One of the first things you learn as a writer is how to lower your expectations, lest you self-immolate.
Then, there’s the (very gradual) acceptance that your taste for great, great literature clearly exceeds your abilities…followed by a lifelong struggle to rectify that.
My transition from journalist to author — and then balancing the two — felt like an imperative, because I longed to delve more deeply into the topics about which I was writing. In journalism, there’s this need to retain a sense of immediacy at all times in a story, forcing current events to the forefront and important things like context and history into the background. Sure, there’s a little context, but it always takes a back seat — a waaay back seat — to unfolding events.
Yet you know as the writer that context and history mean everything. Hence, you are always fighting to put as much extra information as you can into whatever you’re writing.
Getting the necessary financing and logistics in place to allow yourself to write comfortably for months on end is, from a scale of 1 to 10, a solid 10 in terms of difficulty. I found that hewing to one goal — publishing my first book and then moving on to long-form writing — was the only way to get through to the other side. Anything between me and that had to be eradicated, and was. Although I did not know what lay on the other side. Continue reading On Writing…And The Point Of It All→
My close friends — Jonathan and Vahni — flew from London to Jersey this winter to oversee the packing of my things, mostly personal belongings and papers, after the Jersey authorities flagged me for removal at the UK border following my research into the Haut de la Garenne scandal.
These things also included fancy dress shoes, which were of apparent interest to the authorities.
The boxes arrived in the U.S. many weeks later, slashed open by X-Acto knives and in some cases (such as the box pictured below) ripped open by human hands. The boxes arrived with a form stating that a “contaminant” was found inside, but it did not say what that contaminant was. Frankly, it’d be nice to know.
Below, a transcript between Vahni and the United Parcel Service, which was entrusted with my packages, hinting that the possibility of poisonous UK-Jersey soil on my dress shoes had established grounds for a lengthy search of my belongings. All of which makes one wonder why we are allowed to walk off planes in street shoes after taking international flights?
Based on the fact all the boxes were opened and the shipment arrived weeks late, we can only deduce someone had a very strong interest in going through my stuff.
Initial Question:Receiver [Leah McGrath Goodman] has just told me that ALL packages opened/damaged. Things actually spilling out of them. They were just left at side door without knocking. They were delivered after the promised delivery date.
UPS Sammy A.: Hi, this is Sammy A.. I’ll be happy to assist you! Vahni: As you can see – not happy!
UPS Sammy A.: I need to connect you with a representative who can track your international package. Can I connect you now? Vahni: yes please UPS Sammy A. has disconnected. UPS Ursula P.: Hi, this is Ursula P.. I’ll be happy to assist you. Vahni: can you see my prior chat? Very unhappy with the condition of shipment.
UPS Ursula P.: Yes, I can see the prior chat. Just a moment while I review your tracking information. Vahni: there are 7 packages in that shipment. ALL were opened and not reclosed securely. Vahni: And were left at side door without knocking to see if anyone was there to receive them. UPS Ursula P.: Please give me a couple of minutes to check what happen with your packages and i will also find out about the delivery. Vahni: We’ll be checking carefully through the items to see if anything is damaged or missing. Vahni: if so, what is the procedure for filing a claim? UPS Ursula P.: I understand that you need to know about this packages. I would need a couple of minutes to find all the information for this packages. Would that be okay with you? Vahni: Yes. Basically I need to know why they arrived in such bad condition UPS Ursula P.: Thanks, Just give me a moment. UPS Ursula P.: Thanks for your patience. I review all the information of this tracking number in the system. The system shows that your package was held by the U.S. Customs Agency. The USDA (United States Department of Agriculture) required the package to be cleaned and disinfected the 11 pairs of shoes. Soil from another countries is not allowed to enter the USA. the customs inspector cleaned and disinfected the shoes. Then the package was back to UPS for delivery.
Vahni: Yes. but all the shoes were in one box. All the boxes were opened, and not reclosed properly. Vahni: Things were poking out of them. Vahni: Why? UPS Ursula P.: I am sorry.
When I was 29 and first embarking on my writing career in London, I discovered a beautiful island off the coast of England that I would return to many times in the years to come. Jersey not only has heavenly beaches and culinary delights, but the people of the island are some of the loveliest I have known. After a busy week in the City, a puddle-jump flight could see me there in less than an hour, soaking up the sun on the white sands under wildflower-draped cliffs. The island’s locals would sometimes hint that Jersey’s pristine exterior belied a dark side. But I couldn’t imagine it. How could a place with such warm people have a dark heart?
