Blog Exchanges

So I was reading the Spectator website (my web reading list is pretty much The Spectator, a ski racing blog called Alpine Race Consulting and a financial website called Zero Hedge) and I came across this interesting article http://www.spectator.co.uk/coffeehouse/5849178/the-cost-of-browns-propaganda-splurge.thtml that confirmed my thoughts about the constant Government advertising/propaganda that you hear during the ad breaks.

I posted something on the comment board and then this developed into an interesting exchange with a guy called Moraymint, who I know is a small business owner like me and someone who shares equally pessimistic views on the state of the economy and the UK future. His posts I thought were sufficiently interesting and well constructed to post on my blog (and yes I know that DangerDave is a crap name to post under);

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Moraymint
March 18th, 2010 6:50am

It is utterly obscene, isn’t it?

How does he get away with it? Why does the mainstream media not run with this sort of story? Have we really reached Orwell’s 1984?

DangerDave
March 18th, 2010 9:07am

Thank god you have posted this. I thought I was the only one that had noticed that almost every ad on LBC was a government one.

Sing this from the rooftops.

Moraymint
March 18th, 2010 11:29am

wrinkled weasel
March 18th, 2010 10:27am

“I want a revolution”

I know how you feel.

The problem is that those of us who understand the depth and scope of the truly unholy mess that is now British politics, our economy and our society remain in a distinct minority.

I’m convinced that most British citizens are really only vaguely aware that something could be wrong with this country. By and large, it’s no big thing and everything should turn out alright in the end … just give it a couple of years … sort of thing.

As usual Wat Tyler is on the money; see his postcript to this blog post:

http://tinyurl.com/yjmfc6x

Here I go again. Most of our fellow citizens will not know what in hell has hit them about this time next year; in fact the hit could well come during the second half of 2010.

There really is a steam train coming down the tracks – the leading indicators are everywhere you look. Most folk ain’t looking.

DangerDave
March 18th, 2010 12:54pm

@Moraymint

I entirely agree with your post and indeed more or less all of what you post on the speccie comments.

I sense a kindred spirit insofar as I think we both run small businesses that have been hugely affected by this monumental economic cock up and the endless public sector waste that we see all around us.

I also agree largely with your doom laden predictions of more to come. I certainly think that the markets haven’t unwound fully yet and there is still a lot of toxic crap in the pipeline still to come out.

I’m trying to counter this by selling up over the summer and moving out of the UK but am concerned that I won’t get out in time.

Could you expand more on what you see coming?

Moraymint
March 18th, 2010 3:05pm

@DangerDave

“Could you expand more on what you see coming”

At heart, I think what will emerge after the election is the extent to which our government and the whole of our political class will be unable to deliver the scale of cuts needed in state expenditure, at the speed required, without social unrest and/or the unwillingness of the bond markets to fund the UK’s national debt at anything other than punitive rates.

Simultaneously, deleveraging (paying down debt) will be foist into every corner of our economy by banks unwilling/unable to lend – to credit card holders, to mortgage applicants, to businesses looking for working capital. The banks are basket cases and are desperately fighting for their own survival; lending is the last thing on their collective minds. Those banks that can lend are cherry-picking and will continue to do so for the foreseeable future.

Energy costs, especially the cost of oil, will rise quickly as developing nations grow their economies faster than we’re able to grow ours. As the pound continues to fall, our (largely imported) energy costs will be hit by a double-whammy. We’ve reached the end of mankind’s era of cheap energy; the end of the industrial age; we’ve started the long descent.

There’s more to be said, but I think we’re in the lull before a perfect storm. The government has been able to defy economic gravity thus far, through judicious use of QE, misappropriation of taxpayers’ money, propaganda and outright deceit. The UK economy is structurally flawed after 13 years of unopposed Marxism – and we are simply going to have to pay for it from here on in.

The house of cards will start to collapse from May onwards and I see nothing to make me think otherwise.

Look at it another way: is anyone seriously arguing that during 2010 we shall start to feel the reassuring push of acceleration in our backs as the UK economy flips into rapid and sustainable economic growth? Only the Treasury’s forecasts make these sorts of predictions – and we know who writes those, and why.

Sorry it’s a bit downbeat, but I’m a realist. Tout s’arrange, mais mal, as Lord Lawson would say.

