Dave Hart Omnibus

by David Charters

  The problem is, the announcement has been made, and the board are too afraid to issue a correction: ‘What Mister Hart really meant was…’ It is particularly difficult in Germany, where many liberal commentators think this is a fantastic development, that finally a major financial institution is doing the right thing, making the right social commitment, showing the rest a fine example. So the board are like a rabbit caught in the headlights, and the only thing they know for sure is that this is my fault, and as soon as the noise dies down, I’m toast.

  I do the only thing a man can do on an occasion like this, and call the Silver Fox. We – or at least I – have to have a strategy. I’ve got twelve hours to work out what to do, and how to dig myself out. For once I’m not bored.

  He takes about half an hour to come to the office – he is always dining at some smart restaurant or other in the evenings, usually with a newly divorced or separated actress or model on his arm, but tonight when he arrives, he has a whole team with him: branding consultants, advertising people, speechwriters, you name it, he has them. They set up camp in some of the Grossbank meeting rooms, and I take him into my office.

  ‘Dave, this is about you. You are the story here…’

  I hold up my hands to stop him before he goes any further. ‘You don’t have to win this business. It’s yours already, whatever the cost.’ I look at him imploringly. ‘Just save me…’

  * * *

  OUR STOCK closed Friday at seventy-five euros a share. On Monday morning the Frankfurt market opens and Grossbank shares are off ten per cent within minutes of the start of dealings. Not only are institutional investors bailing out of a stock that clearly can’t pay the sort of dividends the other German banks can – because they aren’t so dumb as to give away ten per cent of their profits to charity – but the hedge funds are shorting the hell out of Grossbank, opportunistically trying to drive us even further underwater, selling shares they don’t own, but have borrowed from elsewhere at seventy-five euros, hoping to buy them back in a few weeks at fifty, netting a fat profit out of our misery. Our share price hits sixty euros, it is the big story of the week, and some of the institutional shareholders are actually asking if the board will re-consider their decision on the Grossbank Foundation. Re-consider it? Hell, yes – they didn’t even make it. They’d love to re-consider.

  At eleven o’clock, having been carefully coached by the Silver Fox, I fire my first salvo. I do a live interview for EuroBizTv, a satellite business channel carried all over the world, and syndicated to most of the German TV stations.

  I do it from the trading floor at Grossbank in London, where a pretty woman reporter, a camera man and a sound guy have been prepped by the Silver Fox.

  ‘Mister Hart – what is your reaction to the fall in the Grossbank share price? Is giving to charity bad for business?’

  Relaxed smile. ‘Absolutely not. If there are people out there who are uncomfortable with our business philosophy, I’d rather they didn’t own our shares. We’re taking a moral stand here, and that’s what matters to me.’

  ‘Even if your shares keep on falling?’

  ‘You can’t run a business of the scale of Grossbank – or any of the major German banks – and spend your life worrying about daily share price movements. We’re here for the long term, and people need to know where we stand. Grossbank is different from the other German banks, and proud to be so.’

  ‘How is Grossbank different?’

  ‘None of our competitors has given anything like the commitment that we have to putting something back into society. By banking with us, our customers are making a moral statement. They are saying we want to do business with a firm that believes in our moral values, that is prepared to sacrifice profit for the future benefit of society, for our children and our children’s children. That’s the difference.’

  ‘But do customers care?’

  ‘We’ll see. It’s easy to say you believe in moral values, but people need to demonstrate commitment, as we have done. If there are people listening to this interview in Germany, who bank elsewhere, they should think about that. Do they want to bank with a firm that doesn’t care, or one that does? It’s their choice.’

  ‘Dave Hart, head of investment banking at Grossbank, London, thank you…’

  I do a whole series of similar interviews for the print media, a couple for radio, and some pre-records for late night business TV shows in Germany. Meanwhile our stock’s hit fifty euros. I call the Silver Fox, who says to stay calm. We’ve done all we can for today, tomorrow will be the acid test.

