PART THREE 4 страница

I hadn’t planned any of this, of course, and as I was doing it I didn’t really believe I’d get away with it either, but the boldest stroke was yet to come. After he’d agreed to do consultancy on ‘the project’ and we’d established a few ground rules, I managed to edge the conversation back around to the loan. I told him my advance on the book had already been spent and that the 75K was a gambling debt I had to pay off – and had to pay off today.

Yeah, yeah, yeah.

This matter was now a minor distraction to Gennady. He took out his cellphone and had a quick conversation with someone in Russian. Then, still on the phone, he asked me a series of questions. What was my social security number? Driver’s licence number? What were the names of my landlord and my employer? Where did I bank and what credit cards did I hold? I took out my social security card and driver’s licence, and read out the relevant numbers. Then I gave him the names and the other stuff he wanted while he relayed the information in Russian to the person on the other end of the line.

With that taken care of, Gennady put away his phone and got back to talking about the project. Fifteen minutes later his phone rang. As before, he spoke in Russian, at one point covering the mouthpiece with his hand and whispering, ‘That OK, you cleared. So – what? Seventy-five? You sure? You want more? A hundred? ’

I paused, and then nodded yes.

When he’d finished on the phone, he said, ‘Will be ready in a half-hour. ’

Then he put the phone away and placed his hands down flat on the table.

‘OK, ’ he said, ‘so who we going to cast in this thing? ’

Half an hour later, on the nose, another young guy arrived. Gennady introduced him as Leo. He was skinny and not unlike Gennady, but he didn’t have Gennady’s eyes, didn’t have what Gennady had – looked, in fact, like he’d had whatever it was Gennady did have surgically removed. Maybe they were brothers, or cousins, and maybe – I started thinking – maybe I could make something out of this. They spoke in Russian for a moment and then Leo pulled a thick brown envelope out of his jacket pocket, put it on the table, slid out of the booth and left without saying a word. Gennady shoved the envelope in my direction.

‘This a knockdown, OK? Short term. Five repayments, five weeks, twenty-two-five a time. I come by your place each…’ He paused, and stared at the envelope for a moment. ‘… each Friday morning, start two weeks from today. ’ He held the envelope up in his left hand. ‘This no joke, Eddie – you take this now… you mine. ’ I nodded. ‘I go into other stuff? ’

I shook my head.

The other stuff being, I presumed – at the very leas t – legs, knees, arms, ribs, baseball bats, switchblades, electric cattle-prods maybe.

‘No. ’ I shook my head again. ‘It’s OK. I understand. ’

I was anxious to get away now that I had the cash, but I could hardly appear to be in too much of a hurry. It turned out, however, that Gennady himself had to go, and was already late for another appointment. We’d exchanged phone numbers, so before he left we agreed that in a week or so we’d make some arrangement to meet again. He’d check up on some stuff, and I’d work a little more on shaping – maybe even expanding – the central character of what had somehow mutated, during the course of our conversation, from a novel into a screenplay.

Gennady put on his Ray-Bans and was ready to go. But he paused, and reached over to shake my hand. He did this silently, solemnly.

Then he got up and left.

I called Klondike from the payphone in the diner. I explained the situation and they gave me the address of a bank on Third Avenue where I could deposit cash that would immediately be credited to my account.

I thanked Nestor for his help and then took a cab to Sixty-first and Third. I opened the envelope in the back of the cab and fingered the wads of hundred-dollar bills. I’d never seen this much cash before in my life and I felt dizzy just looking at it. I felt even dizzier handing it over at the bank and watching the teller count it.

After that, I took another cab back to Tenth Street and got settled down to work again. In my absence, the stocks I was holding had increased dramatically in value, bringing my base capital up to $50, 000. This meant that with Gennady’s contribution I now had almost $150, 000 at my disposal, and with only a couple of hours’ trading time left – and consequently very little time for research – I just jumped right into it, tracking valuations, schlepping stocks around, buying, selling, sprinting back and forth across the various rows of figures on the computer screens.

