THE GREAT thing about the Silver Fox is that he’s seen almost everything. If he hasn’t actually done it himself – he’s definitely had a colourful life – he has a client or a friend who has. Right now we’re relaxing in his office at Ball Taittinger, slumped in soft leather chairs, surrounded by framed front pages of newspaper stories that mark the triumphs of his career. I’m too discreet to ask whether the stories themselves were real, half real, entirely fictitious, malicious or well intentioned. But they worked. Whatever it was they were meant to achieve was accomplished.
‘We need a distraction, Dave.’ He has a lazy voice, gravelly in the way that cigar smokers’ voices tend to be as they reach their sixties. He’s elegantly dressed in a pinstriped suit, white power shirt and pink silk tie and has his longish grey hair slicked back to give him a racy, vaguely decadent look. I like the Silver Fox. I think he’s who I might like to be in fifteen or twenty years, if I make it that far.
I shrug. ‘Sure – but what? One way or another, we have to announce these losses. How can we hide that?’
‘If you’re in the shit, one way not to get particular attention is to make sure everyone else is in the shit as well. We call it our spread-it-around strategy. Get everyone in there with you.’
‘How do I do that? We’re the one with the rogue trader. The competition are lucky – they didn’t hire him.’
‘How do you know?’
‘How do I know what?’
‘That they don’t have their rogue traders too. But they’re burying them while you’re preparing to go public? Because you believe in honesty, openness and transparency? How do you know that the real story isn’t the huge losses made by investment banks that are kept buried from public scrutiny but actually threaten the very viability of the banking system?’
‘I wish. But they’d have to cough them up.’
He leans back even further in his chair and stares at the ceiling. Thoughtful. I like him like this. I feel safer already, which is why I always insist on paying top dollar for his advice. He’s reassuringly expensive, and where my personal reputation is concerned I will spare no expense to get the best – particularly as the bank picks up the tab.
‘But there are some types of business where banks move risk off their own balance sheets, aren’t there? They move the risk into special offshore vehicles that are not subject to the same reporting constraints.’
I nod. ‘Sure. We all do that. Particularly the smaller firms without the balance-sheet strength of Grossbank. It’s normal practice.’ Bingo. I can see already where this is going. It’s my cue and I take up the story. ‘Naturally, as a prudent firm we ought to be overhauling all of that side of our business, cleaning it up and, if we need to, taking a big one-off hit – which we announce to the world, at the same time setting a new standard for the industry. All of our mess gets sorted in one go, and we make a virtue of it. The others can match us, or be left with a bad odour wafting around them. Either way, we’re off the hook and we move on.’
He’s smiling now, happy. The master with his pupil. He leans across and pats me on the knee. ‘Dave, I think we’re in business.’
MELISSA MYERS is lying on her back, naked. She has perfect, naturally pouting blow job lips that I’ve been doing my best to wear out. Right now she’s spread-eagled on the four-poster bed in my flat, her wrists and ankles bound with Hermès ties. I’m still wearing a bathrobe and I’m leaning forward about to anoint her with a jar of maple syrup that I’ve just fetched from the kitchen.
Which is when the bedroom door bursts open. I spin around angrily. The only person with a key to my apartment other than the porter is Two Livers. I actually insisted she should have one, which is unusual – normally it works the other way round, and I spend my time explaining that on security grounds I’m not allowed to give out keys. But she’s different.
There’s a beautiful figure standing in the bedroom doorway, wearing a pale green slip dress from Christian Dior that sets off her bronzed skin beautifully. She’s taken her shoes off and is standing barefoot, staring at me.
‘Two Livers.’ My eyes feast on her. She’s perfect. ‘When did you get out of hospital?’
‘This afternoon. They say I’m ready. I’m starting back at work tomorrow.’ She nods over my shoulder towards Melissa, who has her eyes shut and a ‘this is not happening’ look on her face. ‘Is this a bad time?’
