For the six-part VPRO series PlanetFinance filmmaker Marije Meerman delves into the world of cat bonds, short sellers, oil futures and currency gurus. That world affects almost everyone – stocks and pensions depend on it – but is understood by almost no one. How did Meerman, former editor-in-chief of Backlightwho want to make accessible?
‘First I went looking for a black swan,’ she says by telephone. ‘That is an unexpected and impactful event.’ In the episode about the futures market, that is the moment that buyers of oil futures contracts receive money (!!) when the world comes to a standstill due to corona.
The futures market is in PlanetFinance explained on the basis of a beautiful cow animation. ‘That market originated with farmers,’ says Meerman. ‘In a contract they agreed on a price, place of delivery and date in the future for, for example, their grain, so that they were assured of income and could already buy new seed.’ Futures can only be concluded for bulk commodities: eggs, grain, gas, and therefore also oil.
Meerman: ‘Traders could not imagine that the price of a barrel of oil (currently around USD 75, ed.) would ever become negative.’ That had never happened in history. Until April 20, 2020, when corona lockdowns paralyzed oil sales. ‘There was a huge shortage of storage capacity,’ says Meerman. ‘You can’t just turn off the tap of an oil well.’
To make an abstract world concrete, Meerman opted for an anthropological approach. She did not speak to economists or investigative journalists, but to people involved in the market.
Two years of research yielded her colorful sources that paint a curious picture of Planet Finance and its inhabitants. Take Dan Dicker, a former oil futures trader, who bursts into laughter at the story of the man who ascended the World Trade Center in 1977, after which traders frantically bet with each other. From which floor will the climber fall to his death? Or the tattooed, Ford Mustang-driving oil trader Bob Iaccino, who reluctantly tells that the collapse of those same towers on September 11, 2001 heralded his most lucrative period.
Both Dicker and Iaccino mark the day when the price of oil turns negative. But central to that story is the Canadian Syed Shah. When his uncle in Pakistan points out that the price of oil is collapsing, he decides to enter the oil futures market at a price of 1 cent. Expecting to be able to resell them later at a nice profit, he purchases 212 thousand barrels. But the price continues to fall and at the end of the ride the counter stands at 7 million US dollars in loss.
“At first I thought it was a joke,” his father says to Meerman in the series. “But when I realized it was true, I was shocked.” Due to a defect in the investment app – which could not show negative prices – Shah is compensated for $ 6.9 million, but the consequences remain major: he visits the doctor due to high blood pressure and the financial blow means that he lives with his father again. He is now 32.
At that age, Shah is no exception to investment apps. ‘Many young people see a hit on the stock market as the only way to get a house,’ says Meerman. ‘It is often no longer possible with just a salary.’
PlanetFinance (VPRO) can be seen every Monday at 10.15 pm on NPO 2 from 16/1, or streamed via NPO Plus.