Various Pets Alive and Dead (7 page)

As it happens, Otto phoned last night, and ended up blabbing about a tricky situation he’s got himself into with regards to his girlfriend, who is pregnant, and his flat, which is about to be repossessed. The two things are connected, because Molly Mackie – a pretty red-haired girl whom Serge dated once – is a dancer in a small grant-funded troupe. Her income, combined with Otto’s meagre postgrad studentship, enabled them to secure a mortgage on a two-roomed flat above a hairdresser’s in Mill Road. But now Molly’s pregnant she’s had to quit just as their mortgage interest rates have gone up, and they find themselves facing homelessness.

‘Jeez, I should have known better than to get involved with these money dudes,’ said Otto, in the quasi-Californian accent which he’d acquired during his gap year and never shaken off.

And Serge had said, foolishly as it turned out, ‘Don’t stress, kid. I’m solvent. I can tide you over.’

The thing is, he got his bank statement this morning, and what he can’t understand is how the seven of them managed to run up a bill of £13,107.01 on Maroushka’s birthday bash. And what he also can’t understand is why it all came off
his
credit card. He remembers volunteering his card at the beginning of the evening, in fact he was quite insistent. She was watching, with that indecipherable half-smile, and yes, okay, it’s a bit sad to equate dick size with bank balance, and probably she wasn’t thinking that at all, but the trouble is you can never be sure what women are thinking when they look at you that way. Anyway it’s a convention, surely, that the guys share the cost at the end of the evening? He vaguely remembers there was a flurry of cards and banknotes at some point, and some banknotes came his way and he stuffed them in his trouser pockets. He remembers the maître d’ was a bit unfriendly. Something about broken crystals, for God’s sake. He remembers he banged his head and blacked out. He remembers throwing up in the toilets. He remembers also throwing up in the taxi. The taxi driver was a bit unfriendly too, understandably, so he had to tip him well. Today he checked his trouser pockets after the bank statement came; there was the credit card receipt but no itemised bill, and all the cash he found was four screwed-up fifties.

On the ninth floor of the FATCA tower, he lets himself out of the lift, wondering how he’s going to broach this delicate subject. Most of the quants are at their desks. Tim the Finn has disappeared somewhere, but he must have been in already because the potent smell of his aftershave still lingers around the Securitisation area. The two French guys, grads of the École des Hautes Études Commerciales, were knocking it back that night. Now they’re in conference with a futures analyst, trying to cobble together a cocoa deal that’ll assign the main risk of any downturn to the farmers. He’ll catch them later. Joachim Dietzel (everyone calls him the Hamburger, because he comes from Hamburg – subtle, eh?) is sitting at his desk poring over a martingale representation. Lucian Barton and Toby O’Toole (nicknamed Lucie and Tootie), the two ex-UCL physicists and the biggest boozers on the desk, are staring into their monitors. Lucie is pink and freckled, with an awful ginger mullet, which he obviously thinks is cool. Tootie has pale-grey eyes with strangely enlarged pupils, an unpleasant nasal voice and acne scars.

‘You remember that bash for Maroushka’s birthday?’ Serge leans casually against Lucie’s desk. ‘Did you know the bill came to more than thirteen k?’

Lucie shrugs. ‘Maybe they made a mistake at the restaurant.’

Tootie’s lip curls. ‘Don’t tell me you’re feeling monetarily challenged, Freebie.’

‘I just wondered, since there were seven of us …’

‘Why don’t you ask
her
? She’s the one who ordered the Château d’Yquem.’

Tootie nods towards the door, which opens at that moment to let Maroushka in. She’s wearing pale green today, with a string of silver baubles around her neck. She slinks past them on her way to the glass-walled office, pausing for a minute by his desk to ask, ‘Everything normal?’

Should he ask her about the Château d’Yquem? No, that would be the ultimate loss of face. He’ll sort it out with the restaurant, or ask the guys to chip in.

He can’t phone the restaurant until he gets the chance to nip out of the building at lunchtime. Unless … The disabled loo is the only room on the floor which you can lock from the inside, and is rumoured to be a den of illicit sex and prohibited phone contacts with headhunters. He slips away from his desk and loiters until the coast is clear, then sneaks in, locks the door behind him and whips his phone out. It’s hot and airless in there, and stinks of chlorine, pee and … what
is
that smell? A familiar odour pricks his nostrils, a familiar odour that belongs to a different context. He focuses on its distinctive components. Benzene. Aniseed.

