This is my first post and as much as I want to write about style, design and beauty and the things that lift our souls, I'm just not in that space. Because as I watch or read the news I find myself getting more and more agitated, wanting to shout at writers, commentators and politicians to stop telling the narrative version of what's happening with the Euro and to start to get into what it actually means to us. And if they won't, I will at least try.
When Lehman fell in 2008, we were growing our fledgling beauty business at around 400 percent year on year with all of the risks and challenges that involves. We watched our relationship with our bankers change over the months that followed as they had their goal posts moved by their parent group. Yes, they were still just as supportive as they had always been but you could tell that they were being forced to change as the world changed around them.
We survived a difficult period together and are now happily enjoying the semi-stability that has followed. But this is why I am so worried at the moment -- because this stability has been so hard-won and is so fragile that any form of asymmetric shock to the system will undo much good work and put us all in a worse place than we can imagine.
As we look at the Greek economic debacle unwind (BTW did you realise that their pharmacies have their profits guaranteed by the state?!) the question of the Greek default is now not if, but when. And the reason why I scowl at most commentators is that the Eurozone dominoes are lined up, one by one, ready to topple in turn while they just tell the story of demonstration followed by parliamentary event followed by Euro ministers in conference.
With Portugal, Ireland, Spain and possibly Italy all at risk of seeing the bond markets take their toys home with them, I'm reminded by the words of an old friend and very senior international banker who outlined some of the possible consequences to me last year when he said "there isn't enough money in the whole world to write the cheque if Spain goes."
I am normally optimistic and positive, but I also believe that you plan for the worst and allow yourself to be pleasantly surprised. And right now the worst seems to be that sovereign debt contagion begins (in spite of the efforts of the ECB -- which are somewhat compromised by lack of any domestic political will in Germany) as Greece defaults and, whatever the consequence for the Euro, the banks will be involved in another bloodbath on their balance sheets.
While that may not seem so bad outside of the Eurozone (Euro banks suffer from their own mistakes is hardly worthy of too many tears), it is. Because those banks are underwritten, at least in part, by non-Euro banks on both sides of the Atlantic. And when they start to have to adjust their finances to take this all into account, it will be done by closing the door on lending to anything other than a company who doesn't need to borrow. Who knows, maybe just the need to borrow will disqualify a company from access to debt entirely as their risk profile will be too high.
What's to be done? I will leave those brighter than me to rush the IMF et al to the bed of the ailing Euro. But outside the Euro zone, I think we have to look, and with speed, at ring-fencing bank operations by separating retail banking from investment banking, and make sure that the banking structures that support small and medium business and the consumer are stable and insulated NOW.
So when the Vickers report is delivered in September (in the UK), the implementation must be given the same imperative as we would to a war or a national disaster. Even if it is inevitable that the banking system has a serious write-down coming, the only way our economies will recover is through the engine-room of small and medium-sized business. If there is no fuel for them to grow, there will be no recovery.
After all, there's nothing wrong with the old adage 'panic early and avoid the rush'.