The Icarus Prediction: Betting it all has its price
Page 10
“I didn’t know insanity was measurable, but yes, in that vein it probably is some kind of record.”
Sergei looked at the ceiling. “But why take such a risk?”
Stryker shrugged. “I don’t see it as a risk. Simply the lesser of two evils. If we did nothing, there was no way to claw back from the hole William dug for us. You’ve already got a retirement stashed away, or you could go back to teaching. But for me and the rest of the team, we’d be pariahs on the street once the firm imploded. In fact, we would probably be prosecuted and at the very least we would be fighting for the next 10 years to clear our names. This way, we at least have a real chance to dodge this bullet—or should I say artillery shell?”
“What you call in American football a Hail Mary?”
Jarrod raised his glass and clinked the Russian’s. “Exactly.”
“Have you telled William?”
Jarrod shook his head. “I’m all in. The bets have been placed. I’ll tell him tomorrow after I get some sleep. Nothing else to do, really.”
“I tink I stay and have another,” said the Russian.
*
Stavropol Krai Province, Russia
Arkady Lemontov observed carefully as Mitrofan Markov—a bookish man known as the Professor—applied his ministrations to the fire hydrant-like device. He used a socket wrench to attach a circular plate that was forty-two inches in diameter to the tail end of the hydrant. The plate had an inner lip that held a large spool of filament line of some kind, making it look something akin to an open fishing reel. In fact, the line was slightly thicker than what you’d find on a fishing reel, but not by much.
After pulling on the wrench until it wouldn’t pull any more, the Professor looked at Lemontov and nodded.
There was no smile or emotion from Lemontov. Any soul he possessed had been extinguished long ago in the rubble of Grozny. A Hind helicopter gunship had sent a barrage of rockets into the house where his wife and children were hiding. Since then, he’d only had one purpose: to inflict as much pain on the Russian bear as possible. He’d longed to get his hands on a nuclear weapon instead of the pitiful gnat bites of suicide bombers. But Basayev—wow! He had convinced him this would inflict as much mayhem on the Kremlin oppressors as a nuclear blast, perhaps more. It had taken years of planning, but now all was in readiness, and the green light had been given.
He heard the satellite phone chirp on the workbench. He opened the screen cover and saw the word POMEGRANATE. Lemontov sent a “Da” reply and looked at the Professor. “Shamil is in Tbilisi. We execute in twenty-four hours.”
CHAPTER TEN
New York City
Jarrod Stryker walked down the carpeted hallway toward William Blackenford’s throne room, and this time there was no confrontation with Rosita. He was expected.
Rosita murmured into the phone, then nodded, indicating that he was permitted to enter. He walked through the doors, strode directly to his boss’s desk, and sat down.
“William, I have something to tell you.”
Blackenford’s tone was guarded. “And what would that be?”
“I will cut to the chase. You put the firm in an $850 million hole. EIGHT-HUNDRED-AND-FIFTY-MILLION-DOLLARS! With the liquidation of assets, the Valkyrie sale, and the profit made from energy trades this past month, there is still a $500 million deficit hanging over us. You have pledged the capital from the client discretionary equity accounts to cover this deficit. While in a legal sense as general partner you are empowered to do this, the reality is that when a half a billion in client dollars goes up in smoke, the firm, you, me, and everyone else with fingerprints on Blackenford Capital will be toast.”
William’s face was turning pink.
“Simply put, if we try to rely on conventional means, there is absolutely no way we could close the half-billion dollar deficit inside of a few weeks. If the firm is going to have a snowflake’s chance of surviving, then extraordinary measures have to be taken.”
Jarrod took a breath. He kept his voice even. “In my capacity as executive in charge of the energy trading desk, I have authority over all funds in client discretionary trading accounts, which is separate and distinct from the client equity accounts you pledged.”
Blackenford’s face started to twist up—sort of like when the surface of the earth deforms just before a volcano explodes.
