Magazine article The Spectator

Gross Greed

Magazine article The Spectator

Gross Greed

Article excerpt

Gstaad

The fat cats were all over Davos last week, greedy bankers, self-important bosses of publicly owned multinationals, craven hedge funders and shameless publicity-seekers such as Bono and others of his ilk mixing freely with Gordon Brown, Al Gore and Bill Gates. No, Carla Bruni did not attend, nor did Amy Winehouse, who had better things to do. Like being filmed smoking crack.

Some 20 years or so ago, while in my cups, a lady who used to chauffeur me around suddenly came up with a pipe and offered it. I like to think myself a chancer, but I drew the line at that one. Crack will get you nowhere fast except the morgue. But back to the fat ones.

The greed of bankers is well known. This time they managed to surpass themselves.

They created a product which was no good and sold it as gold. So avaricious were they that massive interest-rate cuts by the Fed have had no effect at all. The trouble is that the architects of this mess do not suffer personally. They will take massive golden goodbye cheques -- some in the hundreds of millions -- and then retire to Palm Beach or St Moritz and become elder statesmen. And it gets worse. Until recently, people trusted banks. No longer. Bank after bank has had to seek huge capital infusions. The Saudis will end up owning most of America's banks, which might not be such a bad thing as the first thing they will do is stop lending money for American women to buy cars and houses, or have breast enlargements. The French are also doing a Northern Rock. Société Générale might be gobbled up after dropping a bundle. Fear is the cheapest commodity to be had in Davos, with the lack of trust having intensified as some banks which had offset their loans by purchasing insurance against defaults are now facing dicey claims.

The irony is that a lot of money can be made during rocky times such as these, or even during a recession. Back in 2001, Charles Fix, Taki's financial adviser and known as the magician among those in the know, had his best year. Ditto in 1997, during the Russian meltdown. I was Fix's first investor back in 1989, after my daddy's death.

People told me I was nuts. Fix was new to the game -- he was, after all, a brewer back in Greece. (Fix was a monopoly for years, ever since the first Fix came from Bavaria with King Otto and started a brewery east of Athens. ) But my childhood friend was no fool, nor was he greedy. He created a fund of funds with something no one had thought of before, a simple game plan which went as follows: every fund manager played but only those whose results were to the good remained in the game. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.