'That's why I think you guys should get out.'
'Where are the Russians based? Moscow?'
'Yes. But they also have offices here. Heard of the Russian Samovar?'
'The contraption that brews tea?'
'No. Name of a restaurant and piano bar,' laughed Danny. 'It's near Broadway. If I remember, it's on West 52nd Street. Not far from the Sheraton.'
'Does it have Russian music and dancing?'
'Yeah. Lots of Russians frequent the place. Vodka and beer to wash down herring, smoked fish, borscht and caviar.'
'Do those Borodino and Veruschka guys go there?'
'I'm told that it's their drinking hole. Their office is about a block away. I think it's on West 51st Street.'
'Would you know them if you saw them?'
'Yeah. Someone pointed them out to me at a hedge fund conference last month.'
'If they're such big players, don't you want them as clients?'
'My boss was going to pitch for them, but we decided against it.'
'Why?'
'We've been told that they've got unsavoury connections.'
'Who?'
'We hear that the Russian mafia might have a stake in the funds.'
I turned away from him, looked towards the waterfront and adjusted my dark glasses.
'Have you come across them in London?' asked Danny, observing me closely.
'No, I haven't,' I lied, feeling uneasy.
'Tell you what Jack, I don't live very far from the Russian Samovar. We can have a drink and bite there and go for a walk in Central Park. Who knows we might find out something.'
I wasn't terribly happy with the idea, but went along with it. Maffie and Ruff were expecting me to find out as much as possible about the Russians.
After leaving a message on Pearl's mobile, suggesting that we meet in Broadway and see a show, we arrived at the Russian Samovar. A pianist was playing Russian melodies and several people were sitting by the bar chatting in a language which I assumed to be Russian. We sat down near the bar and sampled some vodka, caviar and smoked fish.
'That's them,' whispered Danny, nudging me.
Two fairly big guys, who were dressed in smart suits, but looked like gangsters, entered. They sat by the bar near to us.
'Are you sure that they're hedge fund managers?' I asked. 'They look like thugs.'
'Yes. The guy with a scar on his forehead runs Borodino and the one who limps, Veruschka. Should we introduce ourselves?'
Before I could reply in the negative, another man came up to the bar and joined them. He was well over six foot with a large flat broken nose and a thick black beard. To say that I freaked was an understatement. If he wasn't the same killer who I had encountered on Charing Cross Bridge, he was a pretty good double.
'I have to meet my girlfriend,' I mumbled, after swiftly downing my vodka. I put on my dark glasses and carefully made my way past the bar, making sure that I didn't disturb the hedge fund gang. By the time I was outside, I was in such a panic that I was breathing rapidly. I had chest pains and was feeling dizzy. It was all the more scary as I had read an article about sudden death syndrome that morning. Guys my age could have a heart attack and die! The more I thought about the possibilities, the faster the breathing and the greater the pain. Danny followed me outside, rushed up to me and rubbed my back gently.
'Jack, what's wrong? Do you have asthma? Are you allergic to anything?'
'I don't think Vodka agrees with me,' I fibbed, making sure that my dark glasses were on and trying to stop breathing rapidly.
'Let's have something to drink, Jack,' said Danny, pulling me into a café. He sat me down, swiftly purchased two bottles of water and grabbed a paper bag.
'You're hyperventilating. Breathe into the bag. Yes, that's right. Hold it by the neck. Breathe into it. Say "sh . . . sh . . ." That's it. Good. Go on! "Sh . . . sh". Feeling better. Good.'
He anxiously watched me drink some water and sat with me as I leaned over the table and coughed.
'Thanks Danny. Thanks a lot,' I gasped, feeling relieved.
'No sweat. Did a course in First Aid. Sure you're OK?'
'Sure.'
'Do you know any of those guys?'
'Promise me two things Danny. One for my sake and one for yours. Don't tell anyone about this and don't have anything to do with them.'
'Sure, Jack, don't worry. When you're ready sometime, maybe you'll tell me what's going on.'
My mobile rang. It was Pearl.
