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the crash interview: rob johnson
rob johnson
He was a top portfolio manager for George Soros's Quantum Fund, a private investment fund, from 1992 to 1995. He left the money management business in 1996. (Interview conducted in the spring of 1999.)
Can you explain the importance of exchange rates? ...

Sure. The exchange rate is essentially the price at which you exchange goods between one society and another ... The way in which it tends to affect you ... [is] your life as an employee. People all around the world are producing. They receive a wage rate in their domestic currency. How that competes with your wage in your own domestic currency, say, Indonesian rupiah vs. U.S. dollars, depends on the exchange rate. The exchange rate's, say at 2,000, which it was before the crisis, then you have a relative sense of wages and wages adjusted for differences in productivity in the labor force.

It's almost as if the market is a religious icon. I see that mirrored in the very, very high valuation of the U.S. stock market and the tremendous conviction that citizens have that the United States is good, is right. The free market is great, and the stock market is where you put your money. When the exchange rate goes to 16,000, the relative cost of labor of any given quality type in the two societies changes. That sets in motion pressures to relocate employment to where things are cheap and to divest or lay off or cut wages in places where things are now relatively expensive. So at the first level, the competition for employment around the world, the terms in some sense, are set by the combination of the domestic labor costs in each place as translated to put on a comparable footing by the exchange rate.

If the rupiah was at 2,000 to a dollar, what does the investor want vis-à-vis the exchange rate, and what happens when the rupiah begins to lose value?

Well, the exchange rate to the investor is integral to how you value his investments. So it's nice to buy a foreign asset when you think the exchange rate is going to strengthen. For instance, a number of years ago, a guy I know bought a timber farm in New Zealand only because he thought the currency relative to the dollar was going to strengthen by 20% and that the timber farm wouldn't lose money ... A strengthening currency implies that the plant that you bought will be revalued higher in successive periods ...

So if you bought into a country ... and suddenly there are rumors that the currency is going to devalue, what happens?

Well, in the first instance, many of these developing countries institute exchange rate regimes like the peg to the dollar, a peg to a basket of currencies, to inspire confidence that that won't happen; meaning a devaluation will not happen, and therefore, inspire capital to flow in.

So you start the rumors of devaluation after a long period of stability when a lot of people have been inspired to go in. If there's nothing that's gone in, nothing has to come out. But generally when your question starts, a lot has already gone into the markets, so there can be a stampede. The things you think about at a time like that are, number one, other guys will be afraid, too, so even if [you] don't think they need to devalue, if lots of people run on the currency, it may be a self-fulfilling prophesy.

The second dimension is generally domestic interest rates in the economy skyrocket, because there's been a lot of foreign short-term capital that's gone into the country, like a Thailand or a Korea, that when it gets scared it runs. In essence, what you're doing is borrowing in that currency, transferring through the foreign exchange market and landing somewhere else to cover your exposure. Unfortunately, when those interest rates skyrocket, they often weaken the fabric within the economy.

Because?

Construction gets depressed, high interest rates make working capital expensive for businesses, and many, many companies come under stress, consumer durable purchases slow down ... Many times, when the economy starts to stagnate investors and speculators say, "Well, now the economy is weakening. They're going to need a weaker exchange rate to stimulate exports and come out of their slump." But if that belief is reinforced, then the currency gets weaker still, which means interest rates go higher still, and the devaluation almost becomes self-fulfilling.

And the smart traders have figured that out ahead of everybody else?

The smart traders and investors will have studied what you might call the vulnerability of the economy, and they will say, "Is this economy in the jaws of the lion?" where the lion is this process we've just discussed. If they feel it is a candidate for that, they may withdraw their investments, so-called removing long positions.

Alternatively, they may take a short position. Now, it's not costless to take a short position because, for instance, in Thailand when people got scared, interest rates might be 40% or 50%. So if you're borrowing at 50%, hypothetically, and lending in the United States at 5% and you wait a year and you don't have a devaluation, you lost 45% of your money, just the difference between the two interest rates.

Who would be borrowing at 40% and investing at 5%?

Anybody that's taking a short position in the currency ...

What are you betting on? ...