  As I know I won’t sleep anyway, I call the Pussy-Cat Club and book Fluffy and Thumper in the private room…

  * * *

  THE NEXT day starts early, even by City standards. I get a text message from the Silver Fox – ‘It’s started’. What’s started? I’m early in the office and stay glued to one of the big TV screens on the trading floor. They are showing scenes from Freiburg, where I first gave the speech that started all this. There are lines of mostly young people outside the main Grossbank branch, waiting for it to open. Some of them are interviewed and explain how they are moving their accounts from other banks to Grossbank. Later they show other places. To begin with, it is particularly strong in university towns where there are lots of young people, but in the course of the day it starts to catch fire across the whole country. In no time Grossbank’s branch network is being overwhelmed by new account openings, and the internet banking site goes down under the volume of hits. The share price carries on falling for a time, then stabilises around forty-five euros. The business news channels carry interviews with hard-nosed analysts – twenty-five year olds who know nothing about anything – trying to work out whether increased market share might cancel out the negative effect of giving away ten per cent of profits. The prevailing view is that it won’t, and the stock starts to fall again.

  The next couple of days are hell. In Germany, we’ve signed over three million new customers, but are losing momentum because the system simply cannot cope. The board are reserving their judgement and I stop getting calls from Herman. Now we fire the second salvo: a full-blown advertising campaign with some big shot TV stars, singers and comedians, saying on German TV, ‘I’m with Grossbank. Are you?’ The logo for the campaign is a thumbs up sign, and we’re printing millions of bumper stickers, badges and baseball caps. We want to create the New Cool, and the Silver Fox is masterminding a viral marketing campaign starting in the universities. By the end of the week, we’ve passed the five million new account openings mark, the system is in meltdown, and the stock is hovering just above forty euros a share. As we head into the weekend, we need to pull another rabbit out of the hat.

  Luckily for me, that’s exactly what the Silver Fox does.

  Late on Sunday evening, I do another interview, this time in a TV studio in Frankfurt, with a leading German business commentator.

  ‘Mister Hart, the Grossbank campaign has attracted over five million new account holders for your bank in a single week, but it still has not stopped your share price falling to a little more than forty euros a share. It has almost halved since you announced this new initiative. How can you say it has been a success?’

  ‘The Grossbank share price has been manipulated downwards. It’s being sold short artificially by mostly foreign institutions – hedge funds and speculators. These people have no understanding of business, let alone morality. For them this is all about short-term profit. And you’re right, what they’ve done has been to force our share price down to little more than half the level of a week ago. But that’s good news.’

  ‘Good news? I don’t think your shareholders would agree, Mister Hart.’

  ‘Right now, perhaps not. But when the benefit of five million new account holders works through to profits, there’ll be a different story. And in the meantime, the share price at such an artificially low level presents a huge opportunity.’

  ‘How so?’

  ‘Anyone who believes in Gr
ossbank and what it’s doing should buy our shares. They’ve been forced down to this level by international manipulators and at forty euros they are a bargain. The people who voted with their feet by moving bank accounts should buy our shares too. Buy one share, buy two or three or five or whatever you can afford. Buy them for yourself, for your children or your grandchildren. Because you’re investing in an institution that will change the way business is done. This is not for now, it’s for the future. For all of our futures.’

  In fact, the particular future I have uppermost in my mind is my own, but I say all this with my best ‘earnest conviction’ look, head tilted sympathetically to one side, leaning forward into the camera, smiling, relaxed and positive. Out of camera shot, the Silver Fox gives me a double thumbs-up.

  I’ve done my bit, now we need to see what tomorrow brings. I leave the Silver Fox in the studio chatting to the presenter and head back to my hotel room to ponder my future with Inge, twenty-three, from Cologne, and Iona, twenty-one, from Athens. I try not to think too much about what will happen next.

