Home' Greymouth Star : June 27th 2014 Contents Greymouth Star
4 - Friday, June 27, 2014
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uLetters to the editor
1743 - In the War of the Austrian Succession,
King George II of Britain defeats the French
at Dettingen, the last British monarch to lead
his troops into battle.
1844 - Founder of the Mormon
Church, Joseph Smith, and his
brother are killed by a mob.
1857 - Massacre of Cawnpore,
India, where British soldiers and
male residents are executed after
promise of safe conduct by the
1893 - Major stock market plunge begins
in the United States, leading to a depression
and the collapse of 600 banks and 74 railway
1995 - The Atlantis space shuttle blasts into
orbit with a US-Russian crew of seven on the
first shuttle-docking mission with Russia’s
space station Mir.
2001 - Actor Jack Lemmon dies; age 76.
2002 - John Entwistle, the bass player for
British rock band The Who, dies.
2007 - British Prime Minister Tony Blair
resigns after a decade in power.
uWest Coast yesteryear
uToday in history
Helen Keller, US blind and deaf scholar
(1880-1968); Bob Keeshan, US actor
Captain Kangaroo (1927-2004);
Bruce Johnston, US musician
with the Beach Boys (1942-);
Julia Duffy, US actor (1951-); J
J Abrams, US television writer
and producer (1966-); John Eales,
Australian rugby player (1970-);
Tobey Maguire, US actor (1975-);
Raul, Spanish footballer (1977-); Svetlana
Kuznetsova, Russian tennis player (1985-).
“Genius is eternal patience. ” — Michelangelo,
Italian artist (1475-1564).
“Can anyone hide in secret places so that I
cannot see them?” declares the Lord. “ Do not I
fill Heaven and Earth?” declares the Lord.”
— Jeremiah 23:24
A brown paper
£250 in £10 notes
has been received
by the Auckland Mission to Lepers from an
anonymous donor on the West Coast. The
mission secretary says that a total of £2750 has
been received in brown paper parcels with the
same post mark since 1953.
Recently Corso headquarters received a
similar parcel from the West Coast area. It
contained £250, and brought his donations
over 10 years to £2940.
A Roa mineworker was injured in a mishap at
the colliery this morning. He is Harry Kenneth
Bowkett, of Harper Street, Blackball. It is
believed he received a broken arm and other
body injuries in the accident.
Mr Bowkett, a trucker, was hit by a mine tub
while working at the foot of a stone drive. He
was taken by ambulance to the Greymouth
The derailment of a railway jigger near
Kumara railway station yesterday afternoon
resulted in four men being taken to the
Greymouth Hospital. The men were tossed
from the jigger when a mishap occurred at a set
of points. John A C McDonald, Ward Street,
Cobden, driver of the jigger, was the only one
of the four admitted to hospital. He has pelvis
and thigh injuries.
Also in the jigger were Kelvin Keating and
Kerry Keating, brothers of Fox Street, Cobden,
and Thomas P Sinnott, of O’Grady Street,
Blaketown. They did not require medical
Greymouth baker George Andrew Smith
who lost an eye as the result of a motorcar
accident near Murchison in March 1962, was
awarded a total of £2294 10s damages in the
Nelson Supreme Court this week.
uFood for thought
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errill Lynch was in
essence a massive
with about 15,000
rich private clients.
Through a network of
advisers, each with about 100 clients, the
firm could find investors for any financial
“If you were IBM and you wanted to issue
commercial paper or bonds or stock you
virtually had to deal with Merrill Lynch.
But in foreign exchange we used to go to
other banks, almost like a customer.
“So in London I said, look, we have all
these customers doing all their trading with
us in bonds and equities and everything
else, but they are not doing foreign
exchange with us. What we can do is build
a liquidity distribution and go to these
clients and say, we are not asking you to do
anything at extra cost to you, we are asking
you to do your foreign exchange through
He took his proposal to the other big
Wall Street investment houses such as
Morgan Stanley and Goldman Sachs.
“I went out to lunch with guys from
Goldman’s and said, I’m going to go
interbanking, you guys should come with
me. The investment banks can go in there
and beat them all. They said, you’re mad.
