by Ashton, Hugh
“I see why you wanted us out of the room,” commented Sharpe with a wry smile.
“Don’t worry, I didn’t do it,” replied Meema. “Anyway, no more trading today. I’m exhausted and now I’m going to sit down for a few minutes and then I’m going to cook a vegetable biriyani for us all.”
“I am thinking that half a million dollars plus change is quite enough for one day,” agreed Vishal.
“I really can’t believe it,” said Mieko.
“Nor me,” said Meema. She looked flushed, and was breathing heavily, as if she’d just run a long-distance race. “Now just let me sit down for a moment and do nothing and get my strength back.”
After the next successful trading sessions a few days later (they had decided to leave the market alone for a short period in order not to draw undue attention to themselves) which netted at least another half million dollars each time, Sharpe talked a little more with Kim, and with several million dollars in profits, he decided it was time to start making money for Kim very soon.
-oOo-
Chapter 11: Tokyo
Sharpe was on the phone to Kim a few days later when the real problems started to take effect. Sharpe had just confirmed to Kim that the first transfer to M&M had arrived safely through a complex series of previously agreed financial cutouts, involving large amounts of cash being transported between different banks in different parts of Japan, when the conversation was interrupted by a piercing wordless scream from Meema’s trading room.
“Excuse me,” said Sharpe. “I’ve just heard a terrible noise, and I think I’m going to have to do something about it.”
He put down the phone and rushed to Meema’s room. Vishal was already there, with his arms around Meema, who was shaking and sobbing. Sharpe looked at Vishal.
“Not sure,” he replied in answer to the unspoken question, “Something on the news feed. I haven’t seen it yet. Something about Lehman Brothers, she said.”
Sharpe moved over to one of the screens showing a news ticker. “Holy shit!”
“What?” asked Vishal, his head still buried in Meema’s hair. “I still haven’t looked.”
“Lehman have gone bust. Official now. Chapter 11.”
“Couldn’t have happened to a nicer bunch of people,” said Vishal sarcastically. The rivalry between Vishal’s bank and Lehman Brothers was notorious. The implications hit him. “You what? You mean they’re closing the Japan office?”
“No, the whole thing round the world is going into liquidation. Lehman Brothers is basically bankrupt. RIP. Rejected the Korean offer, and Barclays isn’t going to buy them, it seems. Barclays don’t want the bad debts, just the assets.”
“What assets?” said Sharpe. “These people have been living on borrowed time, not to mention borrowed money, for ever and a day. Now their credit line has run out. Bet you no-one’s interested in their repo business any more.”
“Bloody hell!” said Vishal. He stared at the screen for a few minutes longer, apparently in shock. “What’s the matter?” turning to the still weeping Meema. “You weren’t that fond of them, were you?”
“It’s … not … just … them,” sniffled Meema. “Just take a look at the rest of the news.”
Sharpe scrolled down the screen. “No!” he shouted. “This isn’t happening!”
“Told you,” said Meema, almost triumphantly.
“What’s not happening?” asked Vishal, craning his neck. Sharpe’s head was blocking his view of the screen.
“The whole financial world is just going crazy.”
Meema answered. “All of this has sent the currency forecasts haywire. Just look at the screens there.”
Obediently, they all looked at the Katsuyama program screen to see what was going on. As Meema had said, the line predicting the exchange fluctuations was only roughly following the actual exchange rate.
“I see,” said Sharpe. “That seems to be real trouble.” He continued reading down the screen. “What’s this going to do to AIG? I mean, these guys are backing all the banks, and I bet that they can’t cover all the losses.”
“That means all the insurance for the banks has collapsed,” said Vishal.
“Effectively, yes. Holy crap!” said Sharpe.
“But …” wailed Meema. “I’ve lost all of Kim’s money.”
“What?” said Vishal. “But he sent us about two million dollars yesterday. We can’t have lost it all just like that. Can we?” he added dubiously.
