Sure, you’ve seen Trading Places. But do you know about the history of futures contracts, or why some things are traded on commodities markets and others aren’t? I didn’t, not really. So I spoke to Kara Newman, food writer and author of The Secret Financial Life of Food. One of the things Kara is keen to stress is that where money is involved, there’s always a temptation to cut corners, and her book is full of delicious food-based scandals. One of her favourites is The Great Salad Oil Swindle. If you’ve never heard of it, there’s an interesting reason why.
The story of The Great Salad Oil Swindle has been told in a book by Norman C. Miller, based on his Pulitzer-winning articles. Some of Miller’s original articles are online, and there’s a nice account originally published in Accountancy. Bottom line seems to be that while everyone was making money, no-one was inclined to investigate too closely. And an interesting coda to the story, from those articles. The bankruptcy of De Angelis brought American Express almost to its knees. While it’s share price was depressed, Howard Buffett bought a sizeable stake, believing the company fundamentally sound. It was a pretty shrewd investment.
- Kara Newman’s book is the Secret Life of Food: From Commodities Markets to Supermarkets. She also has a website.
- Trading Places turned 30 last year. NPR’s Planet Money did a bang up job of asking how accurate it was, with added Roman Mars.
- Photo of bacon and eggs by Phil Lees