The interview aired two weeks later.
“Come on, you’re not mad are you?” Rohan asked Jason as they left the office after an especially confrontational meeting with Eric.
“Are you fucking serious?”
“Not you too…”
“Look, I defended you in there but Eric’s right. The fund has just over 11 months left in existence. The press is tearing us apart. Were you going to consult us before going on a suicidal tirade? Our careers are on the line here too, not just yours.”
“Dude, you worry too much. Any press is good press.”
“That’s not true and don’t even start with those pithy aphorisms.”
“My what?” Rohan gave an exaggerated shrug, “And here I thought I was the writer.”
“Please find the courage inside yourself to be serious for one moment. Just dig down, Rohan, and talk to me like an adult. What are we doing after this? Like it or not, my fate is currently tied to yours, and I want to know if you have a plan or if I need to start thinking of one.”
“Look, Gavin’s been funneling money out for all of us. There’s a nice severance package ready in case things go awry. My expectation however, is that we’re going to succeed. And if we do, well, money will be the least of our problems.”
Jason’s mood shifted a bit.
“Guess I better get busy then. Eric’s more terrified of what’ll happen if we succeed than if we fail. Gavin’s working on God knows what. You’re busy doing interviews and Austin can’t be reached ever since he hired that new secretary. How fitting that the Chinese guy is left to do all the heavy lifting.”
“What’s that supposed to mean?” Rohan said.
“Well, China’s been the economic center of the world for all but 200 years since Jesus. And now, once again we’re the global economic engine. Let’s face it, you lazy Americans rely on us.”
“Yeah, only problem is you’re about as Chinese as orange chicken.”
They parted ways in good spirits, while Eric remained inside his office nursing an upset stomach. Their meteoric rise had left the world astounded, and those heights from which Eric envisioned them falling gave him bouts of vertigo. What Rohan and Gavin were proposing was foolish, if not outright suicidal. A martyr he surely was not. He picked the phone receiver and called Jake into his office.
“What’s up boss?” Jacob entered his office with excitement, knowing few junior employees were ever summoned by Eric.
“Your old man’s firm still work with Hermes Capital?”
“Of course.” Eager to impress, he added, “Bill went to Eton with my dad. He’s been over to our house every summer for the past five or six years. He would never drop H&M.”
Eric was pleased, “Good. I want you to get me a meeting with Bill Garza. In person. Preferably London, but I’ll fly to New York if I have to. Make it happen and you’ll be in good shape for a promotion.”
A week later, Eric was seated across from the legendary fund manager at Gary Danko’s famous restaurant near Fisherman’s Wharf. Bill had opted to meet on the west coast, rather than London or New York, not only to suit his own schedule but because he knew the delirium from the long-haul travel would leave him sharper, in a better position to negotiate. Just in case there was something to negotiate. Jacob had been strangely mum about Eric’s intentions for the meeting, but he’d asked around, and everyone had told him the same thing. Eric meant business.
Seated comfortably in a corner booth, Eric tried to begin the conversation cautiously, but found that Bill had no patience for small talk. Having seen Rohan’s recent interview, Bill wanted to know first and foremost, whether the whole firm consisted of radicals.
They talked geopolitics over two ounces of Golden Ossetra caviar, before moving on to the main courses of guinea hen breast and loin of lamb, which Bill decided they would share family style. Reaching over to stab a prime piece of hen with his fork, Bill finally inquired about Eric’s real purpose for the meeting.
“So Eric, as pleasurable as the small talk has been, I don’t take it you’ve flown the ten thousand odd miles just to discuss CIA gun running and weather warfare… so why don’t we cut to the chase?”
Eric spoke between bites of the lamb with tart bourguignon sauce, “Astute as your reputation, Bill. The reason I called this meeting is to discuss some recent developments at the fund. Namely our positions in the European markets.”
