by Ben Mezrich
“Like I said,” Reston continued, “it’s been going on for more than a hundred and thirty years. Traded down from father to son, almost forever. A real family business. Like we told you, you can’t just walk into the Merc and try to get a job. And even if you did, you wouldn’t survive without a mentor. It isn’t something you can learn at Harvard Business School. We’ve all seen it before, the Ivy League kids who hit the trading floor and fall completely apart. You have to have the heart to do this, as well as the mind.”
David nodded. Reston really seemed to have a stick up his ass about David’s degree. Maybe Reston was letting him know that he wasn’t going to get any special treatment—that just because he was Giovanni’s newest kid, that didn’t make him a de facto star. Or maybe Reston simply didn’t like him. Either way, David knew he was going to have to work to earn Reston’s respect.
Their conversation was interrupted, briefly, as the two traders who had shoved each other a few minutes ago went at it again. This time one of them had to be pulled away by two others in similar bright blue jackets. David heard at least one ethnic slur in the shouting that followed—but it was one Italian talking to another, as far as he could tell, so it didn’t go any further than that.
“Christ,” David said, only half-joking, “I might need to bring my boxing gloves if I’m going to be spending a lot of time with the traders.”
Reston shrugged. “The Merc is a real physical exchange, a street fight. Trading on the Merc truly does involve physical confrontation. There are real bodily limitations to the floor. Where you stand—being closer to certain traders looking for certain positions— can mean the difference between millions of dollars. Fistfights are not uncommon, downstairs or up here. Certainly, pushing and shoving is a daily thing. There’s one trader, Bobby Maroni, a little guy, maybe sixty years old and shrinking every week, who has two clerks paid to actually stand behind him, holding him in the pit so he doesn’t get tossed out when things get frantic.”
David laughed, then realized Reston was serious. It was amazing to think that a modern exchange worked this way— men physically fighting for space as they traded millions of dollars worth of energy futures. And further, that this seemingly archaic battle had far-reaching implications, because at its heart was the price of the ultimate commodity.
“See, but it makes sense,” Reston continued, as if reading David’s thoughts. “Oil is volatile. To trade oil, sometimes you have to be equally volatile. The traders on the floor are working with millions of dollars per day. And sometimes they don’t hold their positions very long at all—some hold for only a few seconds, others a few minutes, while some hang on overnight. And the price is always changing. And not just little changes like with the stock market—huge swings that seem to come out of nowhere. So these guys, they’re really gamblers at heart. The biggest gamblers in the world, playing in the biggest casino you can find.”
“Why does the price of oil change so much?” David asked, hoping it wasn’t too stupid a question. Reston seemed happy to answer—maybe happy that the Harvard brat had realized he had to ask questions, because this was as foreign to him as Harvard was to most of these guys from Brooklyn.
“Most of our oil comes from certain specific regions of the world, while the demand is ubiquitous. A variety of triggers can vastly affect the price. Hell, you know what one of the most influential triggers is to the price of oil?”
David’s first thoughts were war, maybe unrest in the Middle East. But then it dawned on him—something much more commonplace probably had a much bigger effect.
“The weather?”
“You win another beer, whiz kid. Yeah, the weather is enormous here. In the traders’ offices, they’ve got it on their TV screens all the time. They even have a meteorologist on staff.”
Intuitively, David realized, it was easy to understand: A cold front hits Manhattan, and suddenly the demand for oil skyrockets. The trading floor becomes a churning mob scene as the traders take advantage of the price movement, and the volatility increases, building on itself. Millions of dollars are made in minutes, sometimes seconds.
“So when the weather goes crazy—”
“This place turns upside down. Funny story. About four years ago, when I was still trading full-time, I was at a rehearsal dinner for my niece’s wedding. Cute girl, Fiona, my older brother’s kid. Anyway, I was about to make a toast when I caught sight of a TV in the background. A hurricane had just earned its name, and the weatherman was predicting that eventually it was going to hit the Gulf. Everyone else at the wedding was laughing and smiling, but I was fighting back tears. I was in a deep position on crude, and I was going to lose millions.”
