KERRY O'BRIEN: After 10 years as World Bank president, and a year as special envoy to the Middle East for the so-called quartet: the UN, the European Union, the US and Russia, Australian-born James Wolfensohn, has scaled back on his career somewhat. And in his 75th year, with a glittering career behind him, why wouldn't he.

But Jim Wolfensohn remains one of the best connected individuals on the planet. Over two decades before his World Bank appointment, he built a legendary reputation on Wall Street, first with Salomon Brothers before building his own firm which ended up with branches as far afield as Europe and Japan.

In an interview with Jim Wolfensohn today, he spoke candidly on several controversial fronts, acknowledging that his close friend, former US central bank president Alan Greenspan, had been blindsided in not seeing the sub-prime crisis coming.

He also says his job as Middle East envoy was made untenable in 2006, when America and the Palestinian faction Fatah, "cooked up a deal" to drive Hamas out of the Gaza strip.

Here's that feature-length interview.

Jim Wolfensohn, from your decades inside Wall Street, how do you assess the seriousness of the sub-prime debacle?

JAMES WOLFENSOHN, FORMER WORLD BANK PRESIDENT: Well, I think it's serious and it's already had its impact in the US markets and it's had its impact in Asian markets and around the world both in anticipation and as the losses have been seen and I think what the Secretary of Treasury was saying yesterday in his remarks is that there is a need to take another look at the methods of control.

KERRY O'BRIEN: That's almost an understatement, isn't it?

JAMES WOLFENSOHN: But after the horse has got out of the yard, and I think what all of us are worried about and concerned about is that obviously the Fed and the authorities are trying to play down and say it's okay and let confidence return but I personally have apprehension. I think it's been such an enormous break in the system that we may have some period ahead of uncertainty. I believe that will happen.

KERRY O'BRIEN: You believed that there will be some further nasty shocks potentially?

JAMES WOLFENSOHN: They may not be shocks but I don't think it's going to be remedied very quickly. We've sustained very substantial losses. The credit market is tightening, the confidence of business is at a low of over 20 years.

So, these are signs that the public, which is heavily borrowed as you know in the United States, and which has been the engine of growth. If you start cutting off credit or tightening credit then you're attacking the very essence of growth in the United States.

KERRY O'BRIEN: Why didn't the smarter minds in banking see this coming or were they all, if I could put it crudely, too busy feeding at the trough?

JAMES WOLFENSOHN: I think it's sad to say they were too busy feeding at the trough. This was, and the people that were running it were a new breed of bankers with PhDs in mathematics to back them up. Trading and securities, which frankly none of the top managers really understood and all they understood was that you had, if you had 20, 30, 50 billion invested in its then it increased your bottom line and they were trading with each other until it's a bit like the story of the emperor has no clothes. One day someone came in and said, "My God, the emperor's naked!" When they did that and they discovered what they were trading then everything happened and it happened very quickly.

KERRY O'BRIEN: Many of those now applying hindsight to what went wrong are blaming Alan Greenspan at least in part for keeping rates for too long during 2003 and '04, keeping money very cheap for longer than necessary and fuelling the house bubble. He says in his defence he was concern about deflation at the type. Do you think his reputation will stand the test of time or having accepted the credit for his years in office should he perhaps face up to some of the deficit?

JAMES WOLFENSOHN: Well I'm in a bit of a problem here because Alan's one of my best friends.

KERRY O'BRIEN: I know.

