The Last Hedge (7 page)

Dylan sat down and removed both of their sandwiches from the bag.

“Hey, Bink. Here is your sandwich.” When Dylan turned to hand it to him, he noticed Binky’s mouth was open, and his face was whiter than a ghost on Halloween.

“Uh, Dylan. We got a little problem.” Binky pointed towards the screen.

The message on the screen indicated that the trading system had just been halted. Illegal trade authorization was cited as the reason why.

“Jesus, Binky! What the hell just happened?”

“Dylan stood up. King and Richard Wong were both looking at him.”

“What the hell just happened?”

“Josh just happened,” Steve Wong said. “He hit his God button.”

“What?” Dylan asked.

“The
deux ex machine
.” King got up and started to stroll towards Dylan. “Josh has a switch on his trading console. If he wants, he can kill any trade he wants.”

“Are you serious?” Dylan asked. “Why?”

“God complex,” Wong said. “He wants to be like us, but he can’t. So he sits in his office and plays with himself, and his kill button.”

“Who the hell gave it to him?”

“Dude, he built the system,” Steve said.

“When the system was built, Ray worked Josh like a dog. So when Josh told Ray the kill switch was needed for “risk management purposes”, Ray threw him a bone. Josh is really only supposed to use it in case of on an emergency, like someone has a fat finger and presses millions instead of billions.”

“You gotta be kidding me.”

“I wish I was. Every now and then he gets the urge to use his little toy instead of surfing porn and masturbating.”

“Does he do this to you guys?”

“Every now and then to prove he’s not irrelevant, which he is.”

“Don’t worry, dude,” Wong said. “He’s just marking his territory. Besides, it’s only on trades over a certain size, though Josh moves that number around, depending on the circumstances.”

“So now what?” Dylan asked.

“He’ll be out in a second,” King said. “He’s gathering himself.”

“Like the volcano, dude.” When Dylan turned around, Josh was already heading towards him.

Dylan noticed for the first time that Josh had a slight limp, as if one leg was shorter than the nother. From across the trading floor Dylan could see the scowl on Josh’s face, and he was moving faster than usual, with a head of steam under him, propelled by his anger. Dylan began to speak as Josh approached him.

“Josh,” Dylan said, “I’m not sure what happened.”

“You two happened.”

Josh had his hands on his hips and nostrils flaring, his arms crossed halfway over his extended belly.

“Josh,” Dylan said. “You haven’t been out of your office in a while. It’s nice to see you.”

“Nice to see you, Dylan. I didn’t know we had a couple of rogue traders in our midst.”

“I am not sure what you mean by rogue. I am a trader. That is what I do for a living. I don’t sit behind a glass wall in a glass office.”

“You made a trade today without proper limit authorization from Ray or myself.”

“My understanding of authorization was that it was to come from Ray. I did not even know you were in the chain of command.”

The other traders had noticed the exchange and had left their desks to circle the action.

“You do not make those trades without the permission of my brother, or myself! If you do that again, you will be terminated from this firm.”

Dylan just started at him. “Are you finished?”

“Yes,” Josh said. “I am.”

“Good.” Dylan and Binky watched Josh as he turned and made his way towards his glass office. A few minutes later, the power to their computers returned.

“You work on that,” Dylan said as he got up from his chair. “I think it’s time I found out what the real deal is.”

Dylan got up from his desk and walked towards Martha Thomas’ office.

Martha did not hear Dylan when he entered her office. He admired for a moment her perfect hair and posture. She was wearing a blue dress, open at the neck, and a stylish set of pearls.

“Martha, we have a problem. I need to speak to Ray today.”

“Is it an emergency?”

“Depends on how you look at it. Look, I plan on getting paid this year. What it boils down to is I work on commission. If my book is not making money, I don’t get a bonus. I got my assistant here, and King giving me a hard time all day. It’s not an easy situation.”

“I realize that.”

“So what this means is … I have to be able to trade at some point. And without Ray here, my hands are tied.”

“I completely understand.”

“So? May I call him? Is he reachable by phone?”

“No, Dylan. Today he is not.”

