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30 Jan, 2009 06:52

Party in Davos less posh than ever?

As the World Economic Forum in Davos enters its third day, financial leaders are searching for ways out of the current financial crisis, but who are the players involved?

Peter Sutherland is chairman of one of the world's biggest investment banks or, more accurately – former investment banks. Goldman Sachs was one of the first crisis victims.

Stephen A. Schwarzman, CEO of Blackstone Group. Business has ground to a halt as private equity firms cannot borrow money now. Many of the target firms that they asset-stripped are now worthless.

Jacob Frenkel, Vice President of AIG. America's biggest insurance company failed to provide just that, and its bailout is costing billions.

Timothy Flynn, Chairman of KPMG. They, along with three other major accountancy firms, approved the very financial schemes that brought the global economy to its knees in the first place.

Richard Haythornthwaite, Chairman of MasterCard – one of the voices behind the 'spend now, pay later' idea, which is now costing millions of people… well, millions.

And yet, after playing such a crucial role in the downfall of global finances, these CEOs are still happy to spend thousands on a week-long stay at the top hotels in Davos. In addition, business at BB Heli AG, a helicopter company providing services to Davos, is still booming.

Changes have happened, however. Passengers are trying to curb costs. Instead of paying $US 9,000, they are handing over a paltry $US 5,800 for a single-engine chopper rather than the usual twin instead. Regardless, humility is not all that evident from the CEOs in attendance. Davos old-timers, however, do say changes are evident.

The hotel Belvedere has been the focal point of the Economic Forum for years. Used to dishing out caviar and Cristal, this year they've been serving more wine and local foods.

“Of course it’s not all cheap wine. We still have and serve exclusive wines and food – but company wise, it’s less so,” said General Manager of Hotel Belvedere Ernst Wyrsch.

In spite of his remarks the most expensive wines in the world, like the 1971 Château Pétrus, are steadily depleting in stock at the Belvedere. The wine is flowing, but the parties are winding up early.

“Last year, they were all so sure of themselves. This year, it’s not so,” said Wyrsch, adding that it does not seem that customers are ready to spend as much as before.

Even with the crisis, over 2,500 people descended on Davos – public figures and CEOs alike – just like they do every year.

As for journalists’ living arrangements – they have not changed one jot. People live in former hospitals and share flats with dozens of strangers.