Death of a Financier

by John Francis Kinsella

  She did not concern herself with Stephen's business, it was not her role, and as a consequence she knew almost nothing of events that were to turn the West Mercian affair into a Greek tragedy, with Parkly in the unfortunate role of a fallen Midas, everything he touched had once turned to gold, but everything he now touched turned to ashes and there was no Dionysus to save him or a Pactolus in which to wash his hands. Tragic it would be with three thousand jobs in peril along with the investments of thousands of small shareholders.

  During the good years over-inflated boardroom reputations were built and government ministers endlessly boasted of the solid prosperity of Great Britain overlooking the lesson of the forgotten New Economy.

  After the Northern Rock debacle few were willing to risk their reputation and money on a rescue plan for West Mercian and the once glorious Parkly was forgotten by all and sundry as they fought to save what they could of the firm.

  It all began a couple months earlier with questions from the press on the consequences the subprime crisis knock on effect could have on West Mercian. Already the stock had lost almost a fifth of its value since the previous summer as investor sentiment soured in financial markets.

  Parkly reassured the press that West Mercian's unique business model with its aggressive market approach would enabled it to overcome any short term crisis by broadening their base, becoming more competitive and producing greater profits, a notion that seemed unrealistic in the view of certain analysts who predicted a credit crises in the housing sector.

  It was like the New Economy paradigm, when people had been firmly convinced that there was a new way of making money, which under normal circumstances would have been written off by clear headed people as being too good to be true. The euphoria was gone and funds were drying up, the cycle was at its end, and borrowing short from the wholesale market to lend long to retail customers allowed no room for manoeuvre.

  At first ministers were unavailable, then refused all comments as the problems at West Mercian unfolded, initially leaked to the financial press, then splashed over the front pages of the tabloids, it seemed like a repeat of Northern Rock.

  There was no longer any question of a quick fix with the government guarantying the savings of West Mercian's investors who fought to withdraw deposits as money poured out of the bank like blood from a stuck pig.

  In Parkly's unexplained absence, a spokesman for the firm declared deposits were 'safe as houses', an unfortunate figure of speech in the circumstances. The Chancellor of the Exchequer made himself scarce, already in deep for the equivalent of almost ten percent of the country's budget thanks to the Northern Rock, at the same time the Prime Minister, swanning in front of the world television on an official visit to China, announced it was not government policy to interfere in every minor crisis that befell the mortgage industry.

  The share price of West Mercian plunged through the floor, dragging the market down even further, threatening the pound sterling with a repeat of its vertiginous fall during the 1997 ERM debacle.

  The government, and more precisely the previous chancellor of the exchequer, had often accused Brussels and their European partners of over generous state subsidies and protectionism, only to now to offer billions, in the form of a government guarantee, to an insolvent mortgage bank, after having constantly refused funds to productive industries in the coal, steel, textiles, automobile, shipbuilding and electronics sectors, costing Britain hundreds of thousands of jobs.

  It was incomprehensible to many that the government should offer largesse to a few thousand employees of a failed bank when public funding for vital projects such as aerospace, public transport and nuclear power was unavailable.

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  Chapter 62

  Barton left Emma in the suite, she was extenuated and needed more sleep. As for himself he needed a drink and a breather in order to think, he was not used to handling such kind of situations, his usual dramas were with clients whose mortgage application was refused, until recently a rare event.

  As he headed for the bar his mobile rang, it was Ryan.

  'First, the British Embassy is in New Delhi, but I've informed the consulate and they've spoken with the ambassador who is investigating the situation.'

  'Good, what about Parkly?his body?'

  'That's more complicated. Look, I'm at the airport in Bombay, Sarah and my mother have checked in for their flight to London, I've just left them at passport control. I'm booked on an Air India flight to Trivandrum and will be there sometime late tonight.'

  'Great, that's the first good news I've had all day. Oh yes, one more thing, nothing complicated, whilst you're at the airport try and pick up a couple of English newspapers for me, you know The Times, Telegraph or Financial Times?'

  'No problem, I'll call you in the morning, I'll find a room at the beach, I think it best if I avoid the Maharaja Palace.'

  In the bar Barton ordered a whisky, he was not a whisky man but he felt he needed something strong. As the drink arrived he spotted Oxana standing at the door, she was alone and looked a little lost. He made a sign to her to join him.

  'How are you?' he asked.

  'Fine.'

  'Enjoying your holiday.'

  'Yes,' she said not seeming very convinced.

  'Where's your cousin, Tanya?'

  'She's sick.'

  'Sick?'

  'Yes, stomach trouble,' she made a circular movement with her hand over her pretty midriff, visible under a short top.

  'Ah yes, Delhi-Belly,' he said.

  'Belly-Delly?'

  'No,' he laughed. 'Here they call it Delhi-Belly or turista.'

  'Ah turista,' she laughed. 'Everybody seems to have it.'

  'Everybody?'

  'Well a few of the other people from St Petersburg.'

  'A few?'

  'Yes. One lady seems to be quite sick, they've called the doctor.'

  'When?'

  'Just before dinner.'

