FALCO

By G.M. Weiss

The 1990s: a world still without Internet, email or electronic documents—when business was still (mostly) conducted face-to-face. Through a web of intrigue, murder, sex, and the destruction of well-known banking names along the way, Falco chronicles the rise and fall of its characters through a series of temptations, as they try to sidestep disaster. At its core, the story centers on a debt—large enough to bankrupt a major financial institution.  While others might have acquiesced, walking away and dealing with the consequences, that was never an option with Falco: a company always on the edge—looking to go beyond the scope of reasonableness or lawfulness, into realms both murky and unknown in order to survive. Author G.M. Weiss weaves a tale that smolders through a backdrop of mounting tension, while careening towards what could become the largest financial meltdown the world has ever seen.

• Language: English
• Publisher: Hillcrest Media Group
• Release date: Apr 15, 2015
• ISBN: 9781634134316

Book preview

Terms

Hamilton Bermuda December 1996

On the night of the Falco Christmas party, only the slightest hint of oleander wafted through the air of post-tropical December in Bermuda. Unlike the thickened paste of summer, cold wind gusts heaved through needles of steel-like rain, not at all like the vision of paradise sewn together in glossy tourism ads. The scooters on the road belonged to locals wearing rain gear—no shorts, bathing suits or t-shirts—the practical time of the year, when hotels were either closed or empty; vacationers were in short supply.

The sideways tilt of riders on their Yamaha bikes would give away the driver’s orientation to the careful observer without fail. Locals were cool, riding jaunty, cockeyed with one shoulder angled slightly higher than the other by degree. Helmets, only marginally secured by a dangling chinstrap, seemed for many to serve the purpose of only protecting their large puff of hair: Rasta styled dreadlocks piled high enough as to form a wind barrier, bouncing in rhythmic sequence around the slippery roads, narrow with a sheen of cold water spittle. Stonewalls were the real enemy on nights like this. Although picturesque and tidy in daylight, they were also steadfastly unforgiving in a crash. The ex-pats, motoring intently on their more Teutonic Peugeot scooters, clearly understood. Not having grown up around the lush foliage overhanging winding roads, often with unforeseen hazard, they took their ride seriously. Handlebars clenched tightly, glasses secured, their teeth would grit hard, particularly on the hills: steep on the rise, giving way to a yawning chasm of uncertainty from the peak.

The affair, although hastily planned, was at Café Capri, an exclusive watering hole at the bottom of the threadbare luxury property on Elbow Beach. Cosmo and Stefano had helped put together a menu that was reflective of a high profile customer that ran a small but enigmatic exempt company. They never knew where or how much money seemed to swirl around Falco, or in fact Jonas White the CEO, but they had a good idea that the connections within and out of the island ran deep. private planes taxied White and colleagues back and forth to the mainland, and although it was never told to the Maître d’, rumor had it that there were significant connections with the Austrian.

In so many ways it felt like the planes were always at the root of things. Everett at Bermuda Aviation seemed to wear too many hats working at the local FBO (fixed-base operator). Mostly relied upon to be discreet as to the comings and goings of his clientele, for the most part, at least to them, he was. But unfortunately his actions often contributed to the great irony in the divide between local and ex-pat: Their existence ran mostly parallel and often complimentary, but never really coincided. In fact, there was usually enough enmity between the two for situations to sometimes run counter to each other’s benefit.

Since restaurants in particular looked at the private planes as a good barometer of business on any given night, Everett felt no compunction about telling what he knew through informed and effusive commentary to his wife, who carefully and discreetly informed her sister, who happened to work for Cosmo, who by most accounts always seemed to be the most informed person on the island. The fact that anyone who actually cared enough could easily have an insight into the arrival and departure of White, his business associates, and even the Austrian carried with it a certain sense of inevitability: a fallout in the quirky way business just seemed to operate in Bermuda. This compromised information channel was acknowledged with a nod and outward scowl by those implicated in its clutch. At times it was problematic, but in a way it could almost be useful even if only as a temporary ego boost.

That night the Falcon 10 was in, as well as the 900 b, which meant that White and at least one of the New York contingents, was on the island. But the Gulfstream IV had left unexpectedly that afternoon which meant the Austrian was not. Whatever the true meaning of these movements, was less important than the inventory. Either way, money was on the island, and the dinner would be expensive. As White would say I want killer juice for everyone at the party.