The restaurant doesn’t seem to have a website, so he has to call Directory Enquiries. When he finally phones the number it rings and rings, and he’s just about to click off when an angry female voice answers, ‘Yes?’

He asks to speak to the manager.

The woman says, ‘If it’s La Poire d’Or you want this is the wrong fucking number, and it’s the fourth today, and just between you and me I wouldn’t bother because the food’s crap and they rip you off.’

‘I’m sorry, miss. But you don’t have to be so shouty.’

‘Fuck off!’

The phone goes dead.

He looks again at the receipt in his hand. There’s something about the number that seems odd – £13,107.01. That 1p at the end – where did it come from? There was nothing on the menu that ended in 1p, in fact everything was in multiples of £20, even the water. Nor could it be a percentage added as a service charge. It’s more like a number pulled out of thin air, with a few pence stuck on at the end to make it seem precise. No, he’s seen that number somewhere before. He stares: 131071. Isn’t it the sixth Mersenne prime? M
_p
= 2
^p
– 1, where p is a prime, in this case 17? Yes! A coincidence? A pattern?

Back in the trading hall the buzz has stepped up a notch as the traders get into gear. All around him, money is being made at a phenomenal rate – in fact, he’s helped to make quite a chunk of it himself. These guys aren’t any brighter than he is, they probably couldn’t even recognise a Mersenne prime, yet they’re making shedloads of money. Most quants don’t trade, though some VPs, like Timo Jääskeläinen, straddle both roles. He’s often sat at Timo’s elbow and watched the dance of the data, as they’ve tried to pin it down in an algorithm. Timo is an able guy, but a bit of a plodder. The rumour is that it was Timo who ‘discovered’ Maroushka, when he was fretting over an algorithm one night while she was hoovering around his desk. She pointed out the mistake, then carried on hoovering. Surely if Timo can make money trading, then he could do the same. He could avoid all this hassle by paying the bill off himself, then claiming it back off the other guys if the restaurant doesn’t cough up.

This isn’t the first time he’s thought of doing a bit of personal trading. When he was first buying his flat and needed a deposit, he started investigating some of the engineering companies around Doncaster, partly out of sentiment and partly because he thought his local knowledge would give him an edge. But then his broker offered him a 110 per cent mortgage, so he put the idea on the back burner. Now this sticky patch with the bill and Otto’s cash-flow problem gives him a reason to follow it up sooner rather than later. He’ll play it careful, set himself tight limits. He won’t go mad, like he’s seen other guys do.

He sits back and takes the time to study the FTSE Fledgling, Small Cap and AIM markets. He’s noticed some interesting recent activity here. There’s a tremor that ripples upwards then draws back down. The same tremor is there in Small Cap, where his target shares are located, though you wouldn’t notice unless you knew what you were looking for. The pattern’s familiar, the usual ebb and flow of the market – what’s unusual is the retracement, which has slipped back below the previous pivot point. Something similar happened last week and again yesterday, but by the time trading closed it had righted itself. Today it’s happened again, and this time the retracement is 38.4 per cent – that’s 0.2 per cent lower than it should be according to the Fibonacci code. Is this a variant within the normal range of Fibonacci retracement, or the start of a market reversal? His heartbeat has stepped up a gear. He brings the charts up on his monitor.

The thing about predicting the markets is that it’s as much about psychology as science. The more people predict something, the more likely it is to happen – the stampede effect. Fibonacci allows for this human factor, it’s an intuitive system which has quite a following among traders, thanks in part of course to Dan Brown. There are all sorts of crude adaptations of the golden ratio out there, but the real secret of making money is simple – you have to get in there first.

‘There’s money to be made in falling markets if you’re bold enough to seize the moment, and smart enough to know when the moment is.’

He remembers the exact words Chicken had spoken during his interview a year ago. Serge had been sitting on a leather swivel chair, sweating with nerves, half strangled in that same borrowed Queens’ tie he’s wearing today (the difference now is that it’s ironic), knees clamped together and anchoring both feet on the ground in order to resist the temptation to swivel.

