Before driving out of the cemetery gates, Becky’s mind kept iterating back to Talisha’s mention of ‘cupcake’. It meant nothing to her either. Somewhere in the deep recesses of her mind, though, she recalled the last time that she saw Joel alive was when he left Neil Robson’s office. As he sped out of the door, he smiled at Becky and said, ‘Thank your Mum for the cupcake, it was fantastic!’ Joel had left the office before Becky had time to ask ‘what cupcake?’ Her mum’s baking was royally atrocious! She couldn’t bake a cake to save her life. She would never have attempted cupcakes and she would certainly not have sent any to Joel or her boss. The culinary embarrassment would have been too great. A few years ago, Becky would have just let this puzzle pass. It was probably nothing. Talisha had told her that the police had investigated. They thought Joel’s death was suspicious but they could find no evidence of foul play by a third party. They were still investigating but had no leads. Joel, however, had encouraged Becky to be thorough in her studies, not to accept the obvious. If something seemed funny peculiar then it probably was funny peculiar, he used to say. The cupcake thing was indeed funny peculiar Becky concluded as she drove out of east London. She owed it to her friend to do a modicum of research at least and that research was going to begin with a phone call to her mum.
* * *
While Becky was on the phone to her mum, Toby Naismith was in JJ’s office at MAM in Mayfair. It was mid-afternoon and Fathead had already put in a few calls to the main gold depositaries in the United States. The Chicago Mercantile Exchange (CME) is one of the biggest financial exchanges in the world. It has nearly 3,000 employees and assets of over US $40 billion. The exchange’s core businesses involve exchange traded derivatives including futures and options in the world’s key commodities and currencies. Fathead’s interest in the CME today, however, was in its five approved New York based Commodities Exchange (COMEX) precious metal storage facilities. These are JP Morgan, HSBC, Brink’s, Scotia Mocatta and Manfra, Tordella & Brookes (MTB). In total, these five had an estimated 12 million troy ounces of gold stored in their secure facilities in New York, though only the CME authorities know the precise aggregate amount on any given day. One bar of Kim Jong-un’s gold weighed nearly 12.5kg or around 402 troy ounces. The Sprinter van’s haul of gold, therefore, was the equivalent of one-fifth of the COMEX warehouse’s total stock of gold.
How nice it would have been for Toby, JJ, Neil Robson and the British government if Fathead could have just rung up and said, ‘Do you fancy a few bars of gold?’ Unfortunately for all concerned the process of getting refined gold into the legitimate financial system was not that simple. For any particular refinery to deliver gold onto the commodities exchange it must be from a registered approved brand, the main ones being Heraeus, Johnson Matthey and Metalor Technologies. Fortunately for Toby et al these three approved brands are also on the London Bullion Market Association (LBMA) Good Delivery List. This list contains the names of refiners authorised to produce bullion bars used by central banks and the IMF in their reserves. Each bar has a serial number, the refiner’s hallmark, its degree of fineness (purity) and its year of manufacture. To be ‘good delivery gold’, the bullion bar must have a fineness of at least 995 parts per thousand. All the bars in the Sprinter van complied.
Toby was in a good place. He could try to sell part of the gold to the refiners, as they often bought their own gold immediately after it was refined or in the after-market if they were confident that the price of gold was going to rise or if their stocks were low. These refinery groups are huge conglomerates; the Heraeus Group’s precious metals trading desk in Hanau, Germany, for example, is like the bridge of the Star Ship Enterprise. He could also sell part of the gold to the refiner’s customers, via the depositaries or directly if they had a commodities managed account with MAM. As each of the bars has a hallmark, a serial number and a year of manufacture, it is probable that they could be traced back to their original owner if anyone wanted to know that piece of information. In the case of the Sprinter van’s gold that could be North Korea, China, Russia or elsewhere. In essence it did not matter. Gold bars can be bought and sold anonymously between customers like central banks, private banks, more or less anyone. Provided a specific set of serial numbers etc. had not been noted as stolen, the original ownership or even subsequent ownership usually was not of interest. For whatever reason, maybe to do with saving face, maybe to not alerting its enemies, maybe even with the forlorn hope of recovery, the DPRK’s authorities had not yet reported any stolen gold.