I said, you’re mad, you’re in the dark ages.
“In the end business flowed into us
because we had all these cross-collateral
agreements. We were cross-selling several
products off one bit of margin. We could go
to big hedge funds and say, give us a billion
dollars and we will let you buy bonds,
stocks, equities, we’ ll revalue everything.”
Soon the other investment houses
followed Merrill’s lead.
With so much going on in New York it
must have been tempting to move there.
But Bronagh, Key ’s wife, and their two
children had settled in the L ondon suburb
of Barnes in a house they liked.
Key became a frequent trans-Atlantic
commuter, often taking the 6.40pm flight
out of Heathrow on a Monday night after
a day ’s work in L ondon, arriving in New
York around 1.30am, going to a hotel,
taking sleeping tablets “or you just couldn’t
do it”, then waking in time to do a day’s
work there on Tuesday.
He would sometimes stay three days
in New York then repeat the overnight
commute, taking a Thursday night flight
from JFK, landing at Heathrow at 6am,
showering and shaving and working Friday
There were periods when he made the
trip three times in 10 days, other times he
would not need to do it for three weeks or
a month, but it averaged out that he was on
Wall Street about every second week.
No wonder his weekends were quieter
than the excesses of the financial trading
stereotype, though Key saw plenty of that.
“There were guys working for me ...
On Mondays they ’d say, how was your
weekend, and I’d say, oh great, we took
the kids to a duck pond, Saturday night
we went out for dinner, what did you do?
They ’d go, I took the Brazilian lap dancer
over to the US on Concorde and had a bit
Bronagh recalls friends who would go
to a resort in the middle of the Indian
Ocean where they worked out they were
spending $US1 a second while they were
there — “ why would you?” “It was just
stupid,” agrees John. “Guys that worked
for me had jets and just blew their money.
Lots of people around us were doing that.
In the end they came away with no money
and they had been earning around the same
levels as me.”
Key will not divulge how much he did
earn at Merrill Lynch but will give a good
hint. When he came home, after six or
seven years at the top of international
currency trading, the National Business
Review put him on its rich list with an
estimated personal wealth of $50 million.
“They are just guessing,” he says. Maybe,
but when it is suggested that $50m seems
a little high for someone on salary and
bonuses for that time, he explains that not
long before he joined Merrill Lynch in
1995 its remuneration packages had been
typically cash, stock and stock options in a
ratio of 40:40:20.
“When they came to me at the end of
1995 I said, I don’t want cash, pay me 100%
in stock and options. I was convinced the
stock was undervalued. So they paid me a
bit of cash but not much. The proportion
of stock was much higher and in the years
I was there it went up seven times. You
can do the maths. If it was a $2m (annual)
package it ended up being $11m. So even if
I paid $4m in tax, I was doing all right.”
By the time he left the firm at the end of
2001 he would have been paid in Merrill
Lynch’s appreciating stock for nearly seven
years. That figure of $50m for his personal
wealth was probably close to the mark.
While Key is in politics it sits in a blind
trust. His lawyer chose the trust managers.
Key does not know them. He gave them a
mandate to invest conservatively (lower risk
“I want to be able to look down the
camera 100% and say, ‘I don’t have a clue
what I own’.” John and Bronagh had left
New Zealand intending to be away only
a couple of years. They did not sell their
newly built house in Remuera until it was
clear they were going to be away much
longer and, even then, they had their eye on
a new property in Auckland.
Ever since she had come to live in the
city Bronagh had loved Parnell. The old
inner city suburb with its quaint shops, art
galleries, boutiques and fine restaurants
was no longer the most fashionable real
estate in Auckland. It had been eclipsed
somewhat by the gentrification of equally
old Freemans Bay, Ponsonby and Herne
Bay on the western side of the inner city.
But to a newcomer to Auckland there
was, and is, no contest.
