Dave Hart Omnibus II

by David Charters

  From the outer office Barnes could hear the sounds of his secretaries arriving.

  ‘You’re late!’

  ‘I’m sorry, Mr Barnes, I missed my tube.’ A stunning, Barbiedoll look-alike in a Chanel suit stood in the doorway. She spoke in a coyly ingratiating way.

  ‘Not you – get me more coffee.’

  ‘Yes, Mr Barnes.’ She disappeared.

  ‘Mary, where are this month’s P&L numbers?’

  An older woman entered the room, probably in her early fifties, and sighed.

  ‘Ronald, they’re where you left them last night, on top of the Reuters screen.’

  ‘Oh,’ he looked over to the screen where the offending papers sat accusingly. ‘Okay. That’s all.’

  She left, closing the door behind her with a determined thump to show her irritation. Mary had been with him from the beginning, and was the only employee to call him by his first name. Or to let him know when she was irritated.

  He wandered over to the window to study the activity on the trading floor. This was a key part of his daily routine, and he considered it a better guide to the day’s fortunes than any briefing meeting or written report. As he scanned the room he studied the individuals closely. Most did not catch his eye, though they had all noted his arrival. One or two older hands nodded in his direction. The senior traders, some of whom he had known for years, were identifiable by their sagging bellies and grey hairs. They had grown old in the markets and had lived-in, seen-it-all faces. The younger traders were mostly in their twenties, slim, hard-bodied and highly strung. Many had prematurely receding hairlines, and one or two had ponytails, though most opted for short, almost military haircuts and copied their boss’s taste for red braces, Hermès ties and chunky Rolexes. There was no ‘dressing down’ at Barnes & Co.

  There were also no women. Women were temperamental, difficult people to work with and a distraction on the trading floor. And they brought legal baggage with them. You had to be careful what you said to women. They could sue you. And so, inevitably, even the most talented women traders somehow failed the interviews for Barnes & Co.

  He focussed on a group of three young men on the far side of the floor. They were standing with their backs to him, and unlike just about everyone else in the room they were not shouting, waving, or otherwise animated. Trouble, he thought. The tallest, a fair-haired, youthful figure in a pink shirt, normally strode around the floor with athletic vigour. Now he was hunched over a computer terminal with visible sweat patches under his arms.

  Barnes strode to his desk and leant across to a flying-saucer shaped speaker-phone. ‘Senior traders – my office, five minutes! Jules – my office – now!’

  His voice boomed across the desk-speakers on the trading floor. The young man in the pink shirt visibly jumped as he heard his name called. Julian Thomas, a twenty-six-year-old PhD in astrophysics, had never failed at anything in his life. He had the most glittering resumé with the highest scores, the top prizes and the finest references. He dated the coolest girls and went to the innermost ‘in’ places. But his greatest prize, at the tender age of twenty-six, was to run Barnes & Co’s junk bond portfolio.

  The young man entered the office and looked guardedly at Barnes.

  ‘Jules, you’re sweating. I like a little perspiration on the trading floor, but not sweat. What’s going on?’

  Jules paused, flushed, swallowed hard. He thought himself tough, but he had never lost before.

  ‘Banner Corporation’s folded. Finished. Disappeared. Kaput. They’re not coming back.’

  Barnes looked at a screen by his desk. It was flashing black.

  ‘Why don’t I see it on the screen, Jules? Where are the numbers?’

  ‘We… I haven’t input it yet. I was checking, double-checking the terms of the bonds.’

  ‘How many did we have?’

  ‘Thirty million.’ He paused. ‘It’s all gone. We’ll be lucky to see ten cents in the dollar.’

  It was then that the histrionics started. Who is he doing this for? thought Jules as the speaker-phone crashed into the book-case. He stopped short of physical assault, but then he always did. Jules wondered what would happen if he took hold of the evil, over-weight dwarf and threw him through the plate-glass window onto the trading floor.

  Finally a sort of calm descended on the room once again.