  * * *

  TWICE IN the twentieth century the world learnt to tremble when the Germans went on tour. On Monday morning they do it again, only this time they do it peacefully.

  From the trading floor at Grossbank in London, Paul Ryan is giving me a running commentary. ‘Massive retail buying, there’s been more volume in the first hour of trading than in the whole of Friday. Millions of individual orders. The Exchange are saying the shares may have to be suspended if it continues. They’re already close to capacity and the system could crash.’

  ‘But where are we on price?’ I’m still in my hotel near the Grossbank Tower in Frankfurt, preferring not to show my face to the board until I know what’s happening.

  ‘So far, we’re up two euros, hovering around the forty-three level. The hedgies are doubling up, going for quits, and some of the prop desks at the other banks are having a swing at us too.’ Damn. The proprietary trading teams at the major investment banks are effectively powerful hedge funds in their own right, swinging their firms’ capital around and sometimes moving markets regardless of what actual investors are doing. Soulless bastards, turning on one of their own – not that I wouldn’t do the same, of course.

  ‘What’s the outlook?’

  ‘Sorry to say it, but it’s not good, boss.’

  Damn. I’m sending millions of foot soldiers over the top, ordinary Germans who are putting their savings where their mouths are and taking on the hedge funds and the prop desks. But these are the big battalions of the finance world and they are mowing my guys down like the first day of the Somme. Not that I could give a shit, but if it doesn’t work then it could be a disaster. I could lose my job, and that would be serious. I could be history. I watch as our share price starts to fall again, dropping through the forty-two level, and then through forty-one. I’ve only card left to play. I call Two Livers.

  ‘I need a favour.’

  ‘Boss, you need more than that. You need the Seventh Cavalry.’

  ‘I want you to call Tripod Turner.’

  There’s a silence at the other end of the line. Tripod Turner and Two Livers were close once upon a time. He’s the London-based Chief Investment Officer of the Boston International Group, the world’s largest investing institution. Physically massive, he’s said to be the biggest swinging dick of all – hence the nickname – and we are sort of buddies, though not in the way that he and Two Livers once were. I have asked her if it’s true about his alleged sheer physical size, but she discreetly looked away and pretended not to hear.

  ‘I don’t want to pressurise you, but it’s now or never. We’ve got one shot at this. Leave it another hour and we’re done.’

  Still there’s silence.

  ‘Are you there? Hello?’

  The line’s gone dead. Damn. I misplayed that one. Should never have asked. Maybe I should call him myself. Ask for a favour. No, beg for a favour. Except that never works. Once the market knows you’re desperate, you’re history. Kindness is for girls.

  Around mid-day I watch as the stock goes through forty euros. I turn off the TV and start drafting my resignation letter. I’m half-way through it when my cell phone goes. It’s Paul Ryan.

  ‘Boss – have you seen this? It’s amazing.’

  ‘Seen what?’

  ‘This interview – on EuroBizTv. Get yourself in front of a screen right now. It’s Tripod Turner!’

  I flick the remote control and sure enough, there is the big man, sitting scratching himself in his office, tie undone, shirt sleeves rolled up, bright red braces with golden dollar signs and the initials ‘B.I.G.’ on them.

  ‘…and we perceive it as a major, indeed a permanent shift in the banking landscape, not just in Europe, but globally. Banks will have to do business differently in future. And Grossbank is leading the way. In the long run, we see it as very positive for Grossbank’s earnings and overall positioning. That’s why we’re moving to a heavily overweight position in their stock, while selling off others.’

  I half scream into the mobile. ‘What’s going on in the market? Are they buying?’

  ‘Buying? They’re stampeding. There’s blood on the streets. It’s terrible – terribly good for us, that is.’

  I feel like crying. In fact between you and me, I might have done. It was only afterwards, at the post-mortem that I got the whole story.