Bill scoffed, “What’s there to discuss? You’ve made your bed, now lay in it. If you had asked for a meeting before that interview, maybe we’d have something to talk about. Now, if I’m even caught associating with you, my investors will be asking me some very hard questions.”
Eric leaned in closer, pressing up against the table.
“Bill, listen to me. I’m like you, I got into this business to make a good life for me and mine. I’m not in it to fight doctrinal battles. Legion is going to take on positions that are highly inadvisable, and I refuse to risk my future on a political stunt.”
“Ok, you have my attention, Eric. Go on.”
“I can’t stop Gavin’s machinations… But I don’t have to lie on the train tracks with him. Piling against European bonds is crazy, the technicals just don’t support the move at all. The strategy is bound to fail, unless…”
Eric trailed off. He knew that if they exhausted all their ammunition, they could trigger flash crash after flash crash; breaking the market repeatedly would be tantamount to collapse. The momentum would be halted by regulators and reversed by the plunge protection teams but public faith would be lost. It would bring them and the whole HFT industry under a ton of scrutiny. The last thing traders like him needed was another scandal like this after Flash Boys.
“Unless?”
“What’s clear to me now, is Gavin and Rohan always intended to use the firm for a kamikaze mission. If they succeed it could have major implications for the whole industry. I’ve been in finance since I got out of college, I don’t know any other life.”
Bill gave a long sigh, “So have I Eric but I’ve got about 20 years on you. What exactly are you proposing?”
“What I say from here on, never leaves this table. Agreed?”
Bill nodded in affirmation.
“Gavin wants to structure the trades to target the weakest links in the Eurozone first: Greece and Spain. As their economies fall into crises, he wants to put pressure on the Euro. He said his benchmark for success is how many currency pegs he can break.”
Bill laughed, “I’d love to meet this character. He seems like a guy who actually has the balls to pull this off.”
Eric nodded, “Which is why I’m trying to convince him to go after the Bund instead. Luckily, it’s playing right into his egomaniacal nature. I suggested that if we’re trying to have the greatest impact why not target the Germans. They’re the country that matters. Rohan’s on board, he thinks it’s better than punishing the poor Greeks and Spaniards.”
“So you’re sabotaging your own firm? That’s a slippery slope, my friend.”
“They brought it upon themselves. I supported them as long as they stuck to using the fund as their soapbox. But trying to bring down the very system that supplies our daily bread? That’s not something I can go along with.”
“And where, in all this, does Hermes come into play?”
“Right after Legion announces the plan to short the Bund, I’d like you to support it. You have a large following yourself, jump on the bandwagon and give an interview or write something similar. That it’s the short of a lifetime, or some such.”
“And why would I do that?”
“Because we need to draw the ECB’s attention on this. We need them to prepare their own ammunition to support prices. Without Hermes, they won’t take the threat seriously. You know half the time these people are asleep at the wheel. Their inaction could send prices over a cliff. But if you jump on board, we’ll have their attention. After a small correction, the ECB will have no choice but to step in.”
“And we save the day. A tad anticlimactic, Eric. Is that it?”
“Not entirely. After you announce your support for Legion there should be a technical correction. We gauge the readiness of the ECB and start selling puts at much higher prices after the dip. We collect, and once the ECB moves in to support prices: we’re free and clear. We’ll look like geniuses. Well, you’ll look like a genius.”
“I’m intrigued. I’ll have to think this over some more but if I was to go along with your plan, how exactly do you stand to benefit?”
“Glad you asked. I want a share of the earnings, of course, since I’m providing the critical intelligence. I have several million out in banks near you I could invest in your fund, to build trust. I could always use a trip out to Grand Cay.”
“And that’s all?”
“Not quite, I’d also like to secure employment with Hermes, after I’ve wound things down at Legion. I don’t want to fight against my friends, I just need to ensure I have something to fall back on when they blow up everything we worked so hard to build.”
“A prudent man. We can handle the details later. Now let’s finish with the business talk and enjoy dessert.”