When I returned to the U.S. in late 2008 with my first book contract, it came as a shock when I witnessed, from a distance, Jersey’s horrific child abuse scandal. Day after day for weeks, I watched the deputy chief of police, Lenny Harper, give interviews to a crush of international press outside the shuttered orphanage of Haut de la Garenne. Harper seemed increasingly alarmed over the human remains his team was finding inside, although what to make of them was hotly debated by the media.
The islanders, who are quiet people, were quietly devastated. The notion that, for decades, their children’ homes might have been used as a sexual cafeteria for the rich and privileged – as hundreds of the victims contended – was distasteful in the extreme. During the probe government officials repeatedly stated that they fully intended to run a thorough investigation. Yet, within months, Harper and his boss, the island’s head constable, Graham Power, had been smeared by the local newspaper, The Jersey Evening Post, as unfit for their jobs and driven from the island. Their main advocate, Senator Stuart Syvret – then-health minister and one of the island’s most popular politicians – also found himself under siege, eventually sacked and jailed twice. The cases made against each man were as flimsy as the headlines were flashy.
It seemed that anyone who attempted to stand up for Jersey’s underprivileged or conduct a proper investigation into their treatment soon found themselves in the fight of their lives.
Evidence found at Haut de la Garenne – including bones that were “fresh and fleshed” before being burned and dozens of children’s teeth with the roots still on them in the furnace area – was turned over to a new police chief who downplayed its significance but also admitted to throwing some of it out. As an investigative journalist, I found it hard to understand how this could possibly inspire confidence. It seemed the situation needed to be looked at by someone without an axe to grind or an ass to save.
After I passed in my first book, which also focused on cultures of corruption (The Asylum: The Renegades Who Hijacked The World’s Oil Market, HarperCollins 2011) I began to travel to the UK on a regular basis to conduct interviews with the victims, senators and law-enforcement officials.
While Big Oil is always active during an election season, this year news and radio shows have been particularly shameless about airing back-to-back commercials propounding the virtues of oil and gas. Just yesterday, Sunday’s lineup featured a parade of ads from the American Petroleum Institute — the Washington lobby for Big Oil — hailing oil and gas companies for paying for health care and schools and saying they have created 9.2 million jobs nationwide. It did not offer any independent sourcing to back up those claims, but I am guessing it’s safe to assume we can trust them?
If an oil company is building a school, frankly, I would like to know about it. I am still waiting to hear back on the name and location of these schools. Or even just one school.
Sunday is the major news networks’ time to roll out their TV version of The New York Times Sunday section. On “This Week With George Stephanopoulos,” a commercial break featured the American Petroleum Institute, Chevron and British Petroleum — in a row.
Pandering To Oil And Gas
While it’s no secret news shows are increasingly desperate for cash, this gives the impression that some shows are literally for sale. If that’s true, it is a bad time for it, as this country is in dire need of objective, non-ad-fueled journalism. The Fourth Estate is the last barrier against obfuscation and corruption and, lately, it is not doing the greatest job of keeping its head above the fray.
If news outlets don’t take seriously the need for diverse messaging not only in the content of their programming, but also when it comes to their commercials, it isn’t that different from narrowing the conversation to hard Orwellian limits. Here, an example of what really happens during an American Petroleum Institute commercial shoot that purports to feature “real” Americans.
So, onto the commercials themselves (which were hilarious if you could ignore for one second that a single member of the viewing public might actually believe them).
A tip to the Big Oil marketing agencies: if you are going to make a misleading ad, try to not make it so hysterical.
Surreal Oil And Gas Ads
Among Sunday’s procession, the American Petroleum Institute managed to look the least ridiculous (which is kind of like complimenting someone for being the world’s tallest midget), while Chevron’s ad featured a young blonde woman, supposedly a Chevron employee, making intense statements about how “proud” she was of the company for investing in American concrete and American steel (a little too weird).
Happy National Pancake/Leap Year/Week before Super Tuesday Day, all. It has been a turbulent past few months and not just in the oil market. I will get into why very shortly but, for now, let’s just say that after a long and dark winter, I am once again available for dancing in the streets. Without any further cryptic remarks, I’d like to share an interview I just did with The Global Journal, based in Geneva, which rang me up to discuss ‘The Asylum’ and what the future holds for the energy market and gas prices during this, our illustrious Election Year.
(Q portions courtesy of Janine Huguenin-Virchaux, the magazine’s books and culture editor.)
Your book mentions that “the market is no longer reflecting supply and demand.” What is the use of a market that does not reflect the true price of oil? Do we need new hijackers?