Driving around Parnell, Bronagh used to
look longingly at a spare section beside an
old house in St Stephens Ave. She often
said when they passed, “I’d like to live
They had been in London a couple of
years when John made a quick trip home to
visit his mother and a friend in Auckland
phoned to tell him “Bronagh’s section” was
He went there, saw that the house and
section were on the market and phoned the
“He came around and said it ’s on for,
let ’s say, $2.7m. I offered him $2.4 . He said
that was what it previously sold for and
told me there was a guy willing to pay the
asking price but hadn’t yet fronted with the
money. I said, here’s the deal: it ’s $2.4m
cash and you’ve got 15 minutes. I’m flying
“He started to play games. I said, it’s 13
minutes, take it or leave it. He said, well
there’s this other guy ... I said, there’s always
another guy, you’ve got 11 minutes.
“So, anyway, he took it. I signed the papers
at the airport. Then, when the plane landed
at Singapore, the agent was on the phone
offering us more than we had paid to walk
away from it. Turned out there was another
guy, who hadn’t believed we existed, and he
was offering $100,000 more than we’d paid.
The agent said, would we sell? I said, nah.”
It is a story that Key could use to illustrate
a theory of why some people get rich
and the majority do not. Most people, he
explains, take their profits too early and cut
their losses too late.
If they buy a house for $500,000 and
a month later somebody offers them
$600,000, it is human nature to take the
money and dine out on their good fortune.
Conversely, if they put that $500,000 house
on the market and the best offer it brought
was $350,000, they would hold onto it.
A good dealer would not. As soon as he
realised the asset was losing value he would
get what he could for it and put the money
into a new, hopefully better, investment.
At Merrill Lynch Key used “profitability
profiles” for each of his traders showing the
days they had made money and the days
they had lost it. Some who made money
most days never made enough to make up
for their big losses on other days.
“They got out too soon on good days and
never cut their losses quickly enough on
the others.” He was a manager more than a
trader in his years at Merrill Lynch though
there were days when he would sit down
in the dealing room and quote prices, “just
to keep my hand in, show them how it ’s
done”. To do it well, he needed complete
confidence in his instincts. “I used to be
able to sit there and look at two digits and
tell whether the price was going up or
down.” At the dawn of 2001, the year he
would turn 40, John Key decided it was
time to think about starting on the second
big ambition of his life.
Key went to New York to tell the head
of the investment bank, G Kelly Martin,
he was leaving. Martin offered him the
position of global head of sales, in charge
of the whole debt business side of Merrill
Lynch. Key seriously considered it.
If he took the post, which would mean
moving to New York, he knew his political
ambitions in New Zealand would be
buried. “I wouldn’t have come back.” By
then he was on the boards of a number
of Merrill Lynch subsidiaries in Europe,
including the board of its Capital Markets
Bank set up in Ireland. He had transferred
much of Merrill’s London business to
Dublin to take advantage of Ireland’s low
corporate tax rates.
He was also doing an e-commerce
project for the company in association
with Harvard University. Currency trading
margins were being squeezed by new
information technology that let
clients see the market as clearly
as dealers could.
Key believes the narrowing
of margins contributed to the
global financial crisis as dealing
houses tried to maintain their
profitability. They compensated
for the reduced margins by
increasing their volumes
exponentially and relying on
leveraged accounts like hedge
funds with $1b on which they
were trading $50b.
When he visited the firm in
later years he was astonished
at the risks it was carrying.
Merrill Lynch was the third
of the big five Wall Street
investment banks that could
not sustain its losses after the
subprime mortgage collapse
and, in September 2008, it was
bought by Bank of America.
Had Key stayed at Merrill Lynch he
would have been, according to a former
boss, Gavin Walker, “without doubt a
candidate to be their global chief executive.
He was in that echelon just below”. But
Key had made up his mind to go. He had
made about 50 times
the million dollars of his childhood
The Keys returned to build a $5m
mansion in St Stephens Ave — “the house
that Merrill built”, John would call it. They
had a beach house at Omaha north of
Auckland, they kept their London house
and they bought a Hawaiian holiday home
for a reported $3.6 million in the exclusive
Wailea resort on Maui.
More than 12 years after quitting the
financial world, the Keys remain content.
Says John: “ We are not ridiculously wealthy.
