James Orlin Grabbe

James Orlin Grabbe, more commonly referred to as J. Orlin Grabbe, or just JOG, was a scientist and prolific writer with significant contributions in the theory and practice of finance. He was also separately known for his articles and essays about personal freedom and governmental abuse. Born and educated in the U.S.A. he was also active in many places all over the world. He died from heart failure around March 15, 2008 in San José, Costa Rica.

Early Life

Orlin Grabbe was born 8 October 1947 in Texas, where he grew up on a farm in Briscoe County in the Texas panhandle. He and his brothers (Lester and Crockett) early on showed great academic prowess and Orlin was invited from already in his teens to participate in nation-wide specialized education in mathematics. In fact, all brothers achieved doctorates and then became professors, each in their own discipline.

Ambassador College

Inspired by his family's religious interests and the Worldwide Church of God, based in Pasadena, California, Orlin Grabbe joined his older brother at its Ambassador College in the fall of 1966. He graduated in 1970 and stayed on the staff as a teacher until he left in 1973. During his time at the Ambassador College he was also the editor of the student newspaper. In a widely quoted essay / memoir written some years thereafter, Memories of Pasadena, Orlin Grabbe described not only his own experiences and thought processes but also the atmosphere that permeated the college, its students and the organization as a whole.

Berkeley, Harvard and Wharton

Leaving the ongoing turmoil at the Worldwide Church of God and the direct involvement in religion, Orlin Grabbe instead decided to pursue his interests in research and science, especially mathematics. After getting an A.B. in economics in 1976 at the University of California, Berkeley he continued his education at Harvard University, Cambridge, Massachusetts where he was awarded a Ph.D. in economics in 1981. He had specialized in the study of financial derivative instruments and published important pricing models for futures, forward contracts and options, especially in the foreign exchange (FX) markets.

Later on, as a professor at the Wharton School of Business at the University of Pennsylvania, Orlin Grabbe found a lack of educational material for the emerging field of international finance and the increased trading in financial derivatives that this created. For this purpose, in 1986 he wrote the book International Financial Markets, a highly acclaimed book that has been used world-wide in the education of students and practitioners of such trading. The third (and now final) edition was published in 1995.

FX Systems

As a professor at Wharton, teaching traders and MBAs, the financial regulators, policy makers and operatives of the future, Orlin Grabbe continued to develop the mathematical models of financial derivatives. In order to make the theories more accessible he created computer programs based on these models. Direct interaction with people acting in the real marketplaces showed the needs and benefits of these models.

In 1985 Orlin Grabbe transformed his informal interactions into a company and founded FX Systems Inc. in partnership with one of his students. Some of this is described in his essay A Derivative Life, published in 2001. The company grew and after having resigned from Wharton the following year Orlin Grabbe focused on the further development of the software. The company stayed in the forefront of the emerging markets for such products and acquired more and more financial institutions as customers.

In 1990 Orlin Grabbe decided to sell his share of the company. Unfortunately the new owner and Orlin's previous partner (his former student) soon ended up in disagreements leading to a split of the company. Orlin Grabbe continued for a while as a part time consultant with one of the successor companies, FNX Systems, lead by his former student and business partner. That company has since become one of the more successful in the market.

Freedom, Nevada and 60 minutes

Based in the neighborhood of Greenwich Village, New York until he and his cat moved to Reno, Nevada in 1995, Orlin Grabbe continued his professional career with consulting in the financial arena. He was interspersing this with furthering his interest in cultural expression by getting a formal education in media. In 1993 he created the company Kalliste Inc. and produced experimental films as well as shows of fractal computer graphics. He also produced a CD, Cuba di mi Amor, featuring the well-known (ex-)Cuban pianist Danilo Pina.

As was evident already by the textual contents in the book 'International Financial Markets', Orlin Grabbe was not especially impressed by the efforts of market regulators and authorities. Having allegedly been approached by 'official representatives' during his time in FX Systems, asking for his assistance via his software in clandestinely gathering financial information from his vast network of customers, and thus the customers' customers, Orlin instead started gathering facts about such secret activities, in the mindset of a serious researcher, with the intent of making at all public. At the same time he also began researching about how to protect oneself from such interference, a quest that led him to seriously reading up on cryptography.

(Notes)

Due to the removal of the Homepage of J. Orlin Grabbe, direct access to many of the documents referred to in this entry have been (temporarily?) lost. Relevant links will be added once things settle down on the web.