‘Not at all.’ I place my hand on her shoulder and gently guide her out of the bedroom, closing the door behind me. ‘This is a great time.’ I put my arms around her and we kiss in the hallway until she undoes the cord around my waist and pulls my robe off.
It’s only a couple of hours later, when she’s gone, that I remember Melissa and go and untie her.
TODAY I had an epiphany. I can’t quite pin down the reason, but I have an uncomfortable notion that it’s to do with my feelings for Two Livers.
Paul Ryan and I were having lunch with Norman Grimm, one of our major hedge fund clients. Norman is an American, punchy, aggressive, impatient and arrogant, but at heart a warm, fun-loving, family man and a committed Christian – which I interpret as meaning he’s the kind of Christian who really deserves to be committed.
Paul had booked a table in Tophi, a trendy minimalist French restaurant just off London Wall. I barely made it to the office in time to leave for lunch, and even getting there at all was quite an achievement, although I didn’t get any credit from Paul. I was out at the Pussycat Club last night and staggered back around three, much the worse for wear, with a girl on each arm, both tipsy, planning to carry on partying. But when I opened the door to the flat, there were lights on, soft music, candles and Two Livers in a tight-fitting silk dressing gown that made it clear she had nothing underneath. The girls were sent packing and Two Livers showed me how grateful she is to her hero boss. I can’t remember exactly when I fell asleep, lying naked against her in the big four-poster bed, but in the morning she woke me with a Cuban alarm call, disappearing under the covers in the way that Cuban women do when it’s time for their men to rise – which of course had the exact opposite effect if what she intended was to get me to the office on time.
Anyway, I made it, and I am the boss, so to hell with Paul and his bad attitude.
An angry, black-clad midget minced over to our table and announced that he was our water waiter, and could he offer us some water.
‘Certainly not,’ I told him. ‘Send over the sommelier at once. And while we’re waiting we’ll have two gin and tonics. Large ones. Bombay Sapphire.’
The miniature menace displayed all the attitude that angry small people reserve for other small people who piss them off, announced that he would send over our waiter to take our drinks order and see if he could find the sommelier, then waddled off with a ferocious backward glance – only to be called back by Paul Ryan.
‘Let’s have a bottle of still water, and make it one gin and tonic.’
It’s a minor thing, but he never did this in the past. If the boss needs a drink, you keep him company. You don’t have to finish it, just show solidarity. What was his problem?
Before I could ask, Norman Grimm arrived, wearing a dark grey Armani suit, no tie and his shirt collar unbuttoned – the standard form of dress in Mayfair’s hedge fund alley. He’s mid thirties, with longish fair hair, a suntan and piercing blue eyes. Last year he gave five million pounds to the evangelical Bible-bashing church he founded in a particularly run-down part of Balham.
Yes, that’s right. The man has his own church – well, you would, wouldn’t you, if you’d been making two or three hundred million a year for the past four or five years? We should all have one. Think of the followers, the faithful, who can pray for you and be grateful and doff their caps and pay dutiful attention while you drone on from the pulpit about bullshit you know nothing about.
Anyway, Paul made the intros, rehearsed all the brown-nose stuff about how important this turkey’s business is to the firm, while I polished off both gin and toni
cs – they made a mistake and brought both, which was good because it allowed me to top up and stopped my hands shaking.
It goes without saying that Norman wasn’t drinking, this being lunchtime and him being an important, heavyweight individual who takes his responsibilities seriously. Paul kept the client company on the water, so I ordered a bottle of rare and expensive 2006 Puligny Montrachet for myself, and tucked into it, ignoring the glances they exchanged across the table.
So far, so good, but then we ordered our food and when it arrived, Norman folded his hands in front of him, instantly mimicked by Paul Ryan, and said grace! That’s right. That godless, soulless, mercenary of the markets, that ruthless finance whore, thanked the Lord for the food that He’d put on our table. Thank Grossbank, you turkey – we’re the one paying for it. Or rather, thank yourself, because it’s the commission you paid us that covered the lunch bill. But so powerful was his sense of self-righteousness that Paul fell meekly into line and mumbled ‘Amen’ at the end of it, while I drained another glass of wine, reached over to the ice bucket and topped myself up before the sommelier could get to it, and stared at the two of them like they were lunatics in an asylum.
