APT8 at Brisbane’s GOMA

apt8-1One of the world’s great long running art exhibitions has opened again in Brisbane. The eighth Asia Pacific Triennial is a once every three years showcase of the best and most vibrant art from the Asia and Pacific regions in one of the best art galletries in the world: Brisbane’s Gallary of Modern Art or QAGOMA as it has renamed itself (Qld Art Gallery/Gallery of Modern Art). The name may be awkward but there is nothing awkward or forced about the art, which is true reflection of the most vibrant part of the world.apt8-2

Whether the exhibition is dealing with post Soviet trauma in Central Asia, life in the Bangkok banlieus or Aboriginal nationhood, APT8 brings a refreshingly deep perspective that is an antidote to the bland isolationism of modern Australian life. APT is the flagship exhibit of QAGOMA and its eighth incarnation emphasises the role of performance in recent art, with live actions, video, kinetic art, figurative painting and sculpture “exploring the use of the human form to express cultural, social and political ideas, and the central role of artists in articulating experiences specific to their localities.” There are works from over 80 artists and groups, with ongoing performances and projects, a conference and cinema programs, publications and as always, plenty of activities for children.apt8-3

Asim Waqif creates large scale installations from leftover and found objects. Waqif was born in Hyderabad, India in 1978 and now lives and works in Delhi. His work All We Leave Behind dominates the entry space to APT8. Prior to the exhibition Waqif visited Brisbane to learn about the history of building and demolition in the city. He collected worn timbers typical of south-east Queensland construction and used nooks and crannies of art gallery space to construct an edifice that is labour intensive and unplanned but also inviting. Waqif is fascinated by the concept of waste. In a 2013 interview he compares waste to archaeology. “One can speculate about the habits of a person by looking at the waste he/she generates,” he said.apt8-4

Eddie Mabo was probably the most famous person to come from the Torres Strait island of Mer (formerly known as Murray Island) but an important elder on the island today is Segar Passi. Passi began painting in the 1960s, observing sealife, birds and weather, and painting portraits, daily life, and Creation narratives. Passi encourages people to be mindful and respectful of their environment,  important social and cultural practices and knowledge. His works study the volcanic islands off Mer and Passi references the physical features of the islands and their geological evolution. His paintings speak of a profound and culturally embedded knowledge of place, with geological links to the ancient volcanic landscapes of Papua New Guinea.apt8-5

Burmese artist Nge Lay‘s large-scale installation The sick classroom (2013) came out of years of research and regular visits to Thuye’dan, a village ten hours north of Yangon (Rangoon). With her husband and fellow artist Aung Ko, Nge Lay established the Thuye’dan Village Art Project in 2007 which shared art with the villagers working with some of the most successful artists in Myanmar. Nge Lay also worked closely with local craftspeople to create sculptures that have become the basis for her recent sculptural works. The sick classroom features life-size carved wooden sculptures of the classroom, the teacher and 26 first-year students. The installation is a call for better rural education in Myanmar.apt8-7

Paphonsak La-or’s realistic drawings and paintings are critiques of the politics and history of his native Thailand. ‘Silent no more’ 2014-15 features empty landscapes around Fukushima and Futaba abandoned after the 2011 tsunami and 2011 nuclear disaster. Through Google Maps, La-or discovered a connection between these uninhabitable but lush landscapes and his frustration with the political situation in Thailand around the time of the 2014 military coup. La-or emphasises the contradictions between the peaceful Japanese scenes and the Thai turbulence using jarring text rendered in dust. apt8-8

STAB is the School of Theory and Activism, Bishkek in the capital of Kyrgyzstan. STAB is an artistic, research and activist platform informed by Soviet avant-garde art and activism, STAB runs animation workshops on dominance of the Russian language in Central Asia, urban development, and post Soviet homophobia. STAB also examines the Kollontai commune, a Soviet era queer communist and feminist collective associated with the architecture school in Frunze (now Bishkek) in the 1970s.apt8-10

Rosanna Raymond draws on her New Zealand, European and Samoan heritage in her multi-art installation and performance event SaVAge K’lub. Savage Club was a British 19th century gentlemen’s club but Raymond’s K’lub places more emphasis on the VA’ within SaVAge, a term invoking Samoan philosophical understandings of space. This, says Raymond, “is an active space. It is activated by people. It binds people and things together. It forms relationships, and reciprocal obligations.”apt8-11

Leang Seckon lived through Year Zero and the Khmer regime in Cambodia. A generation of artists was wiped out leaving a visible gap in the country’s contemporary art. Leang’s dense paintings have lush tapestry-like surfaces, that combine myth, popular culture and history. Hell of Tuol Sleng 2014 depicts a high school that became a notorious prison and death camp. “In 1977, when I was about seven years old, I had a serious fever and I fainted and was taken to a hospital near Tuol Sleng,” Leang said. “When I went to shit behind the building, I saw troops wearing black uniforms taking a very skinny person, almost like a ghost, to plough the fields. The person couldn’t even walk, but the soldier hit him and brought ants to bite him. The person fell onto the rice field. I hid beside a small group of trees and felt horrified.”apt8-13

Like Paphonsak La-or, Navin Rawanchaikul is a Chiang Mai Thai artist who draws inspiration from Japan. Navin exhibited in APT2 (1996) and his panoramic figurative paintings draw on film posters and murals. APT8 features ‘Tales of Navin 1–4’ 2013-15 capturing the many stages of his career and accompanied by a letter From Navin to Navin (January 2, 2015) that reflects on his relationships, love and death. These include the death of his mentor Thai artist Montien Boonma and Rawanchaikul’s trips to Australia to assist Boonma in the 1990s.apt8-14

Guangzhou artist Duan Jianyu’s playful work uses erotically charged imagery and humour as parody of Chinese and colonial life. Her faux-naïve style owes to Revolutionary Realism and the French Barbizon school portraying rural peasant women carrying giant geese with snaking, phallic necks echoing European modernist ideas into China post-Cultural Revolution. She also draws attention to tensions between urban and rural, and tradition and modernity in a society undergoing enormous change.apt8-15

Chilean-born Australian painter Juan Davila has six works in APT8. They draw on many references, including 19th century Parisian advertisement posters in Paris, with Davila devising his own typefaces and fonts. Hung as a group they address the treatment of refugees and asylum seekers in Australia using barbed wire and people of mixed gender and races. apt8-16

Mongolian artist Gerelkhuu Ganbold’s painting Soldiers Who Don’t Know Themselves (2013) is a vertical triptych, depicting mounted horsemen in armour riding through a vast desert space. On close inspectionthe armoured suits are either empty or inhabited by skeleton figures, sitting up on their horses in a ghostly way. Gerelkhuu’s draws from Mongol zurag painting and equestrian art, and contemporary comics and science-fiction cinema. His horde recalls Genghis Khan while also commenting on modern Mongolia which is rapidly urbanising and undergoing economic overhaul.

