The Gods of Greenwich (28 page)

The financial institutions reminded Leeser of the poison people from his youth, always scuffling for their next fix. The big institutions, saddled with their own problems, were indifferent to everyone and everything in their endless quest to find capital.

Eddy had been crystal clear last Friday. No more money. Merrill Lynch would not help shore up Bentwing’s stock price. More likely the investment bank would force LeeWell to dump assets at fire-sale prices in order to pay off debt. Losses would be huge, and investors would jump.

LeeWell’s hedges were Cy’s second problem. They protected against risk. They were working. But not fast enough. Nor big enough. Cy never anticipated losses of $350 million. If the markets stayed this bad, he would be playing catch-up for months, maybe even years. And at least one of his partners was an absolute pain in the ass when it came to hedging.

Jimmy Cusack, to Cy’s way of thinking, was
the
solution. The kid offered access. He offered size, important now that Bentwing was dropping like a rock. But the kid was slower than cross-town traffic in Manhattan, always dragging his feet, always finding some excuse to whine and bitch about his “complicated” relationship with Caleb Phelps.

“That shit stops today. And I know just how to make Jimmy dance.”

The third problem was that Qatari sheikh. He rained crushing hell on Bentwing, which traded under thirty dollars for a few minutes on Monday. Leeser was no longer running a hedge fund. He was running a triage unit where everything was hemorrhaging all at once.

The sheikh’s wrath almost felt personal. But why? And how did the sheikh connect Hafnarbanki to LeeWell? Cy had been stewing over the question ever since late August.

*   *   *

After hanging up with Bianca, Leeser checked Bentwing’s share price. Still north of thirty—that was good. His thoughts turned to Hafnarbanki. Nobody knew about LeeWell’s bet against the bank. Nobody outside the company—that is, except the reps from Merrill, not to mention Tall and Napoleon, his partners in crime.

Only one other person was present that cold December night in a Reykjavik bar. And he made no sense. He was bookish and financially naive. He called with great deals, one that landed a million-dollar payday. And he just might be the walking colonoscopy behind Leeser’s troubles.

Cy picked up the phone and dialed Iceland. There was nothing like Bentwing hovering over thirty dollars to focus his thoughts.

“What a pleasant surprise,” Siggi said. “I’ve been thinking about you.”

“I bet you have.”

“What’s that mean?”

“Let’s cut to the chase,” snapped Leeser. “Who do you know at Hafnarbanki?”

The mild-mannered art dealer said nothing at first. Mentally, he struggled for something, anything, to throw Leeser off the scent. The Icelander had worried about this moment. He knew the day would come when Leeser linked him to Ólafur. And he cursed himself for not prepping ahead of time.

A pause was all the confirmation Leeser needed. “Who?” he demanded.

“I don’t know what you’re talking about,” the art dealer stammered.

“What the hell was that Raphael about?” persisted Leeser.

“An opportunity. That’s it. I swear.”

“Who’d you tell, Siggi? I don’t have time to play games.”

“Tell what? What are you talking about?”

“Me shorting Hafnarbanki.” Leeser knew the Icelander would break. Rapid-fire interrogation, unrelated questions zinging from every direction, always flustered the battle-scarred CEOs of public companies. He would wipe the floor clean with a third-rate gallery owner who spent his life shuffling around that volcanic afterbirth of an island.

“I don’t know what shorting is,” pleaded Siggi.

“Bullshit,” bellowed Leeser. “Tell me, or I’ll be knocking on your door five hours from now.”

“No. You’ve got it all wrong.”

“Five hours. And you’ll wish you disappeared with the Nazis instead of that painting. Who do you know at Hafnarbanki?”

“Ólafur Vigfusson,” cracked Siggi.

It took Google .40 seconds to find him and Leeser another ten to scan the Web hits. “So, who is this managing director to you?”

“My cousin.”

“Give him a message for me.”

“I’m afraid to ask,” confessed the art dealer.

“Twenty-four hours.”

“Twenty-four hours for what?”

“To start buying Bentwing,” barked Leeser, “or Hafnarbanki gets a barbed-wire enema that sends the stock price to sewage treatment.”

“Cy—”

“Give your cousin my phone number if he has questions. And tell Ólafuck I know about his sweetheart deal with the sheikh.” The words were a total bluff, a best guess, but worth the shot with Bentwing trading at $32.01.