And of course he noticed. He said nothing, but he noticed. In fact I wanted him to, particularly because it pissed off Paul Ryan. Paul picked up the baton and directed the conversation, and I tried not to let my mind wander back to what I was doing last night, or on to what I plan to do tonight, all of which is infinitely more interesting than structured derivative products. But eventually I got so bored I had to say something, before I actually fell asleep.
‘Norman, you’re a busy man. We’re all busy, and time is precious.’ And frankly I’d rather be anywhere else but here, I thought, though I won’t say that to your face – you can probably work it out yourself from the body language. ‘Paul’s run through our day-to-day business dealings with you, which are great, but is there something more that we should be doing? Something strategic? What are your main challenges right now? Where can we really help?’
Good. I thought I sounded reasonably sober, no obvious slurring, but I did have to raise my voice a bit. I blame the acoustics of the restaurant: high ceilings, lots of noise, you end up shouting at each other. Although I’d had so much to drink I’d probably have been shouting anyway. But I’d managed to make the stuff Paul was talking about sound low key and routine, and now I could sit back and listen while Norman and I did big boys’ talk and Paul took notes.
‘Dave, thank you. I appreciate it. My biggest concern right now is the German company Motorrad. We own close to thirty per cent but we can’t do a damned thing with it. We need to force management to change, to make cuts, get costs under control and be more commercial.’
I’d heard of Motorrad. They make some of the finest cross-country motorcycles in the world at a factory outside Munich. They’re still run by the founding family, Bavarian aristocrats for whom the bikes are a passion first and a business second. In theory, easy pickings for an aggressive activist hedge fund manager who can grab a stake in the business cheaply, force the board to accept a couple of his nominees and push through the kind of reforms that will sweat the assets and squeeze the profits up – even if it means firing people and cheapening the quality of the product.
‘I know a bit about Motorrad. They’re run by some German aristo, aren’t they?’
He nodded. ‘Graf von Himmelstein. He’s a count.’
‘What did you say?’
‘I said he’s a count.’
My turn to nod. ‘That’s what I thought you said.’ I glanced across at Paul Ryan and I’d swear he gave me a warning look. Who does he think he is?
‘So what do you want to do to the count, and how can we help?’
‘You can help by acquiring a stake in the company yourselves, and working with us. And what I want to do is fuck the son of a bitch.’
‘Fuck him?’
He nodded. ‘Fuck him, fuck his wife, fuck his kids and fuck his mother. And then we’ll fuck his cousins and his uncles. We’ll even fuck his dog. And we’ll make a killing. He’s a stubborn son of a bitch and he’s got it coming. Are you with me?’
I pursed my lips and looked across at Paul Ryan. I never did like Christians. ‘I was with you until you got to the dog.’
They both stared at me, not sure if I was joking, and that’s when it happened. My epiphany. I don’t want to do this any more. It’s time to start working on the escape tunnel.
IT’S EARLY evening and I’m sitting in the bar at Dukes Hotel in St James’s, at a table tucked discreetly round the corner in the rear lounge. Sitting with me is Arthur James, the self-styled doyen of the financial press. It doesn’t stop him being scruffy, seedy and old before his time in a tacky, untrendy way – quite unlike me, smart, stylish, well dressed and old before my time in a well-heeled, fashionable way.
We’re on our first martini – they serve London’s finest at Dukes, and I always like the finest of everything. In fact finest suits me perfectly in all walks of life.
‘So you’re saying this could dwarf the dot-com bust?’ He’s scribbling in a notebook, knowing in advance that after two martinis – the house limit – he won’t remember much tomorrow.
‘It could make it look like a kindergarten outing.’
‘And all the banks are doing this?’