As he readied himself that evening, the unfortunate idea of a speech seemed to take on an unaccustomed importance for Jonas. A skilled speaker in most every environment, he prided himself on having an extemporaneous wit that didn’t need preparation—an image that belied his natural proclivity towards isolation. To him, each speaking turn was an exercise in strategy, a plan, something to be executed for maximum impact and effect. There were no extraneous comments, no phrases without purpose. The key though, was to make sure that no one knew he was always improving the script to suit his needs. It was a highly stylized approach in an unlikely physical package: a medium height slightly balding man with glasses, anonymous if looked for in a crowd, he’d overcome what to some might have been considered an impediment, being on the wayward side of slightly frumpy, as compared to the more elegantly endowed stereotype of a wall street executive, and over the years had swayed legions of bankers and investors to his fold. A short welcoming speech to his co-workers and their wives should not have caused any thought whatsoever. Yet it did.

1996 was Jonas’ best year in Bermuda. The World Wide Web, barely a thought up until then had finally drawn to the edge of becoming mainstream. Compaq with its Presario model for the home had just begun to warrant enough attention from kids hooked on TV shows like Nickelodeon, to be thought of as a legitimate alternative. And cell phones, previously inhabiting the domain of only just somewhat obscure, were starting to become so ubiquitous as to be viewed as a legitimate fashion accessory.

Although it may have been just trolling through the unspoken backdrop of wishful thinking, there was clearly an idea emerging that maybe the conglomeration of mobile phones, Internet, and technology, might actually make a difference. It seemed to underpin a theme felt by many, particularly within investment and financial circles, that this time, the world had finally and actually turned the corner toward being good again, like it used to be. But that of course was a high-level view, with sweeping declaratives and notions that mostly didn’t apply when viewed through the prism of such a tiny island. Here, it was the little things that in many less obvious ways, just seemed to be working. The girls were ensconced at Warwick Academy, content that they were at the epicenter of all private school contingencies that could possibly exist within their known universe. The family had just moved to a new house at the top of McGalls Bay in Smiths, where there was a regal, almost godlike expanse of lawn to ocean to sky. And the simple quotidian existence of small events mixed with the heady aromas of perfumed rotting leaves and sea salt, made each day feel as if it was a life version of the tacky tourist pastels lived out in three-dimensional resonance.

Business too, was also uniformly consistent from the prior year, and although the customer base had expanded only slightly, the relationships seemed more secure, and the trading margins were better.

But probably the greatest gift of that year was the pay down of past-accumulated losses from what seemed like the ancient, tectonic history of 1990. Jonas had carried the chains of these debits, floating from year to year while accumulating vast amounts of interest, until profits had finally expanded enough to start amortizing them away. It was through his myriad strategy of selling and buying options, associated with the remarkably advantageous credit and trading facilities he had negotiated, that the plan had actually and finally, worked. If things continued as planned, and the trades on the books settled as anticipated in February, the last $20 million would be gone. With a laser focus on the implications of this date as it drew closer, he could almost feel a palpable warmth, like the burn of good Armagnac settling into the sternum of his chest.

Still, like during the past years, there were parts of this road, which were outside of his control. The accounting, the cash flows on an inter-company basis, the wild swings in affiliated company’s profits or losses: he was essentially the bank of last resort at Falco, needing to fund all these contingencies and more; always him, because unlike anyone else, he was the one that knew how.

* * *

PART 1

Geneva Switzerland, April 1990

Hasan Bajar needed money. It was just that simple.

The shipping subsidiary was basically an illiquid pass through, with assets held in sequestered sub-units that had mortgaged vessels and freight with multiple banks on various levels. It just didn’t have the collateral free financing limits to perpetuate the spending. There was the building in the center of town, the Jordanian bank, the houses, the planes, the cars, the women; all of them needy, all of them beautiful, all of them urgent.

While affiliated in name, Shakeel was finally trading for himself. After a series of false starts and delays, recently having struck out from the larger collective, and notionally independent of his father, he enjoyed the freedom of at last being his own boss. And although he too had the same associated entitlements, as the old man, he had a more nimble sense of market possibilities and seemed able to finance his indulgences without problem. He also had a nameplate for his business that insulated him from many things, including his Pakistani heritage; tall, thin, with long black hair, shoulder length and suggestive of a greasy sheen, he had dark skin that gave way to a two-step cavity of bloodshot eyes punctuated by orbs in the middle, half circles underneath were dark as coal.

