Africa

You Can Profit from the Coming Freebooting Expedition

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Somali pirates set up their own stock exchange:

One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.

"Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 'maritime companies' and now we are hosting 72. Ten of them have so far been successful at hijacking," Mohammed said.

"The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we've made piracy a community activity."

Elsewhere in Reason: I interview myself about the Somalia situation.

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  1. Mr. Mohammed, meet Mr.Sir Francis Drake. Mr. Sir. Francis Drake meet Mr. Mohammed.

  2. Someone needs to contact Peter Leeson so he can write a sequel.

  3. A larger community is now taking part? For some strange reason that brings the Marine Corps Hymn to mind…. :p

  4. I have heard that the pirates in Somalia are fighting the Islamists there. If that is true, I really don’t understand why we don’t just pay them not to pirate with bonuses for the number of Islamists they kill.

    1. I don’t think the pirates are as well equipped as the US military, and thus lack the rifle scopes that can see into men’s souls to tell the difference between IslamoFacistJihadists and just plain Muslims.

      1. Oh well. Collateral damage happens.

      2. I’m sure their god can tell the difference: the good ones will go to paradise, the bad ones to hell. So really, what difference does it make?

  5. This is why we should allow our people to defend their cargo at sea.

    1. I think the Maersk Alabama did just that recently. It was the same ship hijacked a while ago. They now can have guards and they recently repelled attackers.

  6. ‘This is why we should allow our people to defend their cargo at sea.’

    You mean with guns? Someone could get hurt!

    1. Not if they are registered, disassembled and made safe with trigger locks until needed.

  7. The only real question is whether the inevitable comparison to the Wall Street stock exchanges will come from a paid pundit, or one of our homegrown trolls will beat them to the punch.

    1. The Pirate Stock exchange has less criminals, who have committed less serious crimes, than those greedy Wall Street tycoons. I mean, look at all of the money they’re making! THINK OF THE CHILDREN!

  8. This would actually make a good Hollywood movie. Somalie pirates are highjacking cargo. Cargo company tries to get the government to do something about it. But the government refuses. Finally, the pirates go too far and kidnap the daughter of some Ross Perot type billionaire shipping magnet. And he hires a bunch of retired SF guys (think Clint Eastwood in his 60s) who then go in and kill the Pirates and rescue the daughter.

    It would make a good movie if done right and with the right cast. I would do it as a action/semi-farce. Think Kelly’s Hereoes goes to Somalia. Sadly, they don’t have the actors anymore to make that kind of movie. To make it good, you would need the cast out of Kelly’s Heroes (Southerland, Eastwood, the dude that was the Captain on the Love Boat, Don Richols or maybe James Garner, James Coburn or someone like that). And they just don’t make actors like that anymore or write scrips smart enough for them to shine even if they did.

    1. G. Gordon Liddy should be available.

    2. I’d do it more as a dramatic war story in which a pair of young Somali boys growing up in the slums of Mogadishu amide the background of civil war and anarchy, gradually get entangled in the seedy underworld of Somali piracy. One becomes a top-ranking pirate campatain, until he run afoul of the islamists and is assassinated, while the other manages to escape, through the love of his long-lost childhood sweeheart after winning a photography gameshow.

    3. Miranda Cosgrove would play the daughter role well.

  9. It really chaps my ass when you see successful anarcho-capitalist activity founded on stealing from people. Thanks, assholes.

    1. activity founded on stealing from people

      Not to be confused with IP theft (the “good” theft), right?

  10. Episiarch,

    Don’t you know? Somalia is Libertopia. Leftists tell me that all the time.

    1. There was an article in either the WAPO or the NYT just after the election talking about conservatives leaving the country after Obama winning. It actually said that the problem for conservatives was that they only countries more conservative than the US were places like (and I kid you not) AFghanistan, Somalia and Iran which are very hard to move to.

  11. Epi-Wan,

    Perhaps its time to embrace the Sith teachings. Together we could rule the galaxy as father and son.

  12. Wow, profit is a good thing dude. I like profit, I mean who doesnt?

    Jess
    http://www.web-anonymity.de.tc

    1. The anon bot is learning. I forsee problems in the future.

  13. Epi, at least it’s honest theft, not hidden behind words like “taxation” and “social contract.”

    1. Good point.

    2. Don’t forget my favorite “commerce clause”

    3. And I’ll bet the pirates don’t demand you thank them afterward, or name your (scuttled) boat after them.

  14. John|12.2.09 @ 11:35AM|#

    Mr. Mohammed, meet Mr.Sir Francis Drake. Mr. Sir. Francis Drake meet Mr. Mohammed.

