Did Warren Buffett really decide not to come to the rescue of troubled Wall Street banks such as Citigroup and Morgan Stanley because he does not “understand” them?
In Tuesday’s interview on his new favourite medium (goodbye Fortune magazine, hello CNBC television?) the Sage of Omaha said he had eschewed investments in the financial sector’s wounded giants because “there are other things I understand better”, such as the municipal bond insurance market.
Buffett is no doubt an insurance expert – his Berkshire Hathaway is a big player in the sector. But he is certainly no Wall Street neophyte.
He was a shareholder in Salomon Brothers, Citigroup’s predecessor, in the 1990s and even ran the firm for a year during a troubled period.
The Sage is being too modest here. Could it be that the reason he did not bail out any of the banks was that they preferred to tap cash-rich but passive foreign investors rather than a famously shrewd domestic saviour?
Scarcely a day passes in Brussels without someone (French, German, Irish, Slovak, you name it) expressing amazement, despair or even ill-disguised glee at how “semi-detached” the UK has become from the European Union during the past year or two.
But if the pointy-heads who beaver away at Eurostat, the EU’s statistical agency, are right, then the UK is different in more ways than one.
According to new Eurostat figures, the UK contains the richest region in the entire 27-nation EU: Inner London, whose gross domestic product per inhabitant is 303 per cent of the EU average. (Spare a thought for north-eastern Romania, which finished bottom of the pile with 24 per cent.)
Still, before everyone in London bankrupts himself or herself at the nearest pub in celebration, a word of caution is in order. These figures relate to 2005 – that is, the golden age before the credit market crisis, the Northern Rock affair, the weakness in house prices and the government’s proposed tax crackdown on non-domiciled foreign millionaires.
It is a point not lost on EU devotees on the Continent. For if Inner London were to slip two notches down the table, which regions would then be the richest? Answer: those quintessentially EU power centres, Luxembourg (264 per cent) and Brussels (241 per cent).
For art’s sake?
Might Sunday’s audacious art heist in Zurich, where raiders stole four impressionist masterpieces worth about SFr180m, convince the Swiss to back plans for a snazzy extension to the city’s main art gallery?
Civic building in Switzerland’s business capital is very touchy, as backers of a planned new convention centre by Spanish architect Rafael Moneo, or the city’s stalled new soccer stadium, know only too well.
But the four works lifted from the private mansion housing the prestigious Bührle collection were among those most likely to transfer to the new building projected for Zurich’s civic art gallery – if conservationists drop their opposition and city fathers and private sector sponsors pay up.
Although Zurich police claim security standards at the Bührle collection were up to scratch, the thieves managed to get in and out in three minutes – hardly likely at a big civic gallery with guards and elaborate entrance arrangements. If the plans go ahead, Zurich’s new building, due to be put to an architectural competition next year, would house the (remaining) Bührle works on permanent loan.
Perhaps some good may come of the raid after all.
Tea and apology
Australia marked the opening of its 42nd parliament on Tuesday to the sounds of the didgeridoo, performances by Aboriginal dancers in white body paint and a welcome to MPs and senators from an Aboriginal elder.
It was a ceremony unlike any Australia has hosted and comes ahead of Wednesday’s formal apology to the “stolen generations” of mixed-race and indigenous Australian children forcibly removed from their parents.
But there was also the pomp and ceremony associated with hundreds of years of British parliamentary tradition.
Michael Jeffery, Australia’s governor-general who was appointed by Queen Elizabeth II, attended the formal opening of the parliament in the senate and welcomed MPs from the lower house to join him in the upper chamber.
Jeffery later had a pot of afternoon tea with new and old MPs and senators in yet another sign that old traditions really do die hard.
The governor-general’s office seems safe for the time being. Kevin Rudd’s new Labor government has refused even to contemplate a vote on Australia becoming a republic until a possible second term.
Mogul in training
Guy Hands, who likes to complain about the music industry’s profligacy, seems to be warming up to its perks.
The new owner of EMI spent considerable time at the record company’s post-Grammy dinner party, chatting up the likes of Yoko Ono, Sir Tom Jones and Sir George Martin.
“He was clearly relishing playing the role of music mogul,” said one attendee.
Hands did win plaudits for throwing a low-key dinner as opposed to a lavish party at a time when EMI is preparing to cut more than 1,000 jobs.
“They hit the right note,” says Observer’s man backstage.
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