APT8 is on free at QAGOMA, Southbank, Brisbane until April 10, 2016.

Islamism and the West: A new reign of terror

A ripped picture of Syrian President Bashar al-Assad hangs in the northern Syrian city of Raqqa following the fall of the city to the Islamic State on March 5, 2013. Raqqa is now the capital city of IS. (Photo credit MOHAMMAD AL-HUSSEIN/AFP/Getty Images)

The sight of Brussels in continual “lockdown” is a sobering glimpse of the future. The tenuous contract between freedom and equality is on a slippery slope equality’s way and we are all becoming equally enslaved. The cause of the imbalance is Islamism, the largest threat to “western” (a word that has no geographical meaning as modern Chinese and Indian people aspire to be the “West” as much as Americans and Europeans) civilisation and dealing with it will become the thorniest global issue over the coming decades if not centuries. I don’t know why we are so surprised at this as 9/11 showed in horrific live global pictures the extent Islamists are prepared to go. It is war, where we like it or not, and whether we recognise or not who the “enemy” is.

It is also a problem that is not going away anytime soon, regardless of how well the West “copes” . While random easy target attacks with guns and bombs are not as as wicked an economic problem as the effects of climate change with its catastrophic results to the planet, the outcomes posited by Islamism are a more potent and direct threat to centuries of science and innovation. The notion that climate change is a fraud is easier to defeat as the weight of scientific evidence becomes insurmountable in the 21st century. But even supporting science or calling our times the heuristic “21st century” is inimical to Islamic terrorists.

Terror is an overworked word but is accurate to describe the sense of fear crucial to the work of terrorists. The notion is not exclusive to Islamists and is as old as human society. The power of ancient Rome was enforced by terrorism of its own people while the French Revolutionary Reign of Terror enshrined violence as a political right. State terrorism was a core tactic in both world wars, especially the second as en essential element of the Total War mentality leaders saw as necessary for victory.

In the late 20th century, terrorism became associated with non-state actors in asymmetric battles against the power of the state. Growing up in the political complexities of Ireland it was easy to see how one person’s freedom fighter was another person’s terrorist. But central to the strategy of all of these groups was that soft undefended targets were legitimate within the confines of their “wars”. In particular tourism and tourists became targets, both as a easy mark and also as symbols of the mass consumption that defined western society.

Islamists have taken this strategy to the next level in their battles against the West. The idea that tourism becomes unsafe and therefore untenable is a central concept in their war. You are a legitimate target whether you are in a hotel in Bamako, a beach in Tunisia, a rock concert in Paris, a pub in Bali or a plane over Sinai. The activities that mark out daily routines are slowly denormalised and with them, the assumptions that drive life in the West.

Terrorist actions are inescapably political, a fact the West prefers not to understand. Neither side in the traditional left-right divide of western politics understands how to deal with the problems posed by asymmetric warfare. The right is quicker to see Islamism’s threat but its simplistic solution of keeping Islam out and “closing the borders” belongs to less mobile times. The West is post-Christian and imposing a religious solution on secular societies has no chance of success. The borders are a hangover from the 19th project of nationalism and nationalism has few answers to global jihad.

The  other side practices its own stupidities. So determined is the liberal-left to prevent the effects of divide and conquer promoted by the right, it is blind to the causes of Islamism preferring not even to speak of the religious dimension that drives its actions. Their reluctance is understandable, not wanting to drive an artificial wedge between Muslims and non-Muslims. But ignoring causation will never address the problem. The fact IS supporters practise their religion in a way that horrifies most liberals does not make it any less Islamic. When a British Muslim intellectual states it is lazy and wrong to say Islamism has nothing to do with Islam, she is castigated by non-Muslims as a Zionist in disguise. But as she argues, “the repugnant creed of the Islamic State is certainly related to Islam – but it is also inimical to Islam”.

It is not just Islamic State that is the problem, though they have succeeded in their avowed long-term media strategy. Jihadis view themselves as warriors against western imperialism and across the world Islamist groups invoke Allah to drive murderous projects. Boko Haram in Nigeria is even more bloodthirsty than IS, and the aim of their project is reflected in their name which means “western education is forbidden”.  It mounted 453 attacks in 2014, killing 6644 people – “the most deadly terrorist group in the world”.

There are others in similar guise across the Muslim world: Al Qaeda in the Islamic Maghreb  (ALIQ) in northern Africa, Al Qaeda in the Arab Peninsula (AQIP) in Yemen, Al Shabaab in Somalia , Islamic State, Al Qaeda and their proxies in the Middle East, Taliban armies in Afghanistan and Pakistan, Lashkar e Toiba in Pakistan and India, Jemaah Islamiya in Indonesia and Abu Sayyef in Philippines. They have a ready stream of adherents and are well-funded and well organised often by supposed “allies” of Western nations. The Salafist and Wahhabist strains of Islam, as practiced by some Gulf nations, Saudi Arabia in particular, are utterly intolerant and want only a world in their image. They can only be defeated by the populations in which they live.

There are no easy answers for the West. Media castigation of Muslims in their midst sells papers but is counter-productive. Military intervention is catastrophic and must be avoided. Even a peacekeeping mission has the potential to be badly misunderstood. Democracy has not taken root in Muslim countries and authoritarian regimes – backed by western nations for their own cynical purposes – have hollowed out civil societies. Jihadism with its easy illusion of divine sanction has filled the void, with a simplistic message often compelling to those disenfranchised in the west as it is to Muslims.

