James Orlin Grabbe
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J. Orlin Grabbe | |
|---|---|
| File:Orlin Grabbe 1990.jpg Grabbe in Risk Management Magazine 1990 | |
| Born | October 8, 1947 |
| Died | March 15, 2008 (aged 60) |
| Alma mater | Harvard University (Ph.D. 1981) UC Berkeley (B.A. 1976) |
| Years active | 1977-2008 |
| Scientific career | |
| Fields | Financial economics |
James Orlin Grabbe, more commonly referred to as J. Orlin Grabbe, or just JOG, was a scientist and prolific writer with significant and well cited contributions in the theory and practice of finance, notably by his book International Financial Markets and for mathematical models for options and derivatives used in international finance and foreign exchange.
He was also separately widely known for his articles and essays about personal freedom and governmental abuse and for his work as the editor of on-line magazines, such as the Laissez Faire City Times. 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[1] 8 October 1947 in Hale County, Texas, and 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 assistant professor in economics 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 is still being used world-wide as a reference and in the education of students and practitioners of such trading. The third (and now final) edition was published in 1995.
Grabbe introduced the term 'regulatory arbitrage' in the 2nd edition (1991) of International Financial Markets in the context of the eurocurrency markets.[2] One of Grabbe's students at Wharton, Andrew Krieger, was (to become) a legendary Bankers Trust FX trader and author of the The Money Bazaar.
FX Systems
As assistant professor in economics 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, led by his former student and business partner. That company has since become very successful in the market.
The End of Ordinary Money, 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 famed (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 received information from what he definitely regarded as highly credible sources about seriously 'unsavory' acts by highly placed persons, and also allegedly been approached by 'official representatives' asking for his assistance via his software in clandestinely gathering financial information from his vast network of customers, and thus the customers' customers, Orlin Grabbe instead started gathering facts about such secret activities, in the mindset of a serious researcher, with the intent of making it 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.
The increasing popularity of the internet, initially via Usenet and later on via the World Wide Web, made Orlin Grabbe's deeply researched articles and essays widely spread and noticed. Some of his investigations about controversial current events, spiced by wit and sarcasm, made direct contact with sources outside as well as inside the administration easier and more common, adding leads to further investigations. See some of the available archives for examples. Some of those published investigations are still highly relevant even in 2008.
Some other writers with less basis in facts and more relying on speculations or agendas also emerged during this time, thus further popularizing the concept of 'conspiracy theorists'. Orlin Grabbe's writings were more focused on researched facts, using the same care that he applied for researching his scientific papers. As it happened, Lesley Stahl at 60 minutes made a segment about misinformation on the internet (aired March 2, 1997) where Orlin Grabbe was singled out and interviewed on the show as a warning example. Her comments about the dangers of anyone being able to create contents on the internet instead of relying on mass media, were received with some amusement.
In parallel Orlin Grabbe also published philosophical articles and essays about personal freedom and the perceived increasing threats to it, written from a libertarian / anarchist standpoint. This was exemplified in a speech at the Eris Society in 1993 entitled In Praise of Chaos. In May 1995, Orlin Grabbe published his two part essay, The End of Ordinary Money to the Internet. Part I was subsequently published in the July 1995 issue of Liberty (1987) magazine.
Laissez Faire City Times, LFCity and DMT
In November 1997, Orlin Grabbe was invited to edit an online weekly newspaper, featuring essays by well-regarded writers: the Laissez Faire City Times, an operation independent from, but loosely connected to the Laissez Faire City project, based in Costa Rica. Orlin Grabbe relocated, with his cat, to Costa Rica the following year.
In November 1999 he announced The Digital Monetary Trust project in a series of articles in the Laissez Faire City Times, a proposed financial trust for the provision of private, anonymous accounts, for use by individuals and entities within the DMT system to securely store anonymous capital or to make anonymous monetary transactions.
"That is, the DMT will be in the business of providing privacy, and doing so in a cryptographical framework which provides a more solid basis for customer anonymity than the traditional ones of (allegedly) tight-lipped bankers or (often-leaky) banking secrecy laws." (Grabbe 1999)
Chaos, Fractals and Quantum Mechanics
(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.
References
- ^ "Texas Genealogy & History". The USGenWeb Project.
- ^ "Cypherpunks on Regulatory Arbitrage". cypherpunks.venona.com.