    That was my first thought as well.

    And after that, they will start shipping companies of their own and get rich.

    Then someone will start pirating their ships, say off the southern tip of Florida (for tradition’s sake).

  15. one of our homegrown trolls will beat them to the punch.

    I LIKE PUNCH!

    WHERE”S THE CAAAAAAAAAKE?

  16. Step 1: Shipping companies buy majority shares in all “companies” on exchange. If any companies acquire “assets”, shareholder says to give it back.

    Step 2: Tell stock exchange that they can’t let “just anybody” become pirates, they’ll need to get certified. Otherwise, they’ll “ruin the market”. Rent seeking in-fighting keeps Somalis mostly busy.

    Step 3: pay Chinese Navy small stipend to blow up one Somali ship per month — pirate ship, fishing vessel, whatever. Survivors will be sent to Minnesota. Slakes American bloodlust; swells Chinese pride; consoles surviving Somalis who for reasons I cannot begin to fathom think Minnesota is an earthly paradise.

    1. So like 1st Lt. Milo Minderbinder?
      “Everyone gets a share.”

    2. Well, you never have to complain about the heat again.

  17. If they were just dealing with the western democracies, I say that this wasn’t a bad investment. But sooner-or-later, they’re going to either cut into the Egyptians canal traffic or maybe the Saudis will just decide that hiring someone to flatten those pirate villages is cheaper than paying off the ransom. Then the investment will go up in hail of naval gunfire and rampaging Yemeni soldiers.

  18. ChrisH,

    To Minnesota? You’re a harsh man.

    1. Minneapolis has a huge Somali population. One of our Starbucks plays home to what I can only describe as a type of tribal council every Sunday.

      http://www.minneapolisfoundati…..africa.htm

      1. Here’s why (it’s a facinating article):

        For Somalis in Minnesota, refuge and lost identity
        In a rugged corner of Minneapolis, youth try to reclaim their heritage
        By Bob Drogin
        Los Angeles Times
        Updated: 11/27/2009 11:05:33 PM CST

        Barely a block from the Mississippi River in Minneapolis sits a neighborhood Mark Twain could not have imagined.

        Men with henna-streaked beards and women in full-body hijabs stream past the Maa shaa Allah Restaurant, the Alle Aamin Coffee Shop, the Kaah Express Money Wiring stall, the storefront al-Qaaniteen Mosque and other similar structures in the Cedar-Riverside neighborhood.

        “When I came here as a refugee in 1995, there were just a few hundred Somalis, and we were very alone,” Adar Kahin, 48, a famous singer back home who volunteers at a local community center, said this week. “Now everyone is here. It’s like being back in Mogadishu. That’s what we call it, Little Mogadishu.”

        We’re an obvious minority here and have a different religion and culture,” said Abdiaziz Warsame, 37, an interpreter and youth counselor who has worked with such local gangs as the Somali Hard Boys and RPGs. “So people feel a high level of racism.”

        Riverside Plaza, with its public housing towers, looms over Little Mogadishu, stuck between Interstates 35W and 94 and the Mississippi River. The grim concrete structures house more than 4,500 people, most of them Somali.

        The Brian Coyle center is the logistical heart of the community. Its food pantry serves more than 1,000 families per month, and various groups help with food stamps, legal services and other needs.

        But its cultural focus is the mosques and coffee shops.

        http://www.twincities.com/ci_1…..cities.com

  19. I especially enjoyed Sahra Ibrahim’s “investor testimonial” at the end.

    Her ex must have balls of steel — paying an RPG as alimony?!

  20. “The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we’ve made piracy a community activity.”

    I think that’s how Napster got started.

  21. If the whole community is now involved, we can begin the carpet bombing with a clean conscience. Hopefully that will illustrate that pirating can be risky.

    1. That was my thought, too. If everyone is taking part and profiting from it, then there really isn’t any collateral damage to worry about. Just nuke the site from orbit.

  22. I still don’t get why someone hasn’t bought a couple surplus/salvage corvettes from some Navy, outfitted them with a 20mm chain guns & .50 machine guns, and offered their services as cargo ship protection through the Red Sea / Gulf of Aden.

