by Tom Cain
Choi nodded. ‘I agree. This is already an extremely tight schedule. He will not want to rush it any more than he absolutely has to. That is how mistakes are made. So … Wednesday or Friday … thank you very much. That is very useful.’
‘And my money?’
‘Will be deposited in your account as always.’
‘With a bonus if you succeed in killing Carver?’
‘I don’t believe I mentioned any such possibility.’
‘Of course not.’ Ginger fixed him with a brittle, humourless smile. ‘You didn’t have to. And I don’t have to say that I will expect a success fee in the event that the attack on Zorn is prevented … However it’s prevented.’
‘Noted,’ said Choi. ‘And now I’m sure you must be busy. My people will show you out.’
Choi watched Ginger Sternberg as she left the room. She was undeniably attractive for a western woman, and it amused him to see the arrogance with which she used her sexuality, presuming that no man could resist her. It would, he thought, be enjoyable to turn the tables on her one day, so that she was the one who begged and pleaded. That had not, he imagined, happened very often in her life, if at all. She had great power, and it had corrupted her and made her lazy, very much like the West itself. Both would be made to grovel.
First though, he had to deal with Samuel Carver. It would give him great face if he were seen to dispose of a man who had been the cause of such irritation. He would, of course, seek guidance from Beijing, but he had no doubt what his instructions would be. Samuel Carver had to die so that Malachi Zorn might live. And he, Choi Deshi, would personally ensure that the task was accomplished to his superiors’ satisfaction and his own personal glory.
15
* * *
The Old Town, Geneva
CARVER SPENT THE twenty-four hours following his deal with Razzaq deep in thought. He ran through possible identities and disguises; spent hours memorizing the junctions and landmarks on key roads; compared a number of indoor and outdoor locations; and considered all the many different ways of ending a human life at his disposal.
For a while he even toyed with the idea of sabotaging the private jet that would carry Zorn from New York to London. The timing was crazy, though: it would mean hiring a jet of his own to cross the Atlantic in order to reach Zorn’s plane before it took off. It was too soon, anyway. He and Grantham alike both needed to know more about what Zorn was up to. And Carver needed flexibility, a little wriggle room in case he had a sudden change of plans. Nothing about this job felt right, and he had no intention of getting caught with his pants down if Razzaq, Zorn, or some other player as yet unknown started changing the rules of the game.
He ended up concentrating his attention on Wimbledon, searching out every piece of information he could find about the All England Club and the suburban townscape that surrounded it. Looking at the aerial views of the tennis complex, and correlating them with the official maps available on the tournament website, he noticed an entrance gate on Somerset Road, just behind the press and broadcast centres. It was not listed among the spectator gates, and seemed to be an access point for trucks servicing the tournament’s insatiable demand for food, drink and merchandizing. To the left of the gate, the road disappeared into the mouth of a tunnel. It didn’t take long to discover that this led to an un loading bay below Number One Court before rising back up to an exit on to Church Road, on the far side of the club. Carver reckoned there had to be some way of distributing all the deliveries from the unloading bay to the places where they were needed without interfering with the crowds above ground. That meant more, and smaller tunnels. So now he had the possibility of underground ways into, out of and around the All England Lawn Tennis Club.
He also looked into the debenture tickets Zorn had bought. Their original owners had paid £27,750 for the right to buy a Centre Court ticket for every day of the Championships over five years (Number One Court debentures cost roughly half the price for the same period.) They were the only Wimbledon seats that were legally transferable, and could be sold at any price the market would bear. With each seat came perks: a dedicated entrance to the show courts, private bars, restaurants and so on. If Zorn had these tickets, Carver had to have them, too. He phoned a ticket agency.
‘We can do you a debenture ticket. When do you need it?’ the man from the agency asked.
‘Monday, Wednesday and Friday.’
