Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy,   ISBN:9780814410608

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Review by Terry Nichols Clark, University of Chicago

What a marvelous book! Bob Smith leads us through the creation of a new market: for sovereign debt. How do people trade the debt of emerging market countries? For El Salvador, S. Vietnam, or Iraq, especially in the middle of a war, it is hard to sell bonds, to borrow money from the rest of the world. Or Turkey or Russia or Nigeria, as they were working out of black markets and government-regulated currency exchange rates. These were huge barriers to average citizens and investors just a few decades back. People in these countries had trouble buying a refrigerator, and could negotiate with merchants and others about small-scale currency conversion and rates. How rapidly this has moved toward a global , relatively smooth "market" is brought out by Smith's remarkable account.

He tells the story splendidly. He starts in the "middle" of his career and of the emerging market, with a chapter on El Salvador, where he takes us along step by step to show how basic personal relations led him to major results. The big points are made through small specifics. He arrived at the office of a high official, but chatted with the secretary, who in conversation was able to provide a handwritten list of all the bond holders of El Salvador's debt. Bob Smith then shows how this sort of list was the Key to the Kingdom, in El Salvador and as he continued around the globe, seeking to extract or assemble such lists. He could then contact the bond holders individually and inquire about whether they wished to sell their holdings. Many did. He would then ask them to suggest a price. And in what currency? If they wanted dollars, this implied finding enough dollars in the country that could be purchased to pay for the bond. And more transactions to put the package together.

Each chapter builds in a dramatic way, so we soon become fascinated by the story, and want to learn how Smith ever learned to navigate these highly risky, often deceitful and opaque waters. He takes us along, with great humor and self-deprecation, to show what a fatalistic roll he took, year by year, sometimes way up, sometimes way down, with much of his personal fortune at stake.

He went to Vietnam in the middle of the war, not to fight, but to learn things like how people bought old tanks and shipped them out for sale as scrap metal. He learned how to navigate six exchange rates that were used for different kinds of transactions. In Nigeria, it was sovereign debt bonds that had been "dead" for years, but might come back to life.

And in just a few decades it all seemed to become part of smooth electronic global trading. It was no easy trek.

What an engaging, personable tour!

Customer Rating: 

My fiancé mentioned this book to me, and though I don't really follow finance that much, I ended up really enjoying it. It moves quickly, is well written, and actually explains the terms within - bonds, basis points, securities, emerging markets - clearly and comprehensively.

Robert P. Smith is a pretty fascinating guy; the book mentions that he was known as the "Indiana Jones" of international finance, which isn't too far off considering some of the places the book takes you to, like San Salvador, Lagos and Moscow.

All in all, a great read for the financier or the layman.

Customer Rating: 

You can make a fortune anywhere, you just need to know where to look. "Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy" is the memoir and international finance advisory guide as he goes to the darker parts of the world. An intriguing read even without the international finance lesson, Smith's story is one of a mercenary turned economist and will keep you glued to the page as you pick up useful advice. "Riches Among the Ruins" is a riveting and enthusiastically recommended read.

Customer Rating: 

Finance has never been my area of expertise, but this book triggered a new-found enthusiasm for me. When you think of bonds, you don't think "adventure;" more likely, you imagine staid and boring traders sitting at desks on Wall Street, shouting into phones, wearing pinstripe suits and expensive sunglasses.

The author of this book is about as far from that stereotype as you can imagine, although he does spend his fair share of time arguing on the phone. In his case, those, it's with characters such as Russian oligarch Vladimir Potanin, double-dealing Turkish grifters and black-market money changers in war-torn El Salvador. This is the dark, seamy, and thrilling side of international finance.

The book moves along at a fair clip and only lags in a few places. The economics are clearly and concisely explained; I wouldn't call it a manual for trading, by any means, but it's definitely a good way to get a handle on some of the confusing aspects of the global economy. Rather than learn about spreads, basis points, coupons and interest rates in a dull textbook or an MBA class, pick this book up and get your information with a nice fix of adventure.

There's more than just money here; there's also the story of a guy who seems a bit crazy, a bit genius, and completely and totally driven. Ever lost $15 million in a day? Smith has, and he made it all back with sheer nerve. The story jumps nimbly from Brookline to Istanbul to Lagos, and only towards the end does it settle down and slow a little. But that's inevitable, given the fabulous adventures in the first 100 pages. My favorite incident involves a scheme with Lloyds of London in Guatemala that required, if I may say, 'cojones latóns.'

Do yourself a favor. Pick this book up.

Customer Rating: 

'Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy'
by Robert Smith;

As a movie buff, reading the book, 'Riches Among the Ruins: Adventures in the Dark Corners of the Global Economy', invariably reminds me of vivid memories of three great movies during the eighties, 'The Year of Living Dangerously' (starring Mel Gibson), 'Under Fire' (starring Nick Nolte, Ed Harris & Gene Hackman) & 'Salvador' (directed by Oliver Stone; starring James Woods) in some ways.

For me, this book is basically "part-adventure, part-memoirs" of the enterprising author, Robert Smith, lawyer-debt-collector-turned economic mercenary & financial entrepreneur, who has been acknowledged as the 'Indiana Jones of International Finance', especially the more interesting & dangerous parts.