This process gathered considerable momentum and peaked late in the afternoon with two big scores – let’s call them Y and Z – high-risk, high-yield stocks, each on a rapid upswing. Y carried me as far as the $200, 000 mark, and Z carried me considerably beyond it, to just over a quarter of a million. It was a tense, sometimes harrowing few hours, but it gave me a real taste for the thrill of facing down the odds, and also for large quantities of adrenalin, a substance I could almost feel being secreted into, and moving through, my system – almost the way share prices themselves shifted and moved through the markets.

Despite my success rate, however, or maybe because of it, a sense of dissatisfaction began to creep over me. I had the feeling that I could be doing a lot more than just trading at home on my PC, and that being a guerrilla market-maker wasn’t going to be anywhere near enough to keep me happy. The fact is, I wanted to know what it would be like to trade from the inside, and at the highest levels… what it would be like and how it would feel to buy millions of shares at a time…

I phoned Kevin Doyle, therefore – the investment banker I’d gone for breakfast with a few Sundays before – and arranged to meet him for drinks at the Orpheus Room.

The last time we met he’d been very intent on giving me advice about setting up a portfolio of stocks, so I thought I could maybe pick his brains a little and get some tips on how to move into the big league.

Kevin didn’t recognize me at first when he arrived at the bar. He said I’d changed and was considerably slimmer than when we’d met at Herb and Jilly’s.

He wanted to know where I worked out.

I looked at him for a moment. Herb and Jilly’s? Then I realized that whoever Herb and Jilly were, it must have been at their place on the Upper West Side that I’d ended up that night.

‘I don’t work out, ’ I said. ‘Working out is the new lunch, it’s for wimps. ’

He laughed, and then ordered an Absolut on the rocks.

Kevin Doyle was around forty, forty-two, and fairly trim himself. He was wearing a charcoal suit and a red silk tie. I couldn’t remember much of what I’d told him at Herb and Jilly’s, or afterwards in that diner on Amsterdam Avenue, but one thing I did remember clearly was that I’d done most of the talking, and Kevin – apart from trying to turn me on to some stock tips – had hung on my every word. It’d been that thing again, that wanting-to-impress-me, wanting-to-be-my-best-friend thing that I’d had with Paul Baxter and Artie Meltzer. I tried to analyse what this was, and could only conclude that maybe a combination of my being enthusiastic and non-judgemental – noncompetitive – might have struck some kind of a chord in people, especially in people who were stressed out and on their guard all the time. At any rate, these days I had the talking thing a bit more under control, so I decided to let Kevin take the lead. I asked him about Van Loon and Associates.

‘We’re a small investment bank, ’ he began, ‘about two hundred and fifty employees. We do venture capital, fund management, real estate, that kind of thing. We’ve brokered some fairly big entertainment deals recently. We did the MCL-Parnassus purchase of Cableplex last year, and Carl Van Loon himself is currently in talks about something else to Hank Atwood, the Chairman of MCL. ’ He paused, and then added, as though telling me he’d just been picked for the soccer team, ‘I’m a managing director. ’

But when he elaborated on this a bit, explaining that he was one of seven or eight managing directors in the company who babysat their own deals and then came out with huge commissions, I realized for the first time that Kevin wasn’t just some Wall Street schmoe. From what he was telling me, I quickly reckoned that he probably cleared about two or three million a year.

Now I was impressed.

‘What about Van Loon? Is he…’ I asked, not even having a real question here, obviously succumbing a little to the magnetic pull of celebrity that still surrounded Kevin’s boss.

‘Carl’s all right. He’s mellowed a lot, you know. Over the years. But he still works as hard as ever. ’

I nodded, thinking How hard could that be?

‘The firm wouldn’t be what it is today without him. ’

This was a man who probably cleared about two or three million a week.