His company Saudi Gulf International Trade and Finance S.A. (Saudi International) attracted an interesting pool of employees well versed in Islamic carry trades, and implied values of swap differences. These were an unusual skillset in a market for currency trading that was still immature enough not to have quantitative valuation metrics for options and spread trades.

Over the course of the few weeks coinciding with the traditional slowdown in the markets ahead of Easter Holiday breaks, rumor had crept back to head office that Shakeel, or to be more accurate his new employee, Jean Claude, had created a program of selling close in strangle options and buying far dated cover trades, that magically, generated cash: lots of cash. Which is not to say that these trades made money. On the contrary, they almost always lost. Mostly, because like any pyramid, the cash was really just an illusion; the funding would need to be constantly replaced. However, for a period of time, these obscure maneuverings were able to generate what looked like a free amount of funds usable for, well, virtually anything, until the losses inevitably came due some time later.

It was the later part, capable of being ignored and being much less important than the present, where the situation had already deteriorated into something bordering on acute, that prompted Bajar to call his son Shakeel over to his office on the Rue du Rhone for a talk. Although more frequent than when he was younger, and surprisingly more involved than he might ever have thought possible, these talks still presented an awkward dilemma for Shakeel. In a sense, he’d only just barely evolved into his role, having grown up away and outside the family business except for those rare occasions during brief stints in Karachi for summer jobs he couldn’t wait to leave from. His ability, untested and suspect by most within the larger shipping company, was viewed as being more attuned to western methods of business, those that were tame, and more timid in their approach.

We need to have access to your liquidity, he said, clearing his throat before continuing in a stern and commanding tone looking forcefully into the dark eyes staring across his desk. It was a vision that alternated between affection and envy: Shakeel projecting the oblique specter of youth and possibility that could be sensed percolating through his white-toothed perfect smile. And I’m sure you realize that we can provide a guarantee if necessary.

In another venue it might not have been so awkward, Bajar speaking as if towards just a banker, someone nameless and faceless, needing to be herded into the fold, but this wasn’t the reality of that often heard boast of faux credibility. Instead, it was his son, who despite all of his numerous contradictions and frailty, the depth of which couldn’t possibly be fathomed, he loved dearly.

Twitching with the full knowledge of both responsibility and greed, Shakeel didn’t need an introduction: he knew what this was about. His dad always operated a little too flamboyantly for his taste, and sometimes it got a little tight. This was one of those times when he’d actually seen it coming. Forces converging where too much cash was going out the door while credit availability continued to shrink precipitously. It was an inflection point that was more severe than normal; bigger than just him or his coddled independence and fragile ego, it was about the survival of the parent company.

Bajar had for the past year been working closely with the Banque of Commerce and Trust International, Lichtenstein (BCTI) as a conduit for loans, usually to his shipping group, but occasionally to affiliated sub-companies that were secretly owned by the banks’ owners and directors. It was through this spidery network of intermediary finance companies that the bankers, and Bajar, were able to float an enterprise that was virtually unknowable by regulators, tax authorities, and other creditors, but still strong enough (ostensibly) to attract investor capital. In a sense, one might be tempted to credit them with having created an art form. So nimble, so adroit at avoidance or detection and so utterly capable of perpetuating an insatiable form of self-interest, it was truly a wonder.

While clearly a fraud, BCTI, along with Bajar and his related companies, loosely organized around the holding vehicle called Merchants International Gulf, S.A. (MIG Group), had the structural advantage of always being only just a fraud. These were never legitimate business’, as in real banks or finance companies set up to profit from their operations, instead they might best be described as hollow shells, set up to employ the trappings of legitimacy for the sole purpose of the lifestyle it afforded their owners. The problems arose only when loans came due and couldn’t be recycled. Sometimes it was as simple as just a loss in trading accounts organized through a litter of highly leveraged relationships at various brokers around the globe.

Other times there were the unexpected, expenses: a new plane, a new Chanel wardrobe for the enormous contingent of women that seemed to orbit around and through the headquarters at Rue du Rhone, even another palace or Chateau, possibly this time on the Italian side of the Riviera as opposed to the one just on the outskirts of Monaco, in the end it really didn’t matter the catalyst, the result was always the same: a crunch.