But Jarrod would not be distracted and continued on. “Upon my orders yesterday, the firm’s energy capital position was closed out, and the cash was transferred into the firm’s admin account to help cover the Euclid Bank payment due tomorrow. After hedge position expenses, transaction fees, and so forth, the net amount transferred was approximately $90 million.”
Blackenford seemed to relax a bit but then asked, “You mentioned the client discretionary trading accounts?”
“I did. Yesterday, upon my orders, the client accounts were all closed out and put into put options at $81 per barrel.”
“And the hedge position?”
“No hedge position, William. It’s all riding on the downward pricing slope.”
The face skipped red in the color spectrum and went from pink to purple.
“What? You put all the client trading capital in unhedged options!” The volcano had blown. Droplets of sweat appeared instantly on his brow. “Are you insane? How much did you put down?”
Jarrod ignored the seething man across the desk and calmly replied, “Just over 500 million.”
“Half a billion dollars in unhedged options? I thought you had a good head on your shoulders, but you are insane!” He rose, fists planted on the desktop. “You’re fired! Get out of here! You’ve destroyed any hope I had of salvaging my firm, my reputation, my—”
“Shut the hell up, William! I am your only hope to climb out of the hole you’ve dug for us. After that if you want to fire me, go ahead. But for now, sit down and for once in your life listen.”
Fuming, Blackenford slowly lowered himself back onto his leather chair.
“The numbers are straightforward, William. Five hundred million in put options at a strike of $81. To climb out of your half-billion-dollar hole, oil prices have to drop far enough for our 20 percent cut to equal 500 million. For every dollar oil drops, we net about $250 million. It’s that simple.”
Jarrod was referring to the management fee Blackenford Capital received on trading profits from client accounts. For every dollar generated in trading profits, twenty cents went to Blackenford. “So,” he continued, “in order to generate 500 million in fees, the position taken will have to generate 2.5 billion in gross profit. In order for that to happen, plus cover the cost of the position, the price has to drop $10 to $71 within two weeks.”
William started to exhale, and it looked like he would lose the battle for his temper. But he sat down instead and managed not to yell. He calmly said, “So you got lucky betting on the upside track, I’ll give you that. But if the price goes up, we’re done for.”
Jarrod held up a hand. “Check your Bloomberg.”
Blackenford squinted a questioning glance, then turned to his personal Bloomberg financial terminal that was the electronic umbilical all financial traders kept at their elbows. Michael Bloomberg, the Mayor of New York City, had made his fortune by providing arcane financial data no one but the banking gnomes could understand. Blackenford tapped the keyboard, squinted again, and then turned to Jarrod.
“West Texas Intermediate is at $76.25.”
Jarrod nodded. “Right. Now look at what came over the Bloomberg wire an hour ago about Saudi production.”
Rapid taps—well, as rapid as William could muster with his pudgy fingers.
“What? The Khurais field is coming on stream?”
“That news just hit the street. It means an extra million barrels a day pumped onto the market in addition to the increases the Saudis already made to compensate for the oil boycott on the Iranians. We knew about the Khurais field yesterday before I placed the position.”
William st
ared at the screen again. “But at $76.25, that means…”
“We’re almost halfway home. And if we get a drop past $71, we may actually turn a dollar or two for the firm, and you can start paying the partners again.”
Blackenford could only gape at the younger man with an expression that was equal parts shock, awe, and hope of redemption.
“The contracts on the Tribeca tankers are being placed by the Saudis as we speak, so that should depress the price past the threshold mark over the next week or so. Then we’ll see if any profit margin emerges beyond that.”
Contrition was not part of William Blackenford’s essence, but he was contrite now as he looked down and said, “Jarrod, I…I don’t know what to say. I was a fool to have made a play like that on those damned CDOs. You…you may have just saved me, saved the firm…our reputations.”
Stryker shrugged. “As Yogi Berra said, ‘It ain’t over till it’s over.’ Now comes the hardest part. The waiting game. Why don’t you go meet your Bridgemount buddies for a bridge game? I hear they’ve been missing you.”