‘Hhn. ’

‘So… how have you been? ’

‘Me? Fine. ’

I didn’t remember much of our previous encounter, but I was pretty sure I’d mentioned my book, and probably without saying that it was part of a cheesy series for a second-rate publisher – so, at least as far as I knew, Kevin thought I was a writer of some kind, a commentator, someone with their finger, so to speak, on the pulse of the Zeitgeist … someone he could have an intelligent, self-congratulatory but non-threatening conversation with, and about stuff like the new economy and megatrends and digitalization.

But I got to the point fairly fast.

‘What do you make of all this electronic day-trading, Kevin? ’

He thought for a second. ‘It’s just noise. These guys aren’t speculators, or even investors, they’re gamblers – or else sorry geeks who think they’ve democtratized the markets. ’ He made a face. ‘When this bubble pops, let me tell you, there’s going to be a lot of blood spattered on the walls. ’

He took a sip from his drink.

I lifted my glass. ‘I’ve been doing it at home on my PC, using a software trading package I bought on Forty-seventh Street. I’m up about a quarter of a million in two days. ’

Kevin looked at me in horror for a few seconds, taking in the information. But he was also confused, and obviously didn’t know what to say. Then it registered.

‘A quarter of a million? ’

‘Hmm. ’

‘In two days? That’s pretty good. ’

‘Yeah, I think so. But I find I’m weirdly – how can I put this? – dissatisfied with it. I feel constricted. I need to expand. ’

As he tried to come to terms with what I was telling him, Kevin shifted on his stool and maybe even squirmed a little. He was a confident guy, clearly very successful, and it was odd to see him mired in uncertainty like this.

‘Ehm… perhaps…’ he scratched his nose, ‘you could… why don’t you try one of those day-trading firms? ’

I asked him what difference that would make.

‘Well, you’re not isolated, you’re in a room with a bunch of other traders and on the principle that no one in an environment like that wants to see anyone else failing, you help each other out, and share information. Most firms also offer high leverage, anywhere between five to ten times your deposit. You get a better feel for the behaviour of the markets, as well, ’ – he was getting back into his stride here – ‘because it’s often just a question of being able to gauge the collective mood, and then deciding either to go with it or… I don’t know’ – he shrugged his shoulders – ‘against it. ’

I asked him if he could recommend one of these places.

‘There are a couple of good ones I’ve heard about – actually on, or at least around, Wall Street itself. Though if you ask me, Eddie, it sounds like you’re doing pretty good on your own. ’

I wrote down the names he reeled off and thanked him anyway. Then we each took sips from our respective glasses.

‘So… a quarter of a million in two days. ’ He whistled in admiration. ‘What’s your strategy? ’

I was about to give him an edited version of events when two guys in suits came up behind us and one of them slapped Kevin on the back. ‘Hey Doyle, you old dog, what’s happening? ’

These were money-scented financial-sector jocks, and when Kevin introduced me but didn’t say that I was a managing director or an executive vice-president with this or that outfit, they more or less ignored me. During the ensuing conversation about the emerging markets of Latin America, and then about the tech stocks bubble, I could see Kevin struggling with his fear that I was going to start talking again about day-trading on a PC – and in front of these guys. So when I stood up to go, I think he was a little relieved.

I told him I’d phone him in a few days’ time and let him know how I’d gotten on with that thing we’d been discussing.

Lafayette Trading was on Broad Street, just a few blocks down from the New York Stock Exchange. In the main room of a sparsely furnished suite of offices on the fourth floor, twenty tables were arranged in a large rectangle. Each table held enough terminals and PCs for at least three traders, and of the fifty or so traders I saw there on my first morning – all male, each seated in comfortable executive-style chairs – I’d say more than half of them were under thirty years old, and of those about half again were wearing jeans and baseball caps.

The deal was that you put down a minimum deposit of $25, 000 and Lafayette then provided all the hardware and software you needed in order to trade. In return for this, they charged a commission of two cents a share on each trade you made. If you wanted it, and most people did, they also offered pretty high leverage on your deposit. I registered with them, paying a deposit of $200, 000 and then arranged to leverage myself to two and a half times that amount – which meant, effectively, that I was starting off this new phase of my trading career with half a million dollars at my disposal.