Islamic State must be allowed to be seen for what is it: A cruel, despotic and capricious regime that gives its elite a lucrative regime from smuggling oil, drugs and other contraband aroind their black economies. Those that live under IS and other intolerant Islamist regimes need time to find out the dictum that democracy is the worst possible way of organising the world – apart from all the others. Whether the people under Islamist flags ever get to see that, depends on the politics of the West: the right avoiding weapons and bigotry and the left not avoiding reason and rationality. We are a long way from both and the war goes on. IS and their ilk have much room to grow before they being destroyed by their own absurdities.

Dark Paradise: A short history of Norfolk Island

norfolkAs Dark Paradise author Robert Macklin reminds us, all nations lie about their past. Whether it the Turks lying about a genocide of Armenians, Japanese ignoring war crimes, Americans glossing over their slave owning Founding Fathers, or the Israelis invoking ancient Hebrew lore to justify savage oppression of Palestinians, nations across the world have turned history to their agenda. The British, says Macklin, are past masters at whitewashing their past with a cheer squad of intellectuals heaping praise for the way they brought civilisation to the world, while ignoring the pillaging of Africa and the attempt to turn China into a nation of drug addicts.

The Australians have learned well from their British forebears and the predatory conquest of an entire continent has been hidden behind concepts of British law and order. Macklin’s tale is about the savagery that underpinned the Empire’s expansion into a small neglected corner of Australia: Norfolk Island. The Island was the first place that empire expanded after Sydney and its story incorporates three fascinating strands: the dark strain of convictism, the aftermath of the mutiny on the Bounty and the sexual predations of the High Anglican Melanesian Mission.

Captain James Cook discovered Norfolk, though not on the same voyage as his 1770 journey up the east coast of Australia. It was on his second voyage in 1774, a vain journey to find the fabled Terra Australis Incognita, when he arrived at the north-west tip of the island. It was short stay but its significance lay in the discovery of wild flax which Cook believed was a natural raw material for canvas sail. The great pine trees that dotted the island also looked perfect for masts and spars. Britain had neither commodity and was forced to import them from Russia. “The discovery may be both useful and valuable,” Cook wrote.

It took the upheaval of the American Revolution for Britain to turn its attentions to the south Pacific, and not for sails but for jails. Within 18 days of the First Fleet arriving in Sydney, Governor Arthur Phillip dispatched Lt Philip Gidley King to establish a settlement on Norfolk with a group of 15 convicts, five free men and two marines. They arrived on the island on Leap Year Day and took five days to negotiate the reefs to a safe landing.

King had his eyes on the flax and pines, and also on one of the six convict women in his new colony. He was unaware – and it would not be discovered until the late 20th century – the island was previously colonised by a small group of seafarers from north New Zealand or the Kermadec Islands using double-canoes. Between the 13th and 15th centuries they survived on fish and birds before mysterious disappearing either voluntarily or by violence induced by an imbalance of the sexes. They left behind the New Zealand flax and the Polynesian rat.

The latter were joined by European stowaways from King’s ship and together they ruled the ecosystem of the island. King’s plans had a more immediate enemy. The island’s pine trees were too brittle for masts and spars while King’s men did not have the technology to convert flax into canvas. Sexual tension replaced early enthusiasm, with men outnumbering women three to one. King codified 11 commandments into laws which included the need to “behave devoutly” and the more puzzling “no exchange of clothing”. The rats and hot winds played havoc with cultivation and the colony survived on fish. A planned convict rebellion was narrowly defeated by the actions of an informer.

Meanwhile, another British actor in the Norfolk story was plying the waters of the south Pacific. Lieutenant William Bligh, a protégé of Cook, was sailing to Tahiti in 1788 in command of HMS Bounty. Bligh’s orders were to turn the island into a slave state in the service of Empire. Aboard was Fletcher Christian, a midshipman Bligh promoted ahead of longer-serving hands. The pair were attracted to each other, though it is doubtful they consummated their relationship.

Despite this, Bligh found constant carping fault with Christian’s work. The easy Tahitian morals were a profound shock to the straight-laced British crew and Christian’s plotting against Bligh may have begun there. When they went to Tonga, a huge row erupted between them over missing coconuts and Bligh punished him before inviting him to dinner. In a state of confusion Christian plotted with others to desert, a plan which evolved into mutiny. He led a group of nine armed with muskets, bursting into Bligh’s cabin and putting a knife to his throat. The following morning, the Bligh loyalists were gathered together and put onto a cutter for an improbable 3600km journey to Timor, while Christian set sail for Tahiti. Facing a hostile reception and worried about British ships, they departed with 500 pigs and 25 Tahitians going first to Tonga and arriving at Pitcairn in 1790. The island had fertile soil, fresh water, tropical fruits and most importantly was utterly remote.

Bligh returned to Britain and was acquitted at a court-martial. King was also sent back to Britain while the martinet Major Robert Ross commanded Norfolk. The convicts seethed under tiny rations and draconian punishments for minor infringements. King returned as Lt-Governor to find 700 people on an island riven with violence and theft. Flax-dressers were brought from New Zealand to make canvas with no success. The Rum Corps philosophy spread to the island creating a caste system.

On Pitcairn life was no more idyllic. The colonisers divided into two murderous groups treating the Tahitians like slaves while Christian withdrew into a solitary life. Finally the Polynesians rebelled killing five of the nine mutineers before the tables turned and four of them were killed. The spree’s main effect was to rebalance the sexes and a relative peace broke out.

Peace was the last thing on the new Norfolk ruler’s mind when King was promoted to governor of NSW. His replacement, former Governor John Hunter’s nephew Captain William Kent was delayed at sea, so Major Joseph Foveaux came over from the Rum Corps. Foveaux got wealthy by pressing convicts into slave labour on his Sydney farm and he took sadistic ideas of discipline to Norfolk. Humiliation and agony were his tools of trade and he wasted no time establishing a regime of shocking cruelty, which he kept secret from the mainland by censoring mail.

Foveaux was selective in his punishments, ruling with informers who got off lightly while some were routinely sentenced to 200 lashes as a mere “feeler”. Others were kept in tiny dark isolation cells in water pits for 48 hours unable to sleep or even crouch for fear of drowning. Women were treated as slaves and bought and sold freely. Doctors and clergymen on the island tried in vain to ease the punishments before a fellow major took exception at Foveaux punishing his soldiers without a proper court martial. Foveaux was sent to England but exonerated and came back to Norfolk with a promotion. New arrivals got 25 lashes to show authority and whenever a foreign ship was sighted, Irish prisoners were herded up into a timber building with orders for it to be set alight if the ship landed. It was ill-health that ended the horrible reign of King Joseph I of Norfolk and he returned to England in 1804 as an asthmatic.