Ultimatum delivered. Dial tone.

*   *   *

After he hung up with Siggi, Cy conference-called his partners in the Hafnarbanki short. He never mentioned Bentwing. Tall and Napoleon would kick sleeping puppies, not to mention a stock reeling from the coordinated attacks of powerful financiers in Qatar and Iceland.

Leeser focused on the Icelandic bank. “Time to go for the jugular. Let me tell you what our friends at Hafnarbanki are doing in the Middle East.”

Thirty seconds later Tall asked, “Do you know this for a fact?”

“What difference does it make?” said Leeser.

The two other gods chuckled.

Leeser asked Napoleon, “Do you still operate the International Institute for Financial Transparency?”

“Whenever it’s necessary,” the squat hedge fund manager affirmed. “I know where you’re going, Cy. Give me two, maybe three days, and I can whip out fifteen pages.”

“Make it two days,” instructed Leeser. And then he said to Tall, “Can you get addresses of the people we met in Iceland?”

*   *   *

“He said what?” screamed Ólafur.

“You have twenty-four hours to buy Bentwing or else.”

“Or else what?” the banker asked Siggi.

“‘Hafnarbanki gets a barbed-wire enema that sends the stock price to sewage treatment.’”

“Did he say anything else?” Ólafur could feel his blood pressure rising.

“Something about your sweetheart deal with the sheikh.”

“I have no idea what he means,” Ólafur lied.

Leeser’s threat was a bluff. It had to be. No one else but the chairman and the Qataris knew about the nonrecourse loan from Hafnarbanki. And the paperwork was hidden inside a maze of dummy entities. The only way to fight deception, Ólafur knew, was through deception. “Do you still have the case of wine Leeser sent?”

“I don’t get you, cousin. My client just threatened to take down your bank, and you want to drink?”

“Who said anything about drinking? I want the crate.”

“For what, Ólafur?”

“To hit him where it hurts.”

“What are you talking about?” Siggi asked. “And spare me the warrior quotes about castration.”

“Leeser’s ego is where it hurts. Get me the crate.”

*   *   *

Cusack brooded in his office. He doubted the market would continue yesterday’s 142-point rally. There was no confidence anywhere. And every trading session was wood-chipping his bonus, possibly his job, into sawdust.

The phone rang, and Cy asked, “Are you free at four?”

“What’s up?”

“Just swing by my office at four.”

“Roger that,” Cusack affirmed. “Do you have a few minutes now to discuss something else?”

“What’s on your mind?”

“Help me craft a script about how we hedge. No trade secrets but enough to pacify curiosity.” Cusack paused a beat. “Then we make calls, you and me on the line. Get out in front of the problem, because one thing’s for sure.”

“What’s that?”

“Clients will call us if we don’t call them.”

“Anything else?” asked Leeser.

“Level with me about our margin debt.”

“What makes you think we have issues?”

“The whole building heard you screaming at the guy from Merrill last Friday.”

“You finished?” Cy sounded testy, his tone steely and distant. “Because if you want to whine and snivel a little more, don’t let me interrupt.”

“Yeah, I’m finished.”

“I’ve got the margin under control. That’s my job, not yours. And you’re the employee, remember?”

Cusack said nothing and waited. He could hear himself perspiring. He could feel his ears growing red.

“Tell investors,” Leeser continued, “what we always say. LeeWell uses a proprietary trading mechanism to hedge. It’s highly reliable but simple and easy to replicate. If others learn what we do, we’ll lose our competitive advantage. And remember, I sit on the board at Bentwing. We’re knocking the cover off the fucking ball.”

“I’m telling you,” Cusack resisted, “your black box won’t work. People are scared, Cy. They need something tangible.”

“We did just fine before you arrived.”

“The world changed.”

“Then say our gate is up,” Leeser barked. He was referring to a clause in the subscription agreements. If investors tried to redeem 25 percent or more of the money in the fund’s assets, then LeeWell Capital could close the “gate” and limit investor payments until times got better.

“Do our redemptions total twenty-five percent?” asked Cusack, alarmed and incredulous.

“No.”

“I won’t lie. That’s where I draw the line, Cy.”

“Who’s lying? If you don’t follow my instructions, we’ll have the twenty-five percent. Besides, you work for
me.
”

“We can fix that.” Cusack refused to back down.

