Credit Crunch

"Credit crunch claims first Scots jobs", says this morning's Scotsman. "Last night there were fears that the moves were the start of a series of cuts that could lead to as many as 5,000 financial services jobs being lost in Scotland."
So what's actually happened? Well, HBOS is cutting 92 jobs from three corporate banking teams. Some of the personnel will be redeployed, and of the rest, half are based in London. We're told that HBOS has 1,000 people beavering away in its corporate division, so 92 is fewer than 10%. Meanwhile Aberdeen Asset Managers is cutting costs by £15 million, claiming the cuts will mostly come from natural wastage and are a "natural part of the cycle".
Apart from all that 'natural' stuff, which makes the Croc feel a bit queasy - this is finance not yoghurt after all- that's not an unreasonable explanation. Especially when it only takes a couple more clicks on the virtual Scotsman to discover that £15m is about a third of AAM's pre-tax profits for the last six months and they've just bought Goodman Property Investors for £130m.
Which brings us neatly back to the HBOS jobs, some of which happen to be in acquisition finance. Global finance is a complex subject to say the least, but it is hard to see how a crisis in inter-bank lending and general liquidity can be blamed quite so directly for specific and limited job losses in another part of the forest. AAM paid cash for Goodman, which it got by issuing shares. And there are plenty of other ways companies buy other companies, few of which involve the use of a credit card. Yes, the economy is teetering on the brink of economic downturn: but recession means two successive quarters of negative growth and we're nowhere near that yet. Yes, house prices are slipping, but everyone and his dog knew they were stupid and unsustainable (apart from people with stupid and unsustainable BTL portfolios, whose dogs think online poker is a good career option). Sure, it's harder to pick up a cheap mortgage, but does that mean the whole of corporate Britain is going to curl up in the fetal position with its fingers in its ears, singing na, na, na? Apparently not.
"Last night there were fears" is one of those lazy journalistic devices that neatly sidestep the issue of who said what. Quite often the person experiencing the specific terror is a man in a pub, a journalist's mum, or, in the last resort, a drunk at a bus stop. All of whom have good reason to worry. But in this case, the Cassandra is named as Douglas Adams, 'an economist at the Ernst & Young Scottish Item Club'.
Now I'm not saying that the credit crunch will have zero impact on Scottish jobs in general and the financial services sector in particular. And I'm not one to trivialise the impact of anyone losing a job. But normally such trimming of staff would hardly raise a ripple, and to flag it up as the first trumpets of impending doom is surely a bit of a stretch.
But this Adams bloke made the link himself didn't he? Well no. Dougie (as he apparently prefers to be known) does seem to have said that 5,000 financial sector jobs might go, but the Croc can't find the actual report on the Item site and is too lazy to phone their press office. He also seems to have tempered his comments with a lot of on-the-one-hand-and-on-the-other type stuff. And the Item forecast for Scotland in 2008 considers evidence that that the downturn in financial services actually predated the credit crunch.
Who then made the terrifying connection between slightly shorter queues at Starbucks and sectoral meltdown?
My money's on the drunk at the bus stop. I've heard he used to be a journalist.