Shadow Banking

by C. M. Albright

  ‘So you didn’t finish telling me about what happened after you punched out the Frenchman,’ said Miles.

  ‘You mean Le Coq?’

  ‘Sportif?’

  ‘He wasn’t after I’d lamped him.’

  Fergal chuckled: ‘Put it this way, Miles, the entente wasn’t very cordiale. The silly bastard threatened to call the police until Rob and Georgina managed to calm him down.’

  The elevator opened into the lobby on the ground floor and Miles, Al and Fergal made their way towards the revolving doors out onto the street which still retained a residue of the tangerine tones in which the city had been bathed earlier on.

  ‘He tried to spin it that there was something going on between Imogen and me. Said that he thought we were still in love.’

  ‘And are you?’

  Al was taken aback by the directness of Miles’s question. Of course he wasn’t still in love with Imogen but he realised how it might look to others, trying to play the knight in shining armour, the Henry V to Francois’s Charles VI.

  ‘No,’ he said as casually as he could as they stepped out into the warm September evening. ‘He was just saying that to try and drop me in the shit with Krystina. But I think he must have realised that we all knew about him knocking Imogen about and he was going to struggle to find an ally.’

  ‘Anyway, apart from the spilling of a little French blood,’ said Fergal, ‘there was no real harm done. He went back to the hotel and left us to it. By the following day, he’d gone, flown back to Paris claiming some work commitment or other.’

  ‘So what made you lash out at him?’ asked Miles as they made their way down Fifth Avenue.

  ‘It was brewing all weekend. Once Rob had told me about him hitting Imogen, I guess I was just looking for an excuse. When I saw that he’d made her cry, the red mist descended.’

  ‘Good for you. I’d have done the same.’

  Al doubted that but he let it go and three of them continued along the sidewalk.

  ‘So come on, Miles,’ said Fergal. ‘We’re all yours. You grew up here. Take us out and show us a good time.’

  ‘I’m a bit out of the loop.’

  ‘Balls to that,’ said Fergal. ‘It doesn’t have to be where the in crowd hangs out. I just want to see where the young Miles Ratner spent his formative drinking years.’

  Miles smiled to himself. Al hadn’t seen him appear quite so relaxed and happy in all the years he had known him. ‘OK, Fergal, I’ll take the bait. Let’s grab a cab. First stop, the West Village.’

  19 Blackening Skies

  10yr US Treasury yields: 4.8095%

  USD/CHF: 1.6485

  SP500 Futures: 1095.5

  ‘It beggars belief,’ said Al chewing a mouthful of smoked salmon and scrambled egg in the restaurant of the Mercer Hotel in SoHo the following morning. ‘How could I have got it so wrong? Those dot coms just looked so sexy at the time. But it wasn’t as though I was blind to the danger. I wasn’t. I just didn’t realise how quickly the whole shit storm would whip up.’

  Miles sipped at his coffee and nodded.

  ‘It didn’t just hurt me financially,’ continued Al. ‘It screwed up Krystina’s dad’s finances – for which I must take the blame on both a personal and family level. It also kind of crushed my spirit a little too. When you get caught out that badly it wounds you that you were the mug that didn’t see it coming.’

  ‘There were a lot of mugs who didn’t see it coming,’ said Miles.

  ‘Did you get burned at all?’

  Miles thought about this. He had been involved, heavily at one point, but he had been lucky to get out at the right time. And it had been luck. Sometimes, you need to be lucky. This time he was. He felt bad for Al but his conscience was clear. They had spoken a couple of times earlier in the year about how frothy the Nasdaq was getting and it was the last of these conversations that had prompted him to get out when he did. They had both been faced with the same scenario and both had chosen different courses of action.

  ‘No, I wasn’t really involved.’

