SCAM

After confessing to thinking the credit crisis was a trifling inconvenience, the chairman ponders the comparison between a highly-regarded fund manager and an eight-foot Wookie.


“We won’t be talking about ‘Lehman Brothers – one year on’ today, will we?” sighed the chairman of the implausibly-sized investment company Second Coming Asset Management as we met for a pint or two of We Don’t Need Advisers Telling Us How To Run Our Business at The Always Such A Clever And Commercially Sensible Quote To Get In Print.

“Good grief no,” I replied. “I’m sure you’re as tired of offering opinions on the subject as I am of seeking them. Anyway, I think we’re all agreed that any vague lessons to be taken from the last year – for example, that excessive borrowing, excessive lending or excessive bonuses may not always be A Good Thing – have been well and truly learnt by those who should learn them.

“In fact, it’s fair to say that, while we may have been through the mill a bit, all is now well in the wonderful world of finance and the Credit Crisis was just a bit of a damp squib.” “Well, exactly,” nodded the chairman. “It was a storm in a teacup really and I’m delighted everybody can now get back to rising stockmarkets and business as usual.”

“Um … I was sort of being ironic about the lessons learnt and the dampness of the Credit Crunch squib,” I said slowly. “Well … er … so … was … I,” lied the chairman even more slowly. “But we seem to have strayed onto Lehman territory even though we said we wouldn’t. So what were you really wanting to chat about?”

“I was thinking about asking you how global Second Coming Asset Management is these days,” I replied. “You mean aside from the back-office in Basildon?” asked the chairman. “Oh – and the little accountant we used to use occasionally in the States until we discovered he’d been moonlighting for that young scamp Bernie Madoff?”

“Aside from those,” I nodded. “You see, I’m trying to work out if Scam could be the sort of fund group that might be targeted by an ambitious young chap looking to take on a global marketing role in his next job.” “Oh him,” said the chairman. “Well, regardless of how global Scam may or may not be, my understanding is, in his case, we might be joining a bit of a queue,”

“I’ve heard that line too,” I admitted. “But then I’ve heard a few lines on the length of that particular line … um … if you know what I mean. Either way, surely Scam couldn’t pass up the opportunity of talking to someone who is responsible – or at the very least – partly responsible for bringing the Chewbacca Defence to UK fund management.”

“Do you know, I don’t think I’m familiar with that one,” said the chairman. “Perhaps you could enlighten me.” “It would be my pleasure,” I replied. “Say Scam had some very highly-regarded fund managers …” “Good one,” laughed the chairman. “This is only theoretical,” I said. “Anyway, these managers are renowned for a particular way of running money and one day they resign.

“What do you do? You can’t bring in new star managers with a different process as that’s not why your existing investors placed their cash with you and you can’t employ a sort of diet version of your soon-to-be-former managers as why wouldn’t investors just move to be with the real thing, so to speak. But is there a third option? I suggest this is where you employ the Chewbacca Defence.

“In an episode of South Park, Johnnie Cochran uses the strategy when representing a record company against Chef – initially discussing why an eight-foot Wookie would choose to live on Endor among two-foot tall Ewoks. He suggested this did not make sense and nor did his talking about Chewbacca in the current case.

“He sums up by saying something like ‘Does that make sense? No! Ladies and gentlemen of this supposed jury, it does not make sense! If Chewbacca lives on Endor, you must acquit! The defence rests.” “And you’re suggesting this is comparable to, for example, switching European specialists onto an income fund?” asked the chairman. “The defence rests,” I nodded. “And I didn’t even have to bring up the glove puppet.”

_______________________