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JJ Ingersoll, our head of global focus, has just had a wonderful idea. Our chairman came down and made him a huge bet that he couldn’t think of a trade that would return the firm to profitability in the second quarter. What a bet! He chose the right person. JJ is no shoeshine-boy from the Midwest. The great JJ spat on his shoe, twanged a brace, then got out his dick and swung it. Eighteen, maybe 19 seconds later, JJ said, “Heh, maybe we should sponsor a contest.” Even I thought this a bit wild. But JJ continued as if thinking on the spot and not knowing what would come out next. “… Yes, a Eurovision Bond Contest. All the nations of Europe will put forward their best Eurobonds, singing on air.” The floor eagerly listened to what 24 years of global focus could bring to bear on an insoluble problem like the firm’s second quarter profits. The younger traders went crazy. YEHHH, A CONTEST they were shouting. BUT WHAT’S THE PRIZE MAN? MAN, LIKE, YEHHH, WHAT’S THE WINNER’S REMUNERATION? JJ looked into the eye of the needle – the trading floor. “The winner,” he began, “will effortlessly qualify for European monetary union even if its budget deficit exceeds 3% of GDP.” When I point out France can’t lose, Jacques Chirac (no relation) our global head of bond couture, scowls at me. We begin faxing national treasuries to send us the best Euro they have. So here we are in Dublin. Seventy television channels are tuned in live. The bonds are resting in their specially prepared pods ready for launching out of nearby windows. And our host, the ever-affable René Karkrazy, is getting ready for his big entrance, in a huge blue Cadillac convertible with a random circle of 12 or so yellow stars on the bonnet, and a spare Ecu convertible in the boot in case he breaks down. Then he’s out, tightening – despite the advice of his lead-managers – his trousers. “Dames et Herren, basis points und fixed price re-offers, welcome to this the first Eurovision Bond Contest. Our contestants have travelled far. Some have issued wide. But all will be judged on their aftermarket performance by a selection of banks, all of which have committed to make markets in each of the issues for at least a month after they are free to trade.” APPLAUSE. Rapture. No one can believe the banks will make markets for at least a month! Then, silence, because behind René a huge scoreboard descends, displaying a map of Europe and a graph ranging from three to 60, with many countries, especially Belgium and Italy going off the scale. As is customary, France goes first, with its latest hearthrob, Jean-Luc Cades, who wanders onto the stage bristling with designer stubble, looking like he’s on more welfare than the country can afford. The music begins, a doleful number, “Je t’adore le Crédit Foncier. C’est triste, c’est triste. Mais je deteste le Moody’s and aussi le Standard & Poor’s. Downgradez votre mothers …” The audience love it. There’s even a young girl in the front row holding a sign saying, “I’ll participate in your syndicated loan too”, and throwing her commitment fee onto the stage. René rushes on before there’s a teen riot. He’s followed by Italy. And that means Vincenzo La Doria emerging stage east, and singing the House of the Rising Sun, flanked by two dancing sumo wrestlers, and paper which is yen denominated falling over the audience like confetti, seasoned with sake just as the Nippon postal fund likes it. Next, the ever popular Swedish entry gets into its swing with its riveting and catchy chorus, “More, more, more”, followed by a verse which goes, “More, more, more”, and then repeats the chorus twice until the arbitrage and the league-table position just isn’t there anymore. For their finale a viking longship sails across the stage and a Japanese securities house is ceremonially raped and pillaged in the name of sub-Libor funding. The ever plucky Belgians are next with a rasping number called Launched in Luxembourg Time. “Double taxation treaties – I’ve seen a few…But over here, who really needs them…” and as the audience starts to sway the crescendo rolls in to great acclaim, “I Dentist My Way.” Blowout. Finland’s representative Kari Kantilau sings a touching love song, “Morag Stanley”, about an investment bank lead-managing an issue amid a chaos of fjords and ice maidens somewhere near Canary Wharf. The Hellenic Republic then breaks a few plates – in frustrated desperation – hopelessly aware that even a bank as unprincipled as ours couldn’t allow them into the first stage of monetary union, even if they won the contest with their innovative Nana Mouskouri bonds. Seventeen acts later the Swiss in the audience are getting bored and ask when they can buy GECC… The final two competitors don’t help. The Germans field the least inspired entry of the evening, “Der Jumbo Pfandbrief”, a number beginning, “I left my heart on a 10b5 to San Francisco”. Strangely they rejected the more alluring song cycle, “Die schöne Gabriele Müllerin”. Meanwhile the UK doesn’t care either way and enters a floating rate note singing an Elizabethan ditty, “O! for the Beef of Old England”. The audience whistles for more as a guilty repo with zero principals strips before their eyes. Then René is back, ready to adjudicate the scores. During the contest he’s launched 14 deals in 16 currencies, all through swap arbitrage windows located near the rear of the building. “Monsieurs et Signoritas, negotiated and competitive bids, it is now time to call each of our regional sales centres… Bonjour, guten Tag, hello Luxembourg…” A series of political syndicates later, the deciding vote is due to come in. “Hello, Frankfurt. What is the vote of the Finanzplatz, danke, bitte.” “Hello, Dublin,” says Hilmar Koppout. “The German Geleitzug has made its decision: Michael Dobson.” Down the telephone line the audience can hear the German panel laugh at their piercing humour. “Sorry, ve could not resist… Our votes are as follows. Un point, Turkey. Trois points, Belgium. Fünf points Ireland, seven for Iceland and dix points … Norvege.” It’s all over. Norway has won the inaugural Palme de Maastricht. The applause of the audience is muted because Norway isn’t in the EU anyway so it can’t qualify for Emu. The best it can do is asset-swap the award with Belgium. A lucrative trade, I think, and JJ is already on the phone to Hoomf van Wallonnia, probably realizing as I do that this could return the firm to profitability. |
