Fi­nan­cial jour­nal­ists had a front row seat to the brash show

The Weekend Australian - - BUSINESS REVIEW - JOHN DURIE

Just days af­ter hear­ing Wall Street gu­rus lec­ture me about why the bull stock­mar­ket would last, the head­lines in Le Monde said it all: Lundi Noir, La Crise sur la Marches.

I was in the Dor­dogne re­gion in the south of France on va­ca­tion, af­ter a tour of Wall Street in which, to a per­son, econ­o­mists at the re­spec­tive in­vest­ment banks warned of problems and the eq­uity strate­gists shook their heads, say­ing the five-year bull mar­ket would keep­ing run­ning.

The econ­o­mists were right but they lost their jobs.

About 3.5 sec­onds af­ter read­ing about Black Mon­day I de­cided to stay on hol­i­day and get mar­ried, not re­turn to my job writ­ing the Chan­ti­cleer col­umn for an­other pa­per. It was a good call. The mar­kets bounced and fell again but the fall­out in cor­po­rate Aus­tralia would last for years, bring­ing an end to a debt-fu­elled binge which has not seen its like since.

There would be debt binges but no re­peat of the cast of char­ac­ters who ruled Aus­tralia in the 1980s.

Just days be­fore, my stay at the Plaza Ho­tel in New York bought mixed news that the late Robert Holmes a Court had ac­quired the Aus­tralian Fi­nan­cial Re­view.

The ex­pense ac­count had a run but, at the same time, my mind ven­tured into what it would be like work­ing for a man who had his fin­gers in just about ev­ery cor­po­rate pie in the coun­try.

The Plaza was also the home to the fa­mous 1985 ac­cord between the United States, Ger­many, Ja­pan, Bri­tain and other coun­tries which agreed to co-or­di­nated ac­tion to lower the value of the US dol­lar.

It didn’t work, and by Oc­to­ber 1987, as the US econ­omy suf­fered, ac­cord­ingly the five-year bull mar­ket con­tin­ued while man­u­fac­tur­ing jobs were shed.

Some­thing gave. In the end it was elec­tronic trad­ing that copped the blame for the dra­matic col­lapse that cut stock prices by 31 per cent in the five days to Oc­to­ber 19.

The fact the S&P 500 was trad­ing on price earn­ings mul­ti­ples of 23 times against an av­er­age of 14 times was barely men­tioned.

Holmes a Court’s em­pire un­rav­elled in the years to fol­low, as did those of the likes of John El­liott, Christo­pher Skase, John Spalvins, Alan Bond, Lau­rie Con­nell, Bruce Judge, Larry Adler and Ge­orge Her­scu.

As a fi­nan­cial jour­nal­ist this was a mag­nif­i­cent era.

Just two years ear­lier then high-fly­ing in­vest­ment banker Graeme Sa­muels ne­go­ti­ated the peace deal between Holmes a Court and El­liott which brought to an end the $2.7bn bat­tle for Aus­tralia’s big­gest com­pany, BHP. BHP is now worth over $130bn.

The two owned a com­bined 48 per cent of the com­pany and while Holmes a Court was a mav­er­ick, El­liott was fed­eral pres­i­dent of the Lib­eral Party and mooted as a fu­ture prime min­is­ter.

The long lunches at his Jam Fac­tory of­fice in Mel­bourne with top qual­ity red, meat pies, chips and cig­a­rettes still loom large, as do the hours on the phone with Holmes a Court and Ron Bri­er­ley try­ing to work out whether they would “buy, sell or hold.”

New Ar­dent leisure chair Gary Weiss is one of the few cor­po­rate sur­vivors of that era still chas­ing value along, with the likes of leg­ends Frank Lowy and Ru­pert Mur­doch.

But Lend Lease chair David Craw­ford, Rabobank chair Bill Gurry, Sa­muel, and his ju­niors like for­mer AMP chair Si­mon McKeon and out­go­ing Bendigo chair Robert Jo­han­son along with then NAB banker Don Ar­gus, are to vary­ing de­grees, still prom­i­nent.

As are lawyers past and present in­clud­ing John Atanaskovic, David Gon­ski and John Green.

The ques­tion ev­ery­one asked then is still asked to­day, and that is, will we learn our lessons from the crash? And for most the an­swer is in the neg­a­tive.

The Plaza Ho­tel in New York

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