“We were doing so well with the other money that I made out of our trading that I decided I was going to start doing some real trading with real money.”
“Two million dollars? All at once?”
Meema said nothing, but nodded dumbly.
“And that was Kim’s money?” asked Sharpe.
“Yes, it was,” replied Meema.
“Oh shit,” said Vishal. “Ken, you’re going to be the one who tells him.”
“I was just thinking that myself,” said Sharpe. “Are we really sure that we have to tell him?”
“Of course!” from a horrified Meema. “We can’t just let two million dollars disappear like that without telling him, can we?”
“We don’t have to tell him immediately, though,” pointed out Vishal. “We could try to make it back.”
“There’s no way that we can make the money back right now,” pointed out Meema. “Just look at the lines. They’re even worse than they were a few minutes ago.”
“It will settle down,” said Sharpe, hoping he sounded a little more confident than he in fact felt. “Give it a few days and I think we’re going to see something that’s a little more reasonable and rational.”
“So what are you going to tell Kim?”
“Nothing at all. We can use some of the money that we made earlier. We made much more than enough to pay for your sister, Vishal. Once the markets have settled down a bit, we’ll be clear, and we can make back the money many times over.”
“It’s worse than you think, Ken,” said Meema. Her head was in her hands, and it was difficult to make out what she was saying. “It’s not just Kim’s money.”
Vishal and Sharpe looked at each other. “Tell us. We’re not going to bite your head off,” said Sharpe.
“You will.” She was sobbing again. Vishal put his arms around her again, and nodded significantly to Sharpe, who took the hint and went out of the room, closing the door behind him.
“What’s happening?” Mieko asked him as he entered the room where she was sitting.
“The whole bloody financial world has collapsed. Lehman have finally gone under and they’re taking the world with them. There’s no way we can trade, no way we or anyone else knows what’s going to happen next. It’s that bad. It’s worse than that bad. Meema’s just lost all Kim’s money.” Sharpe felt as though he’d been kicked hard in the stomach. He felt sick and wanted to sit down. You don’t lose two million dollars of a gangster’s money and walk away in one piece, he told himself.
Vishal shouted for Sharpe and Mieko to join him and Meema. He looked shaken.
“We’ve lost everything,” he said.
“Thank you for not saying it was me who lost it,” said Meema. She had obviously been crying.
“It wasn’t anything you did,” said Vishal.
“You mean all our money as well?” asked Sharpe. “The money we made? What about Vishal’s sister?”
“That’s safe.” She seemed a little calmer, but her eyes still looked red and puffy. “I put that into a sort of escrow and I promised myself that I wouldn’t touch it. So I didn’t. That’s safe. But all the other money that we made has gone.”
“So we’re back where we started?” said Sharpe. Somehow the news didn’t seem as shocking to him as it might. It’s a lot worse to lose a gangster’s money than your own, he thought to himself. The lead weight in his stomach refused to disappear.
“We’re a lot better off,” said Mieko. “We have the money for Vishal’s sister.”
“
Of course.”
“And we actually have some money of our own. I didn’t lose it all. Not quite.” Meema managed a weak smile. “And we don’t owe anyone any money. We paid for all this,” waving her hand around the office. “At least we’re not going to have anyone chasing us.”
“Except for Kim,” Vishal pointed out.
“Maybe,” Sharpe began, trying to convince himself as much as the others. “Maybe we can use whatever money we have to start again. Things are bound to settle down, and then everything will be back the way it was. And we’ll all be millionaires again before we know what’s happened.
“And if they don’t settle down?” asked Meema. She started weeping again. “Come on, this is big news. Lehman are number three or four. They’ve just filed for bankruptcy and Merrill are shaky, and all the insurance in the world isn’t going to cover the Lehman bad debts. They’re not a brokerage any more, just in case you didn’t know. They’re a real estate investment trust selling fake bonds and equities on the side. This isn’t just a dip in the market, Kenneth-san. This is bloody anarchy. All the trading strategies in the world aren’t going to do us any good at all in this mess.”