I'm betting the Thai baht will devalue against the dollar to which it's pegged, and when I make that bet, I need to essentially borrow Thai baht, go to the foreign exchange market, sell my Thai baht and buy U.S. dollars, and then I deposit the U.S. dollars in the bank. The borrowing of the Thai baht that precedes the foreign exchange transaction, comes at an interest rate and the deposit in the U.S. bank receives an interest rate. If you sit there for a year after putting that transaction on, and you paid 50% to borrow, and you've earned 5% in the U.S. bank, you've lost 45% of your money. If there is no exchange rate devaluation.

But if there is?

... let's say you held it for a year, you would net out 45% and then whatever you gained on the other side. But the art of being a good speculator is not to pay 45% for a whole year, it is to pay it for about 72 hours, so that you're just on the train before things go and then you cover the position subsequently, meaning you then take the money out of the U.S. bank, go back through the foreign exchange market, and then buy back the Thai baht and retire the debt that you took out.

So you retire the debt and because the currency has devalued, you've made ...

Yes. If the Thai baht is at 24 when I sell it and it's 40 when I buy it back, I've made 16 baht in the round trip. Then that offsets ... that interest rate.

So that's what's called ... shorting the currency.

Shorting the currency and then covering the short is the retirement of that position ... The dynamic is when people sense that an exchange rate is vulnerable. The people who are so-called long in the Thai baht, or have investments that have currency exposure to the Thai baht, are alerted to the potential to lose money, and they do what's sometimes called hedging the currency exposure. It's identical in transaction to shorting by a speculator, but it's shorting against something that's already long. Or the equivalent would be liquidating the position. If you own a plant that produces shoes in Thailand, you could sell the plant, but the other thing you could do is short the currency to insulate yourself from the currency risk while continuing to own the operating business.

So you have a plant.

I take $100. I go in and I buy $100 plant in Thailand. But I had to go through the foreign exchange market, convert it at 24 to 1 into 2,400 baht. I buy a plant. For five or six years I produce tennis shoes. All of a sudden, I catch wind that there might be a currency crisis. I'm an American-based company, and I have a valuation on the book for my plant. I go into the foreign exchange market. I borrow baht, sell and deposit in dollars so that when I look at my balance sheet as a company, my foreign plant in Thailand has no currency risk associated with it, because I have hedged my currency exposure to Thailand in anticipation of the devaluation.

So when you show your balance sheet to your stockholders, it doesn't look like you're in trouble. ...

In fact, you're not. You insulate yourself from the currency risk. But the point is when you smell risk in those markets, speculators are shorting. Investors who are long may be selling what they have. People who owned businesses through direct investment may be hedging their currency exposure. But each and every one of those transactions is pulling money out of Thailand and bringing it back to the United States, putting downward pressure on the Thai baht.

A speculator, in addition to thinking about the transaction and the pressure and whether the spike in interest rates will be self-fulfilling is also looking at things like: Did a lot of Thai banks borrow dollars, because dollars had a 5% interest rate, and in tranquil times Thailand had a 12% interest? So the banks were all funding themselves off shore. Well, you know once they get scared, they've got to cover their positions, too. So, many times what you'll look at as a speculator is, number one, what is the structure of financing in the country? Do corporations and financial institutions have a lot of off-shore borrowing? ... If you know a lot of domestic institutions have been borrowing abroad to finance domestic business, they're going to get scared and they're going to have to short the baht to cover their exposures, retire their foreign debt, and so forth.

You watch for those kinds of structural situations. You then look at the macro-economic fundamentals: Is this an economy which will come into ... a realm where it has a policy dilemma, where in order to defend the currency they have to let interest rates go up? If interest rates go up and it weakens the fabric of the economy, which makes it more likely that they will relinquish defense of the currency regime. It makes it more likely that they'll let interest rates and let the currency weaken ...

A speculator will look for that kind of phenomena. It doesn't mean he created it, but it does mean it's not synthetic. It's a real situation that's going to happen. My own feeling is that most speculative crises are accelerated in time by speculators. Because they see it, they anticipate, and they start to act early, which intensifies the interest rate pressure and causes the thing to play out and rupture. But they don't cause it. It would just take place several months later.

But they do, arguably, make [moves] that can turn it into a stampede ... there's not time for a government to take moderate steps or figure out what to do.