Shakeel put aside his ill-defined sense of contrition while burying a faint hint of resentment for having to again bail out his father, and started to explain a strategy. More like an alchemist talking to a desperate renegade seeking absolution in the medieval dungeon of a debtor’s cell, it was his invention that would need to once again save the day.

He broke from his father’s stare and looked down at the rug, an antique Tabriz in muted tones, extracted from some blurred payment scheme gone awry in Tajikistan years ago, before finally talking. It wasn’t so much by design necessarily but by habit. Even though his importance within the group had risen conspicuously during the past year, and his relationship would never have seemed to warrant it, there was an inextricable deference that would, without notice, sometimes overtake his outward expression towards his dad. Like a poker tell, he often thought it worked to his detriment but at the same time it was something he was ill equipped to control.

We have started dealing with a commodity broker out of New York that seems anxious to build up a business in options. They also seem okay with valuing our book according to ‘intrinsic,’ versus ‘market,’ value.

Bajar at first didn’t get it. Shakeel could tell the signs as the cigar drooped from his father’s open mouth, catching on the saliva bead of his bottom lip.

You see, pop, the trades that Jean Claude—who you’ll meet in a few minutes—gets involved with really have 2 values. The first is if you liquidate the whole book at the market, what will it be worth? You know, whatever the market is going to pay at that time. Right? But the more interesting thing for us is if you carry the full position to maturity. At that point only one side of the overall trade can ever be executed against you, either the put option or the call option.

His father was shrewd, but in a more mercurial sense, he often neglected the finer points of details. This talk of options was maybe a bit outside of even his grasp, and Shakeel could tell he needed to break it down further.

Here, just follow me on this: let’s say the market is higher. That is, higher than when you originally got into the trade. If that was the case then the call option would be worth something, right?

Bajar shook his head, but slowly, more measured than enthusiastic, while Shakeel continued, And keep in mind that this same call option would be a loss to us because we were the ones who sold it, you know, we’re short it. But remember, at the same time that we sold that call option; we also sold the put option. Which, because the market is now higher, would be worth zero, as in, we get to keep the full value of cash that we sold it for.

It was at this point where Bajar’s mood changed. He got it. So clever, so ingenious that he almost allowed the upturn of his outer lips to morph into a smile. But through years of stone-faced negotiation, Bajar knew to keep quiet. Let them finish, was his strategy, they always will tell you more than you would have gotten by having asked directly.

Shakeel looked down again, this time clearing his throat before continuing.

"It’s always going to be an either or situation, it can never be that both these options will be at a loss. And that of course is the essence of how you make money on this trade. You hope that whatever you got paid on the short sales of both the put option and the call option is greater than whatever you’re going to have to cough up on the one side that you know you’re eventually going to lose on.

The risk, obviously, is that at the end of the expiration of the options, the loss is higher than the gain, and frankly, that is what usually happens, so for the most part these trades tend to be losers. I mean yeah you could hedge ‘em, but that takes a lot of skill, luck, whatever, and mostly it never works without you almost always losing more than you thought. What it all comes down to is pretty simple really, we generally assume we lose money on the trade, but for a time, if you choose to value the position in this manner, which for most people they would never dream of wanting to do because it’s, well, just too damn risky, then technically, you might always be considered to have a margin excess in the account, or for our purposes, use of free cash.

In the abstract, it all seemed to make sense to Bajar, but at the same time it almost made him feel ill at ease while contemplating the most obvious question,

‘Could it really be that easy?’

There was a short pause as he thought about how to ask his son what was on his mind without sounding stupid, an awkward sensation that seemed to be occurring with greater frequency ever since Shakeel had gone out on his own. In the end though, he had no better prospect for saving face than to just blurt it out.

Yes but Shakeel, the account might show an increase, even if, as you say they would choose to value it in this way, but how could any broker be crazy enough to actually release the cash to you?

This broker would, and they have. In fact recently they paid $4 million over to me against the intrinsic, one-sided liquidating value of the option positions that are due to expire in 6 months.

But this sounds insane! What do they have as financial information? I mean don’t they need to have a direct credit, or lending relationship with us in order for them to essentially give us what amounts to an unsecured loan?

With a smirk, that bled into an incorrigible hiss falling without warning out of the side of Shakeel’s mouth he shook his head in the affirmative while explaining.

Do you remember how we capitalized my finance company?