“Well, we still have enough to pay for Vishal’s sister, and I think we may be able to pay back Kim soon. I’ll just try to persuade him that he’ll have to wait a little more time. I’m sure he can understand what’s happening. He doesn’t strike me as being exactly stupid.”
“I don’t know as much as you lot do about these things,” said Mieko. “But if we’re in trouble with all the special Katsuyama stuff that we have working for us, won’t everyone else be in even more trouble? I mean, they won’t have a clue what to do, will they? Surely we should be able to clean up as a result?”
“They won’t know what they’re doing, that’s true, but I don’t see how that’s going to help us,” said Sharpe. “I’ve never believed that having one eye in the country of the blind is that much of an advantage. Especially when someone turns the lights out on you.”
“So we keep mum and sit it out?” said Meema.
“I’ve no better ideas for the moment.” He shrugged. “Break time, children. All run outside and play till the bell rings.”
Inside, he wasn’t nearly as calm or cheerful as he sounded. If Meema really had figuratively put all of Kim’s money on black, and the ball had turned up red, then they were definitely in serious trouble. As the others left the room, he brought up a spreadsheet on the computer and started to punch in a few numbers.
His earlier guess was almost right. If the money for Vishal’s sister’s operation was at the low end of the scale, there was a good chance that they wouldn’t lose any more of their own money. Of course, the big unknown was the cost of the operation for Vishal’s sister, which was still a large fuzzy number. Phone calls to American clinics and Internet research had proved fruitless when it came to tying down a definite number – something that Vishal in particular, as a computer engineer used to precise answers, found especially irritating.
One thing was certain. He wasn’t going to tell Kim everything that had happened. Memories of the bag in the Tokyo station locker were enough to disabuse him of that as an idea. However, he also had no intention of lying to Kim. That could also lead to a lot of trouble, he felt. He wasn’t about to run away to Hanoi or anything, but he felt it would be best if he didn’t answer the phone at home or work for a few days, and screened all calls on his mobile before answering it.
He saved the spreadsheet and joined the others in the next room, where they were watching one of the cable financial channels. It was like watching the planes crash into the World Trade Center on September 11, thought Sharpe. It almost seemed as if the whole of the Western financial system was dying before their very eyes and here they were, watching the hearse drive up to collect the body.
Every now and then, either Vishal or Sharpe would let out an expletive, and Meema would squeal. It was unbelievable that these major institutions, that had formed part of their lives for so long, seemed to be disappearing before their very eyes.
“We should have seen it coming when Bear Stearns went under,” said Vishal. “The coming of the storm.”
“Bullshit,” replied Sharpe. “It’s been coming for much longer than that, and Meema knows it better than anyone.”
“Me?”
“Yes, you. You were the one making up those fancy trading strategies for the weird derivatives that were being sold. Putting together the packages of California no-doc mortgages and junk debt-funded LBOs.”
“I was only—”
“—following orders. I know. No, it’s not you who invented all these crazy credit default swaps and the rest of the shit, but tell me, did any of the managers off the trading desks really know what was going on? What was being sold? How much risk was involved?” Meema shook her head. “There you are. You had a whole load of greedy bastards selling crap to other greedy bastards who happened to be more stupid than them, with no supervision.”
“Oh, for God’s sake shut up, Ken,” said Mieko. “You’ve been saying this for the past year or so every time you come back home from a bank trading floor.”
“Because it happens to be true,” said Sharpe, a little stung. But he bit his tongue, all the same, as they continued to watch the reports on the Wall Street dance of death.
-o-
After what seemed like hours of flipping channels, and watching the talking heads repeat the same phrases over and over again, Sharpe decided it was time to check the prediction lines on Meema’s screens again. If anything, though, things seemed worse than before. An idea hit him, and he called into the next room.