William Bligh was now governor in Sydney, but again the subject of mutiny this time by landholder John Macarthur. When Bligh attempted to stop the rum trade by arresting Macarthur, his officers sided with Macarthur and instead put Bligh under house arrest. Colonel William Paterson arrived in 1809 to relieve Bligh. By 1810 American whalers had told the world of Christian’s mutineers on Pitcairn while life was generally quieter on Norfolk. The last convicts were removed in 1814 and the island was turned loose to 12 fierce dogs.

That year Samuel Marsden arrived from the London Missionary Society to convert the people of the south Pacific, with New Zealand as his base. In 1824 Norfolk was re-established as an outpost of the “ne plus ultra of Convict degradation”. New governor Ralph Darling enthusiastically ordered the withdrawal of all women to make the island a place of “extreme punishment short of death”. In 1826 a revolt held out for several weeks before its leaders were caught and hanged in Sydney. Another martinet James Morriset arrived in 1829 and he got round the official limit of 300 lashes by imposing the sentence multiple times. Morriset had uncontrollable rages towards his prisoners with a total lack of interest in running the settlement.

Over in Pitcairn a new arrival named John Buffett took over teaching duties and eventually control of the island before falling foul of alcohol. Another charlatan missionary Lord Joshua Hill arrived claiming to be sent by the British. He denounced the older settlers and appointed a cadre of sub-rulers to enforce his own rule until he too was violently deposed. The islanders were anxious to become part of the British Empire and when Captain Russell Elliot arrived in 1838, he produced a “constitution” Britain would eventually recognise in 1887. The island was a regular stop of whalers but became an outpost of the Church of England under George Selwyn.

In Norfolk, there was temporary respite with the kind reign of Alexander M’Konochie. M’Konochie was convinced punishment was counter-productive and allowed prisoners to be treated humanely. They could earn freedom by labour and good conduct and the lashings stopped. However Governor Gipps would not extend this treatment to repeat offenders on the island, an injunction M’Konochie disobeyed. Once word got back to Sydney he was recalled and the brief reform era ended. The island continued as a gulag of terror until closed in 1855.

The empty island suddenly appeared as an attractive proposition for the Pitcairners who were outgrowing their tiny home. An 1855 poll found 153 out of 187 in favour of the move and they sailed west a year later under a founding document auspiced by Queen Victoria, though some returned after a short while. In 1863 there was another split and another 27 settlers returned to Pitcairn. Those that stayed fell under the power of Selwyn and his Melanesian high church Mission. The Mission farm became profitable and the island became a benevolent church dictatorship surviving on free labour or “field hands for the Lord”.

In 1897 Governor Hampden issued an order-in-council annexing Norfolk to any federal body which NSW might join. However Norfolk was not included in the new commonwealth of Australia in 1901. Numbers dwindled in the 20th century and by the 1930s the island was in crisis. An airstrip was built in the Second World War and a radar station, and the war proved a spur to development. By the 1960s tourism was on the rise but so were tensions with Australia over taxpayer funding. Norfolk made money by printing stamps but by 1975 a High Court decision ruled the island was irrevocably part of Australia and should be included in the electorate of Canberra. The Pitcairners lost their special status and a Norfolk Island Territory Assembly was given powers to raise revenues and taxes.

To this day, the tension between Pitcairners and non-Pitcairners remain about obligations to racial discrimination laws. The dysfunction of Norfolk government has been a running sore for Canberra, while Pitcairners emphasise their special status. In June Canberra took direct control of the island ending 36 years of direct rule much to local disgust and mass protest. Governance consultant Gary Russell, a member of the New Zealand UN Association, says he believes Australia cannot continue to act without consulting the founding document. “Even the Crown in England kept reminding the Australian state governments when they kept changing petitions,” he said. “’Have you consulted with the people of Norfolk Island before you instigate these changes?’ and of course this has not happened over the last 160 years.” Macklin’s Dark Paradise has not yet seen the light.

The Asylum: How a bunch of rogue traders at Nymex took over the world oil market

asylumThe little-known but important story of how a bunch of potato traders at the New York Mercantile Exchange (Nymex) came from nowhere to set the world oil price is told delightfully in the book The Asylum by talented American journalist Leah McGrath Goodman. That no one exactly understood how oil prices are set is demonstrated in Goodman’s book with the transcript of an extraordinary interview between right-wing Fox News pundit Bill O’Reilly and Nymex executive John D’Agostino in 2008.

At the time, the oil price was skyrocketing towards $150 a barrel and O’Reilly was anxious to blame Venezuelan left-wing president Hugo Chavez and OPEC’s “greedy sheiks” for the high prices. D’Agostino was having none of it. He told O’Reilly high demand and a low US dollar were more to blame. O’Reilly was flabbergasted as the conversation continued. “[OPEC] gave Cheney the middle digit… they can change whatever they want, right?” he says. D’Agostino replied, “No, OPEC only set the oil supply, the price of oil is actually set in New York”.

The rest of the conversation is worth reporting in detail:

O’R: Is there a guy who says $125 a barrel?

D’A: No. There’s a huge market that sets the price.  It’s filled with hedgers. It’s filled with speculators.

O’R: Somebody has to put the $125 on the barrel. Who does it?

D’A: They’re getting it from this market.

O’R: Who is “they”?

D’A: The oil producers…

O’R: The CEO of Shell or ExxonMobil says ‘We’re going to pay $125 a barrel”. Is that what they say? I thought it was the sheiks and Hugo Chavez.

D’A: No, No. They are all looking to the exchanges, the free markets, to set the price. The markets right now are saying the price of crude is about $120 a barrel. It’s going up and gasoline prices are directly related to crude oil prices.

O’R: But somebody has to make a decision.

D’A: It would be great if there was just one person doing that, because then we could go talk to him.

The exchange ended with an exasperated O’Reilly believing he was being hoodwinked. It was a sentiment shared by his Fox viewers who showered the station with angry emails unable to believe it was American capitalists setting the price of oil not greedy Arabs and leftist dictators. But what D’Agostino was saying was true. The price of oil really was being set by a bunch of anonymous traders off Wall St who thought nothing of bringing the global economy to its knees.

