THE MORNING BEFORE THE STORM

„Not all truths are for all ears.“

  Umberto Eco

 

       „There are truths which are not for all men, not for all times.“

Voltaire

 

 

 

 

A beautiful and sunny October day on the Wall Street was coming to an end. The Indian summer was dragging, bringing warm and pleasant days which were beating back northern winds. The rushing crowd in the streets was becoming scarce. As the afternoon was getting on, relaxing before a well-deserved break crept in. Everything smelled of an exciting weekend that would continue immediately after the offices would close, with another successful end of a productive week that was for a long time strongly governed by the bull from the Wall Street. Successful work of the stock market in the past few years has been followed by a faster recovery of all stock exchange indexes, especially in the course of the last year; from the end of 1986 till now the bull has sovereignly dominated the stock market. The prices of all securities were constantly rising, brining huge positive income to almost all investors, and the general feeling of welfare and expected profit dominated in all pores of this small city, the financial Vatican that governed global financial flows.

Everyone was earning well those days, big ones, small ones, funds and banks, small private investors and profiteers. Everyone was enjoying the benefits of financial expansion created by the US government which decided to eliminate all negative consequences of recession that existed throughout the entire unfortunate decade of the 1970s. That decade for every true American patriot was a sad episode the one hardly wanted to recall. At first there was a crash of the golden standard at the end of the 60s, a crash after which the dollar lost the sovereign primacy of a leading world currency. It seems that the American government and economy in general did not handle the situation on time - it did not properly respond to the sudden loss of the primacy of the dollar. Others were better prepared, as if they expected the end of the golden era, and especially the Germans with their mark which began to dominate Europe. The dollar was going down, and the country was steadily entering the recession, unprepared to accept that it was not the only and absolute ruler of the world currencies any more.

The Oil Shock that came afterwards only confirmed all the fears of what might happen to the dollar and American economy, unused and unprepared for shortages of any kind. A complete humiliation in those years for each American citizen were lines for gasoline, introduction of quotas for purchase of gasoline, and reduced use of the basic American livelihood – a car. The notion that America did not have enough oil and that someone could blackmail it in any way, especially by oil - that essential need of every developed economy - was overwhelming for the average American. And with all those problems which continued as if they were endless, such as recession, inflation, and devaluation of the dollar, the embarrassing and painful Vietnam War was dragging, which eventually culminated in something that no living American remembered or found possible. Defeat! And it happened from one small and undeveloped country, and along with that a communist country. America was sick of taxes.

The new administration that came into power in 1977 faced all those problems and challenges before the biggest free world nation, but it seemed not to be strong and vigorous enough. It was the government of intellectuals, undoubtedly clever and authoritative people, but too soft and refined, who were not looking broadly enough to take the needs of every average American into account. That was why they did not last more than one mandate. After them came a new, dynamic and proactive government with a president who knew very well what his predecessor had not known, how to enter each American home, how to attract the attention of every average American, encourage and motivate the nation to return to the path of old glory. Of course, there were many critics of this administration who were claiming that it was unqualified and superficial, and that it was riding the wave of a raw patriotism, artificially built by economic expansion, and not by actual economic indicators. But who cares about that? It is all politics and fights among politicians and the economic situation on the stock market was never better, at least not in the last twenty years.

That was why the Wall Street was satisfied and delighted on that Friday, 16 October 1987. Everything was good and everyone was satisfied. Another intense, yet successful week was coming to an end, and the weekend days of relaxation and grouping of previous successes, collection of strength for new successes next week, were coming. However, on the twenty-first floor of the unattractive skyscraper which settled among other ugly, massive, similar buildings on the corner of Hanover and Beaver Streets, one man was working hastily and, apparently, very anxiously.