“Meema. What would happen if you were to take currencies which weren’t part of all this and use whatever we have left? Something like Thai baht or Malaysian dollars or something? God, even roubles. Don’t you think that would be a bit more stable?”
“You’re joking, Ken-chan,” she replied. “It’s all linked together. People are doing option calls on half the currencies that are being traded, and hedging the calls with the rest.”
“Oh. Another good idea shattered,” he muttered to himself.
“I honestly think you were right first time,” said Meema. “Our best bet is simply to stay calm and wait till things get better.”
“And to say nothing to Kim,” added Vishal.
“Indeed, as far as possible.”
“What happens if he calls and asks us what’s happening?” said Mieko. “He probably will. I’m sure he’ll want to know what’s going on here while the whole financial world is collapsing in ruins.”
“Tell him some of the truth?” asked Sharpe. “That the markets are so chaotic that the Katsuyama gadget’s useless at the moment. He should wait a bit, and it will all settle down? We don’t have to mention to him that we’ve lost his money. Temporarily. We can tell him later if we want, when it’s all safe again,” he added, catching Meema’s double-barrelled reproachful look.
“Sounds good enough to me,” said Vishal.
“But how long is that going to keep him quiet, though?” asked Mieko.
“How the hell is anyone expected to answer that? Come on, we’ve been watching the greatest media minds on this subject, and they don’t seem to have a frigging clue what’s happening. How are we expected to know?”
-o-
In the next few days, a lot happened in the financial markets – various offers had been made and withdrawn for the stricken giant. In Japan, it seemed as though Nomura, the largest brokerage house in Japan, was about to take over large parts of Lehman’s operations in Japan, but Sharpe had friends in the IT department there who had no interest in the buttoned-down culture of Nomura, and were proposing to sell themselves as a team to the highest bidder.
“Anyone we can find,” Sharpe’s informant had told him in an almost tearful (and Sharpe guessed at least partially drunken) late-night phone call. “Those bastards at Nomura just want to strip everything and they’re not telling us a thing that�
��s going on. All we’ve heard is that the trading desks are going to be paid enormous sums of money. Guaranteed. Ha, ha. What about the poor bloody infantry? Fuck you, Nomura.”
“That’ll piss off the Nomura traders,” agreed Sharpe. Foreign trading houses paid notoriously more than the Japanese equivalents, and the only thing that bound most traders to their employers was the size of their pay packets and bonuses.
“Yeah,” giggled his friend (Sharpe was pretty sure by now he was drunk). “But where can they go? No-one’s going to want a bunch of Nomura has-beens. Anyway, I don’t think Nomura wanted the guys on our front desks anyway – just the technology that we’d been developing, and if I have my way, they’re not going to get it. The whole of my team will come with me if I find the right place for us to work.”
Later, Sharpe discovered that the whole of this specialist back-office team had gone to work for another more generous Japanese brokerage, leaving Nomura with a pile of technology that they could just about manage to use, but were incapable of enhancing, or even fixing if it went wrong. Just like M&M and the Katsuyama technology, really, if you thought about it.
“I wonder what has happened to our bank by now,” said Vishal the next day, referring to the bank where he and Meema had worked before coming to work with Sharpe.
“You’ve still got friends there if you really want to find out,” said Sharpe. “But my guess is that everyone’s going to be in the same sort of mess.” He typed a few addresses into the Web browser. “Well, like I said, everyone’s in the same sort of shit. Your former playmates are as badly off as any of them. Well, not quite. You’re better off than Merrill and a hell of a sight better off than Lehman. But in the hole by several billion dollars.”
“Not surprised,” said Meema. “Some of those derivatives deals I was helping with were pure smoke and mirrors, just like you said the other day, Ken. If the whole thing has collapsed, I’m not at all surprised. And I’m glad of it. I can’t really say I’m proud of the work I did there, after it’s all over.” She sniffed.
