Harsh conditions had made him tough, and even though the harshness of the conditions was not in his case the result of natural forces but rather of the capriciousness of market forces, his background gave him a strength you can only obtain through living.
The man wore a refined everyday suit, dark gray with pale gray pinstripes. It was the work of one of the city’s rare tailors who through the years had always adjusted measurements by eye—added a few millimeters to the waist and back seam, tucked a bit somewhere else. He had noticed it when he sometimes tried on the old suits that still hung in his closet like skeletons of times past: the suit he had worn to receive an honorary doctorate from the school of economics, the suit in which he had celebrated the ten million marks he’d made off the Metsä-Serla warrant.
Blue he had never liked, even though it was favored by the patriotic. His fatherland was money, which knows no color.
When he stared at himself in the window of the clothing store on the ground floor of the hundred-year-old granite building, he saw a man who looked like him: someone pleased with himself, dignified, respected, someone who enjoyed company and could still captivate a small group, but who drew back the moment people appeared whom he did not know.
He looked, in fact, too thriving, considering that someone had tried to kill him earlier that morning.
He was Ransu Grundström; Rafael, in official documents. The nickname was unusual for one his age and brought to mind the children’s TV puppet dog—everywhere in Finland except this neighborhood. At the Helsinki Stock Exchange, Ransu meant nothing but Grundström, the legendary securities dealer who founded the brokerage that ruled the Finnish stock exchange business in the 1980s and early 1990s.
R. Grundström Brokerage was famous for its bold maneuvers, both on behalf of its clients and for its own benefit. Some years Grundström brokered more trades than even the securities trading units of the traditional commercial banks Kansallis-Osake-Pankki and Suomen Yhdyspankki. This lead position meant that Ransu had all the information that moved within Helsinki. No one dared enter the game without first asking his view or without informing him. Anyone who overlooked the rule discovered he had lost money, because R. Grundström Brokerage would attack the markets aggressively and force their opponent to operate the way they wanted. That is what Ransu did if he felt that someone intended to move on his own, or against Ransu’s interests.
He had conducted bruising battles and driven his smaller competitors into bankruptcy. He had recruited the sharpest brokers to his firm, and no one had ever declined. Along with success, he offered merit-based pay, which was very unusual in a Finland accustomed to fixed monthly wages and as close to the Soviet Union as a country that called itself “Western” could be.
“Good morning, Ransu!”
Mr. Lauri Rosendahl, CEO of the Helsinki Stock Exchange, waited, holding the door open. Grundström stepped inside and the CEO hastened to open the second door.
They briefly discussed the situation with the US housing markets, and the previous night’s PMI that had caused US markets to drop. The fall had continued in Asia, the CEO reported, as he checked the real-time Nikkei score on his iPhone. The anticipated index futures indicated that Helsinki would open to a fall as well when the first trades were made after ten a.m.
When Ransu Grundström had stepped through the outer door of this same building every day thirty years ago, brokers had not talked about index futures but about companies whose shares they sold to each other and bought from each other at two-person desks in the great trading hall on the second floor, rather than sending bulk orders electronically to a data center somewhere in Sweden based on what had happened in US and Asian markets.
Nowadays the stock exchange building was a hollow place. Trading had gone electronic by the early 1990s. The company running the stock exchange had first ended up under Swedish ownership and most recently been sold to the world’s largest exchange operator, NASDAQ, known best as the quotation market for hot IT and biotech companies. Ownership of the pale gray granite fortress designed by Lars Sonck had been parked at a foundation.
NASDAQ’s Finnish office did not need many employees or square feet. The old stock exchange hall that had once doubled as a meeting room for the city council now served occasionally as a seminar space, and the rooms on the Fabianinkatu side had been turned into offices.
Grundström had leased one of these for himself. Not because he needed office space—he was retired and traded only occasionally, for the sheer love of it. On the upper level of his two-story home in Kaivopuisto Park he had a fully equipped office with a broad view of the sea. Here, on the other side of narrow Fabianinkatu Street, there was a ramp to the Nordea building’s parking garage, and that ramp, along with one side of the building, formed the main view out the window. Nonetheless, Grundström had made his offer the moment he heard that space was being freed up from stock exchange use, and he had agreed to renovations at his own expense, without trying to negotiate a lower rent.
The location was practical, between Esplanade and Aleksanterinkatu, a block from the main market square and a short walk from his home. Most important, there was an indoor stairway he could use to get from the office to the Bourse Club where Grundström made a habit of lunching. The lordly, conservative atmosphere of the exclusive club felt cozy to him. He might laugh at some details, but at the same time he took pleasure in the fact that modernization had not yet reached quite everywhere.
Here he could live amid the days of his own greatness. For it could not be denied: his greatness was history, visible as affluence, independence, and prestige, but it had been at least ten years since he had been a feared market force. Nor was there need to deny it. Disregarding facts was one sure way to lower your chances on the markets.