  After breakfast, Al and Miles decided they would dispense with a cab and walk down to Wall Street seeing as it was such a nice day. It was days like this in Manhattan that made Miles feel nostalgic for his childhood and his trips to his grandfather’s office on a Saturday morning. He liked London, it was a great city. But he loved New York. It was like nowhere else on earth. He would have happily stayed there after Harvard had it not been for his father and what had happened to him. These memories seemed to have seeped into the very fabric of the city so that whenever he returned on business, they clouded his feelings and made him contemplate his past. But walking down Broadway in the sunshine without a cloud in the sky, it felt as though the shadows that had haunted him for so long were beginning to dissipate. Maybe time had healed him of the malaise that he always felt in this place, or maybe his own success within the industry that had been the arena of his father’s downfall had managed to lift the curse that had descended on his family all those years before. Perhaps the healing process was almost complete and one day he could walk these streets and not feel the echoes of the past, and just enjoy it for what it was – the greatest city in the world.

  10yr US Treasury yields: 4.8100%

  USD/CHF: 1.645

  SP500 Futures: 1096

  Fergal looked out at the clear cobalt sky and the needle sharp points of the buildings stabbing the horizon. It had been a big night but his hangover was manageable. In fact, it was one of those rare hangovers – he had probably only had a handful in his life – that imbued the sufferer with a chemical memory, a mood echo, from the night before. It was as though the party was still going on inside Fergal’s metabolism. His suffering was minimal, a slight hint of a tension headache and a dry, chalky mouth but these symptoms aside, he felt charged with the emotions of the night before. It had been a great night. Instead of the usual haunts, the top end bars and clubs, venues commensurate with their standing in the business, places that they ought to be seen in, they had followed the Miles Ratner tour of Manhattan. It was almost unheard of for Miles to be so open about his past. It was almost as though he had been born fully formed at the age of twenty-one in the offices of Trenchart Colville. But the night before, Miles had opened a door onto his childhood. It was only a brief glimpse shone through the prism of his customary reticence about such things but it seemed to augur in a new phase of their collective relationship. That it had taken seven years to get to this stage paid testament more to Miles’s secrecy about his life than it did to Fergal’s attempts to tease out the truth from his mysterious friend.

  The mood of openness was infectious. All three of them had spoken about their lives, their hopes and ambitions along with their worries and fears. It was a night that was drenched in truth. And the reason that he had loved it so much on a personal level was that he hadn’t felt the need to be funny. What’s more, Miles and Al had not expected it of him. They had let him step outside his assigned role. These past few years, it had felt as though he was playing a part in a play, his very own theatre of the absurd. And as much as he often enjoyed being the social nerve centre of an evening, always ready with a ridiculous story, it also felt good to be just one of the boys. Al and Miles meant just as much to him as any one of his brothers back home in Dublin.

  ‘Can I get you something?’ asked the waitress. She was young, probably about twenty-three, mixed race and smiling nervously as though it might be her first day on the job.

  ‘Oh yeah, great. I’m waiting for some people but in the meantime, can I get a coffee and also some orange juice? Oh and if there’s any way you could see whether someone might have an Advil or something like that for my head – it’s not like I’ve actually got a headache but I can feel it there, threatening if you get what I’m saying. Prevention is better than cure and all that.’

  The waitress looked confused: ‘Coffee, orange juice and an Advil?’

  ‘Got it in one. Thanks.’

  Fe
rgal couldn’t help himself; he watched her walk away. She was beautiful, even the way she moved. Fergal sometimes managed to fall in love two or even three times a day. His waitress was clearly the first of the morning.

  Fergal returned his gaze to the view out of the Wild Blue restaurant. It was so high up there, it felt as though he was suspended beneath a cloud. But there were no clouds that day, the sky was clear. The sun shone. It was a great city, he had always loved it. Maybe he could get a posting here after Hong Kong. He didn’t care that his breakfast guests were late – the meeting was scheduled for 8.30 and it had just gone a quarter to.

  ‘Fergal!’ Gerry had played quarter-back for the Yale University Bulldogs and his big fleshy hand enfolded Fergal’s. ‘Sorry we’re late.’