The book also traced his adventurous global exploits - stretching over three decades across five continents - in the risky world of trading in emerging & submerging markets' sovereign debt & evaluating creditor claims against foreign governments in the most remote, & sometimes hostile, areas of the world.

What had motivated him most was, like he said, "I'm restless & I love to travel... I crave adventure in exotic places... Living by my wits in an unpredictable environment is a thrill I seek over & over... I love the thrill of the deal, & I love making money!"

As a matter of fact, what had really stood out in this book, especially in terms of personal traits, were his astute power of observation, knack for improvisational creativity, & propensity for instinctive (intuitive) decision making.

For me, even though finance is not my cup of tea, this book has been quite an enjoyable read.

Luckily for me, it is not about lessons in global finance, although it does provide numerous snapshots of intriguing financial transactions that go on in the murky fringes of the global economy. To illustrate the magnitude of the wheeling & dealing: The author lost US$15 million on a single day in 1998 pertaining to the ruins of the Russian economy.

I am in fact rather keen to glean street-smart insights from a man on the spot, so to speak (cold calling was a staple of his business), in the remote frontiers of globalisation: El Salvador, jungles & streets of Vietnam, Turkey, Guatemala/Panama, Nigeria, Russia, & post-Saddam Iraq.

Sad for him, his trading days are now over. The globalisation of the market & the availability of information rapidly transmitted electronically has made the business much less lucrative than it used to be.

Nonetheless, I fully agree with him that there are valuable lessons to be learned from his book in terms of understanding human nature, & also about the complex new world in which we live.

The following are my personal takeaways from his book:

- "... sometimes, you have to fake it in order to make it.";

- "... learn to listen critically & discern whether people are telling the truth; learn to weigh people's motives & sometimes hidden agendas; learn how to be at ease & operate in unfamiliar territory; learn how not to behave in a foreign country, when you wanted to get things done.";

- "... find someone you trust who speaks the language & lives in the culture; also, while you handle the business, always find a local partner to handle the politics.";

- "The Vietnamese were, generally speaking, very patient people who listened carefully to everything you had to say, even if they had no intention of cooperating."; [This is an interesting observation.]

- "... to get things done, keep your own dignity & the dignity of others, intact; treat people well & they will follow you to the ends of the earth... ";

- "Psychology is all important if you want to make money speculating in currencies... We are creatures prone to excesses of both pessimism & optimism. We are emotional. And emotions, especially contagious emotions like excessive pessimism & excessive optimism move markets all the time...";

- "Don't get discouraged when things ain't working out. Why? Because circumstances are going to change. All you have to do is be open to new opportunity when it arrives.";

- "... always follow a lead, because you never ever know if there might be a pot of gold at the end.";

- "Timing can be everything in business & in life.";

- "... most positively brilliant ideas are born on hotel balconies in the middle of the night under the influence of alcohol."; [For me, the alcohol part is questionable; maybe I am not a drinker.]

- "... in finance, every financial problem has a solution - or, more likely, a thousand of them. Financial creativity, too, is an organic process, & if there is a way to make money at something, someone will inevitably find it.";

- "(in negotiation)... always let the other party go first... You should never be the first to state a price. By waiting the other guy out, you let him establish the floor. It may be higher than you expected it. If it's lower, you lose nothing... You learn a lot about their thinking that way without selling yourself short.";

- "Things change. There's always another train coming into the station."; [I recall maverick billionaire entrepreneur Richard Branson had also thought likewise.]

- appreciate "the extraordinary value of circumspection. Even today, when there is so much financial information readily available in real time on computer screens throughout the world, circumspection is essential in business...";

- "Play your cards close to your vest or you will lose your leverage. Always suggest your need is limited, not infinite...";

- "You can learn about a country from its airport when you first arrive; continuing in the cab while you pick the brains of the cab driver about local conditions, while scanning the view for more clues; next, from the viewpoint of your hotel window, which gives more clues about the state of the economy.";

- "Countries don't have permanent alliances, only permanent interests (attributed to George Washington). So it is in business, one doesn't necessarily have permanent enemies, either. When mutual self-interest is involved, even former enemies will bury the past to make millions of dollars in the future.";

- "... make investment decisions based on the reading of politics, not economics.";

- Pottery Barn rule: if you break it, you own it;

- "... find the right lawyer for the right job.";

- "... learn that trust should not be dispensed too easily, that you can travel a long way on a good bluff, & that business is largely about shaping perception.";

- "... people's imagination will let them believe what they want to believe.";

- "Things don't always break your way, & to thrive you have to be a survivor. You have to take your knocks & get up to fight again another day.";

- "... to be successful in the global economy you need, first & foremost, to understand people.";

- "... at the end of the day, it's about doing well & doing good, & in my view everyone who has done well has an obligation to do good." [referring to his charitable work in recent years];

In the end analysis, all I can say is that this book has been a rare treat, at least from my personal perspective: an entertaining broad-brush view of the dark corners of the global economy, & a penetrating observation of human nature under dicey circumstances.

[Disclosure: Book came from the author's publicist. Payment: FREE]

[Reviewed by Lee Say Keng, Knowledge Adventurer & Technology Exporer, Optimum Performance Technologies, Ocotber 2009]