David shook his head, laughing. He tried to picture Reston as a trader. The Texan, as tough as he was, seemed so much more refined than the guys in the jackets who surrounded them. David’s eyes searched through the crowd, trying to see if there was anyone Reston might have fit in with—and noticed a table about twenty yards to their right, close to the glass doors that led out to the patio. The table was surrounded by a half-dozen young men in jackets with what looked to be zebra stripes, all standing while they drank from frosted mugs. Only one trader was seated, his feet up on the table as he leaned back, arms clasped behind his head. He was older than the rest—in fact, maybe even as old as Mendelson and Giovanni, certainly late fifties, maybe closing in on sixty. His hairline was receding, a ring of wispy, silver-gray locks sticking up behind his ears like some sort of demented halo. He had dark rings around his eyes and thick, chalky lips, clamped down around a cigar. Nobody else seemed to be smoking indoors, though the outer patio was obviously smoke-friendly. But this guy seemed somehow above the rules. And it wasn’t just the cigar that gave David that feeling—it was the way the younger traders milled about him, not just the guys in the zebra jackets that matched the old man’s but the other traders as well. As an Italian, David had been trained to recognize the signs of that sort of respect from a very young age.
Reston noticed where David was looking and leaned forward over the table between them.
“You’ve got a good eye, kid. His name is Dominick Gallo. He’s the biggest trader on the floor—hell, maybe the biggest in the history of the Merc. He’s been here even longer than Giovanni—fuck, he was born on that trading floor. Worth about three hundred million, maybe even more. We call him ‘the Don.’”
David raised his eyebrows. That was just too much.
“You’re kidding, right?”
“Not to his face. But, yeah, among the board. I told you, this place is a family business, and Gallo’s family has been in this since the beginning. He’s got immense power over the traders, especially the older guys, the ones who came up with him. He’s like a god on the trading floor. And he’s a real mean bastard. He comes to all the board meetings, just because he can. And that often turns the board meetings into pitched battles, sometimes all-out wars. See, technically, the traders own the Merc, even though we on the board run it. So if the Don doesn’t agree with something, we often have to cater to him.”
David realized with a start that Gallo was now looking right at him and Reston. The cigar jerked up and down in the man’s chalky lips as those eyes gave David the once-over.
“His power base extends way beyond this place,” Reston said, waving past David at the older trader. “He’s used his money to buy up journalists, politicians—whoever he needs. And the amount of money he moves through this exchange puts the banks and even Big Oil under his skirt. So we don’t fuck with him, and he doesn’t fuck with us. Usually.”
David watched as Gallo took the cigar out of his mouth and suddenly pointed it right at him.
Reston kicked him under the table.
“I think the Don wants you to come over and kiss his hand.”
David looked at Reston, who shrugged. David wondered once again what the hell kind of world he had gotten himself into. A place like Merrill Lynch had been easy to figure out: there were bosses, and bosses’
bosses—a clear hierarchy. Here it seemed more like warlords and barbarians, all crashing into one another. Still, it was exciting to think about how much money was being made downstairs and what was at the core of all this insanity—oil.
“I’m kidding about the hand,” Reston said as David rose from the table. “Just go over and introduce yourself. And try not to say anything that pisses him off.”
David nodded, though he knew that sometimes he had a knack for that sort of thing. He pushed his way through the crowded lounge, heading straight for the zebra jackets.
The young men parted as he arrived, making room for him across the table from Gallo. There wasn’t a chair, so David stood, assuming that was the protocol. Gallo never changed position, his feet still up on the table, the cigar back in his mouth, his hands clasped behind his head.
“So you’re Giovanni’s new kid,” he grunted, more a mumble than anything else.
David held out his hand.
“David Russo. It’s an honor to meet you. I’m just learning the ropes around here, but any advice you have for me would be greatly appreciated.”
