A section from
‘A Jedi shall not know hatred, nor fear… nor love.’ from Star Wars Episode II
UGLY AMERICANS - BEN MEZRICH
‘The men on the trading floor may not have been to school but they have PHDs in Man’s Ignorance. In any market, as in any poker game, there is a fool. The astute investor Warren Buffet is fond of saying that any player unaware of the fool in the market probably is the fool in the market.’ - Liar’s Poker (Michael Lewis)
John Malcolm bet on football. He played it well, won an Ivy-League scholarship on it and made a name for himself while it lasted. Unfortunately he didn’t cut it with the pros. But Malcolm did cut it with the expat traders in Japan and Hong-Kong - on the trading floor and on the field. What the man didn’t know was business in Japan went beyond the already un-Godly hours a trader put in.
The book’s tagline reads ‘The true story of the Ivy League cowboys who raided the Asian markets for millions.’ but that is a little misleading. While the story of American and British traders playing Asian financial markets runs through the book, the story is about young Malcolm making his bets on money and a woman pay out.
Right out of college Malcolm’s fears about making a living give way to ambition that is fuelled by his mentor, and his high-school affair gives way to the dogged pursuit of a Yakuza boss’s sexy-as-sin daughter. In his path are rogue traders, Japanese mobsters, fellow traders who play dangerous games of chicken, women willing to oblige all carnal desires and alien business cultures.
Malcolm nodded thoughtfully, pretending to know what the hell a hedge fund was, but Carney was watching him too carefully.
“A hedge fund is a private investment vehicle,” he explained, his voice taking on the professional monotone Malcolm had grown used to hearing through the squawk box. “ It’s a kind of mutual fund, only it’s pretty much unregulated and open only to private investors of the fund’s choice.”
“Unregulated?” Malcolm asked.
“Nobody knows - or cares - what the fuck he does to make money,” Bill answered, his words slightly garbled as he was sucking champagne off the hostess’s fingers. “He just has to show a return on investment. He can do arbitrage like us, or he can buy and sell currencies, equities, fuck, anything he wants. He could buy a string of bagel shops and liquidate ‘em. He could round up all the Filipino hookers in Kabuki-cho and sell their organs to the Chinese. Whatever the hell he wants, he doesn’t have to answer to anybody. And he gets paid like a motherfucker when his fund makes money.”
The legendary Dean Carney works Malcolm’s ambition not just for money but for power and audacity; and with his ‘Eight Rules of Carney’ guides Malcolm’s exploits. But Carney’s dark side is manifested early on in his apprentice’s sub-conscious only to be thrust in Malcolm’s face when confronted with the threat to life and limb.
The book is littered with the author’s encounters with Japan and trading community stalwarts, and with a crisp prologue and afterword. And the setting of nearly all chapters illustrates the idiosyncrasies of Japanese culture, most vividly of all the variety of titillating sexual escapes available to men.
But the most sinister of all Japanese policies is the underlying but permeating influence of the Yakuza on business.
These vices and criminal influences are subtly but brilliantly captured by Mezrich who keeps the story focused on Malcolm and his metamorphosis from a young and aggressive trader to a wily businessman who never loses his nerve. The Japan created by Mezrich in this pulp action book is impressive and not easily forgettable; and the straight-shooter protagonist is defined more by his reactions to powerful adversaries and the elusive girl-friend than adjectives.
The story takes place in the background of the financial collapse of Barings Bank in Asia in a world of expats living large on the success of their bets.
Fact Behind Fiction
Guest starring in ‘Ugly Americans’ is real life ‘rogue trader’ Nick Leeson whose dealings in Singapore lead to the collapse of Barings Bank in early 1995. Barings were bankers to the Queen of England and financiers of the Napoleonic Wars. Leeson’s one and a half billion dollar bet tanked and took the age old institution down with it. Leeson spent three and a half years in prison in Singapore and wrote his autobiography ‘Rogue Trader’ while behind bars. The book was later made into a film and Leeson now owns a soccer club in Ireland. Barings was sold the Dutch ING for £1.
Also co-guest starring is Joseph Jett of Kidder Peabody who falsified profits and maintained improper records. Kidder Peabody was subsequently sold and Jett was ordered to repay $ 8.2 million over a $ 200,000 fine.
Yasuo Hamanaka of Sumitomo Corporation was another trader who bent the rules by forging signatures and eventually losing 2.6 billion dollars over ten years. He was finally discovered in 1998.
Other notorious financial fraudsters are Jerome Kerviel of Societe Kerviel and Bernie Madoff.
Also by Ben Mezrich
Best of the Site