That’s a great question – do we need new hijackers? If we could get some hijackers that could take back the market so that it does reflect supply and demand more clearly, then I would say yes, we do! However, I would also say that there is a serious debate going on about the extent to which price does reflect supply and demand. I think there is very good reason to believe that the price does not reflect it anymore. There is also a very technical reason for what has been going on that has not really been acknowledged or understood by many people. And that is the relationship between speculation and price discovery. A lot of the information that I get is from people who read the book and then they come to me and bring me stuff that nobody seems to really know about.
A lot of these guys are just regular traders who trade physical oil and feel that supply and demand is not reflected in the price correctly anymore. Whereas their entire lives – some of these men and women have been trading oil for thirty years or more – they feel the price did reflect it. So they believe there’s a huge difference in what they are seeing today in terms of the market fundamentals versus the price. And what they used to do was see price and fundamentals fit together better. They see a lot of distortion happening now. A lot of these people are concerned with that. I want to say, it’s not all about making money for these people: some of them look at this and say “Oh my God, it’s not acting the way it used to anymore and it doesn’t look like it’s headed anywhere good.” And that is aside from the fact that trading has become so ferocious that it is more about preserving a global casino than about supplying oil to people who need it.
That’s the problem. The casino aspect overshadows everything. Most of the people who play this game don’t want oil. They just want to play the game.
What is the alternative? I mean, these are the people who are speculating on the price of oil. Is there anything that can change to make it different? To make it less casino-like?
FORTUNE — James Koutoulas walked into one of the worst bankruptcies in U.S. history with almost zero legal experience.
“When I got up the first day in bankruptcy court and saw the look on the judge’s face, I couldn’t blame him,” he says. “Bankruptcy court is a rich man’s club where everyone is old, so I stood out. Honestly, when I’m shaved, I look like I’m about 12.”
Yet Koutoulas, 30, may be one of the only former customers of MF Global, the now-defunct futures brokerage house, with the gumption to publicly object to the way they are being treated. Since filing for bankruptcy Oct. 31, MF Global’s woes have rapidly piled up – chief among them losing an estimated $1 billion-plus of customer funds. The loss directly crimped the wallets of some of the futures market’s most active participants, from small-time farmers to ranchers to hedge funds.
Koutoulas, chief executive of three-year-old commodities fund Typhon Capital Management, stumbled into the courtroom drama accidentally. His Chicago firm, which conducts the bulk of its business in the futures market, discovered shortly after MF Global’s bankruptcy that $55 million of its $70 million under management had been dragged into the proceedings. This was a surprise, because, by law, customer funds are supposed to be kept completely segregated from a brokerage firm’s own assets. That wasn’t the case with MF Global. For Koutoulas and tens of thousands of other MF customers, it was a rude awakening.
It’s official: when a Wall Street powerhouse suddenly collapses and (possibly) more than a billion dollars goes missing, it’s no longer just the ordinary taxpayer’s problem. Now, it has moved up the chain. Below, the piece I wrote today for Fortune on what traders do when you misappropriate their money.
While Occupy Wall Street was holding its two-month anniversary rally in Manhattan last week, traders were quietly mounting a rather more sophisticated version of OWS on their own. Call it Occupy Wall Street Bankruptcy Court.
FORTUNE — Big institutional investors are getting a taste of what many frustrated taxpayers experienced during the financial crisis: Being on the hook for losses of a major financial firm against their wishes.
This time, of course, it’s MF Global at the center of the dispute. A once-trusted brokerage with roots dating back to the 1700s, MF Global is now a bankrupt firm suspected of misappropriating customer funds to the tune of at least $600 million.
More than two weeks after MF Global’s Halloween bankruptcy filing, there are more questions than answers and a surfeit of conflicts in an investigation that should be aiming to restore the public’s confidence, but is doing the opposite. On Monday, the bankruptcy trustee for the case announced that there may be much more than $600 million missing from MF Global accounts — perhaps as much as $1.2 billion.
Hundreds of millions of dollars of trading capital and collateral were frozen without notice, dramatically disrupting the derivatives marketplace and ushering in a phalanx of federal prosecutors, regulatory agencies and forensic accountants working around the clock to determine where the missing money is. This, after a lawyer for MF Global assured a New York judge earlier this month “there is no shortfall.”
What’s different about this case? One hedge fund executive summed it up best: “What is scary about MF Global is that there is no political will in this country to look out for people. Let this be a lesson that, if someone tries to steal from you, there is no one who is going to save you. I mean it is literally the most frightening thing that can happen in finance.”
Our national discourse on the nature of wealth has been a good cure for sanity of late.