I think that there is some truth in that. The officials in most countries do what's called intervening in the foreign exchange market. They have foreign exchange reserves at the central bank ... sometimes they resist the level of the exchange rate or they try to keep it at a certain level. But many in floating rate countries, like the United States and Japan, are not as concerned about the level as they are about the violence of the rate of change. So they will intervene to slow down or give pause or make more orderly the transitions ... In essence, the capital market has gotten so large and so forceful that the scale of the capital market relative to the scale of the central bank's tools and reserves has gotten enormous. The markets can gobble up the attempt of the authorities to smooth the transitions, to slow down that velocity of change almost instantly ...

What was your life like when you were making these trades--hour by hour, minute by minute. Is it possible to explain it?

A little bit. By the time you're active as a portfolio manager in that world, you have read about the data, what election schedules there are, who's strong and who's weak in politics, what potential there is for policy change, government minister speeches, and all the context. It's like an information overload from all around the world.

It's continuously coming at you, but you learn to assess probabilities, probabilities of change, detecting changes in tax policy, interest rate policy, and so forth, and so you get to the point where each day you're watching prices. Prices are either contradicting or they're confirming hypothesis you have about what's happening in the world. Many times, rather than reading something in the newspaper or figuring something out because I've talked to a government minister or what have you, I'll see a price movement. And I know that I don't know that much.

Your entire life is unclear when you're a trader because you're watching, and prices sometimes tell you somebody knows something you don't, you'd better jump on the telephone, talk to people through telecommunications, e-mail, what have you, get over there and find out what's going on that's making those prices change.

Another thing you become very conscious of, this underlying sense of politics is the grid, but a sense of where everybody's positions are. Have people been long and enthusiastic about Internet stocks recently? Well, you know they have. You know there are a lot of people who've bought a lot of it. If you believe there's no more good news, you know that positions are, how we say, vastly accumulated in those Internet stocks. Bad news may cause them to fall very abruptly.

So you're trying to sense, in some sense, the psychology of what people will react to, what positions they have, so the capacity for asset prices to change through volume of changing portfolios, and you're trying to discern what truth is underneath about the world around you. It's not just a question of discerning what's going on, on the political grid or the economic business cycles. It's also understanding how that will inspire action by other people.

John Maynard Keynes once had an analogy that he talked about, and he said, "It's like a beauty contest where you're not judging the pictures of the 10 most beautiful girls; you're judging from the 10 beautiful girls what the other people will think is most beautiful in trying to predict who will win the beauty contest ..." Some of what you do during the day, then, is talk to other investors and see what they're reacting to in the newspaper, what makes them afraid, what they seem inspired by, what hypotheses they have.

The other thing that's kind of tortuous is when you have a portfolio like this that you're responsible for, you spend almost all your time, even some of your dreaming time, thinking of things that could help you and how you would react. Contingencies--this is called risk management. How am I going to react if this happens or, alternatively, what can I imagine that could happen that could hurt me that I haven't thought of yet? When I sit at the pool on Saturdays with my kids, sometimes they think I'm not there, because in my mind I'm off playing these scenarios through, in my mind. It's very abstract thinking, but it's all about trying to stay a couple of steps and anticipate and understand what's coming up.

So the best traders figure out ... that something is going to change sooner than everybody else does.

Well, they think about what could change. They detect things that are changing sooner. They have imagined both about what changes and what you do with your portfolio. So they're able to predict artfully what will happen to asset prices contingent on something happening. Some guys may be great at predicting what'll happen, but they don't know how that translates into asset valuation. It's the latter dimension that really requires an artfulness and experience and talent ...

You told me that George Soros has a sense or a nose for political instability in the future ...

Well, in my view, the value of an asset is intermingled with politics. The whole, what I might say, legal regime and sense of trust and how the government sets the rules affects the value of currencies, bonds and equity markets, and if you think if there's going to be a big change in corporate taxes, it's going to affect the stock market. So the government plays a big role in setting expectations of what value will be ... A man like Soros, who in his own writing has talked about fleeing Nazi persecution in Hungary and in the very formative part of his life, understanding political instability, seems to sense when political regimes are gathering strength, under stress, coming unstuck, and that gives him almost like a divining rod to discern when big changes in asset prices are in the offing. I don't think everybody is endowed with that level of sensitivity.

But when somebody like George Soros begins to make a move on a currency, that's not a secret anymore, is it?

