Five years ago, I was invited to Newcastle, north of Sydney, to give a presentation on the history of coal mining in Australia to a group of fund managers. This is not my normal type of gig, but I once wrote a chapter on the topic as part of an interdisciplinary study of the coal industry in Australia. Australia’s coal industry first began in Newcastle, and it still depends on mining.
It was a brief insight into how the other half (or, more likely, the top 10 percent) live. These fund managers were mainly American, and they had just come through the global financial crisis.
These men had been badly burnt – but only metaphorically. Thumbs permanently attached to their Blackberries and groggy with jet lag, they were there to be schmoozed within an inch of their lives. Over the course of a long weekend, they moved from business breakfasts to a visit to port facilities to more presentations and a visit to a mine, interspersed with dinners at the ritziest restaurants Newcastle has to offer. It was all washed down with the best Hunter wines.
At a waterfront seafood restaurant, I ordered salt and pepper squid from the 3 entrees on our special custom menu. This dish can often taste like greasy rubber bands, but here I expected it to be absolutely delicious, and it was. This was some compensation for a boring night, since none of the men (they were virtually all men) around me felt the least need to talk to me. In their normal lives, they probably outsourced small talk to their wives anyway.
Through either luck or good management (your call will depend on your political allegiance) Australia came through the global financial crisis of 2007-9 relatively unscathed, which is why, not doubt, we cheerfully abbreviate it to the GFC. We did much better than America, so these fund managers were surprised by the strength of the Australian economy, the low unemployment, and the fact that Newcastle’s coal industry was touting for their business, promising profits well above what they could make at home. Two countries, on different phases of the investment cycle.
I flew home next day, so I don’t know what happened to these optimistic plans. Five years later, the American economy is recovering but in Australia, coal and iron ore prices are cactus. Green shoots are very thin on the ground – especially in Newcastle, where the boom turned out to have a rotten core of political corruption too, and the uncontrolled growth of coalmines has killed much of the greenery anyway.
Business cycles, by their nature, go up and down, and money managers have a poor reputation for dodgy predictions and self-serving boosterism, if not necessarily for corruption. Sitting opposite me that night in Newcastle was a fund manager from Goldman Sachs. Matt Taibi in Rolling Stone had only recently, memorably, described Goldman Sachs thus:
The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
The image of the vampire squid went viral, and I confess that it was a comfort to me to think of this as I sat there ignored, out of place surrounded by young men in suits twiddling under the table with their Blackberries.
I was ignored until my meal arrived. I had been surprised by how few people ordered the salt and pepper squid. Clearly, when they saw my dish, some of my neighbours regretted not doing so – but it was ‘Mr Goldman Sachs’ who said, with amazement: ‘But it’s calamari!’ It turns out he didn’t even know what squid was. Two nations, divided by a single language.