Peter Bishop, a leading financial analyst of the Stuart Fund, was not calm and quiet, he was not impatiently waiting for the end of the working hours, going for a deserved break at the end of the week. The Stuart Fund was owned by Paul Stuart Johnson. He was the founder and owner of this hedge fund and that was why it bore his name. Peter was only an analyst, but the nature of their business relationship was based on joint investments, or agreement and partnership between the two of them. Paul Stuart had the money and managerial spirit that led him to establish and run one hedge fund. It was not a big fund, but over time it had a potential to cross the magical threshold and enter the high society. It was not that fast, but everything was leading towards reaching that goal in the next five years if the work continued going the way it had started. Peter had the knowledge and good judgement - qualities that a good financial analyst needed, a perfect combination and mixture of two men who wanted success on the Wall Street. Over time Peter invested a surplus of his liquid money in the fund, thus became one of the most significant investors, but even with that his biggest contribution was his knowledge, or as they joked sometimes, his nose. Two of them were partners in a joint effort, running a small yet prosperous hedge fund. Besides, they were friends. 

Peter Bishop nervously walked around his large office which was in a distant corner of the floor, according to his wish, because he wanted to have an absolute peace for his researches of the financial markets. Now he and his instinct were highly upset, he was constantly changing place, moving from a large desk full of computers and huge monitors to the opposite wall with drawing boards full of nondecipherable formulae and graphs. He would shortly stop in front of the board and write something down, updating graphs and adding to the nondecipherable mathematical equations. Then he would go to the cork board and pin papers with photographs, smaller graphs, arrows pointing in strange directions upwards and downwards, and then in all possible directions. Then he would again run to the large desk with computers and slump in the big swivel chair which he pushed to the other end of the desk, constantly typing on keyboards, often switching them. In the last couple of hours he was constantly repeating this ritual known only to him, and eventually calmed down and sat in the comfortable chair, running his fingers through his messy long hair. He took his big ugly horn rimmed glasses off his nose, rubbed the root of his nose and tired eyes with an experienced move, and put the glasses back on. Without those huge ugly glasses with high diopters he was useless. He leaned on the desk, holding the head in his hands, and then, who knows how many times, began to carefully look at graphs on three large monitors in front of him. At one moment he spoke as if he was talking to someone.

“Oh my God, it is happening.“

Then he quickly grabbed the telephone in the corner of the desk, swiftly dialed three local call numbers, and leaned in the chair stretching the telephone wire to the maximum. Paul Stewart lazily and sleepily answered on the other end of the line.

“Yes, Peter, what’s going on?“

“Come here!“

“Peter, it is almost the end of the working day, I promised Maggie that I would take her....“

“Come here immediately!“

Then he slammed the receiver so strongly that he thought he had broken it to pieces. That woke him up a bit, as if it gave him a sign that he had behaved madly and unreasonably. He deeply sighed, skillfully pushed himself away on the chair towards a big window on the left, and leaned back, putting his hands behind the head, looking at the ceiling as if he were resting. He did everything in his power.

 

***

 

Paul Stewart was rushing through the long corridor towards Peter’s office, somewhat angry because of his arrogant and commanding tone, wondering at the same time what was happening to him, what came over him to make him that unpleasant. He was one of the mildest and most polite people he had ever met. He had never heard him behave like that. He came to the door of his office and entered without knocking with a prepared protest.

“Peter, I really promised Maggie that I would take her to dinner and tomorrow to the hills for a picnic...“

He stopped in wonder when he saw him, and then looked around the office in surprise.

“Pete, for God’s sake, why do you look like that? Did you go out today at all, did you have lunch?“

Peter Bishop really looked weird and messy. His shirt was almost completely pulled out from the wrinkled trousers that were twisted around him and untidily hanging on him. The tie, with two undone buttons on the shirt, was also hanging messily, ending somewhere under the left armpit, while the sleeves of the shirt were unbuttoned and pulled high on the upper arms. Peter looked like a sleep-deprived drug addict, with big blue circles under his eyes, uncombed thick hair, and very tired eyes behind the thick glasses.