Well, there is a very rational process going on in the financial markets. It goes kind of like this, "I know I'm not that smart. But I know Soros is. So I'll watch what he's doing, and I'll go along for the ride." They're drawing inference from his actions that he knows something. Just as I spoke earlier about detecting from prices that something must be going on, people know that Soros's organization has an extremely sophisticated information-gathering and interpretative capability, and so they draw inference about what's about to change in the world based on the fact that he's got a reputation for early action. Now, in that case, you can go along with the Soros organization or any other fund and be on board for their mistakes, as well as their successes. No one has a perfect batting average.

And I don't think it's just about the scale of money. George Soros has ... more than $15 to $20 billion under management and that's very large at this day. But it's more important to be smart than to be large. In other words, if I'm choosing who to imitate, I'll imitate a smart guy before I'll imitate a large guy just because, how would I say, you're trying to draw inference about what's happening that you don't know about ...

If Soros or one of his funds decides to either buy a currency or dump a currency, physically how does that happen ....

Let's say the Soros organization, or someone of similar reputation, the Tiger Fund or Moore Capital Management ... If they start to transact, what you'll see on the screen is just evidence of change in prices. But it will not be identified with the person who was selling; it will just be a price change. But they're buying and selling vis-à-vis some dealer or broker and that dealer or broker will know. That dealer or broker may also have his own proprietary trading arm and may choose to buy or sell along with the Soros or Tiger, and they may also have other customers, some of whom have been attracted to dealing with them because they know those guys know about Soros.

So it's a bit ... like your ear to the ground kind of thing. People who are trying to figure out what Soros is doing, try to figure out who he's dealing with ... Then you go to those dealers and you promise them your order flow if they'll let you peak under the tent and get a sense--not moment by moment--but just a sense of the transaction ...

But the Soros organization and the other high reputation funds also think about the strategies of how do you deal with that. In other words, if you know somebody's a real loud mouth and you want to go long $10 million, what you do is you go to the loud mouth and you sell $500 million, let them tell everybody that you're going short, then you step in with a quieter buy, and everybody's selling to you, thinking that you're selling, while you're buying.

... But by and large when a large entity that's made excellent returns ... Warren Buffet is another good example. There are people who sell newsletters about who flies in and out of the Omaha airport. There are people who try to map what Fidelity Magellan Fund is doing and sell it as a consultative service. There are people who watch Buffet's portfolio, always go to his annual meetings. There's a continuous effort to draw inference from smart people about what they're doing in the markets.

So tell me the kind of things that you look at on these [computer] screens.

When you're watching a combination of news, prices and volume, you're looking at where the current prices are, because those indicate where you could approximately transact if you call a dealer. You look at news to understand what is stimulating other people and try to infer what you think is interesting yourself. You also look at charts, which are a combination of price, high and low, and close from previous periods as well as the current price and the high and low on a given day. I tend to work better as a graphics interpreter than I do analytically or with numbers. So I can look at a picture. A picture's worth a thousand words to me ...

How do you figure out how to make a play?

Well, you have to be very simple. You have to say, "What makes money or loses money as movement in prices?" So you have to start with a very simple premise. What's going to make prices move? What makes prices move is actions by other people in the market. What causes or inspires those actions is usually a change in perception.

So we tend to watch very closely what's happening in news and evolution. One comes to the trading day with a perspective on what's happening. Then you look for things that either contradict or affirm that perspective. You also come to the trading day having had many conversations with other traders. So you understand what they already perceive. Because the only way prices move--it's not if your perspective is correct, but if there is a change in the perspective on the part of other people.

So you're always trying to arbitrage. You're trying to look for, what do other people feel? What do you feel? If there is a difference, how they will change their mind? What will be the catalyst that makes them change their mind? When you put on a play is when you feel like you know something that the world doesn't and they will come around to your point of view. The danger, of course, is that you may come around to their point of view and lose money

But if you make a play before the world knows what's going on, and you're right, then you make a lot of money. That's the theory.

Yes, but it's interesting. It isn't about truth, because you can be wrong. As long as the world changes their opinion to feel that what you perceive is true, even if you're all wrong, you still make money. So it's about the migration of their perceptions, more than it is about the underlying truth. One hopes that there is a correspondence between underlying truth and perceptions ... In most cases, there is. So that if you can discover what's happening in the economy or infer from the comments of leading officials what changes in policy will take place or by diagnosing the earning statements of many companies, what's happening in the business cycle will effect bond prices and equity prices. A lot of it's about doing homework before you get to the trading day ...