“I don’t understand. What kind of operation are they running here? I guess Josh came down here and told you what happened.”

Martha smiled at him sadly. She then got up from her desk. She walked past Dylan as she closed the door to her office. She returned to her desk and sat back down, smoothing her dress slowly as she sunk into her chair.

“No. You see, I was the one who told Josh. I hate to be the one to inform you of this, but we are having liquidity problems.”

“What? How can this be?”

“Very easily. Our fund was down 65 percent last month.”

“He mentioned a bad week, but not like 65 percent.”

“How could that he? It’s not the type of thing one advertises to prospective employees. Ray was generous enough to put cash in an escrow account for you.”

“What does that have to do with this?”

“I’m just pointing out a fact. Besides no one has taken a bigger risk than Ray. His whole net worth is tied up in this fund.”

“That’s insane. All of his money?”

“Everything. If the fund goes dead, he loses everything.”

“How could he have been so dumb?”

“Dumb? Because he believed in himself and his abilities? I wouldn’t call that dumb. Perhaps not the best risk management…”

“To say the least. Do the other traders know this?”

“No, not exactly. I think they have some idea. Only Ray, myself, you and Josh know for sure.”

And where is Ray now?”

“He’s out raising capital. Martha looked down at the Rolodex calendar on her desk. After a moment of thought, she looked up. “I believe that he’s in the Cayman Islands. You see, it’s been very difficult to raise money domestically right now. We’ve met with a host of private clients, pension funds, and private equity investors. Well, they all think that our current investment strategies are not working. They believe that the market is commoditized on the type of investment strategies that have succeeded in the past. Therefore, we either need to change our quantitative direction or find a new source for an influx of cash.”

“What’s the strategy?”

“We had hoped that you might be able to help us with that.. You come from a major investment house. That is the type of pedigree we need to go out and attract the type of capital we need to turn this firm around. Let me show you something.” Martha reached into her desk and removed a gold signet ring. Dylan could see it from a mile away, the Veritas shield shining brightly. It was from Harvard Business School, class of 1972. It had the encryption of a Baker Scholar, someone who had finished in the top 5 percent of one’s class.

“I have one, just like you. I lobbied hard for you to be here. Why? Because it tells me the type of person that you are, and the intellect that you possess. It was a struggle for me to get this, but it means the world to me, as it should to you. And I believe in what you can do. I don’t want you to give up on Ray so quickly. The credit crisis will pass, and I will do whatever I can to help this firm and you succeed.” Martha took the ring back and placed it in her desk drawer.

There was nothing to say. They both smiled at each other. Though Dylan felt the ring was a bit much, somehow, he trusted her. Whatever deviousness lurked in the Corbins’ scheme, Martha did not seem to be one of the ringleaders. No pun intended.

“So what do you want me to do?”

“I told Ray what happened here this afternoon. He wanted to speak to you directly, but did not have time today. Can you catch a flight to Antigua tomorrow? A ticket will be waiting at the airport. Ray will meet you at the hotel.”

“Are you sure he’ll be there?”

“If you’ll be there, he’ll be there.”

“Tell him I’ll see him in Antigua.”

“You’re on.”

The intensity of the Antiguan sun was already evident, as the airport limo dropped Dylan off at curbside. A bright, cloudless blue sky hung overhead. For a moment, he wished that he were there on vacation rather than having to deal with the mundane business of banking and raising capital. Dylan took his bag and headed inside the hotel.

Inside the hotel, a small line was gathering at the hotel check-in counter. When Dylan checked in, he found that Ray, the spendthrift hedge fund manager, had splurged on top of the line accommodations. The receptionist then handed him a folded note, written on hotel stationery. Dylan stepped away from the counter while he unfolded the note. It was from Ray Corbin.

Dylan,

Glad you could make it.

Meet me at the hotel piano bar

at 3 p.m.

Ray

That was it. Dylan crumpled up the note and put in it his pocket. He made for the hotel elevator at the end of the lobby. When he arrived on the penthouse floor, he used his key to unlock the elevator. As he exited, a copious spread was waiting: cheese, fruit, caviar, brioche and booze, only of the best quality.

