Hard times when the crash comes

PUBLISHED: 09:00 20 September 2008 | UPDATED: 15:47 10 September 2010

Tim Allman, Capital Canaries

My work has revolved round the City of London for over 20 years. Firstly for an investment house, Gartmore, then the RBS and most recently for The Bank of New York, until our division was sold off to an Australian software company.

My work has revolved round the City of London for over 20 years. Firstly for an investment house, Gartmore, then the RBS and most recently for The Bank of New York, until our division was sold off to an Australian software company. But I'm still a City Boy though, and based a couple of minutes from Liverpool Street Station.

I've seen quite a few rises, falls, and scandals in my time in the City. Six months after joining Gartmore there was the market crash of 1987, which decimated savings and wiped out those who had been sucked into the market right at the top.

Thirteen years later, another stock market bear run started, but with all the smart cash having left a few months earlier. All the money that piled in at the peak was driven by fear and greed; fear of missing out and greed of wanting a part of it. Who thought that the words "dot com" would make them a millionaire? All the dot in the "dot com" did was to move the decimal point a couple places to the left in your investment valuation, and gained an entry pass into the 90pc Loss Club.

And the latest rise, rise, rise and fall in the City this week claimed two high profile victims as Lehman Brothers and HBoS bit the dust when the music stopped in the global pass the parcel game of securitised debt. Expansion in high risk markets, fuelled by cheap and available cash, was always going to end in tears, and it did.

The common factor? Those at the top made their money, banked it, and got out or sold up. Those left trailing in their wake either didn't see it coming or just wanted to hang on in there in the expectation that things would get better. They didn't and the majority, the great unwashed masses, lost their jobs and savings.

So what has this got to with football and Norwich City FC? A great deal in my opinion.

The continued rising price of football clubs, TV rights, player wages is madness and is unsustainable. Their "value" cannot keep on rising in the current economic climate, and reminds me of the craziness at the top of the dot.com market in 2000. When the bubble bursts, as it has done in the City of London, and as it will in the near future in football, there will be a tidal wave round the top clubs, filtering down through the leagues. When times get tough, cash is king, and how many football clubs can honestly say they are in the black, in cash terms? Only two Premiership clubs as far as I know, and maybe the same number in the Championship.

Of course, the credit crunch has already hit Norwich City FC in a big way, as our playing budget for this season has been reduced due to the resignation of Andy and Sharon Turner from the Board. We read that they were worth at least a couple of hundred million, but in the current economic conditions, has anyone considered that maybe they just couldn't afford to loan the money this season and that their fiduciary duty to Central Trust was a little more important than their hobby, Norwich City FC, hence their resignations? At least Norwich City's loan book is looking healthy.

And at a lower level how many of our supporters will be affected by redundancies in the City of London? Aside from the Capital Canaries membership, not that many, but what are the indirect effects? Plenty, I would wager. Losses on savings, reduced pensions are the obvious example, That's less money to spend on those luxuries such as season tickets, football shirts, and the occasional meal at Delia's.

And when this does happen, as it will soon, I hope that Norwich City can ride out the storm.

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