  Boston International Group – ‘BIG by name, big by nature’ – is a trillion dollar monster. In stock market terms, they are like an elephant: when they decide to sit down, they sit down, and you’d better not be underneath when they do.

  The people who were selling Grossbank shares short at forty-five euros, hoping to buy them back at a lower price, were suddenly faced with an avalanche of buying that drove the price back up. If it went above the price at which they had sold, they were looking at a money-losing trade, so they had better buy the shares they needed as soon as they could. Only BIG was in there first, hoovering up anything that moved, and doing so in the kind of size that dwarfed the rest of the market.

  Three or four of the biggest hedge funds, reacting fastest to the change in circumstances, did the stock market equivalent of a handbrake turn. You could almost hear the screeching of brakes and the screaming of tortured tyres as people who were the biggest sellers suddenly became huge buyers.

  For the retail buyers, the ordinary members of the public investing their savings, BIG’s arrival was like hearing the bugles and seeing the cavalry charging over the hill.

  Only BIG isn’t the Seventh Cavalry. BIG is America’s – and the world’s – largest money manager. It’s the US Marine Corps, the Sixth Fleet and the 82nd Airborne all rolled into one. By the time the market closed, our share price was back through sixty euros and heading north. By the end of the week it hit a high for the year of ninety-five. And I’m a hero.

  Phew.

  * * *

  THE THING about heroes is that they tend to be magnanimous in victory. Well, I’m not. Some devious, underhand individual has leaked to the press an internal Grossbank memo from a couple of weeks ago in which Herman states that the entire Grossbank Foundation fiasco is down to me, I should take responsibility, and in his view I should be sacked and the Foundation should be limited to one per cent of net profits.

  He’s instantly transformed into the most hated man in Germany. I don’t mean just averagely disliked for a couple of days until the papers get bored and move onto something more important, like some actress’s boob job or a rock star’s latest divorce. This man is hated. It is not just the millions of members of the public who bought our shares – and profited handsomely – who hate him, but all those righteous individuals who want to see big business sharing more of the spoils. Wherever he turns, people are condemning him, and they want his scalp. He’s the lead in all the German papers, and politicians of all parties are competing to outdo each other in the Bundestag in the strength of their public damnation of this personifi
cation of evil. Some whackos even threaten to kill him. Poor fellow. Can you imagine what it must be like?

  As an honourable man, he has no alternative but to offer his resignation, which is accepted. It takes the board less than an hour to put in a call to me inviting me to consider taking his place as Chairman of Grossbank. I need less than half a second to decide to accept, but I make a show of reflecting on it over the weekend and disappear with Breathless Beth and Beate for some R&R in Cap Ferrat.

  * * *

  Putting me in charge of Grossbank is like giving whisky and car keys to a seventeen year old boy.

  I arrive in Frankfurt a week later for my first board meeting, and head up to my office on the fifty-fourth floor of the Grossbank Tower. I haven’t actually seen this office before, but it is suitably vast – nearly a hundred feet across – high tech, high spec, full of tasteless chrome and glass and generally excessive, resembling the headquarters of the chief villain in one of the early Bond movies.

  Just to show how utterly vulgar they think I am, they’ve brought a Damon Hersh Elephant in Formaldehyde giant glass-tank from the bank’s contemporary art collection and installed it in the office, presumably as a conversation piece, or maybe because the ‘artist’ and I share the same initials.

  When I travel to Frankfurt for board meetings, the Meat Factory come with me, along with Maria, and of course Two Livers and Paul Ryan, as my right hands, and Rory to carry the bags. Two Livers and Paul have been promoted. They are now co-heads of global investment banking. From a practical standpoint, it makes no difference, since between them they ran investment banking anyway. I was just the boss, and always took a ‘hands off’ stance – at least with regard to Paul – so that they could get on with the task of making things happen, while I concentrated on not fucking things up, which I’ve generally felt is the best contribution most heads of investment banks can make to their teams, leaving the markets to do the rest.