Book Review: The Asylum: The Renegades Who Hijacked the World's Oil Market
Hookers, Cristal, and the rise and fall of the New York Mercantile Exchange
The Good: A riveting tale of greed gone mad. Goodman nails the culture.
The Bad: Sometimes it's possible to spend too much time in a boardroom.
The Bottom Line: A great ride for market fans but may be heavy for the casual reader.
The Asylum:
The Renegades Who Hijacked
the World's Oil Market
By Leah McGrath Goodman
Morrow, 398pp, $27.99
The Renegades Who Hijacked
the World's Oil Market
By Leah McGrath Goodman
Morrow, 398pp, $27.99
Anyone who accuses New York Mercantile Exchange (CME) traders of being greedy and lawless anarchists who blow up markets obviously was not working the floor in 1978. In that year a sign at the entrance decreed: Please check your guns at the desk. "A gunshot never went off on the floor," claims John Tafaro, a trader at the time. "That's where we drew the line." He says traders were pretty dutiful about checking their guns, too.
The rest of the rules, though, they ignored, skirted, or subverted, sometimes with brazen crudity, sometimes through deft manipulation of the law—at least according to Leah McGrath Goodman'sThe Asylum: The Renegades Who Hijacked the World's Oil Market. "Any customer who traded there was molested, if not raped," says one ex-regulator with the U.S. Commodity Futures Trading Commission, speaking metaphorically, one hopes. "As far as we could see, the NYMEX traders did nothing but run scams."
They weren't always oil traders. They only stumbled upon oil futures after screwing up Maine potato futures. A whole industry had been built around predicting the Maine potato harvest, and—more importantly—trying to manipulate it. However, the market was closed by regulators in 1976, after defaults on deliveries of more than 50 million pounds of potatoes.
Casting about for something else to trade, then-Chairman Michel Marks tried to boost futures in boneless beef and plywood. After that didn't work, in 1978, he introduced heating oil futures. The market proved a gusher that led to 30 years of good times. Booming with the oil scares of the late '70s and early '80s, heating oil futures begat natural gas futures and became a huge market revolving around the price of West Texas Intermediate Crude, now the benchmark for a barrel of oil.
By Leah McGrath Goodman
The Asylum is a stunning exposé by a seasoned Wall Street journalist that once and for all reveals the truth behind America's oil addiction in all its unscripted and dysfunctional glory.
In the tradition of Too Big to Fail and Liar's Poker, author Leah McGrath Goodman tells the amazing-but-true story of a band of struggling, hardscrabble traders who, after enduring decades of scorn from New York's stuffy financial establishment, overcame more than a century of failure, infighting, and brinksmanship to build the world's reigning oil empire - entirely by accident.
They were a band of outsiders unable to get jobs with New York's gilded financial establishment. They would go on to corner the world's multitrillion-dollar oil market, reaping unimaginable riches while bringing the economy to its knees.
Meet the self-anointed kings of the New York Mercantile Exchange. In some ways, they are everything you would expect them to be: a secretive, members-only club of men and women who live lavish lifestyles; cavort with politicians, strippers, and celebrities; and blissfully jacked up oil prices to nearly $150 a barrel while profiting off the misery of the working class. In other ways, they are nothing you can imagine: many come from working-class families themselves. The progeny of Jewish, Irish, and Italian immigrants who escaped war-torn Europe, they take pride in flagrantly spurning Wall Street.
Under the thumb of an all-powerful international oil cartel, the energy market had long eluded the grasp of America's hungry capitalists. Neither the oil royalty of Houston nor the titans of Wall Street had ever succeeded in fully wresting away control. But facing extinction, the rough-and-tumble traders of Nymex - led by the reluctant son of a produce merchant - went after this Goliath and won, creating the world's first free oil market and minting billions in the process. Their stunning journey from poverty to prosperity belies the brutal and violent history that is their legacy.
For the first time, The Asylum unmasks the oil market's self-described "inmates" in all their unscripted and dysfunctional glory: the happily married father from Long Island whose lust for money and power was exceeded only by his taste for cruel pranks; the Italian kung fu-fighting gasoline trader whose ferocity in the trading pits earned him countless millions; the cheerful Nazi hunter who traded quietly by day and ambushed Nazi sympathizers by night; and the Irish-born femme fatale who outsmarted all but one of the exchange's chairmen - the Hungarian emigre who, try as he might, could do nothing to rein in the oil market's unruly inhabitants.
From the treacherous boardroom schemes to the hookers and blow of the trading pits; from the repeat terrorist attacks and FBI stings to the grand alliances and outrageous fortunes that brought the global economy to the brink, The Asylum ventures deep into the belly of the beast, revealing how raw ambition and the endless quest for wealth can change the very nature of both man and market.
Showcasing seven years of research and hundreds of hours of interviews, Leah McGrath Goodman reveals what really happened behind the scenes as oil prices topped out and what choice the traders ultimately made when forced to choose between their longtime brotherhood and their precious oil monopoly.
About the Author
An award-winning journalist, Leah McGrath Goodman has written for Forbes, the Wall Street Journal, Barron's,the Financial Times, and the Guardian in New York and London. She currently resides in Boulder, where she is a Ted Scripps fellow at the University of Colorado.
Published by Harper Collins
All information on this website is for educational purposes only and is not intended to provide financial advise. Any statements about profits or income, expressed or implied, does not represent a guarantee. Your actual trading may result in losses as no trading system is guaranteed. You accept full responsibilities for your actions, trades, profit or loss, and agree to hold MinKL Invest harmless in any and all ways.
No comments:
Post a Comment