'Hi Jack. You're lucky. I've just finished work and I'm very close to Broadway. A show's a great idea.'
Danny gave her some directions and she was soon with us in the coffee shop.
She didn't seem to notice my distress. Didn't even kiss me hello.
'Jack's been a bit sick,' said Danny.
She looked at me casually. 'He seems OK now. Right Jack?'
'Pearl, this is Danny,' I whispered hoarsely.
'Didn't take you long to get here, Pearl,' said Danny.
'I was virtually around the corner. My client's offices are in West 51st Street. What do you do, Danny?'
'I'm a trader. Friend of Jack. A good friend,' he said, massaging my back.
'What do you trade?'
'All sorts of things. Your accent, Pearl, where do you come from?'
'America, of course. Washington D.C. My parents live in Annapolis.'
'Where were you born?'
'What's the difference? Ukraine. We came here when I was ten,' replied Pearl, irritated.
'Just interested. Must go Jack, will speak to you soon. Now take care!' said Danny, putting a hand on my shoulder.
We shook hands and off he went. That night we saw 'The Music Man'. It was a wonderful show with many trombones. Pity that I wasn't relaxed enough to enjoy it.
* * *
The next morning, I went for a run in Central Park. Running always helped me calm down. If I had had the chance to run the previous day, I probably wouldn't have hyperventilated and would have got rid of the tension. Anyway I felt strong and though I had briefly panicked, there was no way that I would have a heart attack, like Dad. He was a smoker and unfit. I was the opposite. Back at the hotel, I had a swim and felt a lot better. Pearl had a couple of days off. So later in the morning, we bought a suitcase and filled it with clothes chosen from Saks and Bergdorf Goodman.
The shopping spree made me forget myself and at the end of the day, after we unloaded the stuff in the room, I gave Pearl her earrings. To my surprise - because I didn't have much clue about these things - she liked them. She hugged and kissed me and then undressed herself and me. We were soon under the power shower with warm water crashing down on us. Afterwards we made love, with Pearl being much more tender than usual.
Later I bought iPods for both of us and we walked into Central Park, holding hands. It was the most romantic evening I had ever had with her. We ambled from the Zoo to Strawberry Fields, Yoko Ono's memorial to John Lennon. Afterwards we hired a boat, rowed to the centre of the lake and relaxed, enjoying the peaceful park and the Manhattan skyline.
My head was on Pearl's lap while we floated aimlessly. We were so wrapped up in each other that we hardly noticed other boats struggling to avoid us.
'That Danny guy, is he a coffee trader?' Pearl asked suddenly.
'Yes.'
'Where does he think the market's going? Up or down?'
'I have no idea, Pearl.'
'It's boring not knowing what you guys are doing. It must be exciting, but you keep me in the dark,' whispered Pearl, and kissing my ear.
'I'm not allowed to discuss my firm's dealings,' I said firmly.
'What's so important about your trading? Why the confidentiality? You're not a doctor.' No reply.
'OK. I'll bring you into my confidence and don't tell anyone about it. I have to know more about coffee because we're doing market research and branding for a new US and European coffee chain,' she said. 'They aim to beat Starbucks and Costa. To do that they need to have the
best information on the market and qualities and have good supply sources.'
'That's an interesting job for you, Pearl. What's the name of the company?'
'We're still deciding on a suitable brand name.'
'And you want me to tell you about our deals?'
'There you go. Loyalty to your firm. If you don't perform, they'll hang you out to dry. How on earth can we have a good relationship if you don't trust me, Jack?'
'OK. Who was that big blond guy at your place a few weeks ago?'
'Are you stalking me, Jack?' she snapped, pushing me off her lap. 'He's just a good friend, if you really want to know. I help him with his image from time to time.'
'OK, OK. I know it sounds corny, but I really love you, Pearl.'
'So help me with my work.'
I felt that I was letting her down. A frost and price surge could happen at any time, but that would be on the wires almost immediately. The whole market would know about it. Would it really be a problem if my girlfriend knew a bit about my trading? Maybe she had some ideas. After all husbands tell their wives what's happening. Pearl and I were getting very close. Maybe we could go to Las Vegas and get married.
