Greenwich, CT; April 2014
The screen had gone all red, and the market was nearly closed. Gatik “Grant” Chandresan
pulled the earbuds out of his ears and threw them to the side of his keyboard, madly slamming
the keys, trying to close out his positions before the hedge fund he worked for, Phoenix
Investments, Ltd. (“PIL”) lost another $150,000 like they had the day before. And the day before
that. Dammit. I hate getting destroyed like this every day!
Chandresan was a quantitative prodigy, a double major in math and electrical engineering who had graduated cum laude from Cornell. He had done what all science majors did upon graduation: he went to work on Wall Street, where he could be assured of making a fortune in less than ten years. Or so he had been told. His parents had not approved. His father, a civil engineer in New Jersey, had been particularly disappointed. “Gatik, you have this knowledge to make something useful, not play in a casino.” Grant had assured his father that the money he would make for investors would be reinvested, and thus make things of substance. In fact, without profit, he had told his dad, buildings, roads, bridges and cars that everyone used every day could not be created. He did not tell his father to get with the 21st century, although he thought it. His father and mother were quite traditional: work hard; get a good education; marry a nice Indian girl and have a big family; be a loyal employee to the same employer your whole career and save your money.
The last six months Grant had been wishing he had listened to his father. PIL was getting crushed in the market every day. Jerry Andrews’ (PIL’s Chief Investment Officer) bets had been wrong. True, Grant couldn’t see the overall picture, but he couldn’t imagine how a firm the size of Phoenix, even with its rumored balance sheet, could withstand the constant drain. The market took a slight downturn just before the close, saving a few thousand dollars from Grant’s trades. Grant rubbed his face and ran his fingers through his hair. He had to talk to Jerry, no matter what. He stood up from his seat at the end of the trading desk and looked out over the trading floor. He could always tell when it had been a bad day: everyone was quickly but silently standing, packing up their desks, grabbing coats and heading for the exit. Twenty traders covering eighteen different market sectors, and no one was saying a word. Except the commodities guy in the corner. He had made money today. He was still sitting at his desk, talking loudly on the phone and waving goodbye to his assistant. The PIL trading floor was becoming a fucking tomb. And no one wanted to stay in the tomb.
Grant felt he had to talk to Andrews directly. No talking to the floor manager, an empty suit who had been the third in Grant’s short career at PIL. He mustered his courage and walked the stairs up to the third floor, where management sat. Andrews’s office door was closed and Chandresan approached Jerry’s assistant to ask permission to see him. Andrews was always good at hiring talent, be it professionals on the trading desks or assistants. The professionals were easy: Andrews hired top talent who were two to three years out of school working for competitors, and he offered far more than the Goldmans, Morgans or JPMs could offer. This ensured the professionals knew the basics of the business but were not yet promoted high enough 5 to make leaving their old firm a difficult decision. Thing was, once they were here, the smart kids had very little discretion to trade. Andrews held the reins, tightly.
Hiring assistants required a different strategy. Andrews was like any other testosteronefueled BSD (“big swinging dick”) on Wall Street: he wanted to look at an absolute hottie if he was going to be forced to look at the same person every day until he fired them. Problem was, you couldn’t just go to a strip club and hire off the stage. If he could, Jerry Andrews would have. Everyone understood that. No, the woman had to have some skills: computer, phone, interpersonal. And, unfortunately for Andrews, these skills required a modicum of intelligence. Luckily for Jerry he had at his disposal a key ingredient in the fight for that oh-so-scarce resource of a smoking hot assistant with brains: money. Andrews could essentially throw more money at intelligent yet buxom, personable yet athletic, calculating yet long-legged, wise yet young women than most other places on the Street. And he did so with abandon. Exhibit A: Courtney Raich, Jerry Andrews’s personal assistant. She was, without doubt, the most stunningly attractive woman in the office. Brown, shoulder length hair framed her almond-shaped eyes set above a graceful nose and small mouth containing a perfect set of bright white teeth. Her skin was light brown, the result of an Asian mother and American father of English descent. And despite this ethnic background which guaranteed a bird-like bone structure and kiwi-sized breasts, medical science had kindly offered Courtney the best of both worlds: a lithe, athletic body with saline-breast implants which despite their perfect roundness and unlikely size still made people who couldn’t study her longer than a minute wonder if they were real or fake. Grant just wished he could see her walk away from his desk every day, as Andrews no-doubt appreciated. Lucky bastard.