I had to do a short induction course in the morning. Then I spent most of the early afternoon chatting to some of the other traders and more or less observing the room. The atmosphere at Lafayette was – as Kevin had said it might be in such a place – friendly and collaborative. There was a sense of us all being in this together, of us all working against the big marketmakers down the street. But it didn’t take long to see that there were factions in the room, and some big personalities, and that the dynamics weren’t always going to be so easy to read. There were different trading styles, as well, of course. The guy to my left, for example, was a manic keyboard-crusher who didn’t seem to do any research or analysis.

‘What’s that stock? ’ I asked him, pointing to a symbol on his screen soon after I’d sat down.

‘No idea, ’ he mumbled, not taking his eyes off what he was doing, ‘it has a big spread and it’s moving, and that’s all I need to know. ’

Other traders seemed more cautious and did quite a lot of research – by watching the TV sets bolted to the side-wall, or by running from their tables to a Bloomberg terminal at the top of the room, or just by poring over endless stock graphs on their own screens. In any case, when I felt I had the measure of the room, and its mood, I went to work at my allotted table-space, looking for some likely trades myself. But as it was my first day I took it fairly easy and when I closed out my positions before the final bell I was only about $5, 000 up. Given my admittedly short track record, this didn’t seem like all that much to me, but some of the other traders didn’t agree. Clearly, as the new kid on the block, I had already aroused a certain amount of curiosity, not to say suspicion, in the room. Someone asked me rather tentatively if I wanted to join a group of them who were going for a drink to some place down at Pier 17 Pavilion, but I declined. I didn’t want to form any new alliances just yet.

It had been a relatively slow day for me – at least in terms of mental activity and the amount of work I’d done – so when I got home I was feeling pretty restless, even a little frenzied. Unable to sleep that night, I stayed on the couch in the living-room, watching TV and reading. Against a background of cable movies, quiz shows and commercials, I ploughed through the financial sections of the day’s papers, a biography of Warren Buffet and all the text, captions, advertising copy, mastheads and photo credits of half a dozen glossy business magazines.

On my second morning at Lafayette, a Tuesday, I spent a good deal of time nosing around the various financial websites. I eventually opened up more than a dozen major positions, eighty thousand shares in total, and then concentrated on tracking them carefully.

At about eleven-thirty, there was a slight commotion to my left. A few tables up, three of the guys in baseball caps, who appeared to be working very closely together, started punching the air and hissing yessss to each other. It took another few minutes for the ‘tip’ to filter down. The keyboard-cruncher beside me, whose name was Jay, pulled himself away from his screen for a brief moment and turned to face me.

‘Think something’s just come through on the wire about some biotech stock. ’

He shrugged his shoulders and then went back to work, but the guy beside him wheeled his chair around and spoke to me as though we’d known each other since high school.

‘Medical breakthrough, hasn’t been announced yet. MEDX – that’s Mediflux Inc., a Florida drug company, yeah? – seems they’ve got some anti-cancer protein in development. It’s got the white-coats over at the National Cancer Research Foundation all excited. ’

‘And? ’

He looked at me as if to say, What – are you a moron? Then, pausing uncertainly, he said, ‘Buy Mediflux! ’

I could see that Jay, the guy beside me, was already doing just that. I nodded at the other guy and then went back to my screen to see what information might be available about this pharmaceutical company – Mediflux Inc. It was currently selling at 43& #8531;, having moved up from an opening price of 37& #190;. Everyone was assuming it was going to continue this upward trend, and everyone – at least everyone in the room around me – seemed to be buying Mediflux on that basis. I spent a while looking at its fundamentals – historical earnings, growth potential, that kind of thing – and at one point during this Jay nudged me and said, ‘How much did you buy? ’

I looked at him and paused, quickly reviewing in my head everything I’d just read about Mediflux.

‘I didn’t buy any, ’ I said. ‘In fact, I’m going to sell it short. ’

This meant that, contrary to the prevailing wisdom in the room, I expected the Mediflux share price to fall. While they were all busy buying it, I would borrow Mediflux stock from my broker. I would then sell it, having committed to buying it back later at what I hoped would be a considerably lower price. The lower the price, of course, the greater the profit for me.

