The City Diary: The Midas – or Maddison – touch

Slackbelly exposes The good, the bad and the ugly of the square mile

Sunday 23 October 2011 02:24

I'm sure that George Maddison, the Credit Suisse banker, has celebrated many triumphs (and bonuses) during his lengthy finance career. But, curiously, his name only seems to make the newspapers following troublesome little upsets.

Maddison is an adviser to the Pru – whose handling of the deepening AIG fiasco is one of the more humiliating City fundraisings (sic) in living memory. He has also assisted (during its "disappointing" flotation), Carphone Warehouse (during a row about share lockdowns), NatWest (when he was rapped by The Takeover Panel for making unsubstantiated claims) and Canary Wharf (when its 1999 share placing failed).

Might clients surveying Maddison's press cuttings start worrying that their adviser is a little accident prone?

Bear Stearns boss had his eye on the ball...

James Cayne, former boss of the defunct investment bank Bear Stearns, appeared before America's financial crisis inquiry commission last week to explain the reasons behind the bank's 2008 collapse. "I heard the same rumours everybody heard, that hedge funds ganged up and that was all part of a picture of a big fat goose walking down a lane that's about to get eaten up alive. Regardless of whether there was a conspiracy, the bottom line was that the firm came under attack."

What Cayne failed to explore is why his firm might have been so susceptible to assault. Could it have been his management style? In the summer of 2007, when the bank first got into bother, Cayne was posting his golf scores on the internet. The log showed that on 14 June, the day when Bear Stearns reported a 10 per cent drop in earnings, Cayne played a round of 96. On 21 June, as several big banks pressured to increase the collateral on loans they had made to Bear's sinking hedge fund, Cayne scored 98. The following day, as Bear Stearns completed the biggest rescue of a hedge fund in almost a decade, Cayne was back, this time shooting 97. Isn't life grand?

Bookies took wrong punt on election

Oh dear. A hung parliament may not be much good for Britain (if you believe the Tories) but it is certainly no use to the bookmakers. After the gambling industry invested heavily to attract punters to bet on the outcome of the general election, the voters promptly delivered the worst possible result for the betting shops. Creative execs are now desperately trying to convince bosses that the whole election push should be put down as a marketing expense – as at least they attracted some new customers. "We did twice as much business as 2005," says one, before admitting: "but there was blood on the carpet". Who says the bookies always win?

Ex-Rat Packer bets on UK

With stock markets slumping on news of a hung parliament, there's at least one person who believes in the British economy. I hear that Buddy Greco – the 83-year-old jazz musician and one-time member of Frank Sinatra's Rat Pack – has decided to relocate to the UK because there's no longer enough demand for what he does in the US. Two views make a market, and all that.

Dream terms and conditions

With collective economic belt-tightening inevitable, no matter what the new government looks like, it is heartening to observe that the London 2012 gravy train is still rattling away at full steam. Job of the week is the London Organising Committee's Beach Volleyball Manager, who will end up working closely with the equally crucial Volleyball Events Manager. The successful candidate must be "enthusiastic" about beach volleyball (who isn't?) and demonstrate "enjoyment in their work". Applications close later this month. Hurry, hurry.

Red letter days: One investment will be underscored in Dragons' diaries

Dragons' Den, the Beeb's business talent show currently filming its eighth series, features a panel of five outstanding entrepreneurs. At least that's what they tell us. But are they quite as brilliant as they make out?

Rachel Elnaugh famously left the show as her Red Letter Days business slumped into administration in 2005, after reporting losses of more than £4m – leaving the company to be taken over by her fellow Dragons Theo Paphitis and Peter Jones.

With such talent at the controls, it was surely only a matter of time before the business was back in the black, but, according to accounts lodged with Companies House, the firm has failed to make a profit since, and has run up losses north of £11m under the dynamic duo's brief tenure.

Paphitis and Jones have also lent Red Letter Days more than £6m – so I await the next set of results with anticipation. They are due to appear at a nice juncture – just when the new series of Dragons' Den is scheduled to air. What propitious timing.

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