It was a small variation of lending that Bajar had used once or twice with the Lichtenstein bank, and which he had almost forgotten.

We had BCTI fund a loan to me, which I then deposited on your books against a receivable which you guaranteed. Then we got Axelrod Abelson—man, they’re thieves— to verify it as good collateral after they sent out a loan confirmation that you signed and sent back. You then sent the money back to BCTI, so from their point of view they have the same cash back that they just loaned out to me and it was all ... you know, ‘Kosher,’ and everyone was happy...

Of course.

That’s right ‘of course,’ I saw you and that new secretary—whose name I can’t even remember now, in Patek Philippe that same afternoon after the financial statements came out, buying up what looked like the whole place.

Bajar smirked briefly. Those watches are investments...

Yeah right, Pop, investments in you getting laid...

Emblematic of the open relationship with his son that he took great care in cultivating, along with spoiling him terribly since birth, Bajar felt a certain pride in the knowledge that he and Shakeel generally enjoyed each other’s company. Unlike the typical hierarchy one might expect from a wealthy Pakistani clan, they mostly got along like friends. That is, friends who just coincidentally happened to have a massive age gap between them.

Well, according to Falco, they believe our balance sheet has unencumbered cash and receivables of $50 million. We are an excellent credit! In fact, the head guy over there, Graham Denton, is an ex-Chase managing director, who remembers dealing with the shipping company parent years ago and is thrilled to do the business.

Jean Claude was summoned into the office with a nod from Shakeel who stuck his head out briefly through the gap in a doorway, different from the one leading to the receptionist, and often used in the context of discretion, away from anyone who might otherwise be looking on. He had been waiting outside, pacing and alternatively smoking cigarette after cigarette in succession, all the while confused as to the need for him to have shown up at head office, this being the first time since he’d started. Nervously smiling as he ambled through the door, he knew that something important had been discussed between father and son during the time from when Shakeel had more or less deposited him in the hallway with the instructions to just wait.

Jean Claude was a newly graduated quant guy: that is to say he had finished University studies, and found a job tinkering with financial trading for what he thought was a mid-level, non-bank finance company in Geneva. The point for Jean Claude was to refine his trading skills in an environment where it was small enough for him to actually get some experience, have some impact, and maybe make some money. He had friends working at banks such as UBS or Credit Suisse, but these were tiresome and weary enterprises that would rarely afford the opportunity to actually create any level of significance. Besides, Jean Claude had baggage: a nervous condition that required medication, a child of an ill-advised affair, and of course the usual string of multiple debts. All of which should have made any rational person focus more intently on the make some money, part of the equation, as opposed to anything else.

But in his world things didn’t quite operate that way. Instead, Jean Claude seemed to encompass a realm where competing levels of detail existed only in silos, all of which were created equally. An outward, almost autistic focus towards singular tasks; his life was a series of steps, often taken for incongruous reasons, the purpose of the ending conglomeration left mostly to chance. At close to twenty-three years old, Jean Claude was really still just a child, one who never quite recovered from the stage where on his dinner plate the food wasn’t allowed to touch.

For Bajar, he was a new face. Maybe he might have heard something about him from Shakeel, but couldn’t be sure. Regardless, Bajar was focused, and not easily deterred from his dual avocation at that particular moment, of chewing on his unlit cigar while simultaneously leering through the glass of the adjoining office at his personal assistant. An increasingly obvious compulsion, it had recently taken the form of many different guises. Small, idiosyncratic movements of one type or another all acting as a foil against the obvious; she knew he watched, she made sure to always dress and act the part.

Upon entering the room, Jean Claude could sense that Bajar hadn’t directly acknowledged the presence of anyone new having arrived. Instead he had drifted into a new form of serial distraction, lost within the task of straightening his expensive silk tie—a bold patterned yellow with schools of tightly woven blue fish geometrically aligned—as if getting ready for a presentation of some sort. His eyes looked up, just marginally, as his head remained still cocked in a vague slant lower. The elongated jowl of his third lower chin took on an undue sense of purpose as it spilled out over his collar, now partially obscured, leaving a stretched gap between the top few buttons of his shirt where a wisp of white chest hair tentatively popped through.

He began in a dreary monotone. Jean Claude, tell me about your trading. It seems as if you are... how shall I put this... resourceful...?

