Going for a goat
The ten weeks I worked at Bloomberg News were certainly educational if not, in the end, quite my cup of tea. I rapidly realised that financial journalism was not for me. In the main because I just don’t have the brains for it.
After months spent writing up earnings reports on major banks, small insurance companies and big pharmaceuticals, I still don’t understand how bonds work, I couldn’t give you a coherent definition of a derivative and I continue to be baffled by risk ratios.
Prior to being thrown in at the deep end in front of four terminals with more data at my finger tips than I knew how to handle, I was given 24 e-learning courses to do on markets, finance and business, as well as four days of training. Despite their best efforts my inability to get my head round any of it persisted.
Then, two days before I finished my contract, having already turned down the option of staying, a fellow Bloomberger sent me Julian Gough’s brilliant short story The Great Hargeisa Goat Bubble. It brought to light most of what I couldn’t, wouldn’t and didn’t want to grasp in the preceding three months.
“I drove my goat out of the long grass and into the middle of the runway and, leaving her standing bewildered and blindfold where the tyre-tracks were thickest, I ran back into the long grass. The plane was laden, the suspension heavy, the engines slung low: the propeller took her head off and the headless corpse went under the wheels.
“It is the tragedy of arbitrage opportunities: theyare killed by those who love them. The Market abhors a price discrepancy… But oh, it is beautiful to watch the market corrected by the invisible hand! The success of my scheme was noted by others: by the third day, rivals were driving goats onto the runway ahead of me.
Our competition in the market that afternoon drove up the price of goats. Thus, the market price of two goats, paid to us that morning at the airport for each one of our slaughtered goats, was by that afternoon unable to buy us two goats in the market. Goat hyperinflation had set in, for at the airport the next morning we demanded double the new market price for the goats we drove into the path of an old Aeroflot Tu-144.
The airport manager agreed the new rate of compensation. Thus, the compensation now being indexed to the market price of the goat, where the price of the goat is n and the compensation is 2n, capital was in effect free: no matter how high the goat price soared, the fresh capital for the next round of goat finance soared along with it. The tap was held artificially open, and a speculative bubble made inevitable.’
Gough’s wonderful, Somaliland-based tale, introduced the humorous and human aspect to all of the data, figures and functions trapped within the mighty Bloomberg terminal, that had been so lacking. It also confirmed what I already knew: I’d rather write about people (or goats) than percentages.
The Great Hargeisa Goat Bubble was originally published in the Financial Times in 2003. Last year it was turned into a play for BBC Radio 4. In 2010 it is due to appear in Gough’s latest novel, Jude in London.