“Hey Kai, it’s Toby, got a minute?” Fathead was through to his broker-dealer buddy at JP Morgan in London.
“Toby, my man!” replied Kai cheerily. “Of course, for you, maybe two.”
“Great. I need an introduction. We’ve done a massive deal here at MAM, and I’ve been left with some physical gold to sell. You guys are one of the biggest gold depositaries in the USA, right? I want to talk with the guy or gal who’s the decision maker regarding good delivery gold.”
“Sure. That would be Enrique Velasquez. He’s Senior VP in charge of precious metals. I’ll try to get him to ring you in the next fifteen minutes, OK?” responded Kai.
“That would be just fine Kai. Thanks. Let’s go to Nobu soon, it’s been a while,” said Toby. Kai agreed.
While Toby was waiting for that one call from New York he thought he’d get in touch with the chief trader at Metalor Technologies, Tomas Hartmann, whom he had known for several years. Tomas was about the same age as Toby and was based in Neuchatel, Switzerland. He was responsible for the buying and selling of precious metals, physical and electronic. Toby and Tomas had a good chat and a better haggle. Metalor was indeed in the market to buy back some gold and if Toby could offer them a decent discount to market price for a bulk purchase they could do a deal.
“Tomas, there’s no way I can give you 10% off, not even 8%,” said Toby. “I know you want to buy a big chunk, but it’s too much. Gold closed at $1,820 per ounce yesterday and is still rising. In a few months you’ll probably have made a whopping profit. C’mon old friend, let’s do it. 4% off today’s closing price. What do you say?”
“Do any of the bars have our stamp on them?”
“Yes, not all of them but a decent percentage,” replied Toby, who had studied the bars in the van very closely indeed.
“Our new stamp or our historic one?” asked Tomas.
“Your historic one with Meteaux Precieux SA, Metalor on them.”
“Fine. We’ll pay US $1,742 per ounce for one million troy ounces. You need to have it transported by one of the CME approved couriers like Brink’s and have it delivered to our secure vaults in Zurich. You can pay for the courier. Deal?” asked Tomas.
“Deal,” said Toby. They would exchange emails to confirm. Toby had directed Tomas to a new email account that he and JJ had set up specifically for the gold transactions. It would be no problem. Tomas would have his gold in three days and Toby had just unloaded around 2,500 of his 6,000 bullion bar target. It was a mega result.
Enrique Velasquez of JP Morgan got back to Toby as well. Fathead enquired about the state of the gold vaults at 1 Chase Manhattan Plaza. There had been a reported fire there in July 2013, in the secure warehouse one hundred feet below ground level. There was much speculation that this was either deliberate or faked in order to avoid a COMEX delivery notice for 12,000 ounces of eligible gold by declaring force majeure. These speculations were unfounded but it did seem that ever since, JP Morgan would not allow their gold stocks to dwindle too much. After a bit of to-ing and fro-ing, Toby managed to get Enrique to commit to buying a half million ounces of gold. This was just over 15,550kg, or nearly 1,250 bars. Toby was over half way to his bullion sales target and, so far, it had taken less than half a day to do it.
There was still plenty of work for Toby to do. He involved Yves-Jacques in arranging the transportation, Brink’s Inc. for Metalor and IBI Armoured Inc. for JP Morgan, the paperwork and the transport of the bullion bar
s from the van in JJ’s lock-up to a registered bullion vault in London. It would not pass unnoticed if the approved carriers turned up to a Chelsea lock-up to collect several thousand gold bars from the back of a van. Yves-Jacques was on it and it was underway.
Toby was feeling well chuffed with himself. That miscreant Iksil may have been dubbed the London Whale because of the size of his Credit Default Swap trades back in 2012/2013, but they were ill advised, broke JP Morgan’s risk rules, led to regulatory fines and were beyond speculative. In the here and now, Toby felt like the golden whale. Big trades, totally legit, no rules to break. In his unconsumed joy at his day’s work he totally skimmed over the fact that the subject matter of his trades was most definitely not legit! Nevertheless, Fathead was so happy he decided to phone JJ right away.
