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When life throws you lemmings

“Why the long face?” I asked the managing director of Huxley Epsilon, the self-proclaimed future of financial advice, as I walked into his office. “I mean, of course, beyond the obvious horridness of world markets and the general uncertainty of whether every major bank we’ve ever heard of is, on a day-by-day basis, going to stick, nationalise or fold.”

“I’m afraid it’s far worse than that,” the MD replied, looking pale.

“Worse than a bank as big as HBOS being taken over by Lloyds TSB – a deal that as we speak looks like it might actually happen although it could also be off again by the time we finish this meeting?” I said. “What about the implications for competition and the free market – and particularly a market free of government intervention?”

“I think you’ll find both those concepts have been somewhat overrated of late – at least with regard to the banking arena,” said the MD. “Seriously, think about it – when did the number of banks on the high street post-demutualisation ever lead to any meaningful choice in mortgage or saving rates? More often than not, they were just happy to move at the pace of the slowest competitor and pocket the difference.

“And as for the supposed freedom of the banking markets, is the answer to the current crisis really for strong banks to grow ever bigger as they gobble up the weaker ones? Don’t we then wander even further into ‘too big to fail’ territory, thereby increasing moral hazard – not to mention the chances of taxpayers repeatedly being asked to foot the bill.

“If I might quote that clever Simon Nixon, writing in The Spectator, ‘the real lesson of the credit crunch should be that banks need to be smaller. In a healthy free market it should be possible for banks to fail without triggering financial Armageddon. The credit crunch shows not that markets were too free – but that they were not free enough.'”

“Interesting take on things,” I conceded. “Although I do wish you wouldn’t try and raise the tone of our meetings by introducing anything as out of place as an intellectual argument. I thought we had agreed that bizarre Amazonian metaphors – and preferably monkey-oriented ones – were about the extent of our combined brainpower.

“Either way, none of that addresses your generally depressed demeanour. What could be worse than global economic meltdown and its associated ills?” “Lemons,” sighed the MD. “I’m so sorry,” I replied. “I could have sworn you just said ‘lemons’.” “I did,” said the MD. “I mean, of course, it is the work of genius but the timing is hugely irritating.”

“Let me see if I can guess,” I said. “You’re talking about Informed Choice’s whimsically entitled LemonAid report that continues the glorious tradition of advisers laying into poorly performing funds and the groups behind them. So, in addition to Bestinvest’s ‘dogs’ and Chelsea’s ‘relegation zone’, we now have ‘lemons’ and some question- able puns on ‘zest’, ‘bitter taste’ and so on.

“Still, aside from instilling a vague sense of unease about which advice group will opt for which synonym for failure next, I don’t see why this would affect you so badly unless … OK, what were you going to call your line of abuse and how close were you to unveiling it?”

“We thought ‘Clown Watch’ might work rather well,” said the MD. “And we were planning to launch this week.

“We had some lovely graphics too – little custard pie logos with one meaning you might want to review your holding in that fund, two meaning you should probably sell and three meaning it might be an idea to find out where the manager lives. I reckon we’d have got some pretty decent publicity too.” “No doubt about it,” I agreed.

“There’s nothing hacks like better than kicking a company when it’s down and it’s just so much easier when somebody else provides the ammunition. Still, I don’t see why you don’t simply leave it a week or so and then carry on regardless. After all, you know what they say – when life throws you lemons …” “Make gin and tonic?” the MD suggested.

“Very kind of you,” I replied. “I’ll have a large one.”

Any Out of Contexts or Diary stories? Send them to Diary editor Nicole Blackmore at nicole. blackmore@ centaur.co.uk telephone: 020 7943 8190

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