We are now two months into 2009 and, as most people predicted, it is not getting much better. Banks are still getting a fairly bad press and RBS has announced a loss that almost defies description.
People’s confidence in the financial sector is badly shaken, which is particularly sad as many people have been loyal shareholders of their banks for years and now have not only seen their capital fade away, their income, certainly in the short to medium term, has disappeared as well.
The Sunday papers are full of new ISA offers from the banks but it is difficult to equate a 6 per cent yield with losses of £30 billion and a still unknown burden of toxic debt. Reading the small print has never been more important.
On top of this, there is not only Mr Madoff but now Sir Allen Stanford. The English Cricket Board may have to cope with its embarrassment but again it has hit the man in the street — not this time in London, Paris or New York but in Antigua, where the local population rushed to give him their savings and to accept his job offers.
And Mr Madoff may, apparently, not have invested any of the money he was given for the past 13 years, and details of his operation are still making headlines.
Looking after clients is sometimes one of the most unforgiving of jobs; people often remember the bad times, rather than the good. However, running off with the money when people rely on you is not an option for most of us, as we hope that our clients will still be there in the future when markets move the other way.
The other major feature so far this year has been the government’s inability to do much about what is going on, other than to spend extraordinary sums of money. President Obama has announced a huge new injection of money and at the same time wants to cap bonuses for the banks, tax the wealthy (if there are any left) and cut government debt in half in his first term; a very tall order and maybe one of those ideas that come back to haunt him.
Our own government seems to lurch from announcement to announcement, while opinion polls tell us how they are faring — not very well at the moment.
It is, therefore, not surprising that the public are wary of what is happening, in turn making the government reluctant to make their decision on when the election will be.
Finally, the media has certainly been more upfront than the government. The BBC may love Robert Peston, although I am less sure the public does, and he clearly thrives on what he is doing. However, if he was grounded for a month, I think people would cope.
We are looking for green shoots, but they do appear feint at the moment.