'OK Pearl, you're right. I'm being unreasonable. We think that . . .'
I was about to tell her, when my mobile rang. It was Danny on the phone.
'Jack, how are you? Feeling better?'
'Yeah, thanks Danny. Nice of you to phone.'
'Maffie's been trying to get hold of you. She can't get through. Wants you to phone her as soon as possible.'
'Really?'
'Yes. Where are you?'
'Lying in a boat on Central Park Lake. With Pearl. Fantastic day.'
'Jack, put the handset close to your ear. I want to tell you something.'
'What?'
'It's about Pearl . . .'
The phone went dead. I banged it. Tried to phone back Danny. Couldn't get a signal.
'What's going on Jack?' asked Pearl.
I was a bit confused. What was Danny trying to tell me about her? I stood up in the boat and nearly capsized it.
'What does he want, Jack?' insisted Pearl.
'He's worried about the wheat and corn markets,' I lied.
'You were going to talk to me about coffee.'
'Will have to do that later. I have to sort out our grain positions.'
Back in the hotel when Pearl was changing for dinner, I sneaked out of the room, found a discrete place in the reception area and phoned Maffie. 'Hi Maffie. Any news?'
'Yep, Sergio called. The weather's beginning to turn in Brazil. The temperature is falling fast. He thinks there could be a frost.'
'Have you started buying?'
'No. He called after the market closed. You must be here tomorrow. Can you make it?'
'I'll do my best to get the last flight. I'll have to break the news to Pearl.'
'What are you going to say?'
'That you're ill and there's a big problem with the fund.'
Pearl was livid when I told her that I had to fly out that Wednesday night.
'Why are you going, when I need you Jack? It's them, always them. What about me?'
She was so angry that she gave me a punch on the arm, so hard that there was a flaming red mark.
'We were supposed to spend the weekend together.'
'Sorry Pearl, I have to go.'
'You were going to help me understand the coffee market.'
'Haven't got time, Pearl. Will tell you in London,' I said.
She looked hurt. Seriously upset. Had to say something, anything, but despite my feelings and guilt, couldn't tell her what was really going on.
'OK, I'll break our rules for you. We think that the coffee and other commodities are weak and that prices could fall.'
'What am I going to do here by myself?' she wailed.
'Why don't you fly to Washington? See your parents. You haven't seen them for ages.'
'My mother and father got divorced. She got re-married when I was a little girl. I can't stand my stepfather.'
'What about your Mum? Doesn't she miss you? Go on! Go and visit her. I tried to hug her, but she pushed me away.
15 - A KILLING
After managing to get on the last flight, I landed in London late morning and rushed straight from the airport to the office. The coffee charts and price statistics showed that the trend was still down. Since the market had been weak in the past month, profits on our coffee options had halved to around $3 million. The price was hovering around $2.15 a pound. Danny had told me that Veruschka and Borodino had built up huge short positions in the coffee futures and options market. Some European and US hedge funds had trailed them and had also sold coffee short. The Russian bears and their allies were betting that the price would fall below $2 and for the moment, they were on top.
Before the New York trip, Maffie and Krishna had told me to take profits on Aquarium's gold and agricultural shares and other investments. We now had an extra $800,000 cash in the kitty to purchase more options. Our tiny Aquarium fund was about to fight back. David against the Russian Goliaths.
Ruffish was becoming increasingly edgy. I was also nervous, for a different reason. I was paranoid about the big bearded thug at the Russian Samovar and the likelihood that he had murdered Yapolovitch. It was dangerous to take on those guys.
'Come on Jack, block it out. Keep focused. Your head down,' I kept muttering to myself. 'They didn't see you there. They don't know what you look like.'
These thoughts kept whirling round and round in my head.
At last the call from Brazil came. It was 12.30pm in London and 7.30am in New York. The New York coffee market was due to start trading at 8.30am.
'Sergio on the phone for Maffie,' shouted Bess.