This is upsetting because they are not nice people. As Goodman said, traders are yellers. One trader told her they yell because they don’t have time to be polite. “It’s a world of super-assholes,” he said. “They’re all dicks, crude, manly men.” They work on the futures market which is a scarier version of the stock exchange. Energy traders bet on the price of oil in any of the months to follow, to a period of ten years. It is precise. Even if you correctly bet prices will go up in a certain year, if you get the month wrong you could lose millions. Traders not only bet on the future price but also on the difference from month to month in a practice called “spread trading”, which they hedged against the outright future bets.

The market was Darwinian where the strongest and loudest ruled. The trading floor was often violent and nice guys didn’t last. Traders were assisted by runners who wore goggles to protect themselves from the constant shower of trading cards raining down on them. Traders were fined $100 for every card that didn’t reach the pit in one minute of trade and expertly flicked cards which would arch perfectly before landing across the two-storey high room. Position in the trading ring was crucial because if you stood close to a major trader you would have access to all the information they got.

Nymex was always a down-at-heel exchange compared to the New York Stock Exchange. The guys that bet on the blue chip companies looked down on the shabby traders of minerals and commodities. If the NYSE traders took an academic and mathematical approach to the market, Nymex operated more from the gut. Overthinking was bad, trading was “freestyle” and the traders were street smart. Porn was common on the floor, as were drugs. There was reputed to be firearms too. The cops left them alone as they contributed large amounts to the Police Foundation. The traders’ word was their bond and behind their bland trading jackets, there were many multi-millionaires. There were 816 seats in the exchange and they sold for $1.6 million a pop or could be leased out at $10,000 a month.

It was only in the 1980s that Nymex hijacked the oil market. Before that it was trading home of the humble Maine potato. For half a century, around 70 traders operated out of a redbrick mansion in downtown New York betting on spuds, unaware their world was crumbling around them. A rival market was emerging in Idaho potatoes while Maine’s annual potato crop was falling. The market was also corrupt with stories of bags filled with potato-shaped stones and spoiled Maine potatoes arriving at markets in the Bronx. Worse still, a national consensus was developing that potatoes tasted better from Idaho than Maine.

Initially this led to volatile prices which the traders loved. The wilder the swings, the more opportunity for profit. When the supply ran out at the end of spring each year, prices would go crazy, with half the market betting prices would rise and the other half hoping they would fall. The trading pit would be full of farmers, politicians, bankers and spectators who would come to watch the show each May. Traders were obsessed with Maine gossip, Maine weather, Maine soil. Because future contracts were tied to actual quantities, traders had to get in, make money and get out quickly to avoid a pile of potatoes arriving on their doorstep. Traders skilfully exploited the expiration date right up to the last few seconds to end up “flat” in the market without any bets left on the table.

The whole idea of a futures market sounds absurd but has practical value. It made it possible for farmers to lock in future profits in advance at an agreed price. It gave them financial stability to plan their business years ahead with price risks transferred to the speculator who pockets the resulting profit or loss. This underlying utility still drives the futures markets in commodities like oil.

Incredibly, Maine potatoes were the third most traded commodity in America in 1976. But an enemy at the gates was about to spoil Nymex’s party. JR Simplot was an eccentric Idaho farmer, nicknamed the Potato King. When he died in 2008 aged 99, he was the oldest person on the Forbes 400 rich list worth $3.6 billion. Starting out as an onion farmer, he branched into potatoes winning the contract to supply US armed forces in the Second World War and then McDonald’s in the 1960s. Simplot was annoyed Nymex would not trade his Idaho potatoes. In the May 1976 rush he played against the Nymex traders selling millions of dollars of potatoes driving the price down. But unlike the traders he did not go “flat” at the close of trade.

Simplot was left with a contract to deliver massive amounts of Maine potatoes which to the consternation of the market, he did not have. However what he did have in plenty was Idaho potatoes which he offered in compensation.  Nymex refused to accept his Idaho potatoes and the market defaulted. Simplot was fined $50,000 but succeeded in busting the Maine market.

Nymex lost all legitimacy and most of its traders resigned. In 1977 they appointed a 27-year-old trader named Michel Marks to be its unpaid chairman. Marks was the son of a former Nymex trader and a child prodigy. Reeling from the loss of potato futures, the exchange scraped by, betting on odd trades like Australian beef cattle (when it was supposedly tainted by kangaroo meat, the price oscillated wildly, an outcome traders loves). Its rival exchange the Chicago Mercantile Exchange (Comex) overtook it and tried to buy out the cut-price seats at Nymex. The deal only went south when Comex pulled out thinking they had paid too much money for it.

In the short term it left Nymex in a huge hole but in the longer term it was Comex who suffered. Marks worked around the clock in 1978 to understand the business inside out. Some traders wanted to bring back a potato market but the Simplot scars were too deep. In any case the market regulator permanently banned potato trading. There was money to be made selling platinum and other metals but these markets were not volatile enough to be super profitable. Looking at what was dormant on the books, Marks hit on heating oil.

It was an far-seeing energy economist named Arnold Safer who convinced Marks that the free market would eventually set the price of oil. In the earliest days of oil the price was set by John D. Rockefeller and his “barrels”, before it was taken over by a consortium of the Texas railroad and the oil majors. Since the 1973 Oil Crisis, it was OPEC that was flexing its muscle. But Safer told Marks non-OPEC countries would eventually flood the market with excess oil destroying the Middle Eastern cartel. He also advised Marks to only trade things whose prices weren’t fixed by the government. The opportunity came with the deregulation of the heating oil market in the late 1970s. Mark dusted off an old contract to sell heating oil to the Dutch. In an ingenious move, he scratched out Rotterdam and changed it to New York harbour so they could concentrate on local trade.

The future market for heating oil opened on November 14, 1978. Volume was low on the opening day which was not a good sign. “Low volumes beget no volumes” was the conventional wisdom in the trading pits. Marks hassled the big traders, energy companies and banks to trade with him but no-one believed OPEC could be challenged. However because Nymex had no history with oil, the industry made the fatal miscalculation of ignoring them.

