Davos 2015 would be different for a certain number of its devotees. More than two weeks had passed since his confrontation with the City & Colonial pinstripes in his offices in Hong Kong and Kennedy vaguely hoped he would meet Sergei Tarasov or Michael Fitzwilliams.
Fitzwilliams would probably watch from afar, though in fairness it should be said he had never set foot in Davos, never mind the world Economic Forum. Pat suspected the ex-CEO was laying low at his home in Ireland. As to Tarasov he was probably holed up at his place in Limerick, in all probability judging it was too early or too dangerous to confront his friends and associates.
In any case of Vladimir Putin would be absent, too busy handling the economic disaster Russia was facing with the collapse of oil and the rouble. The Russian delegation was represented by its Deputy PM Dmitry Kozak.
After a low profile twenty four hours Kennedy saw there was nothing to be gained in hanging around and decided to move on. He was not interested in rubbing shoulders with billionaires, politicians and bankers, whose presence often looked like an exercise in self-flattery and preening. He avoided the attention of sensation seeking media personalities and self appointed pundits, who rarely got their facts right, not to mind their feeble attempts at crystal ball forecasting.
It was time to head for London to shore up support for INI HK, and discover who his real friends were. Since City & Colonial had dethroned Fitzwilliams and taken control of London, the Hong Kong entity, after the failed grab, had been left to its own means. INI HK was strong enough to survive as an independent private bank. Nothing had changed as far as its ownership structure was concerned, its shareholders were the same, that is to say the INI Banking Corporation was still a shareholder although it was now part of City & Colonial.
The question on his mind was: would City & Colonial sell the shares in the INI Hong Kong unit? There was after all a conflict of interest, its own presence in the former colony dated back more than one hundred years, to the time when City & Colonial had been incorporated in London, serving the needs of British trading companies scattered across East Asia, from Tokyo to Shanghai and Singapore, and from Calcutta to Batavia and Manilla.
Kennedy left the world’s financial string pullers and politicos gathered for their annual knees up behind with the head of the host country’s national bank, the SNB, triying to explain his reasons for his move to abandon the Swiss francs fix to the euro. However, the man from the SNB would not alone, there was also Mario Draggi, the head of the ECB, who was on the point of launching his belated programme of quantitative easing.
When Draggi finally announced more than one trillion euros would be pumped into the eurozone economy, the euro promptly dived., and whilst the bankers and politicians attentions were focussed on the Swiss franc and the euro, Vladimir Putin pumped up the pressure in the Donetsk region, forcing the new Ukrainian president, Petro Poroshenko, to break off meetings with his backers, the World Bank and the EU, to hurry back to Kiev.
HONG KONG
The Wu Family saw INI Hong Kong as, amongst other things, a conduit for incoming and outgoing investment capital, and, if things turned sour, a means of protecting the family’s wealth.
Wu had survived the rigours of Chinese Communism and had guided his family to prosperity. They had survived the tumultuous changes of the twentieth century: Mao’s Revolutionary government, the rigours of the Great Leap Forward and the excesses of the Great Proletarian Cultural Revolution that precipitated China into a decade of grief, shame and violence. A period glossed over by China’s present day leaders, a taboo. An estimated one to two million Chinese lost their lives when Red Guards ransacked homes, beat, tortured and killed ‘decadent, reactionary class enemies’, and famine raged across the land as fields were left untilled and uncared for.
The family nevertheless preserved its wealth thanks to their profitable textile business in Hong Kong as the Peoples Republic suffered from the throes of self imposed chaos.
With Deng Xiaoping’s reforms and overture to the West things started to look up and the Wu’s invested in Shenzhen, one of Deng’s five newly created Special Economic Zones, at first in textiles, then progressively branching out into electronics and real estate development.
After decades of prosperity, clouds were forming on the horizon. Wu was not a pessimist, but there was no denying the future would be more complicated. The last weeks were proof of the instability that stalked the unwary, first was the Umbrella Revolution and the students’ Occupy Central strike that had paralysed Hong Kong for weeks, then the British with their gunboat tactics sending their ‘pinstripes’ as Kennedy called them to seize control of INI Hong Kong. By good fortune Kennedy was there to repel them, and in no uncertain terms according to Lili’s account.
The Wu’s discretely unwound their stock markets holdings as Chinese indexes reached untenable heights, sooner or later speculators would burn their fingers as in 2008, when the market collapsed leaving his family with heavy losses, but Wu was not a strong believer in history repeating itself. It was much more complicated than that, things were never exactly the same.
He did however believe bad luck stalked the unwary and at such times a visit to the temple was in order to pay respect to the gods. There he would make offerings to the three wise men: Fu, Luk and Sau, the Chinese gods of wealth, power and good fortune, entreating them to guide his family in the decisions to be taken and bless them with continued prosperity.
Over the course of the previous five years, world markets, commodities, exchange rates and interest rates had fluctuated within a remarkably narrow range. Then suddenly, almost overnight, everything seemed to have gone crazy, crises jumped into the news on an almost daily basis, it was a connected world and the globalised economy was the new norm.
