Are we all about to become really poor (poorer)?

February 26, 2008

In August last year a lot of City types began to sweat quite profusely as they realised a global credit crunch was about to bite them in their collective bums! I can’t imagine a City type saying it, but they probably should have – it was “sh*t-the-bed-time” for those who had gambled more than they could afford to lose.

Great, at the time normal people who don’t have great big mansions in Richmond thought it would just mean bankers would get slightly less than the normal obscene annual bonuses they usually get. No harm there then. Unfortunately Northern Rock had been hedging one too many bets and its finances fell apart. All of a sudden the business press had a big juicy story they could sink their teeth into – and didn’t they just.

I have been out of financial PR for a year, but still keep an eye on “The City” and do the odd bit of financial PR for my current firm. Since Northern Rock collapsed in the summer, I have helped two (without wanting to say which) enormous companies, which are intrinsically linked to the global economy, announce a couple of sets of results each. On every occasion they have received very little coverage and I have been left scratching my head. Was it my poor work, was it that larger companies announced on the same day, has the world gone recession mad?

The answer, I think, came to me at a recent Gorkana breakfast. The editor of the business section of a particular paper was pretty much frothing at the mouth when he spoke about the credit crunch. The Northern Rock story had provided the opportunity for the business journos to cover front-end stories and they loved it! During the traditionally slow August/Septermber season, the business journos were regularly contributing to the front-end of the paper and saw their stock (unlike the companies they were writing about) soar.

I’m not denying that there has been / is a crisis in the credit markets, but to the extent that we are now facing a global recession? I have my doubts.

The scaremongering has relentlessly followed us through the winter and is still here in late February. Admittedly, some companies have reported weaker than normal results and have revised targets for the next twelve months. However, as I say, there are many companies which are doing unbelievably well at the moment and not a jot is being written about them. As I sat there at the Gorkana breakfast I asked my self why? I will let you decide the answer.

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