  He ordered a drink for Oxana and they chatted for a short while before he made an excuse to leave, she seemed a little disappointed and he promised to see her the next day.

  *

  The next morning Barton received a call from Ryan informing him he had found a room at a place in Kovalam called the Rainbow Restaurant, next to the Jasmine Palace, and asked him to come over, with Emma, for breakfast.

  It was just a short ride from the Maharaja Palace to the Rainbow. To avoid using one of the hotel taxis - whose drivers spoke English - they grabbed one of the many tuk-tuks waiting near the bus stop on the main road.

  The Rainbow stood on a corner facing the Moonlight Hotel at the bottom of the hill leading down to the beach. It was a restaurant with a swimming pool that appeared to be part of the Jasmine Palace. Once inside it took a moment to spot Ryan, he was seated at a corner table, almost hidden by a pillar decked out in gay Christmas tinsel.

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  Chapter 63

  The state health directorate declared a cholera outbreak in the Kovalam area and orders - under directive Section 144 CrPC - were put into effect to control the infected zone, closing businesses, schools and shops.

  All vehicles leaving the quarantine perimeter were controlled and sprayed inside and outside with disinfectant solutions. No one was permitted to enter or leave the zone during the first forty eight hours and then only medical and specialised personnel.

  An information clamp was put into place with telephone lines and Internet services cut without warning for an unlimited period, from fear of the possible repercussions and effects on trade and tourism in the state.

  The Moonlight Hotel was requisitioned by the health authorities and transformed into a temporary cholera treatment centre, while the main building of the Jasmine Palace was transformed into a dispensary.

  All persons suffering from symptoms, such as diarrhoea and vomiting were immediately directed to the Moonlight Hotel, where they were administered antibiotics and rehydration, and if necessary admitted for more int
ensive care. Those showing signs of fever were required to immediately report to the dispensary at the Jasmine Palace, visible from Ryan's new lodging above the Rainbow Restaurant.

  In addition to the countless cases of bottled drinking water trucked in were thousands of litres of saline drips, antibiotics, plasticized cover sheets, soap, disinfectant and chlorine as well as gloves and garments for the nursing staff brought in to man the emergency cholera treatment centre and dispensary.

  All severely ill patients were hospitalised in the hotel rooms transformed for the emergency with special beds, intravenous drips and monitoring equipment. Those patients still strong enough to drink were provided with a solution containing rehydration salts around the clock.

  The risk of cardiac complication and circulatory failure was of course great for the weak and elderly as well as those who had a previous history of cardiac problems, all of whom would be in need of special care and attention with more sophisticated monitoring equipment.

  The hotel was constantly disinfected with a strong chlorine solution. At all entrances and exits hand sprays and footbaths were installed filled with a powerful disinfectant solution.

  Treatment was relatively simply consisting of rehydration and antibiotics. Normally such treatment required forty eight hours, but in the case of children, the weak and elderly it was longer. In most cases those who reported to the centre were free of infection and after receiving a precautionary dose of antibiotics returned to their hotels.

  Controlling the spread of the disease was a much more complex problem necessitating the rapid identification and hospitalisation of those infected, the isolation of suspected cases, disinfection procedures and waste management. Several mobile teams of doctors made the rounds of hotels and guesthouses checking on the condition of their residents.

  In the meantime, all soiled clothes and linen were burnt in a rice paddy situated a couple of hundred metres from the Moonlight Hotel by an army unit as a precautionary measure. Bathing in the sea or hotel pools was strictly forbidden and the distribution of chlorine tablets for the disinfection of drinking water was implemented immediately.

  Containing the outbreak and locating the source of infection was a priority to prevent the spread of infection. Precious time had been lost because of Swami's dithering and the hesitant reaction of the authorities, three days passed before the neighbouring villages were alerted to the epidemic.

  Engineers and laboratory technicians took water samples from taps, wells, streams and sewage drains to try to disentangling the different possible sources of contamination, a difficult task given the haphazard nature of the town's drainage systems, where drinking water pipes lay side by side with those of drains and sewers.

  It was seven days before the disease was brought under control, four deaths were reported, all confirmed cholera cases, several other persons suffered from the after effects, who were extremely weak and in need of special care.

  In the state parliament voices were raised and fingers were pointed as reports came in not only from Kovalam but also from nearby villages where dozens of people were said to have died.

  The opposition accused the government of failing to act quickly and its refusal to declare the outbreak an epidemic. The corporation engineer protested his department's lack of resources, which prevented them from conducting the necessary daily checks, including the random sampling and analysis of water. Monitoring agencies were equally accused of collectively failing to detect the outbreak of the disease.

  The mayor ordered an inquiry into the tragedy with a detailed report on why the state government had failed to provide an adequate sewage treatment system, endangering public health, exposing the state's tourist industry to unnecessary risk, causing a major setback for investors and the inevitable loss of jobs.

  The source of contamination was finally traced to beach front fruit sellers, who had used water to wash fruit and utensils drawn from condemned tube wells located over sewage contaminated groundwater. Many of the tourists infected were those who had naively ignored the risk of eating fresh and sometimes over-ripe fruit, prepared by poor local women, who for lack of access to piped water had used well water.

