The Money Makers (42 page)

‘Right, we know all we need to. Question is: What should we do about it?’

Wilmot, the accountant, was first to speak.

‘Some elements of management and - er - non­ management grades’ - he glowered at Darren - ‘have wanted to reduce our prices in line with the competition. I must caution you very strongly against doing so. Our losses will become dramatically higher if we sustain any further reduction in unit sales prices.’

‘I agree,’ said George.

Darren was stung. He had expected support from his hero and he leaped in fiercely.

‘You can’t score goals with ten men behind the ball. We’re not selling anything with our prices stick where they are. Doing nothing is suicide.’

George nodded. ‘Yes, I agree.’

‘I beg your pardon?’ said Wilmot.

‘Make up your mind,’ said Darren.

‘I have,’ said George. ‘We can’t cut prices, but we can’t leave them as they are either. So we’d better put them up. Twenty percent should do the trick.’

12

Josephine jiggled the mouse and the monitor shook itself awake. The screen was filled with code, completely unintelligible.

‘What’s all this, Miklos?’

‘This? Oh, it’s nothing. My friend writes program to play chess. He want me to look at it.’ He laughed. ‘It’s a very bad program. Also no point.’

‘Why no point?’

‘Chess is ... chess is beautiful. Computers try to look into future. Always this move, that move, this move, that move. More and more times. This is not chess, this just big calculator. Good player look two, maybe three moves forward. Then ask, is this beautiful, is this good for me? Computers play ugly chess. No point.’

‘Could you teach me?’

‘You want to play chess?’

‘No, computers, not chess. Programming, all that.’

‘You? Programming?’

Kodaly wasn’t being deliberately rude, but he still saw Josephine as a secretary, a beautiful and self-assured one to be sure, but still a secretary. And in Kodaly’s world, there were whole layers of intellectual hierarchy between computer programmers and secretaries.

‘Yes, me, programming. I want to learn.’

‘What do you know already?’

‘How to switch on. How to type.’ Kodaly puffed out his cheeks and blew.

‘It’s big job. Maybe a course .. .’

‘I don’t have the time or the money. Maybe my boyfriend could teach me.’

Kodaly puffed his cheeks again, but reached a book down from his shelves:
Pascal Programming 1.01.

‘OK Computers are like chessboards: very simple, very complicated,’ he began.

It was the first time she had called him boyfriend.

Winter 1999-2000

The end of a millennium approaches. The weather is sharp and cold. A tramp and her child are found in the park, frozen to death. The man who found her is a photographer and his photo splashes across the front pages: ‘Still no room at the inn’. The self-righteous headline disturbs no one, at least not if the frenzy in the shopping mall is anything to go by. This is the last Christmas of the millennium. Got to have a new coat. Got to have a new dress. Can’t start a century in last season’s clothes.

On production lines in China and Korea, the fireworks are being bundled into boxes marked ‘for immediate dispatch’. The pyrotechnic stockpiles, already at record heights, rise ever higher. The old millennium will pass away in a glory of gunpowder, and what better way to bid farewell to the tattered old thing?

It is 20 December 1999, five days before Christmas, eleven days from the century’s end. There are 571 days until Bernard Gradley’s deadline.

1

When Jesus said that rich men couldn’t enter the kingdom of heaven, he lost the investment banking vote there and then. In banking, religious convictions are rarer than tattoos. But everyone has to worship something, and at Madison that thing goes by the name of EPAS - the Employee Performance Appraisal System.

EPAS is an Old Testament God, just and unmerciful.

EPAS rewards the good and punishes the wicked. The favoured enjoy huge bonuses, promotions and giant salary increases. Sinners get small bonuses, sideways moves or the sack. The ordeal lasts all year, because as soon as one bonus is paid in January, evaluation of your performance starts again, ready for next year. But, though EPAS’ shadow never lifts, it’s in autumn that the pressure mounts.