“That’s right. We can,” Leeser pressed. “Good luck finding a three-million-dollar mortgage in this market.”

“Don’t threaten me, Cy.”

“Hang up, cool off, and we’ll pick it up again at four.” Threat or not, Cy sounded smug.

Dial tone rang in Cusack’s ears. He slammed down the receiver and started to fume. He could have fumed all day but there was no time. Client calls poured in as the market opened anchors aweigh—down, down, down. The dashboard of his phone resembled Times Square on New Year’s Eve.

One after another, the clients of LeeWell Capital regurgitated what Cusack already knew. “We’re pulling out if you lose our money.”

When the Dow finally closed at 10,609, a drop of 4 percent on the day, Cusack answered one call before heading to Leeser’s office. The next five minutes ranked right up there with a double-barreled case of food poisoning.

*   *   *

“We’re putting our forty-million commitment on hold.” It was Buddy, the chief investment officer from New Jersey Sheet Metal.

Shit.

“The market’s less rational every day,” protested Cusack. “Now’s the time to make real money.”

“How much lower is it going?”

“I don’t know. Which is why we take your forty million and feed it into the market a little every month for six months.”

“I have a better idea,” the pension officer rejoined.

“Which is?”

“We speak eighteen months from now.” Buddy hung up.

At 4:06
P.M.
Cy barked at Cusack over the phone, “You’re late, girlfriend.”

CHAPTER THIRTY-SIX

4:08
P
.
M
.…

Cusack walked into Leeser’s office, where the air smacked of a death sentence. Cy sat behind his desk. His hair was the color of coal. His eyes glowed like bonfires, and his grimace resembled lethal injections. Shannon glared from one of the guest chairs. The big man said nothing, no emotion and no expression. His head had taken the shape of a hangman’s noose.

I’m getting fired.

Cusack recalled the flare-up that morning: “Don’t threaten me, Cy.”

The words sounded insubordinate in retrospect. With Shannon present, Jimmy assumed his outburst had crossed an unspoken line. Security people always accompanied pink slips at investment banks. Bosses fired employees, and guards escorted them out the door. Cy probably borrowed a page from the HR playbook at Goldman Sachs.

“Four o’clock was eight minutes ago,” snapped Leeser.

“I was on the phone with New Jersey Sheet Metal.”

“What do they want?”

“Out. New Jersey pulled its forty million.”

Leeser’s face blew a crimson gasket. “I suppose,” he said, mocking and venomous, “you still insist on a script for investors. Maybe we should gin up something for prospects. Or better yet, let’s invite the ladies over for tea and finger sandwiches because you’re too fucking skittish to close business.”

“I don’t need a script for one piece of advice.”

“What’s that?” asked Leeser, taunting Cusack and inviting him to take his best shot. Shannon watched impassively.

“For you to wake up. The phone is ringing off the hook. Your investors are scared stiff.”

“Forget the investors,” ordered Leeser, “and tell me why you’re freelancing.” He swept back his long black hair with both hands and reclined in his chair, at ease after landing a knockout punch.

“What are you talking about?”

“Providence last month.”

“I saw Graham Durkin. You know that.”

“What else were you doing, Jimmy?”

“What’s your point?”

“I’m the one asking questions,” barked Leeser. “Who’s Dimitris Georgiou?”

“A classmate from Wharton.”

“What does he know about LeeWell Capital?”

“The market’s melting down and you’re asking about a guy named Geek?” Cusack glanced at Shannon. His head had gone from noose to garrote, his expression taut, tight, and plenty keen to get the job done.

“The shorts are circling,” explained Cy. “We’re down over a hundred million on Bentwing. And you’ve been hanging out with that clown since day one.”

“How do you think I found out about the Qataris?”

“Now you tell me,” scoffed Leeser. “Remember what you said three weeks ago, when I asked about your source?”

“No,” said Cusack.

“You said, ‘What difference does it make.’”

“Yeah, and I still mean it. You know who’s attacking us. Geek is immaterial.”

“I’m losing money, Jimmy. You haven’t invested one dollar in my fund. And now you’re blowing it with prospects. It makes me wonder whether you’re a plant for our friend Dimitris.”

“That’s crazy. Money is tight in my home. That’s why I haven’t invested.”