Money managers under the microscope
The morgue after Christmas
He said at the Reuters Restructuring Summit in London that by the end of the year banks will issue “in patient”, “out patient” or “morgue” judgements as they go about the business to decide who gets much needed loans and who does not.
They will do it with the same inexorable cool as the Spirit of Christmas Yet To Come in “A Christmas Carol.” And it looks like this character will be the only one borrowed from Dickens’ tale of hope.
If Davies is right, the only Charles that will shape corporate events this winter will be Darwin rather than Dickens. Leverage per se will not be seen as a morgue attribute though — it will be working capital flows that make or break a company.
As it is often the case, these bankruptcies will hardly be a stand alone phenomenon. In their quest for cash, some companies will stop paying suppliers and to make their positions as rosy as possible when they turn to banks. The weakest ones will be allowed to go to the wall, as the iconic Woolwich which filed for administration towards the end of last year.
It would take the most ardent creationist not to see a case for the survival- of-the-fittest theory.
Unless the equally far-reaching phenomenon of Christmas shopping comes to its own and people spend. Spend. Spend. Spend and give some much needed oxygen in the system. With the spectre of rising unemployment, it is unlikely, but it would not be the furthest fetched thing that happened in the last 18 months. It may yet be A Christmas Carol.
Charles Dickens Vs Charles Darwin.