Moraymint
March 18th, 2010 5:51pm

teledu … yes, your post reinforces my view that since the Labour Party started spinning their way into power 15 years ago or so, we have witnessed an Orwellian transformation of our society.

The state we’re in today was planned as such under the heading of the New Labour Project. The UK’s very own brand of soft totalitarianism is now embedded in our national socio-economic structure and it will be terribly difficult to undo.

The state is everywhere: government departments, local government reliance on central government funds, quangos, private sector companies feeding off the state, multi-generational welfare claimants, government agencies, the bias of the BBC, students studying for government-funded non-qualifications, you name it.

Weaning millions and millions of British citizens off of state dependency will take a generation. I’m not sure the Tory Party is up to it and, even if they are, we keep coming back to social unrest.

Oh, the price we’re going to pay for having either embraced Marxism or having allowed ourselves to be conned into accepting it. The result will be the same.

DangerDave
March 18th, 2010 10:34pm

@Moraymint

Thank you for taking the time to expand on your thoughts.

I hope for selfish reasons that you are wrong about the timings and that I can get out in time.

Certainly the government is delaying the inevitable, £200bn in QE this year pumped straight into government spending, and the largely unreported £4bn budget deficit in January (why this wasn’t screamed from the rooftops I have no idea) It’s just sad that the British people don’t see the charade around them they are living in.

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I don’t think that I really need to add any more to what’s written here. I would just urge people to have a look to see what is really going on around them.

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Buying a care home in administration – things to consider

It’s been a while since my last blog entry and I thought I would update by writing a short article on what seems to be an endless stream of care homes that are in administration that are hitting the market for sale. Whilst the buying a home in this situation may seem daunting, as long as you do your homework and have the right advice, it can be easier in many ways.

In many people’s view, it would be quite difficult for a care home to end up in this situation. At it’s most basic level, fee income comes in, expenses go out and the difference between the two is profit. Whilst in most cases this is true, a lot of the homes that we have seen that come to the market in administration are due to reasons that are nothing to do with the home itself. For example, we are dealing with a case at the moment where the operator had overstretched themselves with other projects and in a recent case we dealt with, it was unpaid taxes that cased the problem.

Whatever the reason, there are certainly some good opportunities to be had. Savills are selling an 88-registed care home in Yorkshire for £2.5m which in a better market and out of administration, would be worth significantly more. Additionally, you are dealing with a receiver and it is in their interest to keep the home running efficiently to secure the best sale price. They will be easier to deal with than many vendors and will give over what information they have to make the process as straightforward as possible.

When buying a care home that is in administration, here are a few important points to consider;



Establish the reason why

This is important if you are raising commercial funding on the purchase. Many lenders will be much more reassured if they know that the problems were nothing to do with the care home itself. If the problems are in connection with the care home, then an action plan can be created to solve the problems that caused the home to be in difficulty.


It should be noted however that the chances of raising funding on the home if the problems are to do with it are greatly diminished, unless you are an established operator with significant cash flow.



Surround yourself with professionals

When buying a care home out of an administrative receivership, it is not the time to cut costs on professional fees. Given the likely nature of cost cutting that may have occurred before the receivers were called in, there may be many pitfalls that await you through the purchase process. It is therefore a good time to get an experienced, healthcare specific commercial solicitor involved. The slight increase in fees over that of the small high street practice, will save you much time and money in the long run.

In fact, this is good advice for all healthcare purchases but more so for homes in administration. We are happy to recommend a small number of good firms (please contact us for details). A good broker is also essential unless you are an operator with a suite of bankers. You will need someone dedicated to drive the funding process through.



Act fast

This is probably the most important of all of the above factors and again this is good generic advice for any purchase but especially the case if the home is in administration. In most cases, there will be a bed block put in place by the CQC and due to the nature of the care home business, the passing of residents will mean that the goodwill of the business will diminish with each one.


If you are trying to raise commercial funding with a bank, the goodwill element will be critical to their

calculations of debt servicing and as such, it is important to drive the deal through as quickly as possible to secure the bank funding.

As an example, we are currently acting for a client buying a care home registered for 28 that is in administration. We were introduced to the deal 10-days ago and have already met with Banks and are awaiting the formal offer of funding. When choosing the lender that we wanted to do the deal, an equally important factor is the speed of which the bank can move, as well as the other usual factors of margin, loan to value etc.