Feldman's Faves: February 13, 2023

GOOD MORNING EVERYONE

The SUPER BOWL was lit. I think it is fair to say that Pat Mahomes will be in the GOAT argument if he continues to do what he is doing.

Just a reminder that we are having our first section lunch on Wednesday. Please make every effort to be there – Alex has gone to town for us. That too, will be lit….

Finally, I want to wish our quiet, low key and world traveling friend Heather, a very happy birthday.

No theme this week – just interesting stuff.

Dead in the Water By: Matthew Campbell and Kit Chellel – I want to thank my good friend David Conklin for giving me this great book as a gift (and I encourage others to give me gifts as well…). I had never heard of this story but it is truly fascinating. Dead in the Water tells the story of the 2011 destruction of a massive oil tanker called the Brillante Virtuoso off the coast of Yemen. But it does way more than that. In this real life murder mystery, we learn about life in Yemen, the crazy ownership structure of these massive ships, the history of piracy (mainly in Somalia) and the “bizarro world” of shipping insurance out of Lloyd’s of London. We also meet some very interesting characters (e.g., British Private Investigators, Greek shipping tycoons and crew members from the Philippines) and about the death of a British man who lived in Yemen investigating the destroyed ship. I won’t spoil the ending but it is a real page turner and an education about a world I knew absolutely nothing about. As one reviewer notes, “At any given time, thousands of ships ply the world’s seas, crammed with the soon-to-be detritus of our lives (and oceans): pot scrubbers, yoga mats, cars, oil. It’s no exaggeration to say that the development of the supertanker and adoption of modular shipping containers, in the 1950s and 60s, respectively, enabled the globalized modern economy. Today, 80 per cent of the worldwide trade in physical goods is done by sea.But because the world’s traditional port cities can’t accommodate them, mega ships have been forced to lesser-known quays, where they’ve stayed out of sight, out of mind. Until, that is, the pandemic came along. Like that moment when, as a child, you first connected your Sunday roast to the cow it once was, suddenly we all understood how the image of armadas of container ships unable to unload their goods related to our inability to buy a Playstation 5 or a bicycle.In Dead in the Water, Bloomberg journalists Matthew Campbell and Kit Chellel expose the shipping industry’s seething, lawless underbelly – or hull – in strange and spectacular fashion through the tale of a single vessel, the oil tanker Brillante Virtuoso, which, in 2011, was attacked by Somali pirates then set on fire in the Gulf of Aden while carrying 100,000 tons of oil. Masked intruders had spirited away the ship’s captain and engineer, leaving the remainder of its mostly Filipino crew to send a distress signal before abandoning the flame- and smoke-engulfed vessel.It’s a jaw-dropping story that weaves its way, drone-like, through a dizzying variety of locales, from the deck of Brillante itself to the interior of a rusted Yemeni salvage tug to Lloyd’s of London’s 14-storey glass and mahogany atrium to the backstreets of Piraeus, Greece’s shipping capital, and points in between. When an author (or in this case, authors) can keep you eagerly turning the pages in an underwriters’ room, you know you’re in good hands. Initially, the Brillante seemed a straightforward case, insurance-wise. But something didn’t sit right with David Mockett, the British marine surveyor tasked with inspecting it, post-attack. Why leave a tanker full of precious oil adrift instead of holding it for ransom, like normal pirates? And where was the damage from the rocket-propelled grenade that supposedly hit the ship? During their interrogation, crew members all parroted identical, scripted-sounding lines. A week later, after passing along his suspicions to his superiors back in England, Mockett was killed by a car bomb.Enter Richard Veale, an East London private investigator with expertise in maritime financial fraud. The Brillante’s insurer wanted him to look at some of the anomalies Mockett had flagged before they paid out. Veale’s first order of business was to determine who owned the Brillante, no easy task given that the entire system of ship ownership is designed around obfuscation in order to facilitate tax avoidance and profit protection. In this, the Brillante proved typical. Its “owner,” a corporate entity in the Marshall Islands, was in turn owned by Greek millionaire Mario Iliopoulos. It sailed under the Liberian flag-of-convenience, whose registry was run by Israeli-American entrepreneurs in Virginia. The oil it was carrying belonged to a Swiss trading firm.Dead in the Water would be riveting enough were it just about the gumshoe work Veale and his partner Michael Conner did to unravel what would have been the biggest fraud in maritime history. But equally fascinating is the book’s portrait of an insurance industry that often turned a blind eye to such duplicity. Like many ships, the Brillante was insured by Lloyd’s of London, which built its 200-year reputation by taking risks others wouldn’t. (Lloyd’s insured the Titanic and David Beckham’s legs; it also insured slave ships back in the day). Lloyd’s’ clubby, bespoke-suited culture had always revolved around discretion and trust. Accusing clients of scuttling ships for profit, even as the latter proliferated in the 2010s, was deemed bad business practice. It was also hard to prove in court. Paying thus remained the default, and could always be offset later through higher premiums. It took the murder of one of its own for Lloyd’s to finally draw the line and take Mario Iliopoulos to court.Starting with the classic setup, where the just-retired detective gets lured back in for “one last case,” Dead in the Water has all the ingredients of the movie it needs to be: backdrops rarefied and low, murder, gangsters, private SWAT teams summoned from afar to protect terrified whistleblowers, backpacks full of cash and a devastated-but-determined widow. Not to mention the class element: street-hardened detectives butting heads with out-of-touch private-school-educated lawyers, and a trial scene where an imperious judge squares off against a decorum-breaking, tracksuit-wearing shipping tycoon who openly makes threats in court. And yet beneath the titillating thrills is a sobering account of ugly capitalism. How, at one extreme, insurance companies readily dole out millions so as not to upset clients they know are swindling them, while at the other, ship-owners pay crews from developing countries a barely living wage – all to keep the rest of us lousy in shake weights and polarized sunglasses. “As consumers, we’ve never before had access to such a bounty of goods,” write Campbell and Chellel, “but we’ve never had to think so little about how they come into our possession.”

We all live very much in blissful ignorance as to how international trade actually happens. Campbell and Chellel do a great job in explaining how the shipping industry, the KEY driver of our global economy, operates in granular and alarming detail. Here’s a good review from the NYT - https://www.nytimes.com/2022/04/30/books/review/dead-in-the-water-matthew-campbell-kit-chellel.html

No Stupid Questions - What’s So Great About Retirement? This is the eternal question. Saving for retirement is one thing. Planning how to live in retirement is something else. While most of us aren’t thinking about it now, it is good to think about it in terms of how you might want it to be one day. Develop some hobbies, keep a diverse set of interests and friend groups and take the approach to be a life-long learner. This PODCAST seems to suggest that if you do these things you have a much better shot at enjoying this chapter of your life (whenever it is that you get there). Here’s an excerpt from the PODCAST itself, “How do you know when it’s the right time to retire? What does a “good” retirement look like? And will Stephen and Angela ever really hang up their hats?”:https://podcasts.apple.com/ca/podcast/no-stupid-questions/id1510056899?i=1000591812024

Thank you for your ongoing engagement and participation.

And remember to stay safe, stay healthy and to docket daily.

Jon