JAMES WOLFENSOHN: But I happen to think that he was one of the best heads of the Fed that there were. But I think he was blindsided by this. I don't think he had, for whatever reason, any sense of the enormity of the potential disaster that was facing him. I think that traditional economists were looking at the question of interest rates, of inflation, they were prudently going about their business for the other members of the board of governors. They would come into the meetings, they'd move it by 0.25 per cent, they'd move up or down, they'd give some sphinx-like comment to the congressional committee and the markets would move a little bit either way, and that was the game the game was played since Volker. Volker, if you remember, when he was head of the Feds, had this problem of uncertainty in the markets he took rates up to 30 per cent, 35 per cent to try and break the inflationary cycle. Alan didn't see that coming. There was very modest inflation. What was happening was that you had an expansion of credit at a level that was unsustainable because the credit quality was being expanded in a way that the new credits that were being added, as is now clear, were simply not tenable and so when the thing, the house of cards came down, there was no base there and the top, which were all these mortgage bank securities, all of a sudden had no value. You couldn't get a bid for these mortgage bank securities. So, banks were writing off $5 billion, 10 billion, 15 billion and some of the major banks, institutions in New York which were one in particular which was worth $270 billion is if today worth $100 billion in the market and this is not atypical of what's been happening in Europe or in the whole banking system.

KERRY O'BRIEN: Could this have come at a worst time for America in terms of its place and its reputation in the world? China goes ahead economically in leaps and bounds while America tries to recover from the perception, if not the reality, of a foreign policy disaster in Iraq, with serious structural economic problems at home?

JAMES WOLFENSOHN: Well I think the United States is not in its best moment. We've had a period of Bush in which the public deficit has gone from $US6,000 billion to $US9,000 billion. So, if you talk about debt, the national debt in the United States has expanded exponentially partly because of the war but not solely because of the war.

Secondly, you've seen a huge belief in the expansion of India and China and we're now seeing that belief is being materialised as they enter the markets, as China enters and so on but China and India today still have a less than a half in GDP than the United States, maybe it's a third of the GDP of the United States, which is roughly 14 trillion and they together maybe 4. So, in terms of the economic power in the world today, and in terms of the place that China and India need, and the world needs, it's US to import.

Now you can wipe off the United States and you can say, you know, they've managed it badly, but God forbid it really gets tough in the United States because the impact will not allow people in China and India and exporting countries to stand back and say well you see they've screwed up because it will affect them and I think it is the interconnection between the United States and the rest of the world, in a sense, still a dependence on the United States which we yet have to assess.

http://www.abc.net.au/7.30/content/2007/s2205214.htm

Bank customers queue round the block as cash machine pays out DOUBLE their money

14:43pm on 19th March 2008

Bank customers couldn't believe their luck when a cash machine began to double the money they requested.

The faulty machine finally ran out of notes at about 8pm.

Two for one: Customers queue outside the cash machine in Hull last night which paid out twice the amount requested before running out of cash

"I parked up and learned that it was paying out double. I joined the queue and when I finally got to the front I drew out £200 but it gave me £400.

"The statement said I only drew out £200. I don't know whether I will have to pay it back."

Taxi driver David Mellors, 37, said he arrived at 7pm but by the time he got to the front, the cash machine had ran out of money.

"I was disappointed. It was the ultimate buy one get one free sale and I missed out," said the father of seven.

"We do not know how much the machine paid out at the moment but the matter is under investigation" she said.

"They were walking away with huge wads of cash and big smiles on their faces.

"They were ringing their mates and telling them to get down quickly. It makes up for all the banks charges I guess. I hope they don't have to pay it back."

Currently my open trades are shorts on AMP and QGC, with longs on IPL, NXS and ORI. I have quite a few other holdings, but I don’t consider them open because they are free carried. I also sold out of Potash on Thursday night, which was a small gain in USD, but probably a loss with currency conversion.

…

IPL, NXS and ORI are not in any huge danger, so there is no need to comment on them for the moment. But, as with all things at the moment, it can change very quickly.

Abraham, Fruchter & Twersky, LLP Files Class Action Suit Against PMI Group, Inc.

March 12, 2008: 06:38 PM ES

Abraham, Fruchter & Twersky, LLP has filed a class action lawsuit in the United States District Court for the Northern District of California on behalf of purchasers of the common stock of PMI Group, Inc. ("PMI" or the "Company") (NYSE: PMI) during the period between November 2, 2006 through March 3, 2008 (the "Class Period").