The massive walls of the granite fortress sheltered Grundström from the winds of change that whipped wildly past and caused the stock markets to plunge and soar with abandon. The once radical daredevil had become a conservative whose thoughts frequently escaped to the intense trading of shares of now-forgotten and repeatedly merged companies.
Ransu Grundström shut himself into his office, which had no nameplate on the door. He spread the Financial Times on the dark-stained conference table from the building’s original furnishings and skimmed the pages without paying much attention, looking at the headlines and pictures. There was so much information that you couldn’t gather, analyze, and manage it all. The present time operated with different logic than the 1980s, when information was limited and you could make money simply by concentrating.
After reading the paper he went to freshen up in the bathroom, which sported unnecessarily modern furnishings. A family-owned investment firm that had made its fortune in faucets controlled the office next door, and its CEO was one of Grundström’s regular lunch companions. The man had managed to convince somebody that a soft stream of water and the latest design in faucets were essential for the hundred-year-old building.
Grundström looked at himself in the mirror. He tugged the left sleeve of his suit jacket. He brushed some black polish onto his pant leg. He used a little soap to scrub the polish off his hands, enough but not too much.
At eleven thirty there was a knock on his office door.
Grundström did not have any employees. What would he do with them? He was a stockbroker and he was used to taking care of his own mundane tasks. He accepted advice and help, but he was perfectly capable of carrying his own newspaper and opening the door if someone knocked on it. He picked up coffee from the club or the Aschan Café on the next block.
On the balcony corridor that circled the inner courtyard stood a tall man. He was at the ideal age, career-wise—about thirty-five—an age when one has enough experience behind him but still hungers for success, unlike fifty-year-olds who are beginning to secure their positions and don’t dare take risks. Grundström had not met this man before, though he had heard much about him.
Grundström had wanted to meet the man in person. But he
did not invite him in.
II
Jarkko Aalto was among the most talented of his generation when it came to making money on the stock and derivatives markets. He had downed many liters of flavored mineral water in head hunters’ conference rooms, listening to the offers their clients would make him. Then with great indifference he would say, at the end of the discussions, that he was content with his current job in the markets unit of the largest bank in the Nordic countries. The merit pay was good, advancement opportunities were available, and he had enough money at his disposal.
But when an invitation arrived from Ransu Grundström, Aalto cleared space on his calendar by moving a breakfast meeting earlier and rescheduling a lunch. And thus it was that on each side of the threshold stood the toughest gambler of the Helsinki finance world, then and now.
“Have you eaten?” Grundström asked. Without waiting for a reply, he stepped out the door and started toward the staircase. Aalto strode beside him.
They climbed up two floors to the Bourse Club. Aalto always left his top shirt button open, but on the stairs he pulled from the breast pocket of his suit a shiny salmon-pink tie and fixed it loosely around his neck. Several loaner ties in different patterns hung from a hook in the men’s room of the club where ties were required, but turning to one of those would have signaled poor preparation. One factor in Aalto’s success was that he always thought through upcoming situations in advance: It was likely that they would lunch at the club, just as it was likely that the German investor who had bought UPM-Kymmene shares the day before would buy more today. With each, he’d place his bets accordingly.
They sat down at a table which Aalto guessed was Grundström’s regular spot. Food selection was not difficult. They were both men who knew what they wanted, and they knew that the purpose of the lunch was not the food. They would barely notice the dishes that appeared before them.
“Do you know,” Ransu Grundström said, once the waiter had filled their glasses with sparkling mineral water, “someone tried to kill me this morning.”
The language of financial centers was generally filled with dramatic metaphors. Life and death were small words, used the way teenage girls discuss their infatuations. But Aalto quickly realized that Grundström was not speaking metaphorically.
“A man, just one man, grabbed me under the arms from behind as I left home. On Laivasillankatu, on the park side of the street.”
Aalto knew that Grundström lived in one of Helsinki’s finest areas, near the house, now a museum, of Field Marshal Carl Gustaf Emil Mannerheim, who had led the Finnish armed forces in World War II. Aalto would sometimes take international customers to that museum. Residences there cost more than in Manhattan.
“From behind some bushes, in the shadows, out of nowhere,” Grundström recalled. “The streetlight is out right there.” He explained that he had consistently supported a so-called night-watchman state. “All sorts of useless income transfers—cost-free university education, government pensions, lavish social security, free school lunches. Nowadays I could even accept some of that, if society would only take care of security. There should be a night watchman.”
“You got away without injury.”
“The bum wanted money. I tossed some bills as far as I could. He ran after them. I escaped down the hill.”
Aalto listened to the former stock exchange czar’s tale with fork and knife frozen and wondered if he was expected to show empathy. “It’s good to have money with you,” he said.
“It makes life-and-death choices easier,” Grundström replied. “I saw the flash of a knife blade. He held it against my throat. It was this close.” He showed a tiny space between his thumb and forefinger.