  ‘No problem, Gerry, I was just admiring the view.’

  Gerry was a genial New Englander who was a big client of DBHK. His occasional trips around Asia with Fergal in tow had been more memorable for the bar antics rather than any market outlook.

  ‘This is Ross.’ Gerry gestured to a dark wiry man with a forced smile. ‘I don’t believe you’ve met although I know you’ve spoken on the phone.’

  ‘Hi Ross.’ Fergal took Ross’s smooth slightly clammy hand.

  ‘Ross doesn’t like heights,’ said Gerry. ‘So I thought we’d bring him here, just to torture him.’

  ‘Good thinking,’ said Fergal with a smile. ‘Here, sit down, let’s get you some coffee and some breakfast. It’s a lovely morning. Makes you feel glad to be alive.’

  Fergal had had a difficult time of things in the past year. Breaking up with Denise had inflicted an emotional wound that would take some time to heal. He wasn’t going to delude himself that he was over her yet but he really felt as though he had turned a corner in the past few days. He felt more comfortable in his skin than he had done for ages. The past few years – moving to Hong Kong, meeting Denise and then losing her – had made him question his outlook and beliefs. He had tried to become something that he wasn’t; he could see that now. It was time to start enjoying himself again.

  10yr US Treasury yields: 4.8100%

  USD/CHF: 1.6425

  SP500 Futures: 1096

  Al and Miles both looked up at it at the same time. It sounded so low. No aircraft, let alone one that looked like a passenger jet, flew that low over Manhattan. The sun glinted off its fuselage as it passed over them, maintaining its unwavering trajectory as it hurtled downtown.

  ‘What the fu ...’ Miles didn’t get to complete his comment as the collision of metal, masonry and burning aviation fuel tore apart the still September morning.

  ‘Jesus Christ!’ Al pulled up next to Miles, the fireball rolling up the side of the building reflected in his eyes.

  Others came out onto the street, staring up at the World Trade Center. A taxi pulled up to the kerb and the driver, a Puerto Rican in his thirties jumped out.

  ‘Did you see that?’ The question was aimed at no one in particular and no one answered. The evidence of what had happened was plain for all to see as the black smoke rose out of the deep gash in the side of the building like a dark cancer against the pure blue sky.

  10yr US Treasury yields: 4.8025%

  USD/CHF: 1.648

  SP500 Futures: 1091

  In the moment that it took for the massive explosion to shake the building, the social structure and systems within the restaurant had been destroyed. There were no longer diners and waiting staff, clients and suppliers, the rich and the poor, the powerful and the powerless; there were just people, all of them energised by fear.

  ‘What the fuck was that?’ said Gerry as the entire building shuddered. People started to move. Outside the windows, the blue sky was blotted out by thick black smoke. A fire alarm started to wail.

  ‘A jet just hit the building.’

  Someone screamed. To Fergal, it felt strangely out of place. Only a few seconds before, the restaurant had been alive to the hubbub of conversation as cutlery clattered against plates. Now, a scream cut through the raised voices as breakfast was abandoned.

  Gerry and Ross were on their feet, looking around.

  ‘We’d better get the hell out of here,’ said Gerry to Fergal and without even awaiting a response, he and Ross joined the flow of people moving away from their tables towards the stairs and elevators. Fergal stood up and was just about to follow them when something made him turn around. There, like a solitary island in the stream of fleeing humanity was his waitress, only a few feet away from his table, motionless, shocked. On the tray she held was a coffee pot, a single cup and saucer, a sugar bowl, an orange juice and a packet of Advil. Moments before, she was a waitress, probably day-dreaming of other things; now, she was frozen by fear.

  ‘It’ll be OK,’ said Fergal. She looked up at him as he took the tray from her and put it down on the table. ‘We just need to get out of here as fast as we can.’