  ‘Goodbye Jules. Get the fuck out of here.’

  ‘Goodbye Mr Barnes. I’m sorry.’

  That produced another tirade. As he left the room, Jules was treated to an explanation of how any mother-fucker could be sorry, but only a real fucking trader could run a real fucking trading book and think a-fucking-head.

  Barnes watched as Jules made his way back to his desk to collect his jacket from the back of his chair and pick up a few personal belongings – a baseball cap with the logo Barmy Barnes’ Army, which he threw into a wastepaper basket, a water pistol and a child’s toy gun that had featured in some of the high-spirited horseplay that Barnes encouraged after a profitable trade. Everyone knew. As Jules left, no one caught his eye, everyone had a phone to his ear; no kind words and no high fives.

  Barnes called through to his outer office.

  ‘Mary – get out and update the termination papers for Jules. I’m firing the mother-fucker for cause!’

  ‘They’re already with word-processing, Ronald.’

  ‘Good.’

  Sometimes he felt frustrated by Mary’s anticipation of his instructions, but today he was pleased. She was very efficient, always on top of things, anticipating rather than responding. He had sometimes wondered whether to hire a younger secretary, but he knew that he could never have replaced Mary. So instead he had hired the expensive blonde in the Chanel suit. She had no real secretarial skills, but looked stunning and could just about serve a cup of coffee. He turned to see his senior traders standing uncomfortably in the doorway.

  ‘Jules is toast. I’ve fired the smart-arsed mother-fucker.’

  No one said anything. They shifted uncomfortably and stared at the floor, the ceiling, the smashed speaker-phone, anything to avoid eye contact with the boss.

  ‘Mike – put Ben in charge of junk bonds. Tell him to clean it up and close it down, and then fire those two mother-fuckers who worked with Jules.’

  One of the traders nodded.

  ‘Sure, Mr Barnes.’

  Barnes opened a large cigar case on his desk and went through the motions of lighting one, using the precious seconds to think while his traders stood in uneasy silence. It was early in the day for a cigar, but fuck it, it was not every day that he lost that much money before breakfast.

  ‘Coffee!’

  The Chanel suit appeared seconds later carrying a refill. Despite their unease, the traders followed her every movement with evident appreciation.

  ‘So how are we going to make back what Jules has lost us?’

  For a moment no-one spoke, then one of the traders cleared his throat and looked at Barnes.

  ‘Intech.’

  The man who spoke was Martin Dade, who ran Barnes & Co’s European equity trading desk. He was short, aggressive, and very determined – just the kind of trader Barnes liked.

  ‘Do you mean the German company? The semi-conductor company?’

  Dade nodded.

  ‘What the fuck do you want to do with Intech?’

  ‘They’re in a price war, boss, with their US and Asian competitors, and the market’s been waiting for news on their latest high-speed chip. There should be an announcement along with the half-year results in a few days’ time.’

  ‘So?’

  ‘So I want to fuck ’em, boss. I want to short the hell out of ’em. I want to sell those shares like they’re going out of fashion – which they will be by the time I’m through. The market’s spooked enough as it is, the stock’s off nearly five per cent in the last week. There are rumours all over the place – just check out some of the Internet bulletin boards. I tell you, it’s thin, it’s fragile. I
want to do a real job on ’em.’

  Barnes looked at him, expressionless. He liked being called boss by the senior traders, and he liked Dade, who had great market sense and was ultra-aggressive. He wandered over to a screen by his desk and punched in some numbers.

  ‘We’ve already got a small short out there. So far we’re up three million. If we start selling shares we don’t own in that kind of size, can we borrow enough from the big institutions to cover ourselves?’

  Dade nodded confidently. ‘Already taken care of, boss. I’ve been taking soundings already, and we can cover ourselves comfortably. Mind you, if I’m right, we’ll sell massively on day one, the price will collapse, and we’ll buy the shares back the same day without anyone knowing we never had them in the first place. This is a winner, boss.’