  *

  Normally, in India, strict isolation of the sick would have been unnecessary and provided standard precautionary procedures were respected, there was little risk to medical personnel and other staff.

  The problem that had faced the state authorities was the organisation of hospitalization in a high profile tourist resort. In another town and under other circumstances, such an organisation would not have been considered essential for the local population, but it was a priority for foreign tourists who demanded a higher degree of medical care and treatment.

  Then there was the press, feared by the politicians and local authorities alike and in whose opinion had blown the story out of all proportion. Once the media had got wind of the story they had arrived like vultures to a feast, inevitably focusing their attention on the plight of the tourists and the incompetence of those they judged responsible.

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  Chapter 64

  Ryan had arrived back in Kovalam the previous evening, just before midnight, where he was dropped off at the Moonlight Hotel by the taxi driver, as was often happened with newly arrived tourists, who showed him to the reception desk in the hope of a commission. The hotel was full - it was to be expected with the high season in full swing. However, the resourceful desk manager invited Ryan to follow him across the road to a smaller hotel, where a room was available.

  'A nice room,' said the manager of the Rainbow Restaurant, who introduced himself as Johnny, 'a balcony overlooking the pool, fully equipped, aircon, TV and a fridge.'

  Ryan took the room and fell into bed, the previous twenty four hours had been exhausting.

  The next morning he was awoke by the bright sunlight seeping through the thin curtains, he looked at his watch, it was just after seven. He eased himself out of bed then opened the door onto the balcony. The view was almost perfect, an image of early morning tranquillity, the only sound was the croaking of the crows and a dog barking, then a small motorbike stuttered past on the narrow road to the left and a dull hammering noise echoed somewhere in the distance.

  Below a dragonfly hovered and darted over the mirror like surface of the pool, for a moment Ryan was tempted by the idea of taking a swim, then remembered the reasons why he was there. In spite of that he had to admit he felt a load off his shoulders now that his mother and sister were on their way home, he was even looking forward to the new and interesting sequel to his visit to India that was about to commence. He called Barton and they arranged to meet for breakfast at eight, giving him about half an hour to explore Kovalam Beach in more detail than he had considered necessary up to that point.

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  Chapter 65

  The papers were full of reports on the Federal Reserve rate cuts and the problems at SocGen, a French bank, plunged deeply in the quagmire of the worldwide financial market turmoil. When Barton saw the headlines there was little wonder Bombay was in free fall with small investors resorting to fisticuffs on the steps of its stock exchange.

  The consensus of financial analysts seemed to be that Europe and the United Kingdom were also heading into recession.

  The Financial Times headline posed the question: Markets ask if the Fed was duped? On reading the details it seemed that after a rogue trader at SocGen had lost four billion euros, the French bank had tried to sell its way out of trouble, causing the panic on world markets, pushing the Fed into making what was considered a massive three quarters of a percent rate cut.

  Analysts seemed to agree that the Fed had used its power to intervene to support equity prices rather than ensure the smooth functioning of the markets.

  It appeared that bond insurers were having difficulties in reassuring rating agencies they had enough capital to deal with losses related to bond guarantees exposed to subprime risk.

  For Barton it wa
s simply further confirmation his own analysis had been right and his departure timely. He also discovered a new word: monocline, related to highly specialized bond insurers, whose names meant nothing to him. It appeared that certain had lost their triple A rating, leaving banks exposed to the risk of uninsured losses.

  In other words, mortgage backed securities, underwritten by an AAA rated insurer, could be carried on bankers' books with a triple A rating. But if the insurer was downgraded, as was the case, then the security had also to be written down. So if the credit rating firms downgraded bond insurers, then subprime related losses would go through the roof.

  It seemed that the incredibly complex system of financial markets was on the verge of unravelling with the risk of seeing trillions evaporate.

  The SocGen trader fraud simply added to the general rout, increasing the fear that a number of large banks had fallen into negative equity, which would keep a downward pressure on the markets and a snowball effect on credit, inevitably leading to a recession in the USA with contagion spreading to the rest of the world.

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  Chapter 66

  As Ryan set out for his quick exploration of the town he discovered the back alleys of Kovalam Beach. Observing the abysmal sanitary conditions behind the gay tourist fa?ade, he remembered people's reactions on the rare occasions the frequent epidemics of infectious disease and related deaths in India made the news in the UK, 'Not many when you think they're over one billion,' was one of the usual remarks.

  However, on a comparable scale, the number of deaths linked to enteric diseases in India was the equivalent of 60,000 deaths a year in the UK, gigantic when compared for example to road deaths, making CJD look insignificant and Avian Influenza a purely academic question.

  The image of India as a booming country seemed largely nonsense to Ryan. From the misery he had seen of Bombay and Kerala, India had little to boast about, even if fifty million or so had made it to the equivalent of the European middle class almost a billion others scraped by or lived in extreme poverty. That was the truth, the rest was little less than a mixture of self-deceiving superlative hype and misplaced pride. It was evident that Ghandi's example of modesty was now far away. The reality was far closer to Mad Max than that of a first world economic power.