"I've had enough," she said. "I'm off. I can't stand much more of this, and if I leave now I'll get home in time to put Oliver to bed. Jamie says he's staying. He'll take the train back. Will you look after him?"
I frowned, trying to decide whether I should go with her.
She saw what I was thinking. "No, you stay here.
You shouldn't leave early, but I can. And I'd be happier if you kept an eye on Jamie."
"That I've done before."
"OK, see you." She put a hand on my arm. "Isabel's nice," she said, winked, and v^as gone.
An hour or so later, as people began to disperse, I phoned for a taxi to take us to the station, and then I went in search of Jamie.
He wasn't inside from what I could see, nor was he in the garden. I caught sight of Isabel. "I'm off now. See you tomorrow."
"Oh, good-bye. It was nice to talk to you."
It was a polite thing to say, but I was sure she meant it. "Yes, it was nice," I said. And then, "Have you seen
Jamie?"
"Oh, yes," she said. "He went that way to look at a statue with Luciana. That was about a half hour ago." She gave me an amused glance.
"A statue?"
"Yes. Apparently there is a statue of Hercules in the wood. One of the Victorian owners of the house removed his equipment. Luciana has had a replacement specially made. I believe she's very proud of it."
Christ! Kate had said keep an eye on Jamie and I hadn't. But to try to do something with the boss's wife at a party with everyone from work would be foolhardy. Insane. Just the kind of thing Jamie when drunk might do.
I hurried out of the back garden around the side of the house, trying to make as much noise as possible, so as not to surprise them doing something I didn't want to see. A copse of trees stood discreetly back from the house, with a path winding through it. It was beginning to get dark.
"Jamie!" I called. Too loud. Someone might hear. Someone other than Jamie.
I found the statue. No sign of Jamie or Luciana. But I wasn't surprised to see that Luciana hadn't stinted in returning Hercules his manhood. He was now a very proud statue indeed.
"Jamie! It's Nick! Come on." I crashed through the undergrowth and eventually spilled out in front of the house. There was Jamie in a little group with Luciana, Eduardo, and Pedro, standing right by the taxi. They were all smiling, all tipsy
"Ah, Nick! There you are!" he called with a broad grin. "I've been looking for you everywhere! Our taxi's here."
I was too embarrassed to go back in and say goodbye to Ricardo, but I thanked Luciana, who drew me close to her for a kiss on both cheeks.
"It was very nice to meet you, Nick," she purred. "Come and see my designs someday."
"I'd love to," I said, and bundled Jamie into the taxi.
The favela deal was dead. Bocci's papers carried the scandal over the weekend. It harmed Humberto Alves and the mayor, but there wasn't enough in it to do them serious damage. Brazilians had found a new enthusiasm for rooting out corruption; they had even successfully impeached a president. But there was nothing that really surprised the city in this story. Everyone assumed that this kind of thing was still going on.
For Bloomfield Weiss the outcome was different. International banks dealing in Latin America have to be scrupulous about their reputations. Gringo financiers make easy targets for accusations of corruption, as Bloomfield Weiss was finding out. They couldn't risk
more damage to their reputation by going ahead with the deal. So they pulled out.
The Dekker machine continued to operate as if nothing had happened, bringing bond issues to market, spreading rumors, buying, selling. I watched Jamie work; it was all beginning to make more sense to me now. But we were both subdued. We didn't mention the favela deal, money laundering, or where he and Lu-ciana had got to at the party the previous day.
But our activities in Brazil were not only marked by Bocci's newspapers. A small article in IFR, the bond-market weekly, caused a ripple around the dealing room when it was first noticed. It was in the gossip column, where the following week's events often first appeared as unsubstantiated rumor.
Dekker Ward Employee Attacked in Brazil An English banker working for London-based Dekker Ward was attacked by a gang in Brazil last week. Nicholas Elliot was walking on Ipanema beach in Rio de Janeiro late at night when he was attacked by a gang and stabbed in the chest. Elliot is understood to have recovered well from his ordeal.