…

Entering 2008 we remain cautious. We expect a drop in earnings and return on equity given the accelerating downturn in the US housing market, slowing global economies, financial market volatility and a shifting interest rate environment. In 2009 we expect benefits from lender captive reinsurance in the US mortgage reinsurance line to make a significant contribution and improve our earnings. This aids in the transition I noted. We also expect the fundamental strength of our international and wealth management and retirement platforms to drive earnings and ROE improvement.

…

http://insurancenewsnet.com/article.asp?n=1&neID=20080305560.2_e15a038c3bc7a4e0

Most say no to tobacco in super funds

By Tamara McLean | March 05, 2008

TWO out of three Australians don't want their superannuation funds to invest in tobacco, even if it returns good profits, a study has found.

But contrary to their wishes, the Cancer Council NSW research also shows nearly one third of funds do hold tobacco shares, while most of the rest failed to respond to questions on the topic.

And only two per cent of funds surveyed had formal policies excluding tobacco industry investments, the study found.

"What is significant about this research is that these superannuation funds have barely considered the issue, treating investment in tobacco companies just like any of their other shareholdings, despite the fact their members are strongly opposed," said lead researcher Professor Raoul Walsh.

The large-scale survey found more than three-quarters of the 3500 Australians randomly questioned thought superannuation fund investments in the tobacco industry were unethical.

Of the respondents who actually had superannuation investments almost two-thirds, or 63 per cent, preferred their funds did not invest in the tobacco industry, even if the investment was profitable.

But in the study, published in the journal Health Promotion International, nearly one-third of surveyed super funds confirmed they held tobacco shares.

A further 58 per cent failed to comment or know the answer, said Prof Walsh, from the Centre for Health Research and Psycho-oncology, a collaboration of the Cancer Council NSW and the University of Newcastle.

"Essentially this study brings to light the fact that almost everyone who holds retirement savings in super funds are likely to be inadvertent and unwilling investors in tobacco companies," he said.

Cancer Council director of health strategies, Anita Tang, said while impressive gains have been made in tobacco prevention, there was still a long way to go when it came to the policies and practices of Australian superannuation funds.

"Any financial gain to the tobacco industry, and therefore investors, is inextricably linked to increased death and ill-health in our community," Ms Tang said.

"We'd like to see Australian superannuation funds and their investors think more carefully about shareholdings in the tobacco industry, as a positive exercise of social responsibility and to realign their practices with the views of their members."

Smoking causes about one-fifth of all cancer deaths in Australia, as well as a range of other diseases.

http://www.theaustralian.news.com.au/story/0,25197,23322155-36418,00.html

Adopt sustainability reporting

By EUGENE MAHALINGAM

AS the largest professional accountancy body in the world, the Association of Chartered Certified Accountants (ACCA) strives to achieve and promote the highest professional, ethical and governance standards.

And with those standards, it endeavours to be a global leader in the accounting profession and to preserve public interest.

According to ACCA chief executive Allen Blewitt, one of those interests involves the ACCA's role in promoting transparency through sustainability reporting and disclosure as its corporate responsibility (CR) initiative.

“Our initiatives in (global) sustainability reporting go back nearly 20 years. We were embracing them when they were quite unpopular and people thought we were mad,” Blewitt told StarBiz.

“But, with climate change, carbon reporting and other mainstream issues, all the work we have done for many years is finally starting to pay off,” he said.

On why companies should adopt sustainability reporting, Blewitt said: “Companies have a responsibility to their shareholders and employees to do so.

“It also provides an avenue for companies to improve their brand value and be viewed as good corporate citizens.”

However, internal factors are not the only reasons why companies should adopt sustainable reporting practices, Blewitt said.

“Consumers are becoming more educated and increasingly discerning about the environment and the carbon impact on the food and drinks they consume.

“They will start to determine company behaviour and have an impact on their success and financial profitability. As consumers add pressure on them, companies would have to implement sustainability reporting practices,” he added.