He nodded. “Perhaps you’re right.”
“I better get back and mind the store.” And with that, he rose and walked to the door.
“Jarrod?”
He stopped and turned. “Yes?”
“Thank you,” the older man whispered.
Jarrod walked out of the room with an air of invincibility.
CHAPTER ELEVEN
Tbilisi, Georgia
One of the henchmen adjusted the lights while another peered through the camera’s viewfinder at Shamil Basayev, who was wearing a peaked hat and sitting on a rug in front of a photographer’s backdrop.
“Microphone check,” said the cameraman.
“Of course,” said Basayev with excitement in his voice. “We certainly want our message to be heard. One, two, three.”
The cameraman held up a thumb. “Ready when you are, Commander.”
“Very well, but before we begin, Elbruk, my brother, come here.”
Elbruk Matsil was somewhat surprised by the summons, but dutifully rose from the bench by the makeshift dining table and approached the Commander.
“My brother, why don’t you go with Vaslav here and go into town” He leaned over and lowered his voice in a conspiratorial way. “Perhaps you can get a bottle or two of vodka for your comrades.”
“Of course, Commander.”
And with that, Elbruk was escorted out of the warehouse by Vaslav, who on his best day, resembled a blond gorilla with a beard.
With a wary eye, Basayev watched them depart, then he nodded to the cameraman, who pressed the record button and said, “Rolling.”
The beady eyes stared into the lens, and with a malevolent smile, he began speaking in Chechen. “This is Shamil Salmanovich Basayev, Commander of the Riyadus Salihiin Reconnaissance and Sabotage Battalion of Chechen Martyrs. As the American author known as Mark Twain once said, ‘Rumors of my death have been greatly exaggerated.”
CHAPTER TWELVE
New York City
Jarrod walked into his apartment that overlooked Central Park west and felt the exhaustion wash over him. What a week! It was enough to give an average mortal a coronary three times over.
He went to the bar and opened the mini fridge to pull out a Lone Star Beer. He’d developed a taste for it and periodically imported a couple of cases from Texas. He took off his jacket, twisted off the cap, and went out on the balcony to take in the spectacular view of Central Park from the seventeenth floor. The sky was a dusky indigo and the lights of the city were starting to wink on like popcorn across the skyline. He pulled on the beer and let the tension ebb from his body, reflecting on how much he loved this city. Capital of the world, really. And he liked the view from the top.
The apartment was a three-bedroom co-op he sublet from a matronly widow who lived in Florida. She’d initially asked thirty grand a month, but he’d charmed her down to twenty-five. Bit of a stretch for him currently, but by this time next week, he’d be catapulted into a partnership and could start shopping for his own co-op. The thought of his own Park Avenue pad boggled his mind. But who else could have turned a $500 million deficit into a positive balance inside of a week? A week! He tried to keep such sugarplum thoughts out of his brain, but this would surely cement his status as the crown prince to take over the firm upon William’s retirement. Then he could mold it to his own vision, and New York would be his oyster.
In that vein, maybe it was time for a little R&R. He’d been pushing it so hard for so long, maybe he should step out on Saturday night. He hadn’t checked his home phone voice-mail in over a week. He hit the play button and deleted the messages on the monthly co-op board meeting, the building bingo tournament for the rich blue hairs, and a stockbroker with the deal of ten lifetimes. But then Lisa Radigan—a runway model he’d met during a function at last season’s New York fashion week—was in town over the weekend for a photo shoot. Would he like to get together for dinner?
Yes, this week had definitely turned around. Lisa wasn’t just a model. She was a lingerie model. Long and leggy with red hair and milky white skin. He’d seen her portfolio. She was staying at the Waldorf. “Call me,” she said.
He plopped down in his leather La-Z-Boy and punched in her cell number.