Not so his colleague, American citizen Martiii Bel-decos, who was murdered in his hotel room in Caracas last month, ostensibly by thieves. Two such attacks so close together demonstrate the increasing dangers facing bankers traveling to South America. However, there may be a more sinister explanation. Sources inside Dekker Ward say that Martin Belde-cos was working on verifying the origin of funds received by Dekker Trust, Dekker Ward's Cayman Islands affiliate. There are rumors in Caracas that Beldecos's murder was not the result of a random burglary gone wrong, but a contract killing. A
spokesman for Dekker Ward denied this, and spoke of the shock felt by the whole firm over the tragedy, and their sympathy for Martin Beldecos's family.
Jamie scanned the article and threw me an anxious glance. "That wasn't you who talked to them, was it?''
"No," I said. "But it's interesting, don't you think?"
"It's just gossip. The real trouble will come when Ed-uardo finds out who has been talking to IFR. Watch out, here he comes."
Eduardo was walking across the square to Ricardo's desk, clutching his yellow copy of IFR. They conferred for a few minutes, and then Eduardo broke away.
"Shit! He's coming this way," whispered Jamie.
He was indeed, a large dark presence, brows knitted in anger.
"Follow me," he growled at me, barely pausing to slow down as he passed Jamie's desk.
I did as he asked, into the opaque comer office.
"Sit down," he said.
I sat.
He strode around his desk and sat facing me, his large shoulders hunched over the plain white pad of paper in front of him.
"Well?"
Initially cowed by his presence, I now began to feel angry myself. I had done nothing wrong. I wasn't a schoolboy. I wouldn't be intimidated like this.
"Well, what?" I replied, looking him in the eye.
"Did you talk to/FR?"
"No." I kept my voice calm.
Eduardo leaned back in his chair and fixed his eyes on mine. They were large, dark, and angry. Like Ricardo's they seemed to bore straight into me, threatening me to tell the truth, daring me to lie.
"No one is allowed to talk to the press at Dekker Ward without permission/' Eduardo said. "And to spread this kind of rumor is a betrayal of everyone who works here. Dekker Ward has worked hard to keep a spotless reputation in Latin America. This kind of rumor can do us untold harm. Do you understand?"
"I understand very well," I said. "As I said, I hav^en't spoken to any journalists. I don't even known any financial journalists." A wave of anger rose in my chest and seemed actually to cause my wound to throb. "A week ago I was stabbed in the chest while I was on business for Dekker Ward. I deserve your trust. In fact, I expect your trust."
Eduardo watched me with his thick lips pursed. "I hope you're telling the truth," he said, "because if you're not—"
I'd had enough. "Of course I am!" I said. "Now, if you'll excuse me." I stood up and left the room, feeling Eduardo's glowering eyes on my back.
Jamie was right. There was no way I was going to tell Eduardo about Martin Beldecos's fax.
During the morning, a number of other people were called into Eduardo's office, including Jamie. The atmosphere in the office changed noticeably. I was not the only one who was angry.
Just before lunch, Ricardo emerged from Eduardo's office and perched himself on Jamie's desk.
"Nick, I suspect Eduardo was a little rough on you this morning," he said.
1 nodded. "He was. And without cause. He has no reason to think that I
talked to the press. And it was me who was stabbed."
"I know. And I'm sorry. I appreciate that. I trust you and Eduardo trusts you too. It's just it doesn't look good for the firm to be linked to a drug-gang murder.
and I think my brother was a little angry about it. Don't worry, you're doing a good job, and we know that. Let's just forget it, shall we?"
He patted me on the shoulder, and walked over toward Dave and Miguel, who both looked like they had had a hard time too.
I glanced at Jamie. "Eduardo does this every now and then," he said. "Loses his rag and throws his weight around. Then Ricardo has to calm things down. At least this time it looks like no one got hurt."
I was still angry. But soon something happened that took my mind off money laundering, Martin Belde-cos's murder, and Eduardo. The Brady battle.
11
The battle started at seven-fifteen on Wednesday morning. We started it. Or rather, Ricardo did.
The battlefield was my Argentine Discount bond issue.