‘You’re going to short it? ’

He said this quite loudly, and as the word short darted its way around the tables like an acute pain along a sciatic nerve, you could almost feel the whole room stiffen. There was a brief silence and then everyone started talking at the same time and checking their screens and looking across at my table. Over the next couple of minutes the tension in the room increased as the original Mediflux faction regrouped and began hurling comments in my direction.

‘Feel sorry for you, buddy. ’

‘Margin call! ’

‘Loser! ’

I ignored these taunts and got on with executing my short-sell strategy on Mediflux, as well as looking after my other positions. For the next while the Mediflux share price continued to rise, reaching 51 points, but then it seemed to stabilize. Jay nudged me again and shrugged his shoulders as if to say, Talk to me, why did you short it?

‘Because it’s all hype, ’ I said. ‘What – a couple of mice with cancer in some laboratory somewhere sit up in bed and ask for tea and suddenly we’re all into a buying frenzy? ’ I shook my head. ‘And when is this new protein they’re developing going to have a commercial application anyway? Five years? Ten years? ’

Jay looked worried all of a sudden and seemed to recoil into himself.

‘Besides, ’ I said, pointing at my screen, ‘Eiben-Chemcorp pulled out of a takeover deal of Mediflux about six months ago, and it was never properly explained – doesn’t anyone want to remember that? ’

I could see him rapidly processing the information.

‘This does not have legs, Jay. ’

He turned to the other guy beside him and started whispering. Soon – as my analysis made its way around to all of the other traders – dark clouds of uncertainty descended on the room.

From the babble of muttering and clicking that ensued, it was obvious that two camps were emerging – some of the traders were going to hold on to their stock, while others were going to join me in shorting Mediflux. Jay, and the guy beside him, reversed their positions. The baseball caps held fast to theirs, but refrained from making any comments about it – not aloud, at any rate. I remained huddled over my terminal, keeping a low profile, even though the atmosphere was electric, with a definite sense that in the ecosystem of the room I was an interloper who was making some kind of a bid for power. I hadn’t intended it that way, of course, but the thing is, I was convinced that MEDX was a turkey – and so it was to prove.

Late in the afternoon, just as I had predicted, the stock collapsed. It started slipping at about 3. 15 p. m., much to the consternation of about two thirds of the traders in the room. MEDX closed at 17& #189; points, a drop of 36& #189; points from its high, earlier in the day, of 54.

At the closing bell, a cheer went up from a small group sitting at the table directly opposite me. They came over afterwards to introduce themselves – and I realized that with them, Jay, the guy beside him, and one or two others, I had formed my own crew. It wasn’t only because they were happy to have taken the tip from me, but it was also, I think, because of what they saw as the sheer, ballsy scale of my own trade. I had shorted 5, 000 MEDX shares and come away with over $180, 000. This was more in one trade than most of them could hope to make in a year, and they loved it – loved the sanction it gave to risk, loved how it confirmed that scoring big was possible.

One of the three baseball caps nodded at me from across the room, a gesture that I think was meant to indicate he was conceding defeat, but then he left quickly with the other two and I didn’t get a chance to say to him – magnanimously, or, perhaps, patronizingly – that hey, they had come up with the stock in the first place. I still refused to go for a drink with anyone, but I did stick around for ages, chatting and trying to find out as much as I could about how day-trading firms like this one operated.

On my third morning at Lafayette I was the centre of attention. But I was also, undeniably, on trial. Was I a one-hit wonder – I’m sure they were all thinking – or did I actually know what the fuck I was doing?

As it turned out my period of probation only lasted a few hours. A position with a data-storage company, JKLS – not unlike the one of the previous day – soon presented itself, and I whispered to Jay that I was about to initiate coverage of the stock at its current price with an immediate short-sell. Jay, who had quietly assumed the role of my underboss, passed on this information to the next table up, and within less than a minute it seemed that the whole room was shorting JKLS. During the course of the morning, I fed out a few other tips that some people, but certainly not everyone, picked up on. Early in the afternoon, however, when the JKLS price began falling rapidly, and a cheer went up, a quick review of my other tips took place, and the doubters joined in.