Let's talk about the phase you used that this stuff can be like a "video game" ...

Well, I think the analog to a video game is that you're looking at electronic screens. When I watch my children playing Nintendo or Sega or Pokeymon or whatever the current game is, it's analogous. There's an electronic screen. At some level, the video game is like a virtual reality. You're playing with this game with your imagination.In essence, you're not out in the field experiencing the changes in employment and agricultural harvests and things like that. You're looking at a distillation of all the indicators about that process over an electronic screen. You're removed from the actual economy, all trying to interpret the economy through electronic means. It can take on that video game-like tone because you're sitting in an air conditioned room.

I said that somewhat facetiously because a video game that my son plays, he just plays in the living room and then goes to bed. A video game that international speculators play has a very profound effect of the well being of people through the effect on interest rates, exchange rates, asset prices, commodities prices.

... at the time I said that I was hoping to inspire people to be a little bit angry, because at one level, if you view it in that lobotomized fashion, that insensitive way, you say with all of these countries and all of this information and all of these things that you can do, it's a tremendous mental exercise, and it is a tremendous game.

But, at another level, it is not a game, because the consequences of what's happening in the world, and prices and the interaction between investors and the livelihood and well being of people, is much more serious and much more important than just a game. When my son and I played the table 64, it doesn't have any adverse side effects for society. When you're involved in large-scale speculation, there are very real consequences.

How many people in the business ... can think about the consequences and still do what they do?

The most successful ones can. There's a very interesting tradeoff. The more sensitive you are, the more you can take on board in terms of awareness, the capacity to anticipate change and therefore make money. On the other hand, the more sensitive you are to the pain and suffering and other dilemmas of how the world operates, the more it fatigues you, or wears you down.

You know, people often talk about, "Do people feel guilty?" There's a difference between feeling guilty ... and feeling a sense of empathy, tragedy, and shame when people in Indonesia are suffering like they're suffering right now. People who can stay within the video game might be quite resilient and not care and not understand what's happening in the world. Those people lack a certain sensitivity, awareness that may cause them to miss a lot of opportunity. A man like Soros is fabulously sensitive to the consequences of his actions and the market's actions and the impact on humanity, and that's both his ability and his burden, in my opinion.

But at a moment when some trader sees prices changing and an opportunity to make a good bet, you're not thinking, "If I do this it's going to help start a stampede and the Indonesian people are going to suffer ..."

You might think about that. The question of whether that awareness of the consequence for the Indonesian people that you described, causes you to refrain from action, is a different thing. Many times, if you will, the rules of the system exist, and if you don't play or if George Soros doesn't play, it doesn't mean the game won't take place. It just means you won't make the money, because somebody else will ... You understood it earlier and you could have had the opportunity, but you withdraw from that opportunity; therefore, other people go forward and make the money, and the same suffering takes place ...

... Sometimes people feel both like a citizen and like an actor in a game, and they're almost compelled to continue to play in the game role, even when it hurts their soul, because they can see the consequences of what this systemic action is producing ...

What effect has the explosion in the computers and the information age have on this world?

It's enlarged the scope of what you can cover, monitor, and so forth. If I'm looking for 10 opportunities in asset markets, which is talking about the price, I can set alarms now on my computer so that when the price touches that point, it alerts me that it's time for action. I can put together files on a Reuters system, where if I'm following 28 companies, every item of news about that company that comes through Reuters worldwide system can be brought up onto my screen. So I don't have to go hunt for it; it comes to me. The sorting, the filtering, the distillation of information has become much less costly ...

So the capacity to make good judgments is enhanced by that technology. On the other hand, it's the old saying about computers: Garbage in/garbage out. People who don't know how to sort facts into meaningful constructs, they don't have interpretive skills, are just overwhelmed ... just like a wave washes over them of all this information. But it's really about making actions that are correlated with successful investments and whether all that information helps or doesn't help. There's a thing they call analysis paralysis, when you're scared to do anything, you just study. But you miss all kinds of opportunities in the market.

What about speed ... you can act instantaneously?

You've always been able to pick up the telephone and ask a dealer for a price. It's not that much different now. The access to the market--I see it as changing quite a lot in individual stocks. These companies like E-trade and, I believe Fidelity and others, have now electronic mechanic mechanisms where you can sit at home and trade stocks directly rather than having to call the broker, get a price, and so forth. That's probably making it less expensive for the end user, the end investor, to make these transactions and make these changes.