“Hi, Grant,” Courtney smiled her easy smile as he approached, breaking off her conversation with one of the security guards who constantly patrolled the building. The man nodded at Grant and walked away.
“Hey Courtney. Is he available for a minute?”
“I’ll check.” She picked up the phone and after a little back and forth, sent Grant in. He knocked lightly and then walked in.
Andrews was behind his desk, a mammoth two-toned glass and steel console that looked like the command center on the Starship Enterprise. Andrews leaned back in his black, ribbedleather executive chair. “Hey, dude,” he said. Andrews called all the traders dude (when he wasn’t calling them fuckhead).
“You mean down? Did you look at the accounts today? We’re getting killed.”
“Grant, what have I told you?” Andrews began patiently. “This business is cyclic. You’re gonna go through periods where you just have to white knuckle it. Just hang on and you will ride the car back up.”
“Jerry, how much more can we bear? We started putting our short positions on over a year ago. Now that they’re all in place, the market’s done nothing but go up. It’s a fucking 6 holocaust on our floor.” Traders had vivid, if exaggerated, descriptions for what happened on the Street.
“How much more can we take?” Andrews answered rhetorically. “A lot more! Because this market’s a head fake. It’s bullshit. It’s completely torn away from the fundamentals. Eventually reality is gonna catch up and these guys who are buying now will run for the exits.”
Chandresan didn’t share Jerry’s assessment of the macro-economic environment, but what did he know? He was a quant guy, looking down the narrow kaleidoscope of his trades tumbling in the large cap market. Chandresan shook his head. “The positions are so big. Our interest payments have to be huge.”
Grant. Do you see the whole balance sheet?”
“Do you know what our other investments make us?”
“Well . . . no.”
“How many companies make up Phoenix Holdings?” Andrews continued, trying not to be condescending. Oh, man, here we go, thought Grant. “Three: Blackmarche, Ventures and PIL,” he answered, using the shortened names for each.
“How much did Blackmarche and Ventures make last year?” Andrews asked.
“I don’t know, Jerry,” Grant answer, going down a well-trod conversational path.
“And that’s because?”
“I work for PIL,” the young man said.
“Did you make or lose money on your desk last year?” Jerry continued.
“And yet despite that loss, what was your bonus last year?”
“Two hundred and forty-three thousand, five hundred dollars,” he replied automatically.
“What if I told you, if everything turns out the way it’s looking right now, you’re gonna make three times that by this time next year?”
Grant picked his head up and stared at Andrews. “I’d say you’re fucking with me.”
“Grant, I think I told you when I hired you that when it comes to money I will never fuck with you. Let me make it clear: I am NOT fucking with you. So here’s what I want you to do: I want you to go get your crap from your desk. On your way home buy a $300 bottle of red wine. Then I want you to hire a Beyonce-look-alike hooker to impale herself on your cock. Come back tomorrow with that tension relieved and do your fucking job. Do you get me?”
Grant smiled and stood. “I get you, boss.”
“Good. Now get the fuck out of here. And don’t even think of ogling Courtney on your way out. We don’t need another sexual harassment lawsuit.”
As Chandresan left his office and closed the door, Andrews tapped on his computer and brought up the day’s results, then imported them into the year’s results. Bad day. Bad year. He clicked over to the ledger for PIL’s High Frequency Trading platform, and was pleased to find a tidy profit. HFT had been the savior of Phoenix’s hedge fund for the past year. Computers located in a non-descript, secure “server farm” in Northern New Jersey scoured the markets for large trade requests, then raced ahead of the customers’ orders to their brokers to the many exchanges where the trades would be fulfilled a piece at a time. Phoenix’s computers bought the same stock for fractions of a cent more than the order, then offered them to the buyer it had identified just microseconds before. Sometimes Phoenix would make only thousandths of a cent per share in profit, but magnified by millions of shares and thousands of trades, this added up to many millions per month.
Problem was, even that profit wasn’t enough to fully subsidize the losses the hedge fund was incurring every day to keep its short positions open. And Phoenix Ventures’ other companies were making a profit, but not enough to cover PIL’s losses. The kid was right, Andrews thought, unworried. If something didn’t happen soon, PIL was fucked. But something would happen.