Through autumn, everyone writes reviews of everyone. Bosses write about their subordinates. Subordinates write about their bosses. Colleagues, nervously competitive, write about each other. The appraisal forms are long, complex, and searching. The forms are written and sent in secret, and you don’t know who is writing about you. Offend someone in February and the payback comes secretly nine months later, through a form you can’t see, with lies you can’t deny. No two bankers ever meet without knowing that any mistake, any word out of place, could come back to hurt them. EPAS is Big Brother turned capitalist, God turned spy.

In December, just before Christmas, the results are announced.

Matthew waited nervously outside Rosenthal’s seldom­used office. Inside, Rosenthal was breaking the news, good or bad, to Scott Petersen. The sounds from inside the glass-walled room were muffled, and the Venetian blinds kept even the smiles hidden. Rumour had it that the bond department - Matthew’s department - was being reduced in size, and Matthew hadn’t had a great year. He fidgeted and waited.

Eventually, Rosenthal was done. Petersen had had a good year and he left Rosenthal with a smile wide enough to swim in. He stopped at the doorway.

‘Thanks, Saul. Thanks very much,’ he said to Rosenthal, then turning to Matthew, ‘Hey, Matt. Hope it’s OK.’ He paused. He knew about Matthew’s losses on Western Instruments and he knew about the downsizing rumours. Matthew was vulnerable. Petersen tried to compress his smile, not to look too happy. But he was no actor and his grin was back before he’d moved a yard. Matthew felt awful.

Still, his turn had come. He was about to tap on Rosenthal’s door and walk on in, when a deep Scots voice behind him said, ‘Hey there, Matt. How are you doing?’ It was Brian McAllister.

‘Yeah, fine, thanks,’ said Matthew, giving the compulsory answer. ‘I’m just about to hear the worst from Saul.’

‘The worst, Matthew?’

‘Well, you know, find out how I’ve done, I mean.’

‘Why should that be the worst, Matt?’ McAllister’s pale eyes bored into Matthew, but it was a rhetorical question and Matthew didn’t need to fumble for another answer. In the end, the Scotsman broke the silence, saying, ‘I hope you’ve no need to fear, but if you don’t mind, I’ll sit in with you.’

Matthew was surprised. EPAS revealed its secrets in one-on-one sessions. They weren’t a form of public entertainment. But Matthew knew better than to say no to Brian McAllister, and the two men went into Rosenthal’s office together. Why had the Scotsman come?

Matthew, Rosenthal and McAllister squeezed round the fake mahogany table which was one of the rewards of making it to managing director. Rosenthal was a born trader, uncomfortable with anything to do with management. But he knew his duties, especially under McAllister’s piercing gaze, and he plunged into his patter, doing his level best to sound like a responsible adult.

He talked about Matthew’s team reviews, what people had liked, what they hadn’t. The reviews had been positive, any criticism mostly constructive. Matthew wondered what Fiona had written about him, but Rosenthal’s summary revealed nothing.

They discussed Western Instruments in depth. Rosenthal didn’t like Matthew’s losses and he didn’t like it that Matthew hadn’t discussed the gamble with anybody beforehand. As he put it, ‘It was a horrible trade. Any time I’m feeling bad, I just remember your Western Instruments trade and it always brightens my day. But I’ll say this, you put your tiny mind to work and your homework was first-class. This bank isn’t in the business of penalising people for making wrong bets, just for incompetent ones - right, Brian?’ Brian McAllister assented with a nod and Rosenthal continued. ‘Next time, you do your homework just as thoroughly, but just remember to talk to uncle before you do anything further. And remember: bow wow. If it barks, it’s a dog.’

Eventually, after twenty minutes, he came to the point. in all, in its excessive wisdom and goodness, and don’t ask me why, the bank’s decided to give you a bonus. Don’t go and blow it all on a soda before you get home.’

He tossed an envelope across the table to Matthew. Matthew tore it open, his hands slightly shaking. He hadn’t been this nervous since the compliance interview.

Inside the envelope was a sheet of paper, headed ‘employee Compensation Award’. Beneath the heading, there was Matthew’s name and employment details, then a two line table showing salary and bonus. Matthew’s salary was up fifteen percent. His bonus was a hundred thousand dollars.

‘Thanks. Thanks very much.’

