As finance ministers from 21 countries jetted into Coolum on Queensland’s self-styled sunshine coast for the annual Asia Pacific Economic Co-operation group talk-fest on Wednesday, their first task before Thursday’s start of serious discussions was to attend an informal barbecue showcasing Australian cuisine.
Tensions over the yen carry trade were put to one side as Koji Omi, Japanese finance minister, rubbed shoulders with South Korean counterpart Kwon O-kyu.
Hank Paulson, US Treasury secretary – in China this week on pressing currency-related matters – dispatched Robert Kimmitt, his deputy secretary, to take his place.
For those less interested in beef, lamb and seafood, the ministers also encountered some uninvited guests despite the heavy security presence – low-flying bats and the odd curious kangaroo.
Host Peter Costello, Australian treasurer, dodged questions on whether he would be enjoying golf at the Hyatt Regency conference site, home of the Australian PGA championship, and another favourite kangaroo hang-out.
Instead, Costello said he prefers a different form of recreation. “I peel myself down to my bathers, I sit in the sun and I swim in the surf.”
Mercifully, delegates are likely to have left Australia before Costello takes to the waters.
Dow Jones employees angry about the sale of the company to Rupert Murdoch’s News Corp have pointed fingers of blame in many directions. Many, including a former executive or two, seem to be singling out Rich Zannino, the chief executive.
Unlike his predecessors, Zannino was never a journalist. He was a finance guy who joined the company in 2001 and managed to outflank former Wall Street Journal reporters to get the top job.
Throughout the negotiations between the Bancroft family and Murdoch, Zannino maintained that he was taking a neutral stance on the bid. But others believed he was harbouring a hope that it would happen.
Those who held that suspicion would have felt a sense of confirmation when reading his memo to staff on Wednesday. Its sunny subject line declared: “Merger Offers Bright Future for Our Business”.
Though some employees who are wary of Murdoch might have groaned after reading that line, he made a point that would be hard to argue with. “With nearly $30bn in annual revenue, News Corp has the money – and the intention – to invest in our businesses on a scale we can’t.”
Whatever the merits of that argument, Zannino is not much of a hero in The Wall Street Journal’s newsroom in lower Manhattan. At least not to the Journal staffers who were out drowning their sorrows on Tuesday night, after the deal was sealed.
Harvard – the world’s richest university by a long shot – has taken a hit after investing in Sowood Capital Management, a Boston hedge fund, which announced recently that it lost more than half of its value amid disastrous bond investments. The cost to the university’s endowment? About $350m.
Sowood – which was founded by Jeffrey Larson, himself one of Harvard’s former managers – is selling most of its portfolio to Citadel Investment, a Chicago hedge fund known for buying distressed ventures.
In a letter to clients, Larson called the move a “painful and difficult decision”, saying: “A loss of this magnitude in such a short period is as devastating to us as it is to you.” You might file that one under “understatement of the year”.
But don’t cry too hard for Harvard. The endowment – formerly run by Jack Meyer, a legend in the institutional investment world, and now managed by Mohamed El-Erian, a star who made his name at Pimco making bold bets on Brazil and Argentina – will be fine in the end.
The university’s endowment weighs in at about $30bn – so a $350m loss in a quarter is small beer.
To put that in perspective, the second biggest university endowment in the US is Yale, at about $18bn, followed by Stanford, which has about $14bn.
The Cipriani family owns some of New York’s most famous restaurants, from the Rainbow Room to Harry Cipriani. But the polished family name was tarnished a bit this week as two of its members pleaded guilty to tax evasion following an investigation by the New York district attorney.
The district attorney himself belongs to a legendary New York family. Robert Morgenthau, whose father served as President Franklin D. Roosevelt’s Treasury secretary, has been serving as the city’s top prosecutor since 1975.
Morgenthau was celebrating his 88th birthday as he announced the Cipriani plea. And, as Bloomberg News reported on Wednesday, Morgenthau already is out raising money for his next campaign in 2009. Last time out, he faced an aggressive challenge from another candidate, so it seems fitting that he might be getting an early start.
When Observer ran into him a few months ago, Morgenthau was speaking energetically about cracking down on white-collar crime – his longtime speciality – and tax evasion in particular.
“When I was in the service, I made a deal with the Almighty,” the second world war veteran told Bloomberg this week. “If I get out alive, I’d devote my life to some form of public service. I’m still paying back.”
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