shop floor in redundancies, don't expect it to change.
And bear it in mind when aggrieved and frightened refinery workers start picketing the gates.

The problem is NOT bad workers, its bad leaders.

Fat Cows, and thin cows and Deflation

I am constantly stunned by the validity of The Manual in assessing and advising even today, 2,000 years later.

Let me paraphrase.

Pharoah Gordon had a dream, interpreted for him by a smart civil servant. Apparently what it meant was that there would be seven fantastic years for the economy and the stock market, followed by a crash, and then seven lean years for the economy and the stock market.

The civil servant advised finding a really smart bloke to put in charge of the economy.

His job was to take 20% of all the returns made in these windfall years of plenty. (One hesitates to call it a tax, doesn't one?). So that there were reserves to hand in the seven lean years so that the people did not starve, have their homes repossessed, lose their jobs in a massive rationalisation of the finance sector etc etc.

Our modern Pharoah said. "Not on your life chief. If we have any sort of windfall tax in times of plenty, then we will discourage the smart cookies from driving the economy forward! Besides if we even say the word "tax" we will be booted out of the Downing Street Palace faster than you can say 'Technicolour dreamcoat!'. Besides I am the smart guy in charge of the economy!"

You can see where it all went wrong can't you?

Back in the day, 3,000 years or so ago when Joseph was the man with the smarts, people were closer to... well let's leave God out of it and say 'nature'.
People knew that good times didn't last forever. The idea of keeping some of the good as a store for the inevitable bad was not political suicide.

Now we are nowhere near close to 'nature', so we assume that all markets boom forever.

We resent windfall (or any other) taxes. And we whine like stuck pigs when our chickens come home to roost. {apologies for a spaghetti junction of mixed livestock metaphors}.

I myself, as a former city type and high earner would always have resisted higher taxes and windfall taxes.

So rather than just advocate them let me make an observation.

When the market was good, we didn't have windfall taxes. We had a low tax environment, investment bankers and average CEOs got paid 6-7 figure salaries. All was good in the world. We looked after our smart cookies. They generated wealth.

Now, it seems to me we still have no windfall tax, we still, really have a low tax environment. We still look after our smart cookies.

But none of them are generating wealth. the economy is stagnant. Unemployment grows. etc etc.

The only factual change is that the market is not going up anymore.

Maybe the smart cookies aren't so smart.

Maybe we don't need to look after them at all, for one very simple reason.

They don't generate the wealth at all, the cycles of the market do. They just write their name on the paperwork and take the credit.

Personally if you could show me some smart cookies who were going to turn this mess around, fine, give them gazillions and don't tax them a penny. But you won't. Because they don't generate the wealth at all. At least not the real wealth.

So, Joseph and Pharoah seemed to have a smarter model than we do.

I wish someone had a national reserve they had accumulated in the seven years of boom.
Don't you?

Our Pharoah is busy borrowing one.

Back to Normal

By which I mean regular up-dating of course, not the stock market.

Although the fact that UK banking sector survived the removal of short selling restrictions does give us some comfort doesn't it?

I can't give much detail, because I promised to stop bashing the bankers, but let's face one fact, the only reason we aren't shorting them is because the price is already in the toilet, and the only way may actually be up. The fact is that 2008 proved the sector to be full of pretty poor (in skill terms i mean - they were far from poor financially) management teams and pretty low levels of ethics. Hardly a natural home for our hard earned cash.

But Bozo, who predicted the crash before any other guru, still thinks the worst is over.

I suppose we have to investigate what that phrase means.
Because "the worst is over" doesn't mean it cannot go down any more.
Because it can.
It means that the awful panic stricken free-falls are out of the system.
I guess i should out the health warning that this excludes any more criminal lies emerging from the finance sector - which given their record may be a big warning!.

If you invest at today's levels, in 5 years, you will be beating the returns on government securities by a multiplier of at least 2 and more likely 5.

BT - a case study

Apologies to all Bozo acolytes for the paucity of updates.

Bozo has had no internet access, and is currently sitting in Starbucks having paid £4.90 to t-mobile.

Why? I hear you ask?

Because BT are rubbish.
But, they are SO rubbish, that they still tried to sell me stuff in the middle of me telling them they are rubbish!!!!

Now that is either genius in sales terms - or - a case of reading the script on the sales screen instead of listening to the customer's words.

The initial call for them to do a house move happened on 18 December.

I am currently hoping to have my broadband on 12 January.

I am not going to bore you with how/when they dropped the ball.
I am not even going to bore you with my bemusement that it takes five working days to flip the broadband switch on my phone line. (Must be a HUGE switch).

I just want to tell you that while i was explaining to them how rubbish they were this nice Scottish gentleman said to me:

"And could I interest you in BT Vision? You get it through your broadband?"
"What broadband?" asks Bozo.
"Well not right now, but when you do get broadband I can arrange for you to have BT vision too!"
"Can I look at the offer on the web?"
"Yes, you can!" Quoth nice scottish gentleman.
"Oh Good, so you're giving me my broadband now?"
"No sir, that will take fivve working days!"
"OK, well when you give me broadband i will use it to look at your BT Vision packages on the web."
"I can tell you about it verbally if you want!"
"Please do!" Bozo at this stage is going to waste the nice scottish gentleman's time, and puts the phone down while he goes to make tea.

I mean seriously?

I know the script says "sell them BT Vision"

ut surely the training must tell them that when you can't prove your ability to transfer a broadband account in less than 21 days, surely you can't expect them to buy your other products?????

Seriously?

PS I hope to be updating on the usual (mostly) daily basis from Tuesday 13th - depending on my friends at BT of course.

Last Quote before Christmas

Happy Holidays.

I leave you with my friend Confucius

Only the wisest and stupidest of men never change.

Make sure you really know which category you fall into...

This is an interesting quote if you remember the US Elections of 1876 and 2000

I know you weren't alive in 1876, but the vote was stolen (in Florida)

You may not agree that in 2000 the vote was stolen (In Florida)

But..... Stalin would have believed the vote was stolen

The people who vote decide nothing. The people who count the vote decide everything. ~ Joseph Stalin

A quote for all the socialists to remember

We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. --

Winston Churchill