There was a soft whistle. ‘Blimey, that’ll cost you. I mean, the best price we’ve got for the men’s semis on Friday is, hang on … $6,758. In pounds that’s—’
‘Don’t bother, I’ll take it,’ said Carver. ‘And I’ll take the other two days. And I want Number One and Number Two Courts as well, all three days.’
Now the whistle became a chuckle as the agency man worked out what he was about to sell. ‘You planning to be in three places at once?’
‘I’m planning to be wherever I need to be.’
‘Fair enough, but there’s a problem, yeah? They don’t do debentures for Number Two Court. So there ain’t no tickets on sale for that.’
‘Yes, there are.’
‘No, there’s not. See, that’s not legal.’
‘I’m sure it’s not,’ said Carver. ‘But if I’m willing to pay the same price for Number Two Court tickets as for Centre Court ones, I reckon someone will want to sell me them. I’ll pay cash, if necessary. So, can you help me?’
‘Well, obviously, selling you them tickets is a criminal offence, as such …’ There was a pause and Carver could sense the battle between greed and fear going on in the man’s mind. Eventually, as he thought it would, greed won.
‘I’ll see what I can do.’
It would take Carver most of Saturday night to finish his planning. But first he wanted to know more about the business his target was in. His financial affairs were handled through a private bank in Geneva. It placed customer service at the very top of its priorities. So when Carver called his personal manager, Timo Koenig, and asked him if he could spare an hour or so for a drink, the fact that this was a Saturday evening did not deter Koenig – openly at least – from saying yes.
‘Great, meet me at seven in the bar of the Beau Rivage,’ said Carver.
The Beau Rivage was an old-fashioned grand hotel on the banks of Lake Geneva. It had been quite a while since Carver had visited it. The last time, also, he’d had a meeting with a bank manager, and he’d been with Alix. Things hadn’t worked out too well for them that night. Carver saw no need to tell Koenig about it … let alone how much worse they’d worked out for the banker.
16
* * *
Hôtel Beau Rivage, Geneva
CARVER BOUGHT THE drinks. A beer for himself and a martini for Koenig, a well-preserved fifty-year-old, kept trim by tennis and skiing, whose idea of casual weekend attire consisted of immaculately pressed jeans, a Ralph Lauren polo shirt, and a cotton jumper so crisp and clean that that it appeared to have only just been unwrapped from the store tissue paper. Carver had not shaved all day, and he’d seen no reason to change before he went out. He felt like a vagabond by comparison, but that didn’t bother him in the slightest. ‘What do you know about a man called Malachi Zorn?’ he asked.
‘Not a great deal,’ said Koenig. ‘I have never had any reason to do business with him. But he made his fortune shorting Lehman’s, no?’
‘You tell me. How does a guy like this work? For example, you say he shorted Lehman’s. I know that means he bet against them. But how?’
‘Mm … good martini,’ said Koenig, savouring his drink before answering the question: ‘CDSs … sorry, credit default swaps …’
‘Which are what, exactly?’ Carver asked.
‘A credit default swap is a way that an investor can make money out of someone else’s loss. You might say it is an insurance policy taken out on something you do not necessarily own.’
Less than a minute into the conversation, and already Carver felt like he’d walked into an alternative u
niverse. ‘That sounds like me taking out insurance on your car. Why would I want to do that?’
Koenig smiled, as though what he was describing was the most normal thing on earth. ‘Well, you might decide that was a good investment if you knew that I was a terrible driver who was almost certain to crash.’
‘Or if I knew I could make you crash …’ Carver said.
Koenig clearly thought he was joking. ‘Ah, well, that would be cheating!’
‘If you say so.’