He was expecting Lili, her husband Pat Kennedy and his son Leung for a family meeting at the family’s Canton mansion. Also present would be other members their enlarged family: partners and shareholders in the family business. Since the death of Lao Wu’s brother some years earlier he was the family patriarch. Not engaged in day to day decisions, but informed daily of all important events in each of their companies and branches, principally in Guangdong Province, nearby Hong Kong and Macao, but also in Shanghai and Beijing.
U
mbrella Revolution and the students Occupy Central
On the agenda was a reappraisal of their business plans in view of the recent developments. There was the question of INI Hong Kong, now an independent bank, which seemed to have escaped the City & Colonial attack unscathed. Looking forward the situation was darkening, there ominous signs of the property market weakening and the worse was yet to come.
A real estate developer, Fafu Holdings, had missed an interest payment and there was risk of a default. Fafu’s problems were near to home, in Shenzhen, where trouble started when the local government blocked approval of Fafu’s property sales and new projects following a series of high profile arrests and accusation of graft.
The notes Fafu had sold to investors had fallen to a third of their original value after its projects were halted, which did not bode well for the hundreds of millions of dollar nominated bonds issued by other construction firms in Guangdong Province where property sales were falling off.
*
Pat Kennedy’s world had changed. In barely a dozen years he had become a rich man, a very rich man, rich beyond the wildest dreams of most men. His fortuitous association with Michael Fitzwilliams and then Sergei Tarasov had been the catalysts for his success. Why fortune chose certain men was difficult to explain. But, it had always been like that; from Carnegie to Vanderbilt, from Gates to Zuckerberg.
He was not yet a billionaire, but there seemed little doubt he would soon be a member of that exclusive club. However, the greatest change in his life was not his wealth, it was the almost miraculous arrival of a baby daughter, Lily Rose, almost eighteen month earlier that had transformed his life; his vision of the world. It gave him a sense of accomplishment and a raison
d’être.
Until that moment, at least until the day Lili had announced the news she was expecting, the idea of having a family had been long forgotten. His first marriage back in Limerick had not produced children, it had not been for the want of trying. Whose fault that had been was unimportant, if fault there was. It was the will of God, his mother had sadly told him, that was how her generation talked about that kind of thing in Ireland.
The couple tried everything: doctors, specialists and quacks, before they turned to prayer: that is to say Margaret. Finally, they had each ended up leading their own lives. He as a banker in London. She dedicating herself to charitable work for the church. It was if they had thrown their respective energies into a kind of diversion to forget the family they had imagined, and which should have been so natural.
Had Margaret’s early death changed anything in his daily life? If he had been asked at the time he would have been forced to admit no. In the period leading up to her illness she had become a friend, a sister, a cousin, or something like that.
He had invested all his energy into transforming the bank into an international group. He with Michael Fitzwilliams had ridden out the storm, confounded the doomsters predictions, as had Ireland, Italy, the EU and the euro.
Then Lili entered his life and offered him the unimagined joy of fatherhood. Their daughter Lily Rose was nothing like he had ever imagined, her smooth black hair, her brown oval eyes, her skin was white, but not that ghostly Irish white.
Their London home was all he could have ever hoped for, a vast mansion on Cheney Walk, overlooking the Thames, a stone’s throw from the functional London bachelor pad he had become used to across the river in Battersea.
C
heney Walk – London
Whenever he watched his daughter sleep he wondered what the future held for her. Whatever happened she would not be one of the have nots, he would make certain of that. She would know two worlds, London and Hong Kong, Europe and China.
China was not however a world he had begun to understand. His Irish upbringing, in provincial Limerick, was far removed from what he experienced in the furore, if not chaos of southern China. He like many ambitious men, who had risen to power and fortune from humble origins, not only owed the extraordinary story of his success to the vagaries of fortune, but also his strength and determination.
*
Lili’s presence had quickened Pat’s heart, all other things faded in importance, which did of course stop the rest of world the from getting on with its business. As Lili headed home to Hong Kong and Guangzhou, the recently buoyant Brics and commodity markets stumbled, China slowed and the smart money headed westward. Capitalism relied on continuous growth, and its twin, consumerism, relied on unlimited resources.
News that Ben Bernanke would phase out quantitative easing set-off warning lights on the banking front. Chinese central bankers were told by the new president, Xi Jinping, to attack the four winds of formalism, bureaucracy, hedonism and extravagance, in a crackdown on corruption as the Shanghai Interbank Offered Rate rocketed to thirteen percent compared to the one year rate of four and a half. At the same time other negative data came in on the Chinese economy. Credit had frozen, at least momentarily, after the tightening of liquidity and the failure of two auctions for government bills caused several Chinese banks to default on their interbank obligations.
