Archive for September, 2011

SEC to sue S&P?,0,5143697.story

This is interesting. Few of us have much sympathy for the credit rating agencies following the banking crisis. How they continued to give sub prime debt a AAA rating will forever remain a mystery, but are they legally liable for their appalling misjudgement?

In the commercial world, credit agencies such as Experian and D&B make it very clear that they are simply expressing an opinion and are naturally not responsible for any decision taken on that. Hardly surprising and fair enough too. As I tend to say repeatedly, a credit report is the start of the process, not the end

So surely the same applies to S&P, Moody’s et al? As much as we would probably like to see such a case succeed, I find it hard to believe that they haven’t protected themselves in much the same way

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Interesting and wide ranging article on current insolvency

Wide ranging and highlights the issue of “zombie companies” (with maybe a slightly overly harsh comment from E&Y). pre pack administrations and why actual insolvencies in business have not been as high as expected, but are likely to rise

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Late payments to end?

Well the government would like to think so and this is of course well meaning legislation. Terms over 60 days are due to be deemed “unfair” and effectively illegal. Or maybe.

Thats all very well, but whos going to file the complaint? The supplier? This is aimed at the big boys in the market and i think its fair to say it would be a brave supplier who takes Boots or Carlsberg (the named offenders in the piece) to task. so will it be down to teams of civil servants to roam around the country auditing AP and purchasing departments? And what will be the penalties?

The doubts about the effectiveness of this are cast in the article and we shall see, but more alarming is the note at the end of the piece. Only one in ten suppliers credit check their clients

How stupid is that?

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How to prevent a depression?

Well there is plenty in this decent article. Its mostly macro measures which would appear to have logic, but does this suggestion work?

Also, since the U.S. and EU financial systems remain unlikely to provide credit to small and medium-size enterprises, direct government provision of credit to solvent but illiquid SMEs is essential.

Im unsure. Do governments have the necessary expertise to hand and would they be able to assemble this? Who gets what?

If they were serious about this, perhaps a more practical solution would be greater short term tax breaks?


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A joke for today…

An Irishman, a Greek, a Portugese and a German walk into a pub

… the German pays

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Who wrote this?

Last week I was consulting and training with a very pleasant new client on credit management issues and as part of the process, we looked at the written communications that this business used.

They were reliant on generic letters produced by a very well known accounting package. These letters were simply awful…

Not only was their no scope for a deadline date within the text (essential in my opinion) but they were badly laid out and frankly poorly written

Most hilariously, the “final demand” letter stated that “this will be our final communication on this matter”. Really?

My view is that, unless the sheer numbers of debtors defeat you. a reliance on reminder letters should be avoided. If possible, the only reminder should be the final one (after the necessary calls have been made and recorded) and in that instance, it should always have clear deadlines, options to respond (get them talking at the very least) and include reference to previous communication

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Rick Perry

GOP strategist Mike Murphy wrote on Twitter: “Listening to Perry try to a put a complicated policy sentence together is like watching a chimp play with a locked suitcase.”

Following on from my previous post about the possible presidential candidate Rick Perry, I had to laugh out loud (LOL) at the above quote from….his own side

From the excellent online Slate magazine

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