Almost stuttering, trying desperately to get it all said without subjecting his audience to the specter of too much spittle being launched in their direction along the way, Jean Claude began speaking as if in effusive counterpoint towards Bajar’s deadpan introduction.

Well really it was just firstly an experiment. We, that is Jean Paul and I, who you don’t know, but who really is the bright one in this scheme, or no, I shouldn’t call it that, really it is a trading strategy but... His voice trailed off as Barbara entered, and the air in his chest cavity seemed to deflate midstream as if sucked out by vacuum.

She was what Jean Claude would have called Oriental, but that wasn’t exactly right. There were no words he knew to adequately describe her origin. She was dark, for sure, but at the same time almost luminescent, easily the most beautiful women he had ever seen. She had piercing blue eyes.

The sinew from her tight figure flushed through the open slit of her skirt, just as Jean Claude exhaled a bit too loudly for it to be ignored, Barbara, I would like to introduce you to Jean Claude, he is our new head of trading strategy for the Global shipping company.

There was a pause, a rough, too-long distance between the dry air hollering through his throat and the necessity for a reply, which lead to a smile from Bajar during the silence.

He didn’t require words from Jean Claude; it was all so painfully obvious. The visible swallow, the upward movement of his Adam’s apple in rapid succession, the unshaven nub of his beard rollicking ever so slightly to the left. These, along with the vacant stare, told Bajar everything he needed to know.

It was late morning before the meeting between the three of them ended, or rather for Jean Claude it was the lull in conversation where it seemed obvious to him that he had been dismissed. But the time of day was less relevant at that point than the confusion that had been ignited, and was now swirling around in his head. Jean Claude bowed out of the office with what seemed to the others as a level of excessive formality bordering on tragic awkwardness.

Just who are these people really? he said to himself, invisibly underneath the moronic grin that tended to be his trademark expression at the lower tip of his nose; this, further shrouded by thick black glasses and oily, flouncing curly hair. And if they now think my trading is so magical what does that really mean?

Without agenda as to what should be done next—him not being a planner who naturally thought in advance of even the next five minutes of his day—he left the office at Rue du Rhone where his path seemed to carry him slowly over to the Place du Molard, a mid sized city square with cobblestones, on the periphery of the Old Town, inhabited by small tent covered eating or drinking establishments in the center. Earlier that morning he had vaguely arranged to meet with his friend Jean Paul, if there was time, and, if the markets weren’t too ridiculous so as to be left to their own devices without the necessity for him to intercede.

Older and stoic, Jean Paul was a man who he looked up to for the purpose of education on many levels of life, not uniquely academic. He worked at Bank Julius Baer on the currency-funding desk, a role at the bank that was mostly a generic one, sober, and usually unexciting. But for all his talent, this, for Jean Paul, was actually an achievement by design. Having once endured a streak of wildly successful trading in precious metals with a Jordanian exchange outfit, Jean Paul had lost his faith in small operations when they eventually reneged on paying his sizable bonus, and instead left town, closing down their large office on the corner of #7, which looked out on the square. That was the last time he would ever allow himself to be put in such a naked position of trust without recourse. So with a resolve towards prevention and stability, as opposed to risk and reward, he instead found comfort in the more predictable realm of just working at a bank.

It was midday, the sun at its apex, and the smell of release from office workers who had sat behind fixed window enclosures for the past few hours, felt palpable. He was perched on a stone bench, quietly looking at the expanding group of revelers milling through what was increasingly becoming a better than average midday gathering spot—the usual crowd of wealthy and well-kept women, some with strollers, other’s having left their kids at home with the au pair and out for some sun, quietly sporting their new Louis Vuitton purse or Hermes scarf— when in the corner of his eye he gleaned a gelatinous sway of bobbing hair coming in his direction, accompanied by the too loud, thunderclap of a greeting Bon matin, mon cher.

It was a force that made him wince.

Excited, and disheveled, the space between the two dissolving into obscurity, Jean Claude had not yet mentioned to Jean Paul that his trading strategy had actually been deployed, much less the details concerning the meeting with Bajar and Shakeel that morning. His promotion? Was he really even promoted? And then of course there was Barbara...

In short it was typical of their meetings. Often impromptu, but always beginning with Jean Claude effectively spilling his guts, without pause or filter, until such time as it seemed he might turn blue for lack of oxygen.

I don’t understand.