With little to do before his meeting, Dylan decided to take a nap. Once in his hotel room he washed his face and undressed. He removed his jacket, then his pants, before he stretched himself down on the elegant Queen-sized bed. The Antiguan sun was still high in the sky. Within minutes, he was sleeping deeply.

Waking, he found the time was close to 3 p.m. He showered, dressed, and took the elevator to the lobby.

The piano bar was practically empty when he arrived. A woman and a man were sharing a martini, alternating sips from the same glass. They were having fun. The man was older, at least in his mid-fifties, a corporate type. The woman was young, a real stunner with black hair and a short skirt. Though she was twenty years younger, Dylan couldn’t help but notice the large rock on her finger. Dylan ambled up to the bar and took a seat.

The piano player was just arriving. In his twenties, he looked fresh from Julliard or some other conservatory. His tuxedo looked two sizes two large. He started in on an Elton John tune, “Sacrifice.”

While he waited for Ray, Dylan ordered a Scotch on the rocks. He had been there less than ten minutes when his boss arrived.

“Hello Dylan,” Ray said, smiling as he extended his hand.

“Ray,” Dylan said coolly, extending his drink but not his hand. “May I buy you a drink?”

Ray laughed. “Of course. Is this seat taken?”

“It’s reserved for you.” Ray took a seat while Dylan signaled the bartender. She came, and Ray ordered a gin and tonic.

“Nice seeing you again, Ray. It’s funny. I was expecting to see you in New York, not Antigua.”

“Thank you for making the trip.”

Though he was trying to keep appearances, Ray Corbin had the drained look of a beaten man. Perhaps it was something in the eyes, a slight hint of lines, or perhaps he was a bit more disheveled than usual. His shirt was slightly wrinkled and the knot of his tie, a double Windsor, had drifted slightly astray. For a moment, Dylan felt sorry for him.

“So how are you, Ray?”

“I’ve seen better times.”

“I can imagine,” Dylan said. “I had a long talk with Martha about the state of things.”

“Yes, she relayed that to me over the phone. I can understand your being upset.”

“Upset really has nothing to do with it. No one likes being lied too. Why didn’t you tell me?”

“Dylan, you know this business. It all went down the week you called. We were taking huge speculative positions in the oil market. When the price of oil was low, we made a killing by selling puts. But when oil prices began to rise last week, we got hit hard.”

“Weren’t you hedged?”

“Well, we had taken that money and invested in natural gas. When those prices dipped, it was a double whammy.”

“Ray, you had everything on those two trades? They weren’t even well correlated.”

“We got sloppy, and we lost.”

“That’s not just sloppy,. That’s plain dumb.”

“Dumb? You blew your fucking money on an art gallery, and you expected me to bail you out? Grow the fuck up! We made some mistakes, and we got burned. You live and learn. Then, you move on.”

“Now what?”

“Look, this is not a business for the faint of heart. We reconstitute ourselves, and we make a comeback.”

“And you expect me to be a part of this?”

“Dylan, after looking at how you made money this week, I want to build the company around you.”

“I find that so hard to believe, because I just got here. Yeah, we made a few good trades, but when it gets out that you had a blow-up, and it will get out, your reputation will be tarnished. The vultures will start circling. What do you expect me to do about that?”

“The only thing you can do is to stop doubting yourself. You went to Harvard.”

“Yeah, sounds great, but I at least I thought that your firm was solvent. I have bills to pay.”

“So do I, Dylan. That’s why we need to get moving.” Ray took one last sip of his gin and tonic, downing it completely as he tilted the glass up.

“And tonight we are off to meet the Wizard, one of the greatest financial minds on the planet. I can personally say he taught me almost everything I know.”

“Is that a good thing?”

“I guess you’ll find that out, won’t you? Let’s go.” Ray paid the check and off they went.

The exterior of St. John, Antigua seemed different now that the sun had gone down. The streets, teeming with tourists during the day, took on a sinister deserted feel at night. It was a poor country. Many of the buildings looked like plywood shacks. Groups of men congregated on the street corners, either standing around or engaged in games of dominoes. Within blocks, Ray and Dylan were outside of the city center, headed for the coast.