“It’s happening, Paul.“

“What’s happening, for God’s sake...“

Peter only lightly turned his head and gestured towards the monitors on the large desk. Paul Stewart swiftly calmed down and looked at the big monitors and weird graphs on them. After a short gaze he turned slowly towards Peter and stiffly asked:

“When?“

“Now, on Monday. On Tuesday at the latest!“

“Oh fuck. Oh fuck! So it’s true! So we were right?“

Peter Bishop was only looking at him, slowly nodding. Paul Stewart stared at the floor with the eyes wide open, while leaning on the desk with the computers. He had to start thinking quickly. Sharply, urgently. The way he had learned here on the stock market where the majority of decisions has been made in the moment, and your future and status depend on the timeliness of adoption of those decisions here on Wall Street. He took a deep breath and pulled a grimace showing that he was ready to start fighting and wrestling with problems. When he saw the familiar grimace on his friend’s face, Peter calmed down and turned on the chair towards the window. Yes, he did what he could have done. Now it was Paul’s turn. He knew that Paul was a magician on his part of the job and would do everything necessary. He did not need him now, he did what was necessary. He was warned in time.

Paul Stewart calmly and in cold blood turned to the telephone on the desk, took the receiver, and quickly dialed a few numbers. After he got the connection, he began speaking calmly and gently, trying to finish the conversation as soon as possible.

“Mag, darling, sorry, something came up... Yes, yes, I’m so sorry, but it’s like that, something came up suddenly and we won’t go for dinner... Yes, darling, but please try to understand… also cancel all plans for the weekend and next week... Yes, yes, and now I’m sorry, but I’m in a hurry. I love you, yes, yes... Of course, I love you too... Byyyyyye.“

He gently put the receiver back and walked toward the chair in the corner, pulled it to the middle of the room opposite Peter, and sat on it looking at him.

“So we were right?“

Peter Bishop only nodded in silence holding hands behind the head and worryingly looking through the window. He turned in the chair and asked:

“What will you do, Paul? What shall we do?“

Looking worryingly at the floor, bent in the chair, Paul calmly responded:

“Liquidation. Full liquidation of all assets. Immediately. But before that I will call someone.“

“Who?“

“George Sorsza. You know him.“

“Why him? I don’t like him. I never did.“

 “I owe him a favor, and he could help us a lot now. It won’t be easy to sell everything for a good price in such a short time.“

“But still, I don’t like it. Just for you to know. Ok?“

“Ok Peter, but now I’m taking over. He is much bigger than we are and he has connections we don’t. Only this time, I promise.“

“Ok.“

Paul Stewart again approached the large desk and took the telephone, quickly dialed several numbers, and took the waiting position. A cold and monotonous voice answered on the other line.

“George, hi, it’s me, Paul Stewart. How are you?... Are you still in the office?... Of course you are... Listen, how fast can you come here?... Yes, it’s important... Immediately... Yes, yes... Ok, I’m waiting for you.“

He ended the connection with a finger, not putting the receiver back, pressed three buttons in a row for a local call in the office, waited a bit, and said:

“Katy, please, come to Peter’s office immediately. Thanks!“

 

***

 

Katy Harper rushed to Peter’s office in her elegant and gracious walk for which she was famous in the firm. She was forty-five, a very pretty and elegant woman, but of unpresentable and unattractive appearance, as she was trying to look strict and tidy not to attract the attention of men or anyone else. Her job came first and perhaps was her only preoccupation in life. She was not married, nor had children, she only had a life in the company. And, perhaps something else, but it was well hidden in her world of intimacy, which was well hidden from others.

She quickly came to the door of Peter’s office, knocked quietly and vigorously, and entered without waiting for a response.

“You called me?“

“Yes, Katy, please. We have, hmmm, a situation in the company.“

Katy looked at him coldly like she used to, raising only the right eyebrow as a sign of question and encouragement to proceed.

“Yes, Katy, you have to promise to me that what I’ll tell you will not go outside the office. No one must know about this conversation, no one must know anything of what I’ll tell you. Ok?“

“Of course, sir, it goes without saying. I’m listening.“

“We’re expecting a very exciting and hard weekend. We are going to work until Monday.“

He looked at her asking for her agreement with the not so minor request, or even order. Katy only nodded in understanding. She was interested, and did not have any special plans for the weekend anyway.