According to Blewitt, the increase in education and sophistication of the consumer base has already begun to have an impact on companies worldwide.

“Mattel learnt a valuable lesson when it had to recall toys that were not suitable for children.

“Nike, which also got into trouble in terms of its labour practices in producing sports shoes in Indonesia. Consumers forced the company to change its practice because they stopped buying,” he said, adding that CR was beginning to have an impact a company's recruiting prowess.

“One of the biggest challenges facing employers today is the ability to attract and retain good workers. From our research, the best employees usually want to work for socially-responsible companies.

“University graduates are also querying human resources departments of companies on what they (the companies) are doing in terms of CR,” Blewitt added.

According to ACCA Asean and Australasia director Tay Kay Luan, this is where sustainable reporting and, ultimately, the ACCA comes in.

“Reporting means transparency, transparency means communication and communication means people are well informed,” he said.

Clear and concise reporting would also boost companies' appeal to potential investors, Tay said, adding: “With reporting intelligent investors and consumers can compare (companies) and choose which one they would support and receive their loyalty.

“As a company chairman or CEO, what you want most are loyal customers. And because you don’t have to market, they stay with you. Loyal customers will become loyal because of sustainability reporting.”

http://biz.thestar.com.my/news/story.asp?file=/2008/3/1/business/20079286&sec=business

Originally Posted by hangseng

I smell serious insider trading and potential for major class action against the directors. Watch this space.

This is quite disgraceful at any level of thinking, all it would take is tracking of trades.

The questions relating to the so-called January production all seem to presuppose that the Company has forecast to the market that production in January 2008 would be 10,000 ounces. The Company HAS NOT MADE ANY SUCH FORECAST. Consequently, the Company does not believe it is able to respond directly to the questions raised on this issue.

172,631 tonnes of ore at 1.96g/t were treated through the plant in December with an average recovery of over 93% as the processing facility moves towards its full rated capacity of 2.2 million tonnes per annum. With ore now being sourced consistently from four sources (two underground mines, the Calista and Discovery, and two open pit mines, the Central and Success) the optimum mix of fresh and oxide ore into the plant has generated this increasingly higher throughput rate. Coupled with the high gold recovery View is confident that these key production statistics can be MAINTAINED going forward to consistently achieve THE FORECAST +10,000 ounces of gold PER MONTH.

Whoops!! Doesn't look as though the board even knows or even reads its own announcements!!!

So for starters, we know, and hopefully the ASX knows, if not they need to read this, that the board are lying.

So anyone on that board has now signed a document that is for all intents and purposes, a blatant attempted deception. I believe if you do that in front of a judge, there are some serious charges? Perj?

I suggest Tim Gooch and the fellas learn how to read... and remember!

I'm also bemused at how they can say that knowing the figures after the 22nd January, they can't make a guess at total January figures, yet two weeks later they can safely make an assumption about the quarterly production. That's just rubbish.

In my mind they don't even attempt to answer question 6 in relation to point (V) (asx dates are wrong here), awareness of outsiders or insiders of administrators being called. I suppose record volume the day before that trading halt just doesn't say anything does it? Could be that they know they are stuffed when it comes to that.

...

Instead of writing on a forum about it, what you guys need to be doing is getting to the creditors meeting, or at least sending a representative in an endeavour to halt the liquidation sale.

It is quite obvious that the view board misled the market, and didn't disclose necessary information, therefore you need to be thinking of the SGW result. i.e. shareholders will be granted the same status as creditors as they were misled.

Given the likelihood that some, if not all of the board members may, or at least should be facing criminal charges over this, you could well be given the same status as SGW holders have now.

The reason Investec have called in receivers immediately is undoubtedly because of this - to get rid of any assets and clear their own books before the criminal procedures can be carried out. I'm sure they are well aware of this, and will be looking to get the money back asap, as it will much be much harder to get that money off them later, if you do indeed end up in a similar situation to SGW holders.