  Barnes looked at Dade, grinning. ‘Shall we place a big bet?’

  There was silence in the room, so much so that the background noise from the trading floor seemed to fade, and the noises from the outer office seemed to disappear.

  ‘How big is big?’

  It was Ray Masterson, who ran the firm’s Japanese desk. He was a consistent producer, and a great natural trader, but he did not fawn upon ‘the boss’ in the manner of some of the others.

  ‘Big, Raymondo, is how big I say it is.’ Barnes could see he had irritated Masterson, as he had intended to, and drew satisfaction from it.

  ‘Right, the rest of you fuck off. Dade – stay here. Gentlemen – we’ve a busy day ahead of us!’

  He chuckled. This would be fun. And it would also be very, very profitable. Barnes had made his name by being a maverick, a contrarian who had no respect for anyone, and the guts to take on all comers if he held a strong enough view about something. He had started in the wake of the ’87 crash. At that time the firm was a start-up, a group of hungry young traders fed up with the bureaucracy and hierarchy of the established City firms. Barnes had never fitted in, but instead cruised from job to job, firm to firm, collecting like-minded misfits who had ultimately joined him in pooling their limited funds with money from some wealthy and eccentric backers to start their own firm. They opened for business in the heyday of the bull market, when it seemed impossible to lose money. Then the October crash came along and everything changed. Everyone was selling, panic reigned and people who should have known better scrambled to unload positions at almost any cost. So when he judged the time right, Barnes bought. And bought. And bought. The firm extended its credit lines, borrowed at outrageous rates, but kept buying. And at first, because they had started to buy too soon, they bled. But Barnes held firm, clinging stubbornly to his view that it was all overdone, and as the markets slowly stabilised and prices started to rise again his positions went from red to black and within days the firm was motoring. Someone was smiling on them and by Christmas they were all rich men.

  The legend grew in the telling, and Barnes did his best to live the legend. He hired the brightest, sharpest people in the business. He paid them lavishly but exploited them ruthlessly. His personal life, always a low priority, was soon squeezed out altogether. He acquired all the toys: a big town house, a country estate, fast cars and a taste for rich living. The first Mrs Barnes was soon replaced with a younger, prettier and much more expensive model, though she too soon faded and after an expensive divorce he settled for a succession of glamorous ‘companions’. Meanwhile the business grew as he found more and more niches to explore. He invested in technology, found friendly insurance companies to invest in the business to grow its capital base – ‘my dumb friends’, as he called them – and adopted an ever more aggressive stance towards the City Establishment, who envied and resented him.

  Now, as he watched his senior traders going back out to the floor, he was overwhelmed with a feeling of boredom, a jaded, tired flatness that made him crave excitement.

  ‘Okay, Dade, let’s do it. But you’d better have something good up your sleeve to make this work.’

  Dade smiled confidently and conspiratorially.

  ‘Don’t worry boss – I’ve wanted to do this for a long time. I never did like the fucking Germans.’

  As he left Barnes’ office, he went to the men’s room, checked it was empty, and got his mobile phone from his pocket.

  As trading started in the German market, it was immediately obvious that Intech was in for a tough time. As Barnes & Co started to sell in huge size and at almost any price, others followed suit, wondering what the infamous trading house knew that no one else did. Just after ten, an Internet bulletin board carried word that the new super-chip was a dud, and that the company would have to write off close to $1bn. The bulletin-board had no official status – it was simply an Internet site where some of the thousands of individual day-traders exchanged advice and tips. One of the most regular contributors to this particular site wrote under the name Gold-miner. He had a good track record and others paid attention to his opinions. When Gold-miner suggested that Intech was in trouble and should be sold ahead of its results, several thousand individual shareholders and traders tried to sell. A similar pattern followed on several other bulletin boards. The selling pressure grew as the share price started to slide. The stock was listed and traded on the US NASDAQ exchange as well as in Frankfurt, and when the US opened and American investors started to pay attention at around lunchtime in London, the slide became an avalanche. No one wanted to own Intech. The stock fell dramatically, at times almost going into freefall when there were no buyers at all. Speculators smelt blood in the water, and by mid-afternoon the share price had fallen by almost a third. $5bn had been wiped off the giant company’s share price. At their headquarters in Frankfurt, the Intech board were said to be in a crisis meeting and were refusing to take journalists’ calls.