“All other employees can go home normally, as if nothing was going on. Don’t tell anyone anything. You are staying here for longer anyway, so they will not wonder why you are staying. Katy, something weird is happening on the stock market. We will try during the weekend, and especially on Monday morning, to save our asses - and company. Prepare everything, for the sale of all our assets...“

“All?“

“Yes, all, here and abroad. But Katy, I repeat, no one must know anything about this. No one must notice that we are selling everything. We have to access each buyer so that they think that we urgently need funds for new investments, but we must not at any cost allow to be blackmailed, or that they think that they’re doing us a favor. Do you understand?“

“Of course. I’m going to start with preparations immediately. Will you join me, Paul?“

“Of course, Katy. We’ll both come, and before that we will have a short meeting here. George Sorsza will come soon. Do you know him?“

“Of course.“

“Welcome him, please, and quietly bring him here. Try not to attract the attention of others. Do you understand?“

“Of course, Paul, I’m going to start working.“

“Thank you, Katy.“

Katy swiftly disappeared down the corridor to her office. She did not have a clue  about what Paul was talking about, just confidently started to fulfil all his orders. She was not worried about her weekend, and did not have the opportunity to have the range of work she’d have before her in the next two days in all her career. It would be exciting.

Paul turned to Peter, already much calmer. The initial shock had passed and he was getting a bit of a trading fever; he knew that by midnight it would completely suck him in and swallow him.

“Katy is the right person for this, we don’t need more people. Although it looks impossible, we will succeed, don’t worry. Besides, Sorsza is a very shady character, as you said, and will help us get rid of everything.“

Peter was frowningly nodding in agreement, although he still did not like Sorsza. He was too shady, as Paul had said.

 

***

 

George Sorsza set off immediately after finishing the conversation with Paul Stewart. He trusted him, actually, he trusted his pragmatism which he knew very well. Although he could not even assume why that sudden call was made, he did not waste a second, because every lost second on Wall Street can be fatal. Miss Katy met him on the Stewart Fund premises coldly and officially as usually. But he was wondering why she met him at all, and it was even weirder to him that she was taking him to Peter Bishop’s office. Still, he behaved as if it were the most normal thing in the world. Katy knocked curtly, opened the door and let him in, and left, closing the door.

“George, my friend, how are you?“, he was kindly welcomed by Paul Stewart,  although he immediately noticed a certain cold and official atmosphere which somehow whispered emergency and panic.

“I am good, thanks, Paul. To what do I owe this sudden and rather panic call? Is something burning?“

“George, sit down please. It is better to sit for something like this.“

He pointed at the chair and they sat at the same time on the swivel chairs facing each other, while Peter Bishop was still sitting on his chair beside the window, looking uninterested. Sorsza cast a glance around the room while taking a seat with his blue, cold, watery eyes which did not express any emotion, simply registered the surroundings. It was strange to him that they were sitting facing each other in the center of the room, and the office furniture was around them as if he was invited to a presentation. Refraining from any comment, he sat comfortably on the chair waiting for an explanation.

“George, my friend, I called you to inform you about something. We are friends. I owe you a favor, don’t I?“

Sorsza only made a slight inadvertent gesture as if he did not want to remember that he had forgotten.

“We think that something big is going on. That we are only a step away from a disaster.“

Sorsza showed a hint of interest in his cold eyes, then snuggled his short podgy body, perfectly tightened his tie, and briefly said:

“Yes, I am listening, Paul!“

“We think that we can expect a collapse of the stock market - a big one. We have already worked on it for some time, actually Peter did; it was his idea, his creation, his model. It would be best if he presented everything to you. Peter, please.“

Peter got up from his chair and came to his huge desk with three big monitors on it, and by typing on the keyboard started the program which put graphs and curves on the monitors and those were constantly changing. He cleared his throat and began:

“Last year, in the summer or so, I had the idea that the market was perhaps moving in the wrong direction due to high appreciation of the dollar, as well as due to a huge increase in money supply on the market. As you know, the Central Bank in the last few years was constantly increasing the amount of money on the market, simultaneously decreasing the base rates. Of course, this eases and stimulates trade on the stock markets and growth of the economy in general, but at the same time it considerably increases the degree of indebtedness. That was suspicious to me, so I created a model of analogue performance, a programme that would monitor developments on the market on a daily basis and compare them to the developments in 1929 from the Great Depression.“

He stopped for a moment to refreshed his throat with a sip of water, giving his listeners time to digest what he had said. Sorsza briefly looked at Paul Stewart, apparently not expressing any emotion, but deep inside he was worried and cautious. Peter continued:

“As you can see on these graphs, the first monitor shows the developments from 1929, and the second, or the monitor in the middle, is a graph of the current state of affairs on the stock market, and the third shows both of these graphs compared. I have taken into consideration the percentage offset, or correction of the stock market indexes in the past fifty-eight years, so that we have identical growth levels from this and that period.“

He stopped again for a moment to give Sorsza some time to understand what he was talking about, and then continued somewhat self-satisfyingly:

“Gentlemen, as you can see, in both cases we have a stable and long period of index growth for almost two decades, and after that we have a sudden, almost spectacular index growth in the year of great crisis - or in this year. The peak value of the index during 1929 happened on 3 September, and this year on 25 August, so with the difference of only nine days. The second, lower peak during 1929 happened on 11 October, and this year on 5 October, so with only six days’ difference. Both graphs show almost identical peaks, the first higher and the second lower, in almost the same time interval.“

While he was speaking enthusiastically, driven by the exaltation of an explorer who entered his world and could not see anything beyond it, Peter pointed with a small metal pointer at strange lines on the graph which so far only he could understand.

“The number of days that passed between the first and second peak of the index value was the same in both cases. Exactly thirty-eight days in both cases. The biggest historical trade of shares happened two days before the outbreak of the 1929 crisis. The biggest historical trade of shares after that happened this year. And it happened today, gentlemen. Fifty-five days passed from the moment of the biggest peak of the stock exchange to the collapse of the stock exchange during 1929. Fifty-one days passed from the biggest peak on the stock exchange this year.“

Peter glanced at the listeners as if he wanted to check whether they were there, not paying attention to whether they were listening to him at all. He leaned nonchalantly, then sat a little aslant on a huge desk, and somewhat playfully said:

“Gentlemen, a big crisis, big collapse of the stock exchange will happen on Monday, or Tuesday at the latest, and it will be huge. Almost the same as it was in 1929. Prepare for a disaster, the unprecedented catastrophy. Do something!“

George Sorsza stiffly turned towards Paul Stewart and, while taking his big cell phone out of the bag, kindly asked him:

“May I? I have to make an immediate phone call.“

“Of course, George, go ahead“, Stewart responded and looked seriously in Peter’s direction, as if thanking him.

Sorsza dilaed several numbers and put the receiver against his ear while swivelling the chair towards the wall opposite the two of them.

“Stanley, yes, it’s me. Cancel everything and wait for me in the office. Find our best people and tell them not to go home. Yes, yes, tomorrow as well, actually for the whole weekend. Tell them to cancel everything, we are staying in the company, and yes, everything will be paid to them, every hour. Multiple. Ok, bye.“

After that he turned back, stood up, and tightened his suit. Although short and podgy, his perfect tailor-made suit made him look taller, and his cold blue eyes, almost watery on a round face, were creating a contrast to his appearance.

“Gentlemen“, he said, “thank you for this valuable information. Peter, congratulations. This was brilliant.“

The two of them only nodded, showing that they were aware of his gratitude and their action, but that they did not find it so important.

“Who else knows this?“, Sorsza asked.

“No one, only the three of us“, Paul responded.

“It’s better like that, let it stay that way.

Impressum

Verlag: BookRix GmbH & Co. KG

Tag der Veröffentlichung: 01.06.2018
ISBN: 978-3-7438-7099-4

Alle Rechte vorbehalten