BHP Billiton’s part in
the Iraq wheat scandal leads news in today’s Financial Review, the paper reporting that the Department of
Foreign Affairs and Trade warned the mining giant in 1996 that its plan to send wheat to Iraq as a
humanitarian gesture and then recoup the costs through instalment payments
would breach UN sanctions against Saddam Hussein’s government.

Macquarie Bank came crashing down to earth yesterday after
chief executive Allan Moss announced that a number of big transactions had been
delayed and were unlikely to be counted in this year’s profit result, says Lisa
in The Sydney Morning Herald.
The news sent
investors rushing for the exits and pushed the shares to their biggest fall
since February 2002, reportsThe Australian. Macquarie’s stock closed down $4.93
at $63.45. The stock is now 18% off the $77.45 peak it reached on
September 29.

Moss attempted to assure investors in his usually
conservative fashion that the bank’s earnings for the year to March 2006 would
be ahead of those in 2005 but, instead of pulling the usual rabbit out of the
hat and surprising the investment community with a staggeringly large leap in
profit, his story was one of a gentle improvement, says Elizabeth Knight in The SMH. And judging by the investor
response, the experience was anything but pleasant, says Stephen Bartholomeusz
in The Smage.

So, it seems Macquarie Bank is subject to market risk like
any mere corporate mortal, says the Fin‘s
John Durie, and yesterday that admission was enough to send its stock almost
into freefall. But the root cause of the sharp fall – against a backdrop of
continued unease over what global financial imbalances mean for interest rates
– was a belated realisation that Macquarie is a global player, subject to
global competition, and as it gets bigger, so do the risks.

And it didn’t help that Macquarie’s
image has been dented in recent times, says Bryan Frith in The Australian. There was the security breach by one of its
employees which forced Macquarie to resign from a $300
million Defence Department project. Missing out on a role in Telstra’s T3 sale,
the $20,000 fine from the Sydney Futures Exchange over one of its traders
creating a sham futures transaction and its upstart takeover bid for the London
Stock Exchange.

Meanwhile, just before Telstra chief executive Sol Trujillo
unveiled his grand plan to slash jobs and improve customer service he splashed
$1.3 million booking out Lindeman Island for a senior staff getaway, reportsThe SMH. The staff members and their
guests spent the weekend on the island in the Whitsundays last October as a

On Wall Street, US stocks closed higher Wednesday as
investors cheered strong results and an increased profit outlook from Boeing
Co., with a steep decline in energy prices adding to the momentum. The Dow
Jones rose as much as 100 points, before closing up 89 points at 10,953. MarketWatch
has the full report here.