“Hey JJ,” said Toby on hearing his boss answer his personal mobile phone. “We have had an awesome day, chief. I’ve unloaded over 3,000 bullion bars today and I feel good, do-do-do-do-do-do and ya know that I should,” announced Toby, more or less springing into song, albeit tuneless and pitch imperfect.
“That’s great Toby, well done,” said JJ, not in a singing mood. “Did you get a good price and is the cable rate in our favour?”
“The average net selling price was under our desired level of US $1,800/oz. boss, but it was quite close and the GBP/USD rate moved a little in our favour. We’re on track for our cash target,” replied Toby with more confidence than perhaps was wholly justified.
“Great. Keep it up. I’ll be in the office tomorrow. The both of us and Yves-Jacques should have a breakfast or coffee meeting to catch up, OK?”
“OK JJ. How’s Cyrus?” asked Toby.
“He’s good, Toby. In Scotland with his grandparents. I may try to get up there next week so let’s see if we can seal the deal on this gold before the weekend. Have a good evening and well done again. I’ll see you tomorrow.”
“Beezer Ebeneezer, JJ, see you tomorrow.”
“Keep your druggy references to yourself Fathead!” exclaimed JJ.
“Sure,” replied Toby, having no idea what JJ was talking about. Clearly, the urban meaning of early 1990s’ Scottish electronic pop lyrics had not registered in the Englishman’s head.
JJ had a good night’s sleep. As yet there had been no sign of any payback attempt by dodgy Russians and Cyrus seemed happy to be with Gil and his grandparents in Scotland. Still, he needed to get this gold sale finished and that wanker Robson off his back and those of the other two amigos.
* * *
Toby had opted for an 8am breakfast meeting, there’s a shocker, and had organised the Pret closest to the MAM office to deliver coffee, juice, warm croissants and a variety of breakfast baguettes. Toby and Yves-Jacques were already tucking in when JJ entered his office, with most of the tucking being done by Toby.
“Good morning guys. Glad to see you didn’t wait!” said JJ, only half joking.
“Hi JJ,” they replied.
JJ didn’t really feel like being overly social, nor was he in the mood for that early morning banter so prevalent in investment houses. He wanted to get straight down to the business in hand.
“Toby, where’s the gold that you sold yesterday?”
Yves-Jacques jumped in, partly because he was the one Toby had delegated the transportation job to and partly because he was quite excited by this edgy extracurricular exercise. “The bars destined for Metalor are in the London Silver Vaults in Chancery Lane. They’re very secure vaults, apart from that one breach a while ago, and their security has been beefed up a lot since then. It is not widely known that they store gold as well as silver and jewellery. Brink’s are scheduled to pick up the bars later today and ship them to Switzerland.”
JJ thought what a small world. The London Silver Vaults were indeed very secure but the breach mentioned by Yves-Jacques had been masterminded by Victor Pagari. Good job JJ knew that the young safe cracker had only just returned from Seoul with a rapidly healing Ethel. “And those bought by JPM?”
“I managed to convince JPM in New York that it would be more efficient and cheaper if they stored the gold at their vaults in London Wall, rather than go to the expense, actually our expense, of having them shipped to the States,” said Toby, still munching on a cheese and tomato croissant.
“That all sounds good guys. What’s today’s plan?” asked JJ.
“We’ve got 2,250 bullion bars to go,” said Toby. “I’m speaking to HSBC this morning and a Geneva based family office in the afternoon. I’m confident that between them they will gobble up the bars. If not, my back up is Heraeus in Germany and Scotia Mocatta in New York. The early morning gold price looks like it’ll trade between $1,840/oz. and $1860/oz. That’s a bit up from yesterday. Cable is stable so we should be all set.” Toby, clearly energised by croissants, baguettes and a couple of nuclear strength coffees was ready to rock.
JJ mulled over Fathead’s information for a minute or two. Though JJ did not trade gold for MAM he was in charge of its inclusion or exclusion from the fund’s portfolio. He needed to know more about the influences on gold than even Toby, though his amigo was the one with the sharp-end trading skills. JJ knew that there were many determinants of the gold price, ranging from supply and demand to geopolitical concerns, doubts over the worth of fiat monies, inflation, government defaults, intrinsic taste of the Chinese and Indians. At the end of the day, however, most gold bugs were momentum players. If the price went up they wanted to hold more and vice versa if it went down. Buy low and sell high did not, empirically, seem to be an adage embraced by the majority of gold market participants. A mere glance at a twenty year chart of COMEX gold stocks versus the gold price showed a correlation of near 90%. With the price of gold rising Toby was selling to willing buyers.
