I returned to office today after three weeks of revitalizing, and dare I say, much needed leave.
During the leave I tried to catch up on my reading.
Without
moving out of our dusty city, I was able to reminiscence with traders
who were at the heart of the global financial crisis, drill into the
brain of the man credited with launching the international spot
market in oil, confer with the most powerful central bankers of our time
before taking a sharp detour to trace the rise of China into the largest
economy in the world -- if some observers are to believed.
Heady stuff. Breath taking characters. Head shaking revelations.
I left a lot unread.
There
is an account of how one country went from world power to gangster
state, how the world's favorite toy making company pulled back from the
abyss of collapse and reinvented itself and how currencies are
increasingly becoming the battle ground on which history is being
moulded.
Boss, I need another three weeks.
This
reading put context to current events we are experiencing, putting it
into context and layering it with deeper meaning than a cursory glance
would provide.
"Why is oil collapsing through the floor like it is now? Is it purely driven by supply and demand or are there larger issues at play? In a world where the east-west divide is history what are the new configurations that are going to drive history? In an increasingly liberalized economy, who are doomed to being at the bottom of the pyramid and how are he leaders of the previous world order jostling to maintain their preeminence in world affairs?...
Clearly the inter play between politics and economics can not be ignored. As one drives the other interchangeably.
These are the threads I was able to weave between my latest literary odyssey.
Chairman
Mao Tse Tsung the father of modern day China was driven by a vision of
world domination that would return the most populous nation in the world
to its leadership position in world affairs. According to "Mao: The
untold story" by the husband-wife pair of Jung Chang and Jon Halliday,
he sought his goal by building a military industrial complex that was
paid for with the lives of tens of millions of his countrymen. While
history may not be kind to him it his force of personality that is the
foundation of the country's current ascendancy to a world economic
power, never mind that China's economy's was in tatters by the time of
his death in 1976.
"China's rapid growth, launched by Mao's successor Deng Xiaoping - whose life I will shortly delve into, through the pages of his self titled biography by Ezra F. Vogel, would have been near impossible if the oil industry had remained controlled by a cabal of oil companies, "The seven sisters"...
Believe it or not there was a time when little to no oil was traded outside the seven sisters, which comprised Anglo-Persian Oil Company (now BP); Gulf Oil, Standard Oil of California (SoCal), Texaco (now Chevron);
Were it not for the plucky Jewish-American
commodities trader Marc Rich this status quo may have persisted. "The
King of Oil: The Secrets of Marc Rich" reveals the role played by this
one, Jewish immigrant in creating a spot market for oil outside the
seven sisters, which made it possible for market forces to come into play
in the trading of this precious commodity, loosening the grip of
governments over its control. There were positives, the aforementioned
break up of the oil cartel was one, and negatives to this, like the
continued supply of oil to apartheid South Africa through his ingenuity
may have sustained the regime for longer than it should have survived.
Arguably on the whole the positives outweigh the negatives in as much as
he helped set the stage for the subsequent growth in the world economy
from the 1980s.
Rich's
testing the limits of the established order in the oil trade spilled
over into other markets. While Rich, the scion of a long tradition of
Jewish traders, remains urbane and cultured, a new generation of traders
with no connections to the establishment, living off their wits and
indulging in excesses of debauchery unspeakable in polite company, took
off where he left off and almost collapsed the world economy as we know
it barely a decade ago, are caricatured in "The Buyside".
The
autobiographical account of Wall Street trader Turney Duff reminds us
that at the end of the day, for better for worse, it's men who create
history not systems and cultures. He narrates a life of high living, fast
cars and even faster women in a world where the fates of thousands and
even millions are in the hands of immature traders whose morality is
vague at best and sense of responsibility to themselves or any one else
is none existent.