    They could probably get $60k for each two week trip, getting a nice return on investment in a real short time frame. If I had the money to invest, I would seriously be doing this.

    1. Or just hired blackwater and run an amphibous operation against the entire lot of them. What is the world going to do about it? It is an interesting question to think about what the world would do if some shipping company started hanging pirates on the high seas. All it would take would to hang a few of them and they would no longer touch any ship owned by your company.

    2. The shipping companies don’t want to do this. They prefer to offload their security costs to the citizens of the countries with larger navies. Paying for their own security is apparently a bad thing.

    3. This is a good point. Is there some maritime law that makes it unwise for people to defend their own ships? I don’t understand why the cargo companies don’t have heavy security.

      If I were sailing anywhere you can bet your ass I’d have a lot of guns on board.

      1. My understanding is that there is no international maritime law prohibiting this, but that different ports have different restrictions on what you can have aboard. Since all of that traffic has either just been through, or is heading towards, the Suez Canal, they have to keep the rules there in mind, and they frown on weapons on board ships.

        So once again, government regulations lead directly to victimhood and crime. Is anyone really surprised by this?

        1. Ah! Better answer.

        2. Why not just hide the weapons upon entering a port? A ship is a huge place. It would be pathetically easy to have a hidden gun vault.

        3. If that was the case, why not small faster ships with a well armed crew to accompany bigger vessels? They could wait out in international waters while the vessel they are protecting is in port.

      2. Don’t know for sure, but it could be that under the Geneva Conventions a vessel with a certain level of armament becomes a de jure warship and no longer has the nominal immunity of a civilian vessel. Alternatively, it could lose insurance protection if it is armed.

        (I have no idea if either of these is the case, just throwing them out as possibilities.)

        1. Some shipping companies have taken to putting armed guards on ships. The ship leaves port and reaches international waters, and is met by a ship carrying armed guards who then board the cargo vessel. When the cargo ship is close to its destination, the armed guards disembark in international waters and the ship sails into port. You don’t read about these ships getting hijacked. But there are still issues with oil tankers, companies are too afraid of a fire fight on board causing the whole ship to go boom and then having to deal with the environmental and personal tragedy. And sometimes the calculus works out that its cheaper to pay the pirate.
          A one or two percent chance that your ship is going to get hijacked, $2MM ransom, that’s a twenty grand cost per voyage, cheaper than paying the guards or arming the ship.

          1. You’re forgetting the costs of the cargo not getting there. Marine cargo insurance is expensive, and the rates for ships going through the Red Sea & Sea of Aden has jumped massively, I’m sure. If two cargo ships “went in” on an escort, they could probably take it out of the insurance they don’t have to pay.

            S-O-B Van Owen – that was the basic idea I was proposing at the beginning of the thread.

  23. From what I understand, the odds of being successfully pirated are pretty miniscule. When it does happen, it’s more cost-effective to pay the ransom and write it off as a loss with the insurer. Pirates rarely hurt people during a raid, and whatever they steal can be replaced.

  24. Where do I invest in this? After I read that article about no one wanting the shipping companies to have any scary weapons for defending themselves– that they should just nod, smile and enjoy their pirate takeovers lest someone get shot in the foot with an accidental discharge– I’m thinking these pirates actually have a pretty good operation going.

  25. When it does happen, it’s more cost-effective to pay the ransom and write it off as a loss with the insurer.

    I would bet your last dollar that piracy is specifically excluded from maritime risk coverage.

    1. I’ll take that bet, then steal it back from you when you win.

      I would imagine that policies covering that area do not include piracy clauses, but that your average high-seas coverage does. Ships travelling through the Strait can probably buy pirate insurance for an additional premium.

    2. I would bet your last dollar that piracy is specifically excluded from maritime risk coverage.

      That’s a bet I wouldn’t take. I bet you’re right.

    3. I don’t think it is, as a general rule. However, I wouldn’t be surprised if endorsements were currently being added to any ship going through the Suez.

      Also, I’m repreating myself, but the cargo on a ship isn’t cheap, and people will be pissed and switch to other carriers if you have a ship hijacked. The costs of piracy don’t end with the ransoms.

  26. this is great news! now the shipping companies can purchase stock to hedge against their losses due to piracy!

  27. Hmm, are ADRs available for these “maritime companies”?

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