In flight over the Atlantic Ocean; May 2014
Undercover work was a pain in the ass, long term undercover assignments even more so. Away from your family, limited contact with anyone from your real life, having to play the part of a person you despise. This is what Chuck Engler usually told friends who asked, but the two guys in the plane with him were so enraptured about it he didn't want to burst their bubble.
He was in the right hand rear passenger seat of a Hawker Beechcraft King Air 350, a turbo-prop that could normally accommodate 11 passengers but today had just three: Engler, and the two sycophants whom he had met in his latest job. One of his companions was Bud Shawcross, second in command at Blackmarche Corporate Security (“BCS”), the security division of Phoenix Holdings, an investment firm. The other was Louie Smysak, Shawcross's lackey. Both were former military. Since Chuck had arrived at Phoenix a year and a half ago, these two were enamored with Engler and his stories from his days at the FBI.
"That double income must be good, though, huh?" asked Shawcross, who was piloting the plane. Smysak was sitting to Engler's left, just behind the pilot's seat. They were headed to an offshore warehouse that one of BCS’s client’s owned. All Chuck had seen for the past half hour was the blue Atlantic. It was a clear day and Engler could see several small islands in the distance.
"How do you mean?" Engler asked.
"Well, the FBI's paying you?" Shawcross responded.
"And then the company you're working at undercover is paying you too, right? I mean, you can't just get hired as an employee and not take a paycheck, right?"
"The Bureau doesn't let you keep the second salary. The checking account in the cover name is blocked. Requires a supervisor to approve withdrawals for greater than a certain amount. But all of your expenses are covered. Rent, car, gas, groceries."
"Damn. That blows," Smysak brilliantly observed. A lull in the conversation followed.
Shawcross filled the void: "We're coming up to the facility in about ten minutes."
This was useless information to Engler. They didn't have anything to prepare. They were making a pick up. He wondered why Shawcross even bothered to tell them.
The plane banked suddenly right, throwing Engler at the door, which was thankfully securely latched. He caught himself with his outstretched right arm and realized what was happening. Shawcross and Smysak had made a mistake. They assumed Engler wouldn't be able 9 to see Smysak pull his weapon and point it at Engler, but when the plane banked, the window darkened when the ocean view filled the pane and Engler saw the fleeting reflection of Smysak's right arm whipping toward him with a big, black, funky handgun in his hand.
Engler caught Smysak's arm with his left hand, rotating it quickly around Smysak's bicep and tricep, pulling Louie toward him while simultaneously locking the elbow and using the arm as a lever to push the barrel past Chuck’s back and steady himself.
Smysak's weapon went off, but instead of the deafening report that Engler would have expected from a normal firearm, there was a sputter of a silenced weapon. Engler grabbed at his ankle, which was where he kept his piece. He was not permitted to carry his personal Sig-7 in the shoulder holster at Blackmarche, but old habits die hard and Engler always kept a backup he hadn’t told them about. Smysak saw this and began kicking at Engler's legs, making reaching for the gun impossible.
Shawcross had been looking back. He righted the aircraft while reaching for his own weapon. Chuck twisted Smysak's arm quickly. There was a loud crunch as the lackey's arm popped out of the shoulder. Louie roared in pain and his gun dropped to the floor. Engler released Smysak's arm, grabbed him by the collar and pulled him between himself and Shawcross.
Shawcross had his weapon out and fired blindly, hitting Smysak several times. Engler reached for his ankle revolver. One of Shawcross’s rounds shattered a window behind him. The plane didn’t fly high enough to need much pressurization, so nothing got sucked out, but cold air whipped around the cabin. Engler’s hand, closed tightly on Louie’s left shoulder, was grazed by one of Shawcross's rounds. Undeterred, he continued using the now-dead Smysak as a shield, aimed over the man's right shoulder and fired into Shawcross's head.
The cabin filled with a puff of blood, whipped around by the wind inside the cabin. The windscreen was splattered with Shawcross's blood and brain material. Bud fell forward on the controls and the plane began a nose dive. As the Atlantic quickly approached, Engler realized that it might have been better not to kill the pilot.
The Long Squeeze
Please enjoy the first two chapters of my next novel, The Long Squeeze,
which was released July 11, 2015.