This sentence was followed by a considerably longer pause, which emphasized Grundström’s shock; Aalto did not want to interrupt the moment, even though arrogance and flagrant disregard for convention were among the characteristics he cultivated. His indifference to propriety often annoyed his superiors, but they never said anything. One does not let go of a money machine nor even irritate it. He annoyed his superiors most of all by earning more than them.
There was a reason for Aalto’s unusually respectful comportment. This man who bowed to no one admired only one person other than himself in the world of investments: Ransu Grundström.
Some ten years earlier a guest lecturer at the school of economics had gotten carried away telling stories of the wild stock exchange of the 1980s—not yet restrained by the Securities Market Act—in which the custom of the land was like that of doping in endurance sports. These stories often included the name Ransu Grundström. Aalto had known immediately that he wanted to hear more about that legendary stockbroker. He maneuvered himself to chat with the guest speaker after the lecture and was able to hear more about this broker who operated with a smuggler’s morals—the secretive czar of the stock exchange.
He got hold of books on the history of the stock exchange and commercial banks, where he found Grundström in the indexes. With a disciple’s dedication he drank up Grundström’s intellectual world. He was not interested in Omaha ukulele players, old softies worshipped by the whole investment world. He was interested in the scruples-free stockbroker who had made his own fortune by sufficiently honest means.
* * *
Grundström said that he certainly did not want to bore a busy young man with chitchat about such a commonplace matter as death—people died all the time. He wanted to talk about these markets that were so different than they used to be.
“The computer screen is full of data and more keeps pouring in faster than you can see. Index decimals flash past. How do you make money anymore?” Grundström asked.
The clever quips Aalto used to entertain his well-to-do guests on the streets beside Nice’s beaches and in the bistros on the slopes of Alpine ski resorts would not cut it now. He had asked some older colleagues who knew Grundström about the man’s personality and was told that he had no interest in empty talk. The only topic that really spoke to him was money.
“The market hasn’t changed. It just looks different.”
“Everything happens at lightning speed.”
“It’s wrong to think that speed is the decisive factor,” Aalto said. “Whoever is fastest is fastest, but the stock exchange is not a hundred-yard dash. What interests me is who makes the most money.”
Grundström laughed and declared that he had no reason to feel otherwise.
“You can make a little money, quickly. If you make a little money, you need to do it often. You have to hammer out trades all the time, with big capital. If you’re lucky, in a day you’ll make the operational expenses and a little more. If you’re not lucky, you lose a lot.”
“Probably quite a lot.”
“A goddamn lot. No point trying for tiny profits with a million shares. Only with tens or hundreds of millions does it start to be felt. And if something goes wrong then, it’s really felt. You have 90 percent leverage and the company posts a profit warning . . . No. Fast trading is a game of chance, and the odds are with the casino. It’s a bit like the retail trade: big turnover, lots of capital, low coverage, small margins. Differentiation factors, scarce. Who would want to be the Tesco or the Walmart of the brokerage business? Who wants to fight with robots?”
Aalto noted with satisfaction that his words were sinking in. He spoke only the truth, but deliberately painted an incorrect picture. He was not lying, just adapting what he said to suit the listener.
Grundström listened to him carefully, seemingly ready to buy his story.
“I’m old-fashioned,” the young man continued. “On the markets you can make a little money or a lot of money. I’m interested in the latter.”
“How do you do it?”
“By buying stock that’s going up before others do, or selling whatever’s about to drop.” So as not to sound unintentionally flippant, he hastened to add that he had his ways of sniffing out which would go up and down, and that, with the right informati
on, you could improve the ratios. “The market’s still the same in that way too. Information is power that turns to money.”
“Back in the good old days when Wärtsilä was getting orders,” said Grundström, “the directors swaggered about on cruises or dining at the Savoy. To make money you just needed to know the right people and use a little power of deduction. Nowadays they send out stock bulletins from every store and new office. Information has become worthless. Everyone has it.”
“Information has become a scarce commodity. That’s why it’s even more valuable than before,” Aalto declared.
“Is it enough for making money?”
“No. It’s not enough. Fortunately, you don’t need information,” Jarkko Aalto explained, watching Grundström’s pupils. “I don’t look for truth but for market movement. Communists shout that the markets are headless. Indeed they are! I completely agree! Fundaments are reflected in prices slowly. That may be enough for a holder who wants to become prosperous. But if you want to get rich—if you don’t want to make just one fortune but rather multiple fortunes—that pace is far too leisurely.
“Truth-seeking is Greek philosophy. Fine. Lovely!” he went on. “In recent years we’ve seen that the Greek tradition is perhaps not the most optimal in terms of managing financial matters. That’s why I’m with the pragmatists: truth pays! More essential than a company’s true value is its price movement. I’m not interested in how a company’s doing. I’m not even interested in what the company’s doing. I am only interested in how I can make money with the company’s stock.”
Inferring from his nods that Grundström was still listening with interest, Aalto continued the presentation which he had practiced in front of a mirror to get just the right facial expressions and emphasis to bolster his message.
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