These bonds had been bom out of Argentina's Brady plan, named after the U.S. Treasury Secretary, Nicholas Brady, who had sponsored the original idea. During the early 1990s, the banks who had lent billions to Latin America agreed to swap their defaulted loans for bonds, which could then be traded. These became known as Brady bonds. In the next few years most of the major Latin American countries had undergone a Brady plan, leaving over a hundred billion dollars of Brady bonds outstanding. Needless to say, Dekker had a lot of fun trading them. The Argentine Discounts, or "Argy discos'' as they were known, were one of the three classes of bonds created out of the Argentine Brady plan in 1992.
After the usual round of comments from everyone, Ricardo told us his idea. "As you guys all know, Argentina has been cheap for a while, and it's getting cheaper. There's no good reason for it. Cavallo's peso
plan is working and their banking crisis is under control. We're not going to see another Mexico meltdown down there/' He was referring to the crisis that had hit Mexico after the disastrous devaluation of its currency in December 1994.
"The discos are cheap. We know that the Shiloh Fund has been offloading a ton of them into the market. So that's where we'll move. Pedro and I have picked up two hundred million so far, but that's just a start."
I caught my breath. Two hundred million! I^cardo hadn't been exaggerating when he had told me he had bought a lot of bonds. I couldn't help feeling a little proud. Of all the bonds in all the world, Ricardo had picked mine to do a number on. I listened in anticipation.
"Now, the Discounts are the smallest of the three Argentine issues with just over four billion dollars outstanding. That's still quite a lot of bonds, but we think that up to three billion is locked away by people who won't sell at these prices, mostly because they'd have to book a loss. So if we pick up four or five hundred million we should really move the market. Get these bonds trading where they should be."
There was a chuckle from the assembled group. "I like it," said Dave.
"Do we cut in our customers yet?" asked Jamie.
"Not quite yet," said Ricardo. "We'll edge up our bids on the discos today to see what we can pick up. But don't encourage your accounts to sell unless they really have to. You don't want to look like fools tomorrow. Any other questions?"
Nothing.
"Anything else?"
Carlos Ubeda, the head of Capital Markets, spoke up. "Yes, one thing, Ricardo. We need to bid for the Mexican deal tomorrow. Two billion dollars, five years."
Carlos meant that Mexico wanted to borrow two billion dollars from the markets through a bond issue, and they had asked us to quote them a price at which we would lead it.
''Two billion! I thought they only wanted one. That's
huge. Why so much? "
''They've got a lot of debt to repay this year. And you know the Mexicans. They like to show the world that they can do bigger deals than anybody else."
"This is hardly the time for it. What price do you think will get it?"
"I think we might need to go inside ten percent."
Ricardo winced. "That's tight."
"The competition's tough."
"OK, everyone. Ask your customers what they're hearing about Mexico. See if we can find out what price the competition are talking. But make sure that they know we thirk it should be at least ten percent."
The meeting broke up. I followed Jamie to his desk.
He grinned at me, his eyes twinkling, and rubbed his hands. "We're going to have some fun today."
He picked up the phone to his old regulars. He was as calm as if this was just any other day, but the calls were crisper than usual. Less chat.
He ran through our prices with Chris Frewer of Colonial and Imperial, a London-based fund manager.
"Heard anything about a new deal for Mexico?" Jamie asked.
"Yeah. Bloomfield Weiss say they might be bringing a big one." Frewer was English, and he sounded the sanrie age as Jamie and me. "Oh, yes? Any price talk?" "A touch over ten percent. Are you involved?" "Are we involved?" Jamie snorted. "Of course we are. I'll let you know when 1 hear more."
"Hold on! Before you go, did you say sixty-eight and a half bid for the Argy discos?"
"That's right."
"Is that good for ten?"
"Good for ten, good for fifty," Jamie said. He dropped his voice to a whisper. "But if I were you, I wouldn't rush into anything this morning."
"Oh, yes?" A note of interest had entered Frewer's voice. He wasn't stupid. "And why not?"