Again men like Tom Barton posed the question as to whether capitalism-consumerism as a system had reached its limit. Perhaps science would find the answers, perhaps not, in any case he could do nothing. Rationally speaking, it did not concern him, it was not his problem, it was that of the politicians, he had his life to live and that was it. Barton was not a bling bling Hollywood star, or worse an aging Rock idol, soon to be relegated to history, prancing before media cameras, hoping to be remembered by posterity for their good works and not their dissolute drug fueled youth.
The massive wave of immigration into Europe was an illustration of the difficulties encountered by politicians: weak men driven by their lust for power. God save the world from them, he prayed, and their governments, elected by the people on lies: promising they would build a solid economic environment for them and their children. With each passing day he was invaded by a feeling of growing pessimism, and there was little reason to feel optimistic about man’s future.
CUBA
With Hong Kong disrupted by the student demonstrations in Central, Pat and his family decided to take a break in Bali, nothing complicated just a week to get away from the general chaos as a front of chilly wet weather moved in from the north-east. Of course for Pat it was all relative, winter in Hong Kong was often tropical compared to an average summer day back in Limerick City.
Pat had suggested they return to Sanya on the south coast of Hainan Island, but Lili protesting the beach was more crowded than a street market in Canton vetoed China. In any case she wanted to get away from home for a break and a simple one; beach, hotel and a change of scenery.
So Bali it was, a four hour flight to the south of Hong Kong, and the four of them - including Lily Rose with her Chinese ayi - headed for the tropical paradise on a Cathay Pacific flight, first class of course. They were almost like any ordinary family taking an almost ordinary break. Hotel, beach, moonlight diners and a couple of excursions whilst the ayi looked after the Lily Rose.
The Grand Hyatt suited them fine, a short ride from the airport, direct access to a magnificent beach, quiet, and if they wanted a trip to the mountains.
Unfortunately for Pat he was soon bombarded with messages of every kind, even after he had switched of his phone people found out where he was staying. He could of course have ignored them … and he did, though not entirely, in spite of giving the front desk instructions he did not want to be disturbed. Lili’s system was more efficient, everything passed through her personal assistant, who directed even the most urgent messages into touch.
The supposed urgency of certain messages overrode Pat’s wall of privacy and they arrived by every imaginable means of communication.
It was the first sign that Pat’s all out enthusiasm for the business world had started to wane. He had made enough money, more than enough. Managing his investments was another thing, but pursuing the same old business routine in an environment that was more and more demanding was becoming ennuyant, as he described it to himself.
The straw that broke the camels back came barely a month later with the sudden and unwelcome appearance of City & Colonial. The thought that a man as confident and well established as Michael Fitzwilliams could be evinced by the stroke of a minister’s pen was deeply troubling.
Pat had passed his fiftieth birthday and the idea of continuing in the same gilded rut was daunting. He needed a break and when the opportunity came he jumped at it. To his surprise Lili accepted it, perhaps that was the way it was in Chinese families he told himself. In any case Pat did not look any further, it was too complicated. He had already realized he could never understand his wife’s country, it was complicated, and perhaps it was why he preferred Hong Kong, a kind of halfway house, and that was the way it was.
Kennedy struggled with his decision for than a week. Hesitation was rare in Pat’s world, but the causes in this particular case went back fifteen years to an experience he would rather forget, an experience that had indirectly led to a brief, but dramatic, sojourn in Dublin’s grim Mountjoy Prison.
From the moment he learnt Barton was in Colombia, his mind was subconsciously made up. The idea that Cuba would be tantalisingly close had the effect of an irresistible temptation. Initially he pushed it away, as he had over the years, but two events changed that. First was the news that Barack Obama was to visit Panama for the Summit of the Americas with the possibility that relations between Washington and Havana would be restored, and the promise Cuba might finally take off, which would very belatedly vindicate Pat’s early adventure in the Caribbean, a decade and a half earlier.
A couple of months earlier, Barack Obama
and Raúl Castro of Cuba, had simultaneously addressed their respective nations, announcing the restoration of diplomatic ties. It was the end of more than half a century of accusations and bitter recriminations, a dispute that was probably one of the last remaining vestiges of the Cold War.
Obama and Fidel Castro’s brother, Raúl, would come face to face in Panama City at the Summit of American nations in 2015, making it the first meeting between leaders of the two countries since 1959.
Lili was not too happy when Pat spoke of visiting Central American. A quick check showed the region to be one of the most dangerous in the world outside of war zones. Violence linked to drug trafficking was everywhere, especially in El Salvador, the small state bordered by Guatemala and Honduras.
The second event was the titillating news that a Hong Kong company, HKND, was set to build a transoceanic canal in Nicaragua, which if it was true would present a huge opportunity for INI Hong Kong.
*
Curiously Pat’s interest in Central America had been reawakened by his father-in-law and his story of banking in China. Wu had related the history of paper money in the Middle Kingdom, which due to a shortage of copper made it the first country to introduce money in the form of promissory notes during the Song Dynasty. Copper coins had been the currency of exchange for centuries. However, as the economy grew, copper became impractical because of the vast quantities of metal necessary; at the peak of its usage, in 1073, more than six billion copper coins were minted.
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