Cover of MoneyWeek issue number 422

Bad news buys

13 February 2009 / Issue 422

Seven shares that can profit in hard times... PLUS:

  • How to get £1 worth of oil assets for 50p
  • Four solid British stocks to buy now
  • Bill Bonner on the bankers' next big swindle

Excerpt

Cut the fat from celebrity chefs

Celebrity chef Antony Worrall Thompson has been all over the press this week, complaining about the banks. He’s not the only one, of course, but he’s got more reason than most. The chef has had to shut four of his six restaurants after his bank refused to lend him more money – at least, not without personal guarantees, such as putting his home on the line, that he was unwilling to give.

You can see why he’s angry. Like every other small businessman, he sees the banks getting a pile of taxpayers’ cash. Meanwhile, his own business is left to fail. And he’s right not to pledge his house, particularly at his age (57). But the trouble is, his bank is right too. Even if you had all the cash in the world, you’d have to be mad to lend it to an upmarket restaurant business right now. With people trading down and expense accounts being slashed, few businesses can be more doomed to failure.

And for all that Mr Worrall Thompson condemns the greed of the banks now, the hard truth is that his business and others like it were built on outrageous City bonuses and huge banking profits. Without a clientele willing and able to put ridiculous bills for lunch and dinner on their expense accounts, London could never have sustained such a wide range of expensive eateries – nor quite as many celebrity chefs, I suspect.

Read the full editor’s letter here: Cut the fat from celebrity chefs