Heating oil merchants paid vastly inflated for their product while even OPEC struggled to turn a buck when its price for oil did not keep up with the changes to supply and demand. Private oil companies exploited the difference by hoarding oil contracts, locking in higher prices. They charged $10 more a barrel than the OPEC price but Marks decided to do exactly the opposite. His heating oil was 20c a gallon cheaper than Exxon. His customers were initially worried whether Nymex could guarantee continuous supply and they also worried Exxon might find out about the deal and punish them. But cheap oil is cheap oil and enough merchants did bid to give Marks the start he needed. Nymex traders didn’t care about the product or the price, what they needed were sufficient bids and offers to work the gaps.

Word slowly got out about the bargains at Nymex. Serious corporate customers arrived in the form of drillers, refiners and shippers of heating oil. Within months the number of bids went from hundreds a day to many thousands. For the first time ever, buyers and sellers of heating oil could tell exactly what the price was by looking at the Nymex trading board. It gradually attracted all of the heating oil contracts of the United States, turning the exchange into an invaluable source of information. People began to trust the exchange because it was a public market and because, unlike the oil companies, it did not rely on ever-increasing prices to make a profit.

Things really took off in 1980 when the Iraq-Iran war broke out. When the news broke, over 50 traders immediately flooded the ring clamouring for heating oil. Within days the Nymex price doubled and would have risen further but for government-imposed price limits. The low and high price were the same as everyone was buying and there were no sellers. There was a vast underground trade into the higher-priced unregulated market controlled by the oil companies, an illegal practice but one which flourished without supervision.

New US president Ronald Reagan gradually eased price controls and Marks debuted futures on leaded petrol (gasoline) in 1981. That market was so successful it continued for two years even after leaded petrol was banned in the US. In 1983 Reagan removed the last of the oil price controls and Nymex launched its crowning glory: a futures contract on sweet crude light oil, the bedrock of the industry. Marks opened a specific market to sell West Texas Intermediate light to the largest oil storage facility in the world at Cushing, Oklahoma.

The dots were starting to join. US Oil production was on the decline and Americans were cutting usage. OPEC jacked up its prices as did the oil companies. But the supply scare had caused non-OPEC companies to increase production flooding the market with oil, plummeting the price. Panicked Wall St traders rushed to Nymex to hedge their expensive contracts. Nymex became a huge liquidation warehouse selling off oil at bargain-basement prices. The traders made a killing on each transaction. Suddenly power was no longer in Houston, Amsterdam or the OPEC HQ at Vienna but at a grimy rat-infested building in lower New York, inhabited as Leah Goodman said by “misfits and pranksters and gun-toting gangsters who had absolutely no knowledge of the oil business”.

Over the years that followed, other players muscled in on the market but Nymex’s position was secure. Even the oil companies came cap in hand to the exchange and openly traded on the market. When Nymex moved to the World Trade Centre the market was so intense, it did not notice the smoke pouring into the room after the 1993 bombing and traders refused to evacuate. Nymex moved out of the WTC before 2001 which was prescient. But it was slower to see the oncoming of electronic trading and almost lost the market entirely to the more innovative Intercontinental Exchange (ICE). With Nymex’s power waning they agreed to a merger with its former enemy Comex in 2008 and finally the electronic boards replaced the whirring of paper in the pits.  A handful of traders still ply their wares in a small venue using the old open outcry system of the potato trading days. There are calls for it to be preserved. But Nymex is no museum. Although people like Bill O’Reilly never knew it, its traders still set the price of oil to this day.

Rwanda reliant on new colonial master China

Rwanda and China's fate may become inextricably linked in the coming years.
Rwanda and China’s fate may become inextricably linked in the coming years.

I watched Hotel Rwanda on television last night for the first time since I saw it at the cinema when it came out in early 2005.  It’s a fine film, not among the greats, but it is honest, tells an important story and it played a crucial role in my personal political awakening. Hotel Rwanda tells the story of the 1994 Rwandan genocide from the point of view of Paul Rusesabagina, manager of the international Hotel des Milles Collines in the capital Kigali. The hotel became a sanctuary for hundreds of people, as all around them Hutu militia rampaged on their genocidal mass slaughter of Tutsi people.

As good as the film was, I remember being left unsatisfied as it did not answer the question as to how, in my lifetime, up to a million people could be murdered purely on the basis of a national characteristic. I thought this was something that happened in cruel times of the past, not in our enlightened era. I was 30 years old when the massacres happened, naive, and living an undisturbed life far away in Australia. I remembered the Edmund Burke phrase that all it takes for evil to thrive is for good people to do nothing. Was I somehow to blame, blissfully ignorant of the causes? How could this happen in the 1990s? What did I know about Rwanda, and Africa more generally? I decided to find out.

That Easter 2005 I was supposed to go away on a four-day long weekend, but for whatever reason the plan fell through. Instead I printed off the 900-page Human Rights Watch report “Leave none to tell the story” and stayed at home riveted to the heartbreaking conclusions on every page. When explained, Rwanda’s genocide was even more baffling than ever, the result of a bogus and arbitrary division of people, African warring, European meddling, and lack of American intervention at the most important time. Worse still, the causes remained uncured and the possibility of it happening again remains real.

Rwanda, like every country in Africa, is a tool in the great game of global influence. In the 19th century it was a pawn in colonial negotiations between the British and the Germans. In the 20th century, first Belgian and then French influence grew. Then in de-colonial times, it vacillated between the Americans and Soviets. Now like most African countries, it is coming under the gravitational pull of China. Long-time Rwandan leader Paul Kagame optimistically paints that current relationship with Beijing as one of equal partnership in “sustainable development, mutual prosperity and respect.”

Yet it is hard to imagine China being any more sympathetic to local needs than any of the previous superpowers for whom Rwanda was a client state. Kagame, a leader supreme for two decades, may be part of the problem. Paul Kagame led the Tutsi rebels that overthrew the Hutu extremists in 1994 after the genocide. An undoubted hero to his people for restoring law and order, his regime has come at the cost of political repression with internal enemies ruthlessly suppressed. This is an African tradition dating back to the end of colonial times but Rwanda’s problems go even further back.

The Hutu and Tutsi people are differentiated purely by when they first arrived in central Africa. The Kingdom of Rwanda was a Tutsi enclave but operated a sophisticated power-sharing arrangement with Hutu people on the basis of cattle patronage. At the time Rwanda was uncolonised, but unbeknown to it, the faraway Berlin Conference of 1884 assigned the territory to Germany as part of the greedy but civilised European takeover of Africa.

