"Commodity players are a shrewd and indomitable lot. And the contracts
they trade are still so loosely regulated that the correct combination
of money and skill creates irresistible opportunity. That's why I'm only
half joking when I call them the secret club that runs the world."
When most people think of the drama of global finance, they think of
stocks and bonds, venture capital, high-tech IPOs, and complex
mortgagebacked securities. But commodities? Crude oil and soybeans?
Copper and wheat? What could be more boring?
That's exactly what the elite commodity traders want you to think. They
don't seek the media spotlight. They don't want to be as famous as
Warren Buffett or Bill Gross. Their astonishing wealth was created in
near-total obscurity, because they dwelled either in closely held
private companies or deep within large banks and corporations, where
commodity profits and losses weren't broken out.
But if the individual participants in the great commodities boom of the
2000s went unnoticed, their impact did not. Over several years the size
of the market exploded, and so did prices for raw materials--raising
serious questions about whether the big traders were intentionally
jacking up the cost of gasoline, food, and other essentials bought by
ordinary people around the world. What was really driving all those
price spikes?
Now Kate Kelly, the bestselling author of Street Fighters, takes us
inside this secretive inner circle that controls so many things we all
depend on. She gets closer than any previous reporter to understanding
these whip-smart, aggressive, and often egomaniacal men (yes, they are
nearly all men). They work hard, play hard, flaunt their wealth, and bet
millions every day on a blend of facts, analysis, and pure gut instinct.
Kelly's narrative focuses on one of the most extraordinary periods in
financial history. Though the practice of gaming out price changes in
commodities goes back to ancient Mesopotamia, it had never before
reached the extremes of the early to mid-2000s. Kelly exposes the role
of the hedge funds, banks, brokers, and regulators in this volatile
market, through fascinating stories of "secret club" members such as...
-Pierre Andurand, a self-made multimillionaire who generated the
winningest annual performance ever for an oil trader in 2008 and hired
Elton John to perform at his wedding.
-Ivan Glasenberg, whose secretive Swiss commodities giant, Glencore,
founded by the infamous American fugitive Marc Rich, orchestrated a
massive merger with the help of former UK prime minister Tony Blair.
-Jon Ruggles, a brash know-it-all--recruited by Delta Air Lines to
revitalize the airline's fuelhedging business, he continuined to make
trades in his personal account, a questionable practice given his
position.
Drawing on her exclusive access to the secret club, and following the
trail from New York to Houston, London, Dubai, and beyond, Kelly reveals
the immense power in the hands of a few, and the so-far contentious
efforts by the Obama administration to rein in the cowboys.