Jean Paul interred, while seeming to focus more intently on a singular blonde woman with definitive and uplifting cleavage, than on anything to do with Jean Claude and his ranting.

When we talked about this last month—which, you may recall, was after a second bottle of Gigondas—this was a theory, not a trade. I said it could possibly be the case if only you lined up the right pricing and the right credit. But I was convinced that it could never happen. You mean to tell me you actually put on the trade?

Yes, and not only that, the cost was incredibly cheap!

Either they are stupid, or we have something wrong. Did you check the basis between prices? Are you sure?

Yes, and I also am sure that they would do much more.

Thinking, almost out loud, as Jean Paul tended to do when he was focused on something to such an extent as to preclude a visit to the world around him, ‘If this were in fact true, and there was an executable outlet, then the loan value arbitrage for the bank could be tremendous.’

Non non, mon cher...

Jean Claude whinnied, as he seemed to be acknowledging the thought behind Jean Paul’s introspection, I know what is going on in your head and it is not to be. This is not to be ‘eaten’ by the bank; it must be for you and me. I have given this a tremendous amount of thought.

Which for Jean Claude meant something in the order of only slightly more than a minute or two.

This is the trade, and the group and the business that we need to make our own. I do not know if we will again see in our life the pieces for this to line up the way they look to be right now.

* * *

Shakeel always kept his Porsche parked illegally outside the Saudi International office on the Rue du Purgatoire. It served his purpose to be both separate but within walking distance of his father and he was willing to pay the occasional parking ticket, along with the expense of having a person on staff to actually stand vigil over the car for the duration. On this evening though, he was to be meeting with Jean Claude and Jean Paul at the Beau Rivage, the luxurious mid nineteenth century bastion of discretion and reserve across the lake on Quai du Mont-Blanc, and although he felt like he could use the walk, there was always something pining at his ego which pushed him towards the valet at a good hotel.

His tires screeched as he pulled into the drop off area outside the front entrance, feeling surprised, once again, at just how Arab, that part across the lake had recently become. Regardless, it didn’t affect him. He was above classification: part of the old money, infrastructure of Geneva. As someone who had gone to school at Institut Le Rosey from the time he was a young boy, sent aged seven from Karachi, Shakeel was a fixture in this town.

Jean Paul, and Jean Claude were waiting in the small bar off the lobby, and both had glasses of champagne in front of them. Although he had a clue as to the purpose of the meeting, he still had a mild sense of trepidation; Shakeel knew that they had something he needed, a trading strategy to generate cash. Which is not to say that Shakeel couldn’t eventually do this without their help, but the problem he faced was one of timing. His situation needed funding now, and his empirical skills were just not as adequately honed as would be necessary for an operation of this magnitude.

The insipid grin, and alternatively the stern mien respectively defined the two Jeans, and seemed more than fitting in their general approach towards most things relating to Shakeel, from the time he had first known them.

So, mes amis, ça va bien?

Ah, Shakeel, thanks so much for meeting with us on such short notice.

Bien sur, Jean Claude, anything for the new head of Global trading strategy for the group. Incidentally, Jean Paul, did he tell you about our meeting this morning with Pop? A bit taken aback, because although he had of course mentioned it, the significance of what seemed to be a promotion, was inconsequential against the backdrop of the rest of the conversation that morning and mostly it had been ignored.

Jean Paul, nonplussed and assuming a stare, as was his habit in most situations where he had no intention of responding, just nodded and exhaled with a typically Gallic Pffift, sound.

There were the three of them now, each gazing at each other, but silently within the confines of their own thoughts about how best to work things to their advantage. Gamesmanship? Although not an overt strategy, it was probably at play below the surface of civility, and at this, Shakeel was at a disadvantage.

Without warning, and typical of Jean Claude’s inability to measure or distill a thought into anything but the most primal gnash or honk, he finally blurted out, I want 20%.

There was silence as Shakeel squirmed through a transient thought, his suit pants shifting upwards on his leg to expose the dark skin beneath his lowered socks.

After only a short pause, as if the comment didn’t require too much thought, Shakeel replied,

That could work, but let’s understand what it means. For example...

Before he could finish, Jean Paul who had been notably silent, started to expound in a terse flow of cutting verbiage, We know that you need cash. We can supply it. We get to keep 20% of any cash we are able to raise. Simple. We do not have deduction for cost, you pay it back or not, I don’t—I mean we —don’t care. The terms are non-negotiable.