Because of the convenient lack of British interference, German needed to send only a small contingent of troops to take Rwanda. The German brought euro-centric notions of racism to Rwanda, handing local administration to Tutsis on the basis they originally hailed from the “more white” Ethiopia. German defeat in the First World War saw new European overseers arrive: the Belgians. The Belgians already managed next door Congo and brought their post-Leopold administrative zeal to the new province, concentrating further power in Tutsi royalty. In 1935 they took the fateful step of issuing identity cards labelling people as Hutu, Tutsi and Twa, ending the fluid movement between what were effectively castes.

The end of the Second World War saw the rise of nationalist movements across Africa including Rwanda. Because Hutus were the most numerous, they dominated the resistance movement, and a notion of Hutu nationalism emerged in 1957. Seeing which way the wind was blowing, the desperate Belgians replaced all Tutsi leaders with Hutus in 1960 but could not stave off inevitable independence.

There followed a civil war in 1963 and mass emigration of Tutsis, destabilising neighbouring Uganda, Burundi, Tanzania and Congo (Zaire). Nevertheless there was a population explosion in Rwanda’s fertile lands rising from 1.6 million in the 1930s to 7.1 million by the end of the 1980s. Hutu leaders carefully held power, backed by American, Belgian and French forces, while disconcented Tutsis bided their time. Around 1990, a perfect storm of events ended the status quo.

When the prices of Rwanda’s chief export, coffee collapsed at the end of the 1980s, there was an economic crisis. Meanwhile across the border in Uganda, exiles backed the overthrow of anti-Tutsi president Milton Obote. The new dictator Yoweri Musavene secretly supported installing a Tutsi regime in Kigali. Finally the fall of the Soviet Union meant Africa was no longer critical in forging pro or anti-Communist regimes and American support for the Hutu regime dissipated.

The second civil war started in 1990 but hopes of a quick Tutsi victory were dashed by the entry of French and Belgian troops in support of the Hutu regime of president Juvenal Habyarimana. The conflict descended into stalemate and guerrilla warfare until a ceasefire in 1992. The Arusha Accords called for power-sharing but fighting continued. Another Tutsi offensive in 1993 was stopped again by the French.

Power in Kigali was moving slowly away from the distracted army to a hard-line paramilitary group known as the Interihamwe. Organising itself with the aid of a radio station, the Interihamwe promoted the total elimination of Tutsi people whom it called “cockroaches”. They could not act too openly while Habyarimana controlled the army. Their moment came when Habyarimana’s plane was shot down at Kigali Airport as he returned from peace negotiations in Burundi. The Burundi president also died in the attack. No one claimed responsibility for the double assassination but hard-line Hutus were the beneficiary, at least in Rwanda. Within hours the Interihamwe mobilised death squads with guns and machetes and began large scale killings across the country.

With the army still hamstrung as it dealt with the Tutsi resistance, the way was left clear for a 100 days of savage slaughter, far from western eyes. The small, mostly Pakistani, UN contingent in Kigali alerted the world to the predicament but Bill Clinton’s America, chastened by ignominious failures in Mogadishu a year earlier, refused to commit US troops to the region. An inept Europe looked on in horror, and the killing spiralled out of control.

On June 18, the French finally invaded in Operation Turquoise. While the UN sanctioned this operation, this was a cynical move by President Mitterrand to shore up French interests in the region. The massacre had ended, but it was the Tutsi rebels that ended it, not the French. Kagame’s forces had finally routed the Hutu army and taken Kigali. Operation Turquoise assisted only in helping two million people flee the country and arrested none of the Hutu massacre leaders. The mission lasted two months and on its end, the Tutsi rebels united the whole of Rwanda under their leadership.

The Interihamwe leaders that caused the carnage mostly escaped into the Congo and Uganda. They used Congolese camps for incursions into Rwanda and also attacked Tutsi refugees in the Congo. The latter formed militias to defend themselves and attacked the Hutus and also the Mobutu government that defended them, opening up the first Congo War, which ultimately overthrew the Mobutu regime. There were still 1.5 million Rwandan refugees in Congo which new president Kabila saw as a destabilising influence. He expelled all Rwandans and Ugandans from his country, an action which, in tandem with the rapacious western need for minerals used in mobile phone technology, only served to open up a new conflict, called the Second Congo War.

The Second Congo War is unknown to the rest of the world, but is the deadliest war in African history. It dragged in almost every country in the south of the continent. It lasted four years, caused thousands of deaths directly, millions of deaths indirectly. It ended with a new government in the Congo, but Uganda’s and Rwanda’s long-term pro-Tutsi governments emerged stronger than ever. Both countries sold the mineral coltan, a crucial component for mobile phone capacitors, found only in eastern Congo.

Kagame was formally elected president of Rwanda in 2003 and re-elected in 2010.  That second election was widely believed to be rigged and dozens of opposition figures murdered. Kagame was re-elected with 93% of the vote, a sure sign of intimidation. However he would probably have won anyway in an open vote. The Rwandan economy is recovering and annual growth was 8% from 2004-2010, including during the GFC. The services sector has grown strongly with good communications and technology infrastructure in a small, populous and relatively well-educated country. Kagame has also done well to improve integrity and remove corruption. Paul Rusesabagina and his family have left the country for Belgium, but Hotel des Milles Collines is still open and thriving again.

Kagame can take much of the credit for his country’s stability but dangerous times lie ahead. The next presidential elections are due in 2017 and having served two terms Kagame is constitutionally barred from running again. The question will be how he deals with that and how the country moves into a post-Kagame transition. Hutu murder groups are still at large in eastern Congo and are spoiling for the opportunity to return to their homelands. The role of China in protecting its increasingly large stake in Rwanda’s economy could be crucial. Saving democracy is not a priority.

The next Turnbullence is only thirty bad Newspolls away

turnbull2It used to be that in order to you change the country, you had to change the government, but these days all you need to do is change prime minister. The incompetent, fear-mongering and doctrinaire Tony Abbott regime already seems like a bad dream the country is quickly awakening from. Just over a week into office Abbott’s replacement Malcolm Turnbull looks relaxed and assured as prime minister having ushered in his new front bench, promising a return to cabinet government with him as “first among equals”. Turnbull is a patrician and the first real born-to-rule prime minister since the previous Malcolm in the job, Fraser.

