Crunch point
TO SEE where all the cash has gone, look at the evidence now piling up from the High Street banks. The results confirm that 1990 was a year of unprecedented bad debts at home — as bad in the first half of the year as in the whole of the previous year, twice as bad in the second half as in the first. This year is showing no improve- ment, and Lord Alexander, chairman of National Westminster, sees no economic recovery before the second half, at the earliest. Bankers say that their shopkeep- ing customers have had a terrible two months (everything must go — but it doesn't), and the question is how far and how fast their troubles spread to their suppliers. My instinct remains (and the bankers tend to share it) that we are at the crunch point, even after this week's cut in base rates, that the next few weeks or months will be the most difficult — and therefore the time when managers should manage with the greatest care, and keep their lines open to cash.
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