“Sounds like a good plan, Toby,” said JJ eventually, “but no more discounts. I understand why you gave Metalor a preferential deal, it’s always nice to get a bulk selling programme off to a good start. The gold price seems to be on the up and most market players will simply extrapolate that forward until the price sinks one day. So get it done at market and let me know the final tally when you’re finished,” advised the Scot.
“Sure, no problem,” replied Toby with belly full of food and mind full of markets.
The meeting of the three amigos ended with JJ again thanking Toby and Yves-Jacques for their commitment and skill. This gold task was not MAM business but a successful outcome was essential to their continued employment with MAM not to mention their entire financial careers and personal freedom. JJ had no doubt that Toby would complete the task and that Yves-Jacques would stay on top of the logistics of moving and storing the bullion bars. They would be relying on JJ to negotiate their release from the vice like grip of the Financial Secretary to the Treasury and the FCA. Nauseating as it felt that meant a meeting with Neil Robson.
* * *
“So where’s my money Darke?” asked Neil Robson abruptly and with a hefty dose of anxiety in his voice. The Financial Secretary to the Treasury was becoming so twitchy about the health of his limbs and the earache he was getting from the Chancellor that he had demanded that JJ come to his office the very day that Toby was finalising the sale of the bullion bars. JJ complied and had been shown in to Robson’s Treasury office by Becky, resplendent in her full candescence again, today’s outfit being primarily a lime green suit with lime green and black designer shoes. JJ thought she was very pleasant albeit a bit bright.
“The gold sales are being completed today,” replied JJ. “The money from them will be safe in an account with a private bank in Luxembourg. If all goes well you can probably have it in a day or so.” JJ delivered the news in a very low key way. Inside he was seething. All the trouble that he and his friends had gone to acquiring the gold. The injury to Ethel, the capture of deep cover Kwon, the stalking of Cyrus. None of that would have happened if both Britain and Greece hadn’t been so fucking financially useless and he and Toby not so fucking financially smart to dance at the
edge of trading legality. Every time that he looked at Robson’s miserable face he wanted to punch his lights out. He needed to be calm and collected however until it was over, not a frame of mind often visited by west coast Scots.
“Good, JJ, good. I’ll give you details where to send the proceeds. Then you can have your nasty little FCA file,” said Robson with a face full of smirk.
“Do you think I came up the Clyde in the shit ship you fucking tit?” raged JJ, his calm and collected aura having hardly registered on any timescale. “I’ll have the file first, any copies hard or electronic, a signed letter from you exonerating me, Toby Naismith and Yves-Jacques Durand from any wrongdoing financial or otherwise. When I’m totally satisfied with that you can have your money, I mean the British government’s rightful compensation for bond defaults by the North Koreans, or had you forgotten about that?”
Neil Robson’s ugly mug had gone as incandescent as one of Becky’s rosso outfits. Even if he had been in JJ’s shoes and done the same he wasn’t going to be dictated to by this Scottish pleb. “You’re in no position to demand anything you fuckwit. I can end your career and have you thrown in jail by tonight. What’s poor little Cyrus going to do then brainbox?”
Any living creature’s neural system can be complex. The internal and external stimuli which trigger a response are not the same across species, or from one human to another. In JJ’s case, a derogatory or threatening remark aimed at his son would almost always trigger that part of the brain which signalled ‘attack’. In a flash, JJ was out of his seat, across Robson’s desk, had his right hand on his throat, punched him full on the nose with his left fist and both of them were on the floor. As JJ was squeezing a little harder and berating the Financial Secretary for even mentioning Cyrus, the door to Robson’s office was opening and Becky was coming through it. The antagonistic pair leapt up, Robson sat in his seat, handkerchief covering his bloody nose, and JJ walked slowly around Robson’s desk and back to his chair.
Darke Mission Page 45