  On the other side of the room someone was shouting about being unable to use the elevators. Others were shouting but their voices were swallowed by the constant howl of the alarm.

  ‘What’s your name?’ asked Fergal. She said something but even standing right next to her it was impossible to make out what it was. He shook his head.

  ‘Tia,’ she shouted into his ear as he bent down to her.

  ‘Listen Tia,’ said Fergal, putting his arm around her shoulder. ‘We’re going to be fine. Don’t worry.’

  She looked up at him; he nodded and smiled and as she reciprocated, he said, ‘I’ll make sure we get out of here. Trust me, I’ll make it my personal mission.’ But the increasingly panicky and frightened voices of those all around robbed Tia of any of the reassurance she might have derived from his comforting words and he felt stupid for having uttered them. Trapped in the epicentre of what might very well turn out to be one of the worst aviation disasters in history, he was kidding no one.

  10yr US Treasury yields: 4.7825%

  USD/CHF: 1.651

  SP500 Futures: 1084

  The smoke was pouring from the north tower of the World Trade Center as Al and Miles maintained a steady pace through the crowds on the sidewalk, all turned to face the same way.

  ‘He’s up there isn’t he?’ said Al. ‘The Wild Blue restaurant is part of the Windows on the World. It’s in the north tower. I went there a couple of years ago. It is, isn’t it?’ When Al received no response from Miles, he turned to see him fiddling with his mobile phone. ‘What are you doing?’ Once again, Miles said nothing. He raised the phone to his ear.

  ‘Hi Toni, it’s Miles. Yeah, I can see it. I’m just a few blocks away. I know, I know. I can’t get to a terminal so we need to get to work trimming risk in the portfolio straight away. I don’t know but it could be huge. Jesus, there’s smoke everywhere.’Al tried Fergal’s phone again and once again, it went to voice mail. He had already left a message – ‘Fergal, call me’ – but he couldn’t help but leave another. He found it vaguely reassuring that there was at least some form of communication going on between them albeit purely one sided.

  ‘Fergs, it’s me. Call me when you get this. I need to know you’re all right.’

  Al clicked his phone shut and put it back into his pocket as Miles finished his call to Toni in London: ‘OK, keep me posted. Speak later.’

  ‘I can’t get hold of him. Miles? Are you fucking listening to me?’

  ‘Yes, I’m listening to you.’

  ‘What are you doing?’

  ‘What does it look like I’m doing? I’m talking to the office.’

  ‘Don’t you give a shit about what’s happening to Fergal?’

  ‘Of course I fucking do.’

  ‘Oh my God!’ The desperate cry came from an old woman standing nearby. It was imbued with so much fear and anguish that it hinted at further horrors and Miles and Al looked up at the same time to see another jet strike the south tower sending a huge cloud of flame erupting from the side of the building. They stopped dead and watched. Everyone watched. There were scream
s. People wept; people swore and cursed. To Al, it felt as though a vent had been torn in the fabric of reality that allowed him a glimpse into hell.

  ‘Toni, it’s Miles. Are you looking at the TV? Have you seen what’s just happened? This is no accident. Everyone’s in the line? I’m fine, Karl. Look, this is the most fucked-up thing I’ve ever seen. This is clearly a deliberate attack. There’s going to be a huge flight to quality. I’m short bonds and long dollars. Shut that down and get long some bonds and some gold. Yeah, at whatever price you can get.’

  10yr US Treasury yields: 4.7725%

  USD/CHF: 1.6495

  SP500 Futures: 1079

  ‘That’s all right for you to say buddy, you’re sitting in a nice air-conditioned office.’ Since the second plane had hit the south tower, the man on his cellphone to 911 who had sounded so calm and measured to Fergal a few minutes before had begun to lose his composure. ‘Well where the fuck are they? I know this is a high building but they’ve got to get up here. There’s got to be some way of cutting into the mains water here and putting this thing out because I’m telling you, if they don’t show up soon, we’re all going to fucking die.’