Mostly the image of loan sharking is a comic stereotype of hard men using bad language. But in real life, they wear suits and sit at high-class hotel bars often referring to themselves as bankers and traders. They don’t use force, they use fact, and in this case the facts were clear.

The message was a sobering commentary on the state of his enterprise, and left nothing on the periphery to be mitigated by either social or ethical norms. Shakeel had been raised to understand that the face of business was only a thin veneer to the underlying scope of evil and greed, so it was not that their demands were necessarily surprising. It was only that this time he was the one on the receiving end of the blunt edge thud to submission, not some unknown quivering jerk.

Still, the loans needed to be paid. The advances from BCTI were not available any more, and the ships were mortgaged at least twice over, with a trail of double collateralization notes that any overly ambitious accountant could easily unwind if they really cared. There simply was no alternative.

Je comprends, was all he could say.

Not knowing how the physical nature of this enterprise would unfold, he also was never the type to deal with underlying details anyway. His world was made up of big picture issues, underlings were created for the purpose of sorting out the rest and he had plenty of those in the office on Rue du Purgatoire. Tomorrow he was fairly certain there would be changes, but he also, instinctively knew that within just a short span of days, he would finally be able to fund the many needy mouths, which had been clamoring for attention since early that past year.

He raised his glass, gave a modest barely audible lilt, along with a simultaneous grin, then he downed the contents like a shot of whiskey—notable to the others who watched silently with raised eyebrows and stares; Shakeel did not drink alcohol.

He motioned discreetly to the security guard at the corner of the bar as he got up from the table where he was seated with his new partners; Shakeel knew that the Porsche would be waiting out front. He made for the door thinking almost out loud how much he needed to see her now; she would be waiting for him tonight, wearing the white silk against the dark skin, against the blue eyes.

* * *

Barbara Fakhoury came from a small town in Lebanon at a time when there was virtually no opportunity for someone with ambition and beauty to be anything more than someone’s wife or sex trinket. A subservient role at best—often ending in violence, despair, or both—her world carried with it a very narrow definition of remote possibilities to the contrary.

Although it is vague as to the circumstances, which arose to upend this monotony of certainty, it was a family friend, the driver for one of Rafic Harriri’s cousins, living in Beirut at the time, who arranged for her to work in the dining room at the Banque Sud Méditerranée office in Geneva. Barbara, always a pragmatist, seemed to have found a springboard out, and regardless of what it required, underneath her beauty was also a pre-wired form of grit enabling her to make the best of even the most imperfect of situations that might work to her advantage.

Soon after she began work though, her almost toxic mix of exoticism and eroticism began to get in the way. Client lunches were more elongated. Propositions were exchanged. Rumors swirled. In short, things within the bank’s dining room, a supposedly demur facility, structured more for the purpose of closing as opposed to wavering upon deals, were ranging out of hand. This is how Guiliani, caterer to the bank, actually took charge of the situation, admittedly to his advantage, and hired her away from the bank, for the front room of his restaurant and how Bajar came upon her one day during his daily repast outside the office.

For a normally monolithic and deadpan Bajar, he found himself in the unusual situation of actually being talkative during his afternoon outings. So much so, that he almost starting viewing these outings as an increased security risk. Invariably reserved, he would at times blurt out things that would almost never have come up, for the sole purpose of impressing, Barbara.

Crazy, he would think afterwards, considering that he usually just bought, his women, never wanting to be entangled, never breaching his unwritten principal of detachment at any cost. But this time was different. His sense of possessiveness eventually took over from his usually impenetrable sense of pragmatism and he put together a well-conceived plan to have her.

On a non-descript Thursday evening in December, Bajar invited Barbara to dinner at the Hotel des Bergues, where the company rented the best suite, on a monthly basis, for the occasional guest or business associate. As it seemed they both knew, this had only been a matter of time.

They met weekly, and then at times more often for the next few months, always followed by some type of acknowledgement in the form of jewelry, or other such abstraction against the obvious point of the relationship. It wasn’t that she even paid attention to the 32-year age difference between her and Bajar. On the contrary, in her own way she even found him modestly attractive. But instinctively she knew enough to make sure that her time with him was not wasted. She viewed her assets, as would any options trader: there was a time value until expiration, which needed to be maximized.

By March of that year, Barbara was working at the head office as Bajar’s personal assistant which,