  Barnes was in his element. He was out on the trading floor, surrounded by a crowd of traders, all eyes on a screen that showed the Intech share price. He noticed that Dade kept absenting himself from the floor and on one occasion joked about all the pressure giving Dade a weak bladder. Dade laughed, but their eyes met and Barnes’ mood changed. He pulled the other man aside.

  ‘Just you be fucking careful! Don’t get too fucking smart for your own good!’ he hissed viciously.

  In financial terms, Barnes was betting the firm. It was all going on one giant spin of the wheel. They had a huge short exposure to a single stock, and if it all went wrong, his losses could be catastrophic. But it was not going wrong. It was going wonderfully, amazingly right. At three o’clock Barnes announced that their profit on paper was over $300m, almost as much as they had made in the entire previous six months.

  The traders cheered, recognising the moment for what it was – a historic day in the markets. After this, their reputation as a trading house would be unmatchable. They had played the market’s sentiment perfectly, and had used their muscle where it counted. They were truly hammering one of Germany’s biggest corporations, and they were doing it from a trading desk in London. Intech’s dramatic share price crash was the lead story on all the financial news bulletins, adding to the feeding frenzy in the markets. The traders laughed and joked and told bad jokes about Germans in strange accents. Dade goose-stepped up and down the floor. The atmosphere was one of total euphoria. Already Dade had mentally bought himself a big new house and a boat. This was truly a great day.

  At 3:15 one of the traders called out, ‘Latest from Gold-miner – Intech’s going to zero!’ Even Barnes joined in the laughing and cheering.

  At 3:30 Barnes looked at his watch. Intech’s price was off thirty-five per cent on the day. There was only about another hour of trading left. He walked over to Dade.

  ‘Buy!’

  For a moment no-one moved. All eyes were on Barnes. Then there was pandemonium. Dade and his team seized telephones and hit the buttons that would direct dial to their major counterparts in the market. All eyes were on the screen as Intech’s price continued to fall. In less than ten minutes Dade had closed their position, buying back the shares they
had sold short. They were home and dry. Dade was punching numbers into a calculator.

  ‘Back of an envelope, we’re up three $320m on the day.’

  Barnes pursed his lips and looked around the floor. It was a moment to savour.

  ‘So don’t stop buying now.’

  Dade stopped in his tracks and the whooping and cheering of the traders subsided. For the first time Dade showed real emotion.

  ‘Boss, we haven’t had a day like this since ’87.’

  ‘I know. So let’s make it an even better day, shall we?’

  He turned to a short, burly looking man in a blue and white striped power shirt and an extravagantly pink Hermès tie. Their eyes met, and Barnes nodded. Rory Chalmers, Dade’s ambitious number two, pushed his former boss aside and seized a telephone to start shouting orders. Others followed his example and soon the firm was buying on a scale previously unimagined. They were the only buyer in the market, and they were taking on all-comers. Barnes was trying to call the bottom of the market. He did not believe for a second that Intech’s super-chip was a dud, and he knew that ultimately the market fundamentals would triumph over Dade’s carefully orchestrated stampede of day-traders and short-sellers. When the market realised the extent to which Intech had been over-sold, the price would bounce back. And he would clean up for a second time. He ignored Dade, who sat slumped in a corner, shaking his head and muttering silently to himself.

  And still Intech’s price fell.

  By four o’clock their earlier profit had disappeared and they were showing a loss of over $150m. By 4:15 their position had almost exactly reversed itself and they were down nearly $300m. Intech’s price had halved. The company had finally caved in and issued an announcement saying that they would be making a formal statement at five o’clock.