We all rushed to Maffie's work station. Compared to us, Maffie was calm and relaxed. She first spoke in Portuguese and then in English.
'You say that the temperature has dropped, Sergio. Are you quite sure there's going to be a cold front?'
She noticed all the anxious faces and put the phone on to speaker.
'The weather forecasters are warning that it could get a lot colder, but they are not that certain,' Sergio said.
'Fulvio believes that there will be a frost, right?'
'Yes, Fulvio says that a severe frost is on its way.'
'What do you think it's going to do to the crop?'
'It's not whether the crop is going to be bad, it's how bad.'
'How come coffee prices haven't started rising?' asked Maffie.
'I can't understand it. It doesn't make sense.'
'It's weak because the market is following two Russian hedge funds that are big sellers,' I said. 'What does Fulvio think?'
'Fulvio hasn't changed his mind. He's now even more convinced. He's sure that it will be 1975 all over again. That frost surprised everyone.'
'Thanks Sergio . . . You're a good friend . . . If we win, you'll also do well,' said Maffie.
'I was going to write, Maffie. Please thank your boss. We all appreciate it. Fulvio, the farmers and me,' said Sergio. '$50,000! Bless you all!'
'I'll tell him . . . Wait, Sergio. If Fulvio's right, then . . .'
'Maffie, Maffie . . . Can't hear you . . . Bye.'
She put down the phone and I looked at my watch. It was 7.45am, New York Time.
'The market opens in forty five minutes,' shouted Maffie.
'Aquarium bulls against Russian bears,' shouted Krishna, slapping his hands against his thighs.
We rushed into the meeting room and sat around the table. Maffie stood before us in front of the whiteboard. She had blue and red felt pens.
'OK, General Shaka we're in your hands,' said Ruffish.
'We're ready, Ruff. Jack has $800,000 to buy another 100 coffee options,' said Maffie.
'Are you crazy? We'll then have 200 options! That's the right to purchase 7.5 million pounds of coffee,' shouted Ruff. 'At $2.20 a pound that comes to $16.5 million! The leverage is enormous.
Our exposure to the market will be more than sixteen times the original capital of the Aquarium fund. If the price falls, the fund's finished.'
'Don't worry Ruff, we're not going to buy all the options at once,' replied Maffie softly. 'We won't lose our original capital as that is safely in the kitty. We are playing with profits and as you know, options are far less risky than futures.'
'I've been studying the coffee statistics,' said Krishna. 'Consumer demand for coffee is far greater than supply. The shortage should squeeze the bears. Prices could go ballistic!
'What's a bear squeeze?' asked Bess.
'South American, African and Asian coffee production has declined. They cannot meet the orders from the manufacturers that roast the coffee and sell it to the shops,' Krishna explained. 'In normal circumstances prices should have risen. Instead they have fallen because the Russian hedge funds and other bearish speculators, have been heavy sellers.'
'The bears sold coffee futures and options short, hoping to buy them back at a profit when the price falls,' Krishna continued. 'Now imagine how they will feel if a frost causes prices to rise unexpectedly. They will be nervous. They know that they have sold coffee that they do not own. They know that they must buy back their positions quickly, if prices rise. If they don't they will lose a lot of money.'
'So they will panic and try and buy back the coffee,' said Bess. 'But you said there's a shortage, so who's going to sell to them?'
'They will have to bid up prices to encourage sellers. But the market will soon realise that the bears are desperate to buy. So players who own coffee will wait and demand even higher prices. The bears will be squeezed into a tight corner.'
'My money and the firm's money are at stake,' said Ruff. 'If you're that sure, are you prepared to back it with yours?'
'Jack already has money in Aquarium and Maffie and I are putting in another hundred thousand each,' said Krishna.
'Me too,' said Tong.
'And you Aram?'
'Can't take chances. I've got a family to support. School fees. I'll give it a miss,' said Aram Zabkian, the Eastern European specialist, who had just returned from visiting his mother in Estonia. He had always been sceptical about Aquarium.
Trader Jack -The Story of Jack Miner (The Story of Jack Miner Series) Page 19