By the closing bell at four o’clock, it was my room.

Over the next couple of days, the trading ‘pit’ at Lafayette was packed to capacity – with all of the regulars in attendance, as well as quite a few new faces. I stuck to my short-selling strategy and led an onslaught against a whole series of overhyped and overvalued stocks. My instinct for identifying these stocks appeared to be unerring and it was thrilling to watch them all behave exactly as I had predicted. In turn, people were watching me very closely and naturally wanted to know how I was doing it, but since these same people were also making a lot of money from my recommendations, no one had the temerity to come out straight and simply ask me. Which was just as well, because I wouldn’t really have had an answer.

It did seem to me to be instinct, though – but informed instinct, instinct based on a huge amount of research, which of course, thanks to MDT-48, was conducted more rapidly and comprehensively than anyone at Lafayette would ever realize.

But that also wasn’t enough to explain it – because there were plenty of well-resourced, well-financed research departments around, from the windowless backrooms of investment banks and brokerage houses throughout the country, stuffed full of pale, nameless ‘quants’ number-crunching till dawn, to places stuffed full of Nobel-prize winning mathematicians and economists, places like the Santa Fe Institute and MIT. For an individual, I was processing a huge amount of information – it was true – but I still couldn’t compete with outfits like those.

So what was it?

After the first day of my second week at Lafayette, I tried to evaluate the various possibilities – maybe it was superior information, or heightened instinct, or brain chemistry, or some kind of mysterious synergy between the organic and the technological – but as I sat there at my table, staring vacantly at the screen, these ruminations slowly coalesced into an overwhelming vision of the vastness and beauty of the stock market itself. Grappling for understanding, I soon realized that despite its susceptibility to predictable metaphor – it was an ocean, a celestial firmament, a numerical representation of the will of God – the stock market was nevertheless something more than just a market for stocks. In its complexity and ceaseless motion the twenty-four-hour global network of trading systems was nothing less than a template for human consciousness, with the electronic marketplace perhaps forming humanity’s first tentative version of a collective nervous system, a global brain. Moreover, whatever interactive combination of wires and microchips and circuits and cells and receptors and synapses was required to achieve this grand convergence of band-width and brain-tissue, it seemed to me in that moment that I had tumbled upon it – I was jacked in and booted up… my mind was a living fractal, a mirrored part of the greater functioning whole.

I was also aware – not to lose the run of myself here – that whenever an individual is on the receiving end of a revelation like this, addressed to himself alone (and written out, say, on the night sky, as Nathaniel Hawthorne would have it), the revelation can only be the result of a morbid and disordered state of mind, but surely this was somehow different, surely this was empirical, demonstrable – after all, at the end of my sixth day of trading at Lafayette, I had an unbroken chain of winners and over a million dollars in my brokerage account.

That evening I went for a drink with Jay and a few of the others to a place on Fulton Street. After my third beer and half a dozen cigarettes, not to mention a torrent of day-trading lore from my new colleagues, I resolved to set a few things in train – changes that I felt it was now time to make. I resolved to put a deposit down on an apartment – somewhere bigger than my place on Tenth Street, and in a different part of town, maybe Gramercy Park, or even Brooklyn Heights. I also resolved to throw out all my old clothes and furniture and accumulated stuff, and only replace what I absolutely needed. Most important, however, I resolved to move on from day-trading and into a wider playing field, to move up to money management maybe, or hedge funds or global markets.

I’d only been trading for little over a week, so naturally I didn’t have much idea about how I was going to pull something like this off, but when I got back to my apartment, as though on cue, there was a message from Kevin Doyle on my answering machine.

Click.

Beeep.

‘Hi Eddie, Kevin – what is all this stuff I’ve been hearing? Call me. ’

Without even taking my jacket off, I picked up the phone and dialled his number.

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