*
A Hilltop Outside the Pumping Station
Stavropol Krai Province, Russia
The ragtag bunch of Basayev’s followers who huddled around Lemontov now thought him the most severe of all. He had that funereal look to his eyes that sent a chill down the spine of anyone who glanced his way. Putin and his Russian horde had pounded Grozny, the capital of Chechnya, into rubble. But now Putin would pay the price. Indeed, for Lemontov, killing a Russian had the same moral imperative as pulling a cork on a bottle of vodka.
The three trucks were parked on a slight rise overlooking the isolated pumping station of the CPC pipeline—the pipeline that ran from the oil fields of the Caspian Sea to the Russian Black Sea terminal at Novorossiysk. Of the five pumping stations on the 1,510-kilometer route, this was the most isolated. The giant pipeline snaked across the steppe and into the fenced pumping facility, then continued out the other side. The pipeline looked like a never-ending eel, making a serpentine path over the Russian steppe. Each section of pipe was suspended above the ground with a U-shaped brace suspended between two steel poles sticking out of the earth, making it resemble a centipede rolled over on its back.
Lemontov peered through the night vision binoculars at the facility. It was well past 3:00 am, and he was waiting for the lone interior ministry soldier to make his way back to the guardroom where—no doubt—he would help himself to some forbidden vodka secreted away in his lunch pail. Lemontov knew this because a janitor who had been working at the pumping station for the last nineteen months actually worked for Shamil Basayev. He was an awkward looking nobody named Kordan who quietly swept, mopped, and stayed in the background—ignored by everyone and recording everything in his meticulous journal. Kordan paid particular attention to security, which was virtually nonexistent. At this time of night, there would only be a skeleton crew of seven people on duty, including the soldier, who presented no problem to Lemontov’s assault team. Kordan had observed that after his patrol he would go to the communications room and log in some “check the box” communication to higher headquarters. Then he would retire to the break room to dine alone and take a nip of some vodka, and after that, a snooze.
How pathetic, thought Lemontov. But convenient. While the soldier himself presented no real obstacle after he’d clocked in with higher HQ, Kordan had noted he always carried a satellite phone with him. That could be a problem if he had the chance to raise an alarm.
Lemontov squinted, waiting.
*
CPC Pipeline Pumping Station No. 2
Stavropol Krai Province, Russia
Kordan Simonov slowly mopped the break room floor. Confident he was alone, he went to the locker belonging to
the security soldier and removed the lunch pail. He took out the thermos filled with vodka, unscrewed the top, and dropped in the pill Shamil Basayev himself had given him. He screwed on the top and gave it a shake as if he were a bartender mixing a martini. Then he put the thermos into the pail and the pail into the locker. He continued mopping out the break room, then went up the corridor toward the communications room. As he got closer, he saw the lone guard walk into the commo chamber and sit down at a computer terminal. After a few keystrokes, he rose and walked down the corridor past Kordan to the break room. He did not even acknowledge Kordan’s presence.
But Kordan paid no mind. He kept his head down and continued slowly mopping into the commo room, then down to the end of the hall. He rolled his mop bucket of dirty water back toward the utility closet. As he reached the break room, he peeped through the window and saw the soldier passed out, face down on the table beside the knocked over thermos. Kordan entered, removed the satellite phone from the guard’s holster, and dropped it in the pail of dirty water. Methodically, he rolled the bucket to the utility closet and locked it in. Then he put on his jacket, took a flashlight from the pocket, and headed outside.
*
Lemontov saw the four long flashes from the grounds near the administrative building. With that, he entered a single word—READ —into the text message field of his satellite phone and hit the send button.
CHAPTER THIRTEEN
New York City
Jarrod was halfway through his Tanzanian quail with cranberry glaze, but he had a sinking feeling this wasn’t the way things should be unfolding. The evening was going beautifully. They were sitting in the main dining room of Le Cirque restaurant, enjoying gastronomic delights of which mere mortals could only dream. Across from him sat a ravishing Lisa Radigan, who was drawing envious glances from every direction, while the sommelier kept their wine glasses filled with a Chateau Lafite Rothschild Bordeaux—a case of which would pay for a college education.