So the speed ... has not noticeably changed?

... I don't think that's changed a lot. You know, Alexander Graham Bell helped. They talk about the old days when J. P. Morgan used to stand with binoculars on the top of his building and look at what boats were coming in to the harbor, and then he would go down and speculate in commodities, based on what he knew was going to be unloaded from the boat. I think we've progressed since then. The carrier pigeons in Europe. They used to discuss what had happened in Napoleon's battle, so the Rothschilds could then invest in it. It's always being about faster to learn what's the truth. Not just what's the truth, but what others will come to perceive shortly, and that time frame has narrowed considerably since the Rothschilds's heyday.

But you also said that your business wasn't about truth, it was about perception.

That's correct ... it's the same idea as the beauty contest. If I know something is true in Thailand, but it doesn't inspire other investors to act, it's an irrelevant truth in terms of the money-making business. If it's a truth that either learn about or don't care about it, they don't see any structural significance, or it's a truth--they never learn about. Other things will inspire their investment activity. So you're trying to guess what things--some of which are true, some of which are not--will inspire other investors to take action. It's more about how will their perceptions change, and whether those perceptions will converge with the truth.

It's like we're talking about some chess game in the sky. Most of us don't even have any idea ... that this game is going on.

Yes, I think that's partially true. The nature of the abstract thinking that's going on in the investment community is sometimes discernible through comments you see in the financial pages. But the way in which all of these prices that affect employment and how goods are bought and sold and what countries experience boom and which countries are in stagnation, I don't think that that connection between how the investor-trader world is setting prices and then the real consequences is well established.

Or well known to ordinary folks.

That's right. Right now when we began to talk was about the very violent consequences going on around the world. We're seeing Russia, much of Latin America, most of Asia, go through episodes in their economies, in their economic life, that are as deep and damaging and painful and profound as the Great Depression was in the United States.

At the same time, the United States is an economy which is characterized by its proportionately smaller exposure to international trade and international influences, and our stock market's at an all-time high. We're at a time when people are almost religious in their worship of markets. The market is now our master. If you espouse a social goal in America today, someone will say to you, "No, the market won't support that."

The market is a tool. We should have a political and social consensus on what our objectives are as a society and use markets to facilitate that. But now the servant's the master. It's almost as if the market is a religious icon. I see that mirrored in the very, very high valuation of the United States stock market and the tremendous conviction that citizens have throughout the country that the United States is good, is right. The free market is great, and the stock market is where you put your money.People used to put their bank balances into gold or bank accounts or CDs, so-called safe things. The stock market was considered risky. Now the stock market is where everybody puts their money 'cause that's considered safe and lucrative. That's a bothersome notion to me. As I mentioned earlier, making money is about changes in perception. Our society has such conviction now that the stock market is a good place. That perception is reflected in prices. The change in perception that's going to make stocks go up further is becoming even more optimistic.

... The ability for perception to change and change valuation in the stock market seems to me approaching the time when the only news that will be meaningful is bad news. That will change your perception. That will make my dentist stop lecturing me about how I have to be in the stock market with all of my wealth because, four out of five years, it's better than bonds. We're at a dangerous point with regard to equities in the United States, and I mentioned it's a little bit like fiddling while Rome burns 'cause the world is struggling all around us right now. And if the United States runs into a downward spiral, declining stock prices ...

Soros has said if things don't change, there is the real danger and possibility that we are headed for a worldwide recession, if not depression.

Yes.

Do you share that fear?

I think that George is accurate. There's an old saying by a now deceased journalist, American, named Christopher Lash, and he said, "Meritocracies are only stable if a large number of people are winners. Otherwise they change the rules."

In the economic outcome, if the United States is successful and the rest of the world goes through the kind of transitions and violence that they have in recent years, and that persists, and for instance if the U.S. slows down, we've talked about it, and it amplifies the pain in other areas, they will not view themselves as bad performers in this system. They will try to change the system.

The nature of the trading system in the world and commerce is at risk in the current time, because large number of people are suffering; large numbers of people have had their lives disrupted and had their expectations about the continuity for growth and progress and employment and wealth accumulation shaken to its foundation. And that sows the seeds of political dissent and the impetus to a change in the way the world is organized.


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