Last National Bank of Boot Hill,
Moorgate, London EC2
I have to keep a straight face when Holey Buckett comes barreling into my office first thing Monday morning, well, first thing for Holey, and tells me: OK, Herbie, I resign, it is like they say in my regiment, better to fall on your sword than sit back on your bayonet.
This has to be the ultimate shock bulletin from Hillboot Intergalactic, which Holey runs until now, setting out on his lonely path armed only with a fat incentive package and a massive overhead and a mission statement setting out to be among the world's top ten investment banks.
Over the years our mission gets held up, we have this trouble with Blue Boomerang when most of our guys finish up in the dock, and their lawyer with them, but we keep on pouring money into Intergalactic and sometimes it seems to respond, until three days after we post our last year's numbers Holey comes up to me and says he has a problem.
Nothing serious, he says, it is one of our traders on the options desk, who moves out the other day to join Bear Essentials on the promise of an even bigger bonus, and the guy who takes over his books cannot make them add up, which is strange, because this trader brings a lot of business to us, tho' you never think so just to look at him, a runt of a Greek called Danaos Donaferentes.
Holey, I say, get the bean counters in quickly, and have someone check El Greco's desk for drawers, I never like it when traders take off and leave unfinished business behind them, the last time I hear of this happening it rings an alarm bell loud enough to wake up the Barings, tho' not soon enough.
Sure enough the bean counters come back and say there are not enough beans to go round, they figure this Donaferentes gets his smile the wrong way up, which is an occupational disease of options traders and causes them to buckle when they need to swash, thus creating a hole and the beans disappear down it, so we maybe need to say goodbye to fifty big ones.
Mom, I can brain Holey if I figure it is worth the effort, three days earlier I can bury all this in the rest of the numbers and no one need notice, as it is we must publish a statement, and say we are conducting an inquiry, and get the blatts around our necks and the stockholders and the supervisers, this I need like a posting to Canary Wharf.
Well, out we come with our hands up, and back comes a blast from head office, signed Harvey Q. Schicklgruber III.V, executive vice president for strategy and tactics, he wishes to know what an option is, and is it some kind of derivative, which makes it as safe as a black mamba, or so he hears at the Rotary Club, and what is a nice bank like ours doing in a business like this?
Of course we all know what Harvey's own strategy is, and his tactics are not to forget the birthday of our president, old Mr Schicklgruber, or not while the old coot keeps having them, so I just explain how options are quite safe in the right hands, and surely he has quite a few himself, in the Last National's stock?
What I do not tell Harvey is what my bones tell me, I figure Donaferentes for a classic case of TIDS Syndrome, this overtakes traders who bet the wrong way, they cover up and double up and hope to keep their job safe and the bonuses coming, and the symptoms are Tickets in Drawer.
Meanwhile Holey is flapping, his organization chart stacks up his managers on one another's backs like fleas, above Donaferentes comes a team coach and a head swapper and a risk management supremo and an interest rater in chief and a derivative director, and all these guys are on bonuses too, so they may not all of them be watching the tickets too closely.
Holey suspends so many of them that the others spend their time in meetings, which are a big deal at Intergalactic, so nobody is left to mind the shop or tout for orders, and business there falls off a cliff so fast that the next numbers are bound to be terrible, even if anybody believes them.
Then our fax machine turns incandescent and it is Harvey again, he says sure he has stock options but they are so far underwater he can see right in thru the Titanic's portholes, which are down there with the stock price, and this is because the market does not rate investment banking, and when Harvey asks who does not rate it, the investment bankers tell him: We don't.
Tucked away in their back rooms in outfits like Holey's, their analysts now figure out that investment banking is a no-no, at least for the owners, who get to bear the costs and pay the earnings out in bonuses and keep the losses, and if this is as good as it gets at the top of a multi-year runaway bull market, what happens to it when normal service resumes?
By this time the blatts start marrying us off to Barclays, or Citi, or some sort of thrift or insurer or usurer, they even suggest that lending money is a safer business to be in, now when that kind of notion gets around the market you can hear the bell ring.
Maybe Holey hears it, which is why he insists on his act of self-sacrifice, Herbie, he says, my desk is as clear as my conscience, but the responsibility is mine, and the time comes when a chap must do the decent thing, whatever it may cost him, provided that a proper supplement comes with it.
Me, I am not sure of Holey's saintly motives, I figure he wants to have his seven figure payoff in his pocket before he strolls down Bishopsgate to apply for the top job at NatWest Markets, which becomes vacant in oddly similar circumstances, except the guy from the parent bank has to move in himself and tidy up the mess.