‘Don’t thank me,’ said Rosenthal, ‘thank the bank. Thank EPAS. Thank Dan Kramer. But well done, any­ way. Someday, you’ll be an all right trader.’

Matthew’s sense of relief was so strong, it wasn’t until later he noticed his disappointment. A hundred thousand bucks was OK for the first year. But it wasn’t good. Petersen had probably made double that. If Matthew hadn’t screwed up on Western Instruments, he’d have made as much as Petersen. If Matthew had got lucky on Western Instruments, if Cornish had done what he’d been meant to do, Matthew could have been looking at a bonus with a three in front of it. If you translate a hundred thousand bucks into pounds, you have about sixty thousand pounds.

Some might think that sixty thousand on top of an already generous salary is good going for a youngster in his first year in a job and without even a college degree. But this was investment banking. This was Madison. This was the magical land where you win the lottery every year, year after year, and you bitch and moan if the payout is down on the year before. Matthew was entitled to feel bad.

‘There’s something else I wanted to tell you,’ said Rosenthal. ‘You’ve probably heard the rumours that the bank’s cutting back in the bond department. Well, that’s true enough.’

Matthew felt immediate panic. He wasn’t going to earn his way to a million quid, that much was clear. But he knew how he planned to make a million, and that plan needed him to keep his job. Matthew’s mouth went as dry as banknotes.

‘Inevitably, when we cut back, the first people to go looking for a new desk are those who have just arrived. Unless, that is, they have done exceptionally well since arriving.’

Rosenthal meant Petersen. Petersen hadn’t made a big bet which went bad. Petersen’s dental-ad grin meant he was staying. And Matthew? What would he get? The regretful smile and a kick in the teeth? Here’s your consolation prize, so sorry you can’t stay. Never mind about your father’s thirty million quid. We’re sure it’ll tum up. Matthew’s mind raced as Rosenthal continued.

‘But we don’t want to lose our promising young professionals. And that’s where Brian comes in. Brian?’

McAllister took over.

‘We’re setting up a new group in London, Matt, and I’d like you to be a part of it. The group’s going to buy and sell distressed debt. European junk, if you prefer.’ Matthew knew what he meant. Say a company - Eurotunnel, for instance - borrows a lot of money. It hits bad times. The bankers and investors who lent to it realise they’ll never get their money back in full. The loans trade, like the Western Instruments bonds, at big discounts to face value. Trading in these markets is a roller-coaster ride, for company and lenders alike. If you’re smart, and you buy in the troughs and sell in the peaks, you can make a fortune. If, on the other hand, what you thought was the bottom turns out to be a brief respite before an even sharper collapse, then you can lose your shirt, collar and necktie, all in a sitting.

‘The job needs trading sense, for sure,’ continued McAllister. ‘But it also needs intelligence, and the ability to do deep research on the situations that interest us. That’s what made me think of you. I think you’re a natural for this group, Matt, and I’d be delighted if you wanted to join it. We’re starting in the New Year, so you’d need to find yourself somewhere to live in London over the holiday if you can.’

McAllister went on to describe the job in more detail, but he didn’t need to. Matthew was hooked. A job like this was perfect, just perfect, for what he had in mind. He was unhappy about his bonus, but the job was perfect. Perhaps Plan B would be possible after all.

The arrangement was quickly confirmed. Even if Matthew hadn’t been keen, he’d have accepted. An offer is only an order in disguise, and Matthew’s old job had crumbled beneath him.

There was only one problem and it was a big one.

Fiona. As soon as Matthew had left Rosenthal’s office, he hurried down the trading floor to Fiona’s office. As he made his way there - passing the secretaries fighting with photocopiers, the traders bragging over their two-dollar cappuccinos, the mail men who serve the firm for fifty years never seeing a tenth of the bonus that had so disappointed Matthew - his mind was full of thoughts.

He was relieved to have a job. He was excited by the new position. He was pleased to get a bonus. He was pleased at the praise that Rosenthal and, more importantly, McAllister had offered him. He was disappointed with the size of his bonus, though he knew it was fair, generous even. But, most of all, as he hurried down the aisle, he realised he couldn’t contemplate losing Fiona.