By his fourth year at UBS, Birkenfeld knew the good times had an expiration date. Everything he was doing was perfectly legal in Switzerland. But back in America, the same activity was a federal crime. That gap was starting to weigh on him.
There is a tiny town in Oklahoma called Cushing. Fewer than 10,000 people. It has a Walmart. A few fast food places. And somehow, this place is the center of the global oil market. Chapter 32 of Torsten Dennin’s “From Tulips to Bitcoins” tells the story of what happened when oil prices collapsed and the biggest banks in the world started renting supertankers just to have somewhere to put the stuff.
There is a tiny town in Oklahoma called Cushing. Fewer than 10,000 people. It has a Walmart. A few fast food places. And somehow, this place is the center of the global oil market. Chapter 32 of Torsten Dennin’s “From Tulips to Bitcoins” tells the story of what happened when oil prices collapsed and the biggest banks in the world started renting supertankers just to have somewhere to put the stuff.
The second half of this chapter reads like a spy movie crossed with a luxury travel brochure. UBS trains its bankers to evade customs agents. Birkenfeld builds his own client pipeline. And the money just keeps rolling in.
Less than a month after Jerome Kerviel blew a $5 billion hole in Societe Generale, another rogue trader popped up on the other side of the Atlantic. This one was not at a fancy French bank in Paris. He was sitting in Memphis, Tennessee, betting on wheat. Chapter 31 of Torsten Dennin’s “From Tulips to Bitcoins” tells how one guy at MF Global secretly built a $1 billion position against wheat, got absolutely crushed, and brought his entire firm to its knees.
Less than a month after Jerome Kerviel blew a $5 billion hole in Societe Generale, another rogue trader popped up on the other side of the Atlantic. This one was not at a fancy French bank in Paris. He was sitting in Memphis, Tennessee, betting on wheat. Chapter 31 of Torsten Dennin’s “From Tulips to Bitcoins” tells how one guy at MF Global secretly built a $1 billion position against wheat, got absolutely crushed, and brought his entire firm to its knees.
Chapter 4 opens with Birkenfeld cruising Geneva in a candy-apple red Ferrari 365 GT Spyder. A $250,000 car. Not his money though. This was “OPM” – Other People’s Money. His overseas clients would tell him what car they wanted, he would buy it, slap on Finnish tax-free plates, and stash it in a luxury garage. When they visited, he handed them the keys. The rest of the time? He drove it himself. Nice perk.
In 2007, a 65-year-old Thai rice exporter stood up and told everyone that rice prices would go from $300 per ton to $1,000. People laughed at him. Not politely. They actually laughed. Chapter 30 of Torsten Dennin’s “From Tulips to Bitcoins” tells what happened next. Spoiler: nobody was laughing by spring 2008.
In 2007, a 65-year-old Thai rice exporter stood up and told everyone that rice prices would go from $300 per ton to $1,000. People laughed at him. Not politely. They actually laughed. Chapter 30 of Torsten Dennin’s “From Tulips to Bitcoins” tells what happened next. Spoiler: nobody was laughing by spring 2008.
Birkenfeld was living the dream at Barclays. First-class flights, fine dining, Russian girls entertaining clients in Geneva, cash handovers like clockwork. He was pulling in CHF 200K, running a one-man monopoly as the only Swiss private banker at Barclays doing this game.