There are a lot of people with more. The
Graeme Harts of this world. There are lot
of people never seen on the (NBR) rich
list who have lots of money. We are not in
that category.” Bronagh adds: “I think it is
fair to say we are conservative with money.
We have a nice home and nice holidays.
We don’t want for things but we’re not silly
either.” Sitting in that “nice home”, John
agrees. “ Yes, we built a big house but this
house is now worth substantially more than
when we built it. It has been a good asset.
We just don’t have an expensive lifestyle
really. We eat well and drink nice wine but
don’t feel the need to drink Chateau du
Pape. If we go to LA we fly business class
because it ’s a long flight.” “ The kids fly
economy,” interjects Bronagh.
“They want to,” says John.
“ Well, we tell them they are flying
economy,” Bronagh counters, “and they are
now at that age that it really is not cool to
be in business class with your parents.”
Why, though, with the financial world at
his feet, did John Key make the decision to
“ Well, three things. First: in our hearts we
wanted to live in New Zealand. Stephie was
eight, Max six. Max had never lived in New
Zealand and Stephie had spent most of her
life away. Secondly: I absolutely wanted
to do it (politics). I used to say to people, I
didn’t want to die wondering. I didn’t want
to sit back one day and think, I could ’ve,
might ’ve, should’ve.
“Third: We had enough money. Okay, we
could have made tens of millions more, but
we had enough.”
Extract from chapter six ‘L ondon,
New York’ of John Key: Portrait of a Prime
Minister by John Roughan
— New Zealand Herald
Portrait of a PM
When John Key joined investment bank Merrill Lynch in 1995 he was soon
commuting between London and New York. In this extract from John Roughan’s
biography — John Key, Portrait of a Prime Minister — he describes how he made
PICTURES: New Zealand Herald
John Key and wife Bronagh.
A young John Key in school uniform.
Thousands of miniature human
hearts have been grown by scientists
to explore a possible cure for a form
of heart disease.
The mini organs, which beat
of their own accord, have been
developed specifically to look at
heart hypertrophy — where the
heart muscle thickens, making it
harder to pump blood around the
Researchers at Abertay University
in D undee are using the tiny hearts
to test potential drugs they hope
could eventually allow them to stop
it developing in those at risk of the
Made from stem cells, the tiny
hearts are just 1mm in diameter
and contract at about 30 beats per
Although healthy to begin with,
scientists are using chemicals to
make them become hypertrophic, or
enlarged, due to abnormal growth
of the cells that make up the heart.
Once diseased, they are then
treated with newly-developed
medications to see if they can
prevent the damage from occurring.
The team said that human hearts
had been grown in labs before but
this was the first time it had been
possible to induce disease in them.
“Heart hypertrophy can be
hereditary, can be caused by diseases
such as diabetes or can be caused by
doing too much strenuous exercise,”
lead researcher professor Nikolai
“In some people, a life-threatening
abnormal heart rhythm will develop
and this is the most common cause
of sudden death in young people.
“Although there are treatments,
these only help to control the
symptoms and there is no known
cure at the moment.”
The process works by using
biosensors to label specific
molecules within the tiny hearts to
see where they are going.
By finding out which molecules
cause the hearts to become
enlarged, the team have been able to
target the drugs at these molecules
and stop them going down the
path they would usually take —
preventing them from becoming
A number of different drugs were
being tested — some for the first
time, Zhelev said.
He said one drug, which is being
trialled in cancer treatment, had had
“Although heart cells are the
only ones in the body that will
never get cancer, we noticed
that the pathways the molecules
in hypertrophic hearts follow
are similar to those followed by
molecules in cancerous cells, so
we thought testing this new drug
on these hearts might have the
same positive effect. And this has
certainly proved to be the case.”
“Some of the compounds we’ve
tested have had undesirable effects
— su ch as increasing the number
of beats the hearts do per minute
and making them stop beating —
but others, such as the new cancer
drug that is in development, have
managed to protect the hearts
and prevent them from becoming
He said the tests were ongoing
but the team was “extremely
hopeful” they could be able to stop
heart hypertrophy developing in
those at risk of the disease. — PA
Miniature hearts grown for research
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