"Well, I could give you a lot of economic bullshit, but I don't want to waste your time. Let's just say they're going up."
Frewer thought for a moment. "OK. I'll hold off and watch."
"Sound decision. But, Chris?"
"Yes?"
"You won't go off and buy any yet, will you?"
Frewer laughed. "Of course not. Keep me posted."
As Jamie put the phone down, I asked him something that had been bothering me. "Are we being fair?"
"What do you mean?"
"Building up a position in a bond issue before recommending it to our customers."
Jamie laughed. "We're not trading British Telecom on the London Stock Exchange. You're on the wild and woolly shores of the emerging markets here. This is the law of the frontier. That's exactly how guys like us make money."
"Ah."
The sandwich man came around, and I grabbed a bacon and avocado on ciabatta. I fetched us both a cup of coffee. But we didn't stop dialing and talking. Then at about one, I heard the familiar handclap. I looked up. Ricardo was standing in the middle of the square of desks, making a "T" sign with his hands. Time-out. The
hubbub swiftly died down as all the phones went on hold. Everyone turned to watch him.
"OK, compaiieros, we've got three hundred and forty million of the discos at an average price of sixty-eight and a half. It's time to go public. Tell your most favored accounts first. Charlotte will release a research report in an hour's time. Any bonds Pedro gets from now on he'll use to fill customer orders. We want to cut our friends in. By now we should have hoovered up all the bonds dumped by the Shiloh Fund. From now on we'll be taking the Street short, so the price should start to move."
The group stirred in anticipation.
"Now, anything on Mexico?" Ricardo asked.
"They're talking a smidgen over ten percent," said Jamie.
"And who's in the market?"
"Bloomfield Weiss, apparently. They say they're confident they'll get the deal."
Ricardo frowned. "Well, keep your ears to the ground. And don't let anyone even dream of a yield of less than ten percent."
The meeting broke up, and Jamie went straight on to his favored customers. Chris Frewer chuckled and bought twenty million. By this time New York, Miami, and all the South American cities were in. Andrea Geller at a small New York hedge fund bought another twenty. And Alejo bought fifty.
Alejo was Jamie's biggest account. He worked out of
Miami, but he ran the money of one of Mexico's wealthiest families. Needless to say, the deals were booked through one of the Dekker Trust numbered accounts. Jamie had apparently cultivated Alejo as a client during his previous job at Gumey Kroheim, and had taken him with him to Dekker.
Alejo's fifty was done at a price of sixty-eight and a half.
"I thought you said the price would go up," I said to Jamie.
"Don't worry," he said. "Give it time. This is good. We've got our people in at a good price."
I looked round the room. It was buzzing. People were buzzing, phones were buzzing, bonds were buzzing. It was intoxicating. The Dekker machine was in action and it seemed unstoppable.
But it turned out Dekker's wasn't the only machine in action that day.
"I'm sixty-eight offered in the discos!"
It was Pedro. We turned to look at him. He was talking rapidly to Ricardo, who was frowning.
"What's going on?" Dave shouted.
"I don't know!" said Pedro, rurming his hands over his close-cropped hair. "I'm getting hit with bonds from all directions!" He grabbed a phone. I watched as he hunched over it and slammed it down.
"Hey, Pedro! Where do you offer ten discos?"
Pedro rubbed his chin. "Sixty-seven and a half!"
The price tumbled. Pedro kept lowering his price, and he kept being sold bonds. We could see the green figures on the screen in front of us winking. Sixty-seven and a half. Sixty-seven. Sixty-six and a half.
"Jesus!" whistled Jamie. "We've got to own five hundred million by now."
Five hundred million! And a two point loss. I did the sums. "That's ten million we're down."
Jamie nodded grimly.
Ricardo strolled over. He leaned down next to Jamie. "I don't know what's going on here. Kent has spoken to the Shiloh Fund, and they're definitely cleaned out.
Someone is selling a lot of these bonds. We need to find out who/'
"ITl see what I can do/' said Jamie. He thought a moment and then called Frewer at Colonial and Imperial.
The market maker Page 11