‘In any case, a default swap is just like a regular insurance policy,’ Koenig continued. ‘You buy a certain amount of cover for a fixed premium, over a given period – usually ten years – and it pays out in the event of loss. The premium is often very low. If you wanted to take out a credit default swap on a very safe, AAA-rated corporate bond, for example, it might only cost you fifteen thousand dollars a year for ten million dollars of coverage. So your downside is fixed: over the course of a decade the maximum you will ever spend is a hundred and fifty thousand dollars. But if the company collapses and its bonds become worthless, then you will make ten million dollars. Those are very good odds. And because the length of the term is so long, a default swap is very useful when you are sure that a collapse of some kind will occur at some point, but you don’t know exactly when.’
‘But what’s in it for the other guy, the one who’s selling?’ Carver asked.
‘Ah, well, he gets a guaranteed income, based purely on a promise,’ said Koenig, to whom this was clearly a perfectly reasonable proposition. ‘He does not have to spend any money of his own. He just collects your premium every year for ten years, and hopes that he never has to pay out. In most cases, he will be right. He will end up with a hundred and fifty thousand dollars for doing absolutely nothing. But sometimes, particularly in times of crisis, an unexpected, apparently impossible, failure occurs and he loses his bet. The market was certain that Lehman’s was safe, because it was too big to fail, and so it was very cheap for Monsieur Zorn to buy billions of dollars of credit default swaps. When Lehman Brothers collapsed, he collected those billions, and, of course, the banks that had sold him those swaps lost the billions they had to pay him.’
‘That wouldn’t make him too popular.’
‘Not if he did it more than once, certainly,’ Koenig agreed. ‘A bank is like a casino. The management do not mind the occasional jackpot. That encourages the other gamblers. But if someone creates a system for winning, and gets the jackpot again and again … well, then they are asked to leave the casino.’
‘Yes … and they aren’t always asked politely,’ said Carver. ‘So these swaps, are they the only way Zorn makes his money?’
‘I had no idea you were taking such an interest in finance, Sam. May I ask why you are so fascinated by Malachi Zorn in particular?’
‘His name came up in conversation.’
Koenig gave Carver the chance to say more, accepted that no further information would be forthcoming, and then smiled as he said, ‘You are very discreet. You would have made an excellent Swiss banker! OK … get me another martini and I will try to explain.’
Carver bought a second round of drinks and settled back for Koenig’s tutorial.
‘So, Zorn … Well, I imagine he’s using a great many different financial vehicles. His aim, though, will always be to leverage his money to the greatest possible extent, so that he gets the maximum possible return.’
‘The impression I got was that he bets on failure most of the time,’ Carver said.
‘In that case, another way to go is “put” options. Basically, that gives him the right to sell a quantity of a stock or a bond at a particular price, on or before a particular date. So, imagine a company that is doing well. Its shares cost ten dollars, and the price is very solid, very steady … But for some reason, Zorn thinks to himself, “These shares are overvalued, they must crash. Soon they will be worth much less.” So he buys the option to sell these shares at eight dollars. Financial institutions will sell Zorn these options, because they see no reason for this price to go down. If they are right, the price holds steady, and Zorn loses all the money he has spent buying the options. But if the share crashes – say to three dollars a share – Zorn exercises his options, sells at eight dollars, and pockets five dollars a share profit.’
‘Which the bank has to pay for?’
‘Effectively, yes.’
‘So what is Zorn paying for these options?’
‘Ah, Sam, that is a very complicated question … But it can be reduced to a pair of very simple elements: time and risk. The greater these are, the more an option costs. Imagine, for example, that you want to buy “put” options on the price of a house, betting that its value will decrease. A six-month option on a house made of straw will cost you much more than a week-long option on a house made of brick.’
‘Unless you know that the big bad wolf has a wrecking ball.’
‘Precisely … in any market, exclusive information is the most valuable commodity of all.’
Carver took a long drink of his beer, using the time to get his head around what he had just learned. ‘You know, what I really don’t get about any of this,’ he said, putting his drink back down on the table, ‘is what’s the point of it all?’
‘It’s business. It makes money. What other point does it need?’