Gallo looked at David’s outstretched hand like it was a hunk of rotten fish, making no move to reciprocate. David heard snickers behind him from the younger traders watching like a gang of fucking hyenas.
“Every year Giovanni brings in an Ivy League piece of shit kid like you,” Gallo said, never removing the cigar from the corner of his mouth. “Coming up with all sorts of Ivy League ideas about how we could make the place more—what’s that faggy word you HBS guys are so fond of? Oh yeah, efficient.”
There was real laughter now coming from the traders, and Gallo seemed to be enjoying the moment. He rolled his eyes, black marbles spinning in the center of those ominous, dark circles.
“Well, let me save you the trouble, kid. I’ve been trading here since it was potatoes and Reston over there was a gleam in some bull-riding, whiskey-drinking Mick’s eyes.”
David had already figured out that there was a divide between the heart and the brain of this place—but was shocked at the outright hostility coming from the man Reston had called the Don. David had barely said a word, and already this guy seemed to hate his guts.
“You want advice?” Gallo continued, finally taking the cigar out of his mouth to jab it like a knife in David’s direction. “Keep your ass up on the fifteenth floor, and your head in Giovanni’s lap. That’s the best way for you to stay out of trouble.”
With that, he waved David away. David stood there for a brief second, stunned. Then the raucous laughter from the traders broke his trance, and he quickly made his way back to Reston’s table. Reston was grinning as David shakily lowered himself back into the seat.
“Don’t worry,” Reston joked, obviously getting the gist of what had gone down from the look on David’s face. “His bite is way worse than his bark.”
“I don’t think he likes me very much,” David managed.
“Hah. That old fuck doesn’t like any of us, but me and Giovanni—and by extension, you—have a special place in his heart. See, we’re not just suits fighting a turf war with the traders; we represent something even worse—change. Gallo has built up his fiefdom for fifty years, he’s made a fortune, and his family has had this place all to themselves for three generations. Now he thinks we’re threatening all that. Modernizing the exchange, going international, automating trading—hell, one day, if we have our way, there won’t even be a trading floor, and guys like Gallo will have a hell of a time adapting. You think the Don knows how to work a fucking Mac? This is his home, he understands it—and he thinks we’ve come here to take his home away. And you know what? Maybe he’s right. But that old fucker won’t be around forever.”
Just long enough to make my life miserable, David thought to himself. His hands were trembling under the table. He’d never been overly intimidated by assholes before, no matter how powerful they were. But something about Gallo scared the shit out of him.
“Maybe you can think of a comeback by the board meeting tomorrow morning,” Reston suggested. “Gallo will be there, you can bet on that. And from the looks of things, he’s gunning for you right from the start. Usually he gives Giovanni’s kids a week or two to get acclimated before he knocks ’em down a peg. So consider yourself special.”
Reston seemed more than a little pleased, and David questioned for the first time if he’d acted a bit impetuously, shifting jobs without doing a little more research. He reminded himself that Giovanni was in charge here, not Reston or Gallo. And he was here to work for Giovanni—his idol, the man he one day wanted to be.
Still, looking over at Gallo and the laughing, zebra-jacketed hyenas, David wondered what it really took to thrive in an environment like this. With his first board meeting less than twentyfour hours away, David had a sinking suspicion he’d find out soon enough.
Chapter 9
September 15, 2002
The view was like something out of a science fiction movie. A veritable forest of massive cranes, spanning as far as the eye could see, each one attending to futuristic monsters of concrete and steel, rising up toward the heavens like fingers reaching for God. Lush greenery interspersed with sweeping glades of sand, man-made fountains and waterfalls and beaches mingling with twenty-first-century roads, bridges, and tunnels. Camels on dirt paths just twenty yards from Ferraris on superhighways, Arabic men and women in traditional robes and burkas strolling past Europeans in Armani suits and the latest fashions of the Parisian runways. London was cosmopolitan; this was simply another planet altogether.
