Financial markets have a flair for rumours
By D.Murali
What can be everywhere, at any time, at any place? Rumour, says Mark Schindler in ‘Rumors in Financial Markets’ (www.wiley.com). Rumour is something mysterious, almost magical, he explains. “A rumour frequently produces a hypnotic effect. It fascinates, overwhelms, entraps and stirs up people’s minds. Rumours are the oldest mass medium in the world and their nature is still difficult to grasp.”
In Macbeth, you hear Ross bemoaning the cruel times, “when we are traitors and do not know ourselves, when we hold rumour from what we fear, yet know not what we fear, but float upon a wild and violent sea each way and move.”
And rumours are alive and kicking. For instance, “Shares in lead and zinc miner Zinifex Ltd have surged more than 13 per cent amid rumours of an impending takeover bid from Oxiana Ltd,” as The Age, Australia reports. “Alliance & Leicester falls on credit rumour,” reads a headline in Times Online, UK. “Rumour: Xbox 360 update will include a virtual console,” says Canada.com. “Angelina Jolie denies pregnancy rumours,” says RTE.ie, Ireland. And Modern Ghana speaks of ‘a presidential hopeful’ advising media against ‘rumour peddling’.
Schindler says that financial markets have always had a flair for rumours, because on the trading floor all action is based on news; and rumours can be, and often are, substitutes for news. “In a tense, stressful working atmosphere, all traders operate with high-powered antennas,” he explains.
“The fear that other people may know something they don’t know leads to stress and anxiety. In these situations the traders need confirmation of their views and positions. Gaps in information are often filled with speculative thoughts.” Rumours thrive on vague statements that companies may issue, such as ‘we are always interested in reasonable and beneficial acquisitions’ or ‘we decline to comment on that issue’.
Drawing strands from finance, psychology and sociology for research, the author finds that the idea of ‘a hidden, strategic operating source’ survives consistently and permits the public to justify believing a ‘false’ rumour. “The source then can be blamed for everything and the responsibility for its creation can be shrugged off completely…”
A book you can reliably be rumoured to have read!
Dark side of globalisation
Hard to believe, but slavery still exists in the US, says John Bowe in ‘Nobodies’ (www.landmarkonthenet.com). “Free people benefit from slave labour. Not just big corporations, but ‘regular people’ – like you and me,” he writes. “We buy car parts made of steel fired with charcoal made by slaves in Brazil. We buy binders, cell phone chips, and leather purses manufactured by slaves in China, and shirts from Wal-Mart made by slaves in Burma.”
Man has always been wolf to man, rues Bowe. “The simple desire to get ahead in life can become a monstrous impulse… This impulse lurks in a million invisible ways in even the nicest people.” There is a dark side to globalisation, the book argues.
In Greece of Homer’s time, the ninth century BC, an average-looking slave woman was worth four oxen, the author narrates. “A highly attractive one was worth twenty. Around 200-300 AD in Roman Palestine, a healthy young farm slave was worth one healthy young cow. Across the empire, in Rome itself, a slave trained in medicine was worth fifty cows.”
If you ‘fast-forward,’ as he urges, what do you find? “A slave in Mauritania is worth about one camel. An eight-year-old camel jockey in the Middle East goes for a mere $300. In Mali, a young adult male labourer can be purchased for only $40. In Thailand, a young, HIV-free girl suitable for prostitution can be purchased for $1,000. In the American South, an illegal Mexican farm-worker can be bought for as little as $600 – more or less the cost of an old pony…”
Shocking tales.
Nuke reaction
The younger generations of Indians in the US were more proud of India and its accomplishments than their parents, writes T.P. Sreenivasan in ‘Words, Words, Words: Adventures in Diplomacy’ (www.pearsoned.co.in), reminiscing his days in the US after India tested nukes in May 1998.
“Unlike their parents, who have some grievance against India on account of their old experiences with the government or the social system, they look at India with clear eyes and appreciate the value of democracy there and are generally willing to help India overcome its present difficulties,” he reasons, in a chapter titled ‘Nuclear winter, Kargil spring’.
The younger ones of Indian origin may not speak Indian languages or understand many Indian customs, but they take pride in their Indianness, the author adds. “The nuclear tests had an electrifying effect on the young generation of Indian Americans,” even as the US President Bill Clinton was fuming in the White House. “We are going to come down on those guys like a ton of bricks,” he said at a meeting at the Oval Office, 24 hours after the news reached Washington.
Sreenivasan also writes about his experiences then at think-tank meetings and discussions. “The older people in the audience, mainly women, asked as to why a poor country like India was frittering away its resources for useless and expensive nuclear weapons… Some of them literally shed tears for the poor people of India! The most widespread concern was that India and Pakistan would blow up the world, while the US and Russia were working hard to remove such a danger.”
Of interest is this snatch, about the author’s response at a seminar on security organised by the Carnegie Foundation, when a Chinese official patronisingly remarked that India should focus on what it could do best (that is, information technology), and not waste its resources on nukes.
“I chose to hit back and said that the Chinese argument smacked of colonialism. In the old days, India’s colonial masters cut off the fingers of Indian artisans to prevent them from weaving delicate fabrics. Indians were advised at that time just to grow cotton and feed the industrial revolution in Europe.”
The Chinese take pride in their solidarity with the developing world, but when it comes to issues like non-proliferation, they are no better than the Western ideologues, laments Sreenivasan.
‘Words’ that you can make space for in your shelf.
Risk assessment
Who are the terrorists and what threat do they pose? For an answer, visit the Web site of the National Memorial Institute for the Prevention of Terrorism (MIPT), advises ‘Risk Balance & Security’ by Erin Gibbs Van Brunschot and Leslie W. Kennedy (www.sagepublications.com).
The site’s database, one learns, “contains information on more than 20,000 incidents, the groups that were involved, and trials that took place.” This ‘up-to-date public inventory’ can be sorted by characteristics such as ‘group, location in the world, type of attack, perpetrator, and victim characteristics.’
In the globalisation framework, there are substantial roadblocks to coming to terms with security threats that emerge from within borders, the authors say. The first hurdle is political – the possible loss of trust by other nations when one has to admit there are difficulties in one’s own backyard.
“Rather than losing face on the international scene, some nations are more likely to concentrate their security efforts on external terrorist threats and to join the war against terror, therefore enhancing perceptions of being team players in the struggle against terrorism. No country is willing to appear weak in the context of international relations.”
Suggested study for an effective risk assessment.
Antiterrorism training
Dealing with terrorism is problematic for multinational corporations, writes Kamal Dean Parhizgar in ‘Global Business Environments: Understanding multicultural behaviour’ (www.jaicobooks.com). “MNCs annually spend a lot of money training their expatriate employees how to behave and cope with terrorist events and acts.” He mentions, as example, the $2-million rescue mission organised in 1979 by Ross Perot, the CEO of EDS, when two of his staff were taken hostage in Iran.
Increased risk perception works to the advantage of certain businesses, though. For instance, metal detectors and electronic gates are in airports around the world, as an antidote to hijacking fears. Parhizgar says that today, there are many antiterrorism companies that serve MNCs either as consulting firms, trainers, or providing highly sophisticated computerised information systems.
For in-flight reading.
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