Bit surprised at the ending regarding justice – I thought Albanian culture tended towards long held grudges and ‘natural’ justice.
Ferrusian Gambit
2 years ago
Apposite story given the fate of Elizabeth Holmes today.
Something similar to this story happened in other ex-Communist countries. It isn’t really hard to see why – free markets do require a well functioning legal system, busniess transparency (in the accounting sense) and clear property rights enforced by the state, otherwise they get swamped by rent seekers, gangsterism and conmen. But the 1990s were a strange time.
Unfortunately finance and corporate governance in recent years has moved farther and farther away from transparency, partly driven by the long term corrosive effect of petrodollars, partly driven by a more to off-radar investments, and partly supercharged by low interest rates since 2008 driving out normal investment flows that could end up a house of cards as much as the South Sea Bubble, Tulipmania, Mississipi plan, railway crashes of the 19th century, the fake Florida houses in the 20th century. The trigger for this will be when people finally realise Tesla’s valulation is a rope of sand.
In Romania there was between 1992-1994 a pyramid scheme called Caritas (not the Catholic one), backed by politicians and the Orthodox clergy.
jonathan carter-meggs
2 years ago
An investment strategy is to invest a little of what you can afford, often and regularly, into well respected profitable companies so that, in the long run, you have accumulated excess wealth. Gambling is to put all of your cash into a get rich quick scheme, close your eyes cross your fingers and hope. There are more gambles out there than good investments. The poor should stick to the first and the rich with excess wealth can indulge in the latter.
Sound advice. But 1990s Albania was a desperately poor country recovering from decades of brutal socialism.
If you had a few thousand dollars, wouldn’t you feel rich?
Last edited 2 years ago by Roger Inkpen
Jon Redman
2 years ago
the government did intervene in two schemes…But here, a curious kind of human psychology took hold. Instead of gratitude, the public mood hardened. Investors chose to blame state meddling for destroying otherwise perfectly decent companies.
Exactly the same phenomenon was observable when a similar scheme went bust in the UK. A fraudster called Kevin Foster ran a Ponzi scheme that was enthusiastically promoted on websites like MoneySavingExpert by suckers who’d fallen for it. When the FSA and police broke it up and jailed him the suckers were enraged that this had happened, exactly as described here. Some were no doubt genuine honest mugs but a good few were enraged that the Ponzi scheme had been stopped before they got paid.
Are you sure about this, I didn’t think Money Saving Expert promoted any financial products. You might find them coming after you and Unherd if you’ve not got evidence for this.
David Bell
2 years ago
Criminal racketeering is a flourishing industry in Albania and one that is exported throughout Europe. I was astonished at the many British number plates on the roads when I drove through the country 10 years ago. A local explained that the cars were stolen in the UK and driven down to Albania for sale.
In Albania a couple of years ago I saw that half the vehicles on the road are Mercs. Even mountain peasants have an old Merc to pull the wooden hay cart up the steeper hills that might kill the donkey. Mind you often the wings were missing and the tyres bald. Now where did all those cars come from? That country is poor in a way that you will find difficult associating with mainland Europe. Lovely place though. Go there before they concrete it all over.
I didn’t know any of that. Thanks for telling their story.
Yeah, great article about a truly ‘unheard’ subject.
I thought it was about the current global economy
Bit surprised at the ending regarding justice – I thought Albanian culture tended towards long held grudges and ‘natural’ justice.
Apposite story given the fate of Elizabeth Holmes today.
Something similar to this story happened in other ex-Communist countries. It isn’t really hard to see why – free markets do require a well functioning legal system, busniess transparency (in the accounting sense) and clear property rights enforced by the state, otherwise they get swamped by rent seekers, gangsterism and conmen. But the 1990s were a strange time.
Unfortunately finance and corporate governance in recent years has moved farther and farther away from transparency, partly driven by the long term corrosive effect of petrodollars, partly driven by a more to off-radar investments, and partly supercharged by low interest rates since 2008 driving out normal investment flows that could end up a house of cards as much as the South Sea Bubble, Tulipmania, Mississipi plan, railway crashes of the 19th century, the fake Florida houses in the 20th century. The trigger for this will be when people finally realise Tesla’s valulation is a rope of sand.
I was thinking of Tesla when writing by earlier comment and EM disposing of his stock
Quite.
“Car company becomes bigger than Toyota and Volkswagen combined using a technology 130 years old”
Oh please
Musk was legally obliged to sell his stock.
In Romania there was between 1992-1994 a pyramid scheme called Caritas (not the Catholic one), backed by politicians and the Orthodox clergy.
An investment strategy is to invest a little of what you can afford, often and regularly, into well respected profitable companies so that, in the long run, you have accumulated excess wealth. Gambling is to put all of your cash into a get rich quick scheme, close your eyes cross your fingers and hope. There are more gambles out there than good investments. The poor should stick to the first and the rich with excess wealth can indulge in the latter.
Sound advice. But 1990s Albania was a desperately poor country recovering from decades of brutal socialism.
If you had a few thousand dollars, wouldn’t you feel rich?
Exactly the same phenomenon was observable when a similar scheme went bust in the UK. A fraudster called Kevin Foster ran a Ponzi scheme that was enthusiastically promoted on websites like MoneySavingExpert by suckers who’d fallen for it. When the FSA and police broke it up and jailed him the suckers were enraged that this had happened, exactly as described here. Some were no doubt genuine honest mugs but a good few were enraged that the Ponzi scheme had been stopped before they got paid.
Are you sure about this, I didn’t think Money Saving Expert promoted any financial products. You might find them coming after you and Unherd if you’ve not got evidence for this.
Criminal racketeering is a flourishing industry in Albania and one that is exported throughout Europe. I was astonished at the many British number plates on the roads when I drove through the country 10 years ago. A local explained that the cars were stolen in the UK and driven down to Albania for sale.
In Albania a couple of years ago I saw that half the vehicles on the road are Mercs. Even mountain peasants have an old Merc to pull the wooden hay cart up the steeper hills that might kill the donkey. Mind you often the wings were missing and the tyres bald. Now where did all those cars come from? That country is poor in a way that you will find difficult associating with mainland Europe. Lovely place though. Go there before they concrete it all over.