‘All of them. It avoids the regulator, avoids capital constraints, in some cases avoids management controls altogether. It’s a speculator’s charter. Anyone who was greedy, ambitious and very impatient would be all over this market.’ I smirk. ‘Not that anyone like that works in the City.’
He grins and scribbles away. ‘And it’s all done offshore, through Special Purpose Vehicles?’ I can see he’s written SPV in his notebook. The Silver Fox prepped me on this.
‘Investment Vehicles,’ I correct him gently. ‘Special Purpose Investment Vehicles.’
He gratifyingly inserts an ‘I’ in his notebook. ‘Thanks. SPIVs. Nice ring to it.’
I nod. We thought so too. I take another sip of martini. Perfect. ‘And they could be the downfall of the City. That’s why we’re going to take steps to do something about it. The problem is, my people will inevitably say we’re handicapping ourselves, coughing things up that others hide – why should we be the only good guys?’
‘But everyone should do it.’ His cheeks are glowing and he’s taking on a look of righteous indignation.
I shrug nonchalantly. ‘Everyone should, but nobody does. We’ll be the first. Somebody has to, because otherwise the whole pack of cards could come tumbling down. Most firms don’t even understand the full extent of the risks they’re taking. And in the end, it’s Joe Public who pays.’
‘The public?’
‘Sure. When the banks bleed, so does industry, because the cost of finance goes up, and that means jobs. Ordinary homeowners pay too, through the cost of mortgages, and so do those parts of society least able to cope when credit dries up – the poor, the elderly, the vulnerable.’ Poor things. But he’s got the point and he’s scribbling furiously. ‘That’s why politicians should care about this stuff, but they really don’t get it.’
‘Never do.’ He’s smiling smugly to himself. There’s a thought bubble over his head saying, ‘Oh yes, they will, once I break the story.’ His piece will set the tone for a whole week’s coverage, and in less time than that politicians can fuck up anything. They’ll come wading in, talking because they have to – because we expect them to – before they’ve had a chance to think, to reflect, let alone to understand. Or, at least, that’s what I’m counting on.
AFTER SAYING goodbye to Arthur James and smirking as he sways off down St James’s Street, I call Keith Ellis on his mobile. Keith is a former investment banker who started his own dot-com business in the late nineties, an online brokerage firm that was bought by one of the big Swiss banks for a fortune before it became apparent that the whole dot-com thing was a scam. Keith banked his money, retired, sacked his first wi
fe and married his former secretary, who had been his mistress for years. The trouble was, leopards don’t change their spots, and within a few weeks of remarrying he had another mistress. That would have been fine, but his new wife was an expert, saw the signs, hired private detectives to get proof and, as soon as she was pregnant, divorced him on the grounds of adultery.
Even a very large fortune can’t withstand too many divorces, so Keith is now resolutely single, but once a year he has a stag do. He gets his closest friends together once a year for a night of sheer indulgence, and in the morning ‘comes to his senses’ and confirms that he’s going to save himself a fortune by not actually getting married again. Ever. As one of his oldest friends, I’m always invited.
And so I’m standing in St James’s Street waiting to be picked up by an outrageously long stretch limo with darkened windows.
I always enjoy Keith’s stag nights. There are usually half a dozen of us and a minimum of one girl each. We cruise around town for hours, getting laid, doing drugs, drinking champagne, occasionally pulling over to drop off one shift of girls and reload with another, or go into a club, or buy more drugs. And the stretch is a great vehicle for combining privacy with intimacy and a sense of luxury.
If it wasn’t for the sex trade most of these ridiculous vehicles wouldn’t make money. But the fact is that most of the stretch limos you see going around London are full of people having sex. The only downside is that you have to check the seats for stains before you sit down.
A big white Lincoln Town Car pulls up, the door opens and Keith beckons me in. He’s mid fifties, overweight and balding, but the main thing is he’s happy. Really happy. He’s got the look of someone who still has twenty million in the bank, no duties or responsibilities whatsoever, and does whatever the hell he wants. All the time.
Dave Hart Omnibus II Page 4