News that a book coming out from the surviving son of Bernard Madoff, mastermind of the largest Ponzi scheme in history, elicited comments from readers that could be called anything but charitable. Alongside an interview with Madoff’s wife, Ruth, whose picture speaks volumes about the toll the scandal has taken on her life — not in the least the suicide of her other son — are comments that plainly show how bitter the feud has become between the rich and the working class in our country. In response to Ruth’s claims of not knowing of her husband’s illegal financial dealings, readers wrote:
“What a bunch of lies. Anyone in the industry knows that the returns had to be made up…the sons knew it, the wife knew it, everyone knew it.”
“I do not think Ruth knew, but she strikes me as remarkably incurious and shallow.”
“This is a woman who married at 18 and never took responsibility for her own financial security. True, she raised their children but she chose to ignore the choices made by her husband. Now she claims to be a victim. I am sorry but I do not buy this. She chose to remain ignorant.”
Aside from Madoff-venting, the debates rage about the solutions. At Occupy Wall Street, which I visited last week, you have, on the one hand, a number of concerned Americans questioning — or outright decrying — capitalism in all its trappings. They suggest that the only solution is to raze and rebuild the entire political and financial system.
Unfortunately, they are still experimenting with new models to offer in its place.
On the other, you have national leaders quick to denounce the financial crisis, but just as quick to vote down any new rules aiming to prevent a financial crisis in the future.
Already, we are seeing the results of this splintering of the populace: we remain effectively paralyzed to redress our own fragility, forced to lurch from one crisis to the next. Large financial powerhouses continue to fail spectacularly as the Department of Justice, the Federal Bureau of Investigation, the Securities and Exchange Commission and a smattering of other government agencies struggle to keep up with reports of unchecked theft, negligence and fraud amid budget cuts frequently meant to hobble them (as if the backlog of cases they’re drowning in wasn’t enough).
In the meantime, too much money in all the wrong places undercuts the healthy cleansing that might otherwise be achieved through a democratic elections process. As one hedge funder told me while in New York last week: “Nothing can pass C0ngress, because the Republicans believe all regulation is bad. They don’t want another financial crisis, but they don’t approve of any new rules either. They haven’t quite worked out their dogma yet.” And we know Obama and the Democrats, whatever the dogma, do not appear capable of executing a plan.
Last week, former U.S. senator, New Jersey governor and high-ranking Goldman Sachs executive, Jon Corzine, stepped down from a job he held for just over a year as head of the world’s largest futures brokerage house. The 200-year-old-plus brokerage, MF Global, handled traders’ transactions in the multitrillion-dollar futures market, where people bet on the future prices of everything from soybeans to gasoline to interest rates.
Corzine’s company, which sought to become a mini-Goldman Sachs, filed for bankruptcy after betting more than $6 billion on bonds tied to the European debt crisis and getting caught short. Corzine, a self-described son of an insurance salesman who grew up on a “small family farm” in Illinois, raked in hundreds of millions at Goldman as he ascended to its highest echelons after starting out as a bond trader there.
Given his trading background, Corzine very likely understood exactly what kind of risk his brokerage was taking ahead of its downfall. (“A good rule of thumb is, if the guy is not a former trader, he probably didn’t know what hit him,” the hedge funder told me over a nice-sized steak. “But if you’re a former trader, you get the joke. You probably wrote the joke.”) Continue reading A Certain Stylishness In Hating The Rich→
You would think it would be the very traders about whom I wrote who would have caused the most trouble. This has not been so. On the contrary, most of them have been supportive to an unwarranted degree, including a rare few who have had every reason to be furious about what I wrote, but instead were reasonable.
Many of them also expressed a sincere belief that the global oil market has run off the rails and that prices are no longer set by supply and demand.
In fact, those closest to him (I am talking about his kids and grandkids here) have personally told me the Seer of Omaha is as hard-nosed as they come. To him, playing the market is a game — and he wants to be the best on the planet. “Dad always says, ‘Bury me with a Ouija board, because when I die, I want to keep on playing,'” one of his sons told me in 2008.
Bottom line: this is not a man looking to be parted with his bucks.
And yet…when confronted with the Hieronymus Bosch painting of political and financial horrors of the past few years, he has felt the need to speak up about the wounds he feels are needlessly being inflicted on ordinary Americans.
In the following New York Times editorial, which should be read by one and all, he offers a brief economic education for those who seek to propagate the untruths ginned up by the deep thinkers in Washington to protect the wealthy from their worst horror of all — tax hikes.
Stop Coddling The Super-Rich
OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me.