“Like a dream,” Khaled said as he touched the floor-to-ceiling windowpane with his outstretched fingers. Directly ahead, in the distance, he could see the great Burj Al Arab Hotel rising up above the coastline, its beautiful billowing sail soaring a thousand feet into the air. Khaled had checked into the world’s only seven-star hotel the night before—and the miraculous construct had been even more mind-blowing at night, surrounded by dancing sculptures of water and fire. Beyond the Al Arab, he could just make out the palm tree–shaped man-made island, Palm Islands—still under construction, but already one of the great wonders of the modern world. And closer, nearly straight down from where he was standing, he could see the great arched, three-hundred-foothigh, glazed-granite building that acted as the entrance to the city’s work-in-progress financial center, the Gate.
Khaled shook his head, stepping back from the window. The scale of it all was almost dizzying. Especially from twenty stories up in one of the most modern office buildings in the world.
“Indeed, it is a dream. Though at times, you’ll see, even the most wonderful dreams have a way of keeping you awake at night. The work here never ends.”
Khaled smiled as he turned to face the portly deputy finance minister. Minister Hakim Al Wazali was a good head shorter than Khaled, with a round, amiable face, puffy cheeks, and thick, sausagelike lips. His white ceremonial robes did not help his appearance, making him seem more marshmallow than man—but Khaled knew that this marshmallow was actually one of the more powerful people in the region, and truly deserving of his post at the forefront of one of the greatest financial miracles in Middle Eastern history.
“It is an absolute honor to be here. I thank you for the opportunity from the bottom of my heart,” Khaled responded, and he truly meant what he said. Looking around the glass-walled office, at the sophisticated decor that included a glass desk with inboard computer, multiple flat-screen TVs, bookshelves filled with finance texts resting side by side with religious literature and political tomes—it was a dream come true.
He could hardly believe that this office was now his own. “No need to thank me,” Hakim said, waving a thick hand in the air. “Your résumé is nothing short of spectacular. Top grades at Cambridge and the University of Geneva Business School. Five languages, proficiency in computers, mathematics, and religious law—we were lucky to find you.”
Khaled nodded, accepting the compliment, though inside he
felt a slight tinge of guilt. He knew his résumé was only part of the reason he had been offered the position, working directly beneath the finance minister in this office in the staggeringly modern Emirates Tower, just two floors below the minister’s own. The truth was, his uncle was a great friend to the nation as a whole, and a personal friend of Sheik Maktoum bin Rashid Al Maktoum, the all-powerful emir of the magical city-state. Sheik Maktoum and his brother, Sheik Muhammed, had created this futuristic oasis by sheer force of will; Khaled’s uncle had sent Khaled to work for them because, in his mind, there was no greater place for a young man to grow into a true leader.
“Anyway,” Hakim said, pulling his robes around him as he headed for the office’s smoked-glass door, “I’ll give you a chance to settle in before afternoon prayer. After prayer, I’ll take you to meet the rest of the staff. You’ll see that we have a top-notch operation—you’ll fit right in, I’m sure.”
Khaled thanked the man again and watched as he waddled away in a swirl of white robes and jiggling limbs. Then Khaled turned back to the magical skyline.
He only hoped he could live up to his résumé and his uncle’s connections. He was determined to repay his debt tenfold.
Watching the endless traffic of people, cars, and commerce in the magnificent city down below, he felt a burst of adrenaline. He was staring at what could only be described as the future—not just of the region, but perhaps of mankind as a whole.
Khaled prayed to Allah that somehow he would be an important part of that future. That somehow he would find a way to make a real difference—for the sheik, for his father, and for himself.
Chapter 10
September 16, 2002
Are you sure about this?”
David closed his eyes as he pressed his face against the cool glass of the VW Bug’s side window. He could feel the sweat pooling beneath the stiff collar of his Oxford shirt. He placed a hand against his stomach, right where the shooting pains seemed to be coming from—then grimaced as the pain seemed to get worse at his touch. He angrily pulled his hand away, gave Serena a quick peck on her worried cheek, then reached for the door handle.