‘But it doesn’t make money, does it?’ Carver pointed out. ‘You said it yourself. Every time there’s a winner on a trade, someone else loses the exact same amount. So nothing new is created. Oh, no … wait … Something tells me that if a trader does a deal to sell one of those swaps, or “put” options, he puts that down as new business and he gets a slice of that business as his bonus. Am I right?’
‘Sure,’ Koenig agreed. ‘Bankers’ pay is based on a percentage of the profits they generate, so yes, in theory …’
Carver was feeling the excitement that comes when you suddenly get an insight into something new. ‘OK … so then a couple of years go by and – uh-oh – turns out that swap was a bad idea. Lehman’s go bust. Now that swap Zorn bought has cost millions, even billions … does the guy who sold the swap, or the option or whatever it was, pay for that loss? No, of course he bloody doesn’t! He probably doesn’t even work at the same place any more. But the bank certainly has to pay.’
‘Of course, it comes off the balance sheet.’
‘Exactly! So the bank’s profits fall, or maybe it makes a loss. Either way its shares lose value, so the shareholders lose money … and those shareholders are mostly pension funds who invest the money for ordinary people who don’t have a clue about any of this. So now those pensions are worth less … and basically what’s happened is that poor people have lost money so that rich idiots can gamble with their cash and never have to take any of the losses themselves.’ Carver shook his head in surprise. ‘Razzaq was right, after all …’
‘I’m sorry, who is Razzaq?’
‘Someone I was talking to. He said Malachi Zorn’s deals ultimately made ordinary people poorer. And he was right. He just forgot to mention that all those other bastards’ deals have exactly the same effect.’
Koenig laughed nervously, trying to defuse the intensity in the air. ‘Calm down, Sam, really … I have never seen you like this before. My God, it’s a good thing you don’t have a gun on you right now. This bar is full of investment bankers. You might try to shoot someone!’
‘Yes,’ said Carver. ‘I just might.’
Custer County, Nebraska: six months earlier
Seen from the air, the valley that stretches to the north-west of the town of Broken Bow looks like the remains of tiles on a crumbling wall. The mottled, dusty-brown and olive-green earth is dotted with perfectly square fields, in which sit circular splashes of emerald caused by the rotating water sprayers that irrigate the cultivated land thereabouts. The dusty, dead-straight roads that bisect the flat valley floor even criss-cross one another like grouting.
Of course, that’s only in the summerti
me, when the corn is growing. In the middle of winter, the rock-hard earth is as dark as bitter chocolate, dusted with sugar-white snow. Jed Rogers grew corn on land that ran along County Route 92, land that his father and grandfather had farmed before him. He had been a local celebrity for the best part of twenty-five years, ever since his final two years at high school, when he’d quarterbacked the Broken Bow Indians football team and been voted Homecoming King. Maryjane Rogers had been his pretty blonde queen. The eldest of their three children, Jed Jnr, was only in his sophomore year at Broken Bow High, but already folks were saying he’d inherited all his daddy’s talent and more besides. And his two little sisters were just as cute and pretty as their mom. The Rogerses were a popular family, good people. They worshipped at the First Presbyterian Church, and never missed a Sunday service. They contributed generously to local charities, and Maryjane was the kind of PTA stalwart who could always be counted on to help out at school events or bake a tray of cookies at a moment’s notice.
Custer County, like much of rural Nebraska, has less than half the population it did a century ago. There are barely eleven thousand souls spread across its two and a half thousand square miles. In a place like Broken Bow, people know one another and lend a helping hand when they can. So when Jed Rogers was found in his barn, with the back of his head blown off by the shotgun he’d placed in his mouth, his death was not officially noted as a suicide, but as an accident. No one wanted Maryjane and the kids to lose the insurance money. And it wasn’t as if the insurance company had really been cheated or anything. Jed Rogers was suffering from Huntington’s disease. There was no hope of a cure. All he’d done was spare his family the pain and expense of caring for him as his mind slowly decayed into dementia and his fine, strong body fell apart.