When he was offered the job and they initiated him into this game, it seemed incredible that you could borrow stocks and then sell them on straight away, before you’d even paid for them, then wait until the price drops and buy them back for less than you sold them for, and return them to the original lender, pocketing the difference. At FATCA, the traders do it every day. Some of them don’t even borrow the stocks – they just sell them on the intention of later buying them back. It’s called naked short selling, all perfectly legal, and it’s the sort of thing that would send his mum and dad apoplectic if they knew.

Given the millions he makes for FATCA, is it so very wrong to want to make a little extra for himself – just to get himself out of this fix and help out a childhood friend? Strictly speaking, it is a bit wrong – City boys like him aren’t supposed to trade for themselves in working time. Their bonuses are supposed to reward that selfish impulse, which is a natural part of human nature, in spite of what Doro says. But many do have personal accounts registered with the Compliance Officer, who checks they’re not breaking the rules. And some people also have unregistered personal accounts, he knows, where the possibilities are greater. Although all their calls are recorded and their emails logged, it’s largely reactive monitoring – nobody actually listens or looks through them unless there’s a reason.

It’s not easy to open an anonymous bank account in these days of money-laundering regs. But the thing is, he does already have access to a semi-dormant club bank account in the name of Dr Black, which is kept ticking over by a few people who forgot to cancel their subs – it’s a hang-over from his undergraduate days when he was treasurer of the short-lived Queens’ College Cluedo Society. And he’ll have twelve k left in his savings account, even after bailing out Otto. If only that annoying restaurant bill hadn’t popped up he wouldn’t even be thinking of trading on his own account.

So where to start?

In his day job, he works on synthetic Collateralised Debt Obligations (CDOs), where the big money is made, but no way is he going to put his own hard-earned cash into this mishmash of dodgy mortgages, retail credit and unsecured car loans, hedged up with a bit of high-end borrowing, all rolled up like an apple strudel, chopped into slices and wrapped and sold and sold again, until everyone has lost track of what was in the original mixture. They call it securitisation; what a joke. It’s hard to imagine anything less secure. He knows – everybody knows – it can only be a matter of time before it goes crashing down again.

At least with old-fashioned stocks and shares you know what you’re getting; you can be reasonably sure what’s in the package you buy. The easy money nowadays is made by trading big volumes on small variations in price, but you need the capital to start with, and he isn’t in that league. To get where he wants quickly, he’ll have to take risks.

He scrolls the Companies House register for details of South Yorkshire firms, where his local knowledge and contacts could give him an edge and minimise the risk. Here’s one, based in Askern. Syrec: South Yorkshire Recycling. The name rings a bell. Wasn’t Clara going on about some big regional development grant? Askern Villa, the team he’s followed since childhood, has been slipping calamitously down the league; but the Syrec story is more upside. Syrec isn’t listed on the Stock Exchange, but the parent company, South Yorkshire Consolidated, is listed on the Alternative Investment Market. SYC is a portfolio company with interests in waste reclamation, finance, building development, sheltered housing, residential homes and retail parks. Ten minutes’ research reveals they have a good folder of northern local-authority contracts, but this new development grant doesn’t seem to have made it into the national media, for there’s been no immediate price spike. That’s the advantage of local knowledge. The major shareholder of SYC is another company, called DASYS Ltd, which is registered in Luxembourg. Why Luxembourg? Not easy to trace the ownership there; but the company’s prospects look good.

Edenthorpe Engineering, listed on the Small Cap market, is another familiar name: a traditional Yorkshire family firm, which has been making machine tools since 1957, and a big employer in the Doncaster area. He once had a work experience placement in their offices, not far from Clara’s school, and he has certain affectionate memories of that summer, and of a receptionist called Tiffany, who had the most amazing tits. But Edenthorpe’s last return looks shaky and, as the bankers’ mantra goes, there’s no room for sentiment in the markets.

Endon (Enterprise Doncaster – ha ha) and Wymad (West Yorkshire Media Advertising – slightly out of his area, but what a stupid name – they’re bound to crash) also attract his attention and, looking at the figures, he can discern the same incipient pattern of a market on the turn from bull to bear. This could be his moment.