The overthrow has happened with the minimum of fuss, indeed Turnbull has set the benchmark for future plotters: “30 bad Newspolls” (poll owner Rupert Murdoch will be delighted with the implied compliment, if unhappy at the outcome). Meanwhile Turnbull has attacked the job with gusto, seamlessly riding through the choppy waters of negotiating with his enemies in parliament (mostly Liberals and Nationals) while a hapless Labor struggles to keep up with the new realities.

Bill Shorten’s minimising of difference with the ousted prime minister has now spectacularly backfired: Turnbull is so much better at not being Tony Abbott than he is. Labor’s policy vacuum has left them looking lacklustre and bereft of ideas now that a substantial leader has emerged on the other side. Unlike the Rudd-Gillard stoush which was primarily a battle of personalities, Turnbull represents clear change from the hard right-wing social conservative style beloved of Abbott and his acolytes.

Liberal backers in the media are torn between denouncing the coup and applauding the bounce in the polls. The voters are far less split. They like Malcolm Turnbull. He has made the Liberals electorally competitive again swooping on Australia’s large swinging vote. The party was always capable of getting half the vote, they did so in 2010 and would have won government were it not for Abbott’s obstinate leadership and unpopularity.

Abbott had still not cured that by 2013, so much so that a desperate Labour turned back to a poisoned Kevin Rudd thinking his relative popularity could turn around the election. Abbott annihilated Labor in 2013, though Labor thanked itself it wasn’t worse. In five years Rudd had gone from saving the world to just saving the furniture.

With Gillard gone from parliament too (what Labor could do with her as leader at the moment), the stage was free for Tony Abbott to turn opinion in his favour. He failed miserably. His high point was the immediate handling of the MH17 crash but as that developed in to a lengthy judicial case, there were few shirt-fronting opportunities. His bluster also flopped at home where the Tone needed to be more subtle. He ruled initially with the support of Clive Palmer whose senators celebrated wildly when the carbon tax was repealed. When Palmer’s group disintegrated and Abbott had to corral any six from eight, he was less successful. The end of entitlement budget was the beginning of the end of Abbott’s entitlement giving the party dismal numbers to match the leader.

Remarkably Malcolm Turnbull comes to the top job as a cleanskin, despite his long record as a minister in the Howard and Abbott governments. He managed to always keep his distance from Abbott’s pratfalls though NBN’s failures may yet burn him. His cabinet looks a lot more promising than the fossilised collection of old men that Abbott had around him. Arthur Sinodinos as cabinet secretary and Tony Nutt as “director of transition” will guide the government in a controlled yet consultative way that the obsessive PMOs of Abbott (and his Labor predecessors) could not manage.

Turnbull’s biggest attributes will be to articulately sell a positive message and work with the cross-benches, including the more middle-ground Greens under Richard Di Natale. He has paid off suspicious Nationals with the water portfolio and kept the new darling of the right (Scott Morrison) inside the tent. There will be some tricky tight-rope walking ahead, especially as he delicately disengages from some of Abbott’s more egregious policies without alienating the base. But he will have plenty of goodwill and an energised party, especially when those bad Newspolls disappear. A Liberal election win in 2016 was a prospect that seemed utterly unlikely two weeks ago. Now the Liberals will enter the next election against a muddled Labor Party with renewed vigour and optimism.

Malcolm Turnbull is Australia’s new prime minister

turnbullThe sixth Australian prime ministerial spill in five years is over, producing the third change of leadership following the coups of Julia Gillard in 2010 and Kevin Rudd in 2013. Outgoing prime minister Tony Abbott fought desperately tonight on the notion that the Liberals were different from Labor and that only the people should change the leader. He proved wrong on both counts. In the end it was 98 men and women who decided 54-44 that Malcolm Turnbull should lead the party, and therefore the country.

The vote brings full circle an even tighter ballot that brought Abbott to the leadership six years ago in 2009, when he prevailed over then leader Turnbull by one vote. But ambitious politicians play a long game and just as Rudd crucially didn’t quit politics and waited three years to gain revenge over Julia Gillard, Turnbull also cemented his position as a popular alternative in waiting, and sat tight until a combination of circumstances made Abbott’s continued rule untenable.

Turnbull put it down to 30 successive bad Newspolls, but in truth Tony Abbott was never a popular prime minister. There is unlikely to be the same public sense of grievance and denial of justice that greeted Labor’s panicky move in 2010. At that point in the electoral cycle, Labor still led. Rudd no longer had the stratospheric positive polls he had a year earlier but surely had the measure of Tony Abbott in an election that would have been called a few months later.

Instead Labor imploded and with the help of Rudd feeding the media, Julia Gillard’s government was undermined from day one. That they hung on to power for another three years was testament to her formidable powers of negotiation but also to the failures of Tony Abbott. The undermining never stopped however and although Rudd succeeded in winning back power, it proved a Pyrrhic victory and Labor was deservedly punished by the electorate in 2013 for putting itself first.

The only problem was that it brought Tony Abbott to power where all his failings were writ large. Abbott was the perennial battler who had no nuance to squeeze the most from power. Ruling as he did from the right of his party, he was out of step with the centre, despite the crude and continuous barracking of Murdoch’s News Ltd empire.

His and Joe Hockey’s first budget announced the end of the age of entitlement but its vindictive nature made it seem that only their enemies were having their incomes docked. They were not helped by fractious Senate cross-bench but their failure to sell their message of economic correction was a totally self-inflicted wound.

Liberal poll numbers never recovered as they never do, and Tony Abbott lost his leadership there and then. The last 12 months have been the prolonged agony of a slowly drowning man refusing to accept his fate and hiding behind a façade of flags and security announcements. An early positive reputation as a strong leader was replaced by a sloganeering, fear-mongering robot.

A Turnbull leadership will change all that and all the smirking tweets today from Labor MPs enjoying the discomfort of their rivals may come back to haunt them. Bill Shorten’s one appearance today was appalling and ill-timed, failing in the old adage of never interrupting your enemy while they are making errors. Shorten was a shoo-in to become next prime minister as long as Tony Abbott was the incumbent. Now Labor have to find a way of giving him substance. Turnbull has many faults, not least his towering ego and impatience, but zingers alone won’t beat him. His victory today may turn the spotlight on Labor’s own recurring leadership woes. Australia’s leadership merry-go-round goes on and on.