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Taking Stock of Bonds

By Aleksandrs Rozens, IDD Magazine

January 28, 2009

Out Of Touch, Or Just Above It All?

Huge writeoffs. Ludicrous bonuses. Fancy jets. Interior decorating.

And Davos.

It’s an annual event that to many of us has been suspect for years. Speeches are made and the press gleefully laps it all up, but what exactly is accomplished in the Swiss mountains? Do any of the announcements made to the press mean anything? Did meeting in Davos help folks compare notes and coordinate a response to the credit crisis in 2008?

The executives attending the resort pay nearly $40,000 to be part of the World Economic Forum. That’s just the ticket for attendance. Remember there are airplane fares, cab rides and other incidental expenses. Meanwhile, did anyone actually secure mandates for new business at Davos? Would it not have been simpler to visit a client’s corporate offices? After all, the money saved on expenses could be passed on to corporations. Their shareholders would surely appreciate the cost savings.

This year, we are told that many corporate chiefs are not showing up. Some firms have canceled parties, dutifully noting that it would not be appropriate in the current environment. According to published reports, Merrill’s former chief, John Thain, had actually planned to show up – before he was sacked.

Some Wall Street firms appear to be sending mid-level executives. Citigroup, a firm whose stock has been pummeled and appears to have no direction, is sending senior managers even as it cuts thousands of staff members. Everybody at Citi should be working the phones, either getting new business, or making sure their various borrowers can make timely payments on their debt.

Thrift and spending less. Some notions that apparently have not made their way to Wall Street yet. Or maybe, some folks believe they are above it all.

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Aleksandrs Rozens

Aleksandrs Rozens has 17 years of experience as a financial journalist. He started his career at Dow Jones, and he has worked at Knight Ridder's business news wire where he wrote about mortgage bonds and real estate as well as interest rate swaps. He also edited Private Equity Week and IPO Reporter, and was a reporter for National Mortgage News and helped start the mortgage backed and asset backed coverage at Reuters news agency. Rozens also worked briefly at the AP where he covered real estate, mergers and corporate bankruptcies. Prior to joining IDD he was editor of Bankruptcy Insider. Rozens graduated from Fordham University where he studied English Literature and Russian Studies.

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