‘You’ve spoken with Tokyo about the trade surplus overshoot?’
‘Yes,’ said Matthew. ‘The figures look enormous and are well above the consensus, but the Tokyo market seems to have shrugged it off. Our economist out there tells me that if you dig into the data, it’s mostly one-off items. There’s a reasonable summary in the Wall Street Journal actually.’
Luigi stared at Matthew, then flipped through his package to the article which was highlighted. His eyes scanned it briefly.
‘Hmm. So no issue then.’
Matthew hesitated a moment. ‘I’m not sure that’s right,’ he said. ‘If I made out the headlines properly, I think the Italian press is a bit more excitable.’
Luigi followed his train of thought. It wasn’t the data itself which mattered, it was other people’s interpretation of it. If Italian investors got the wrong end of the stick because of bad reporting, then they might misjudge their trading strategy until they wised up. Luigi turned to the articles from the Italian press. Again, he scanned the articles in a few seconds.
‘Interesting. I know the Banca di Roma needs to close out a short yen position at the moment. Be interesting to see how they react.’ Luigi meant that the Banca di Roma needed to buy some yen. If it thought the price of yen was going to soar, they’d want to buy quickly before the price had moved.
Luigi was a good trader. He scanned the rest of the documents and picked up his phone. He wouldn’t put it down for more than a few minutes until the end of the day. Right now, he was checking facts, sensing attitudes, exchanging banter with traders and investors, trying to sense the mood of the market. One idea always leads to a dozen others, and when Luigi picked up an interesting lead, he pursued it. He said not another word to Matthew.
The market was in full swing by eight thirty by which time the other traders – Anders, Cristina, and Jean-François – were in and busy. Each of them reacted the way Luigi had to the new-look Matthew. But they were restrained in their praise, waiting to see how long his new work ethic would last.
Luigi called the Banca di Roma, letting the conversation play from his speakerphone. The two men bantered briefly before switching to business.
‘Hey, you better be getting out of that giant short position you’ve got on the yen. Did you see the trade numbers? You’re going to get toasted today unless some kindly person takes you out of it.’
‘Bullshit, Luigi,’ said the Banca di Roma guy. ‘We couldn’t care less about the yen. We don’t have a short position and anyway a month’s data is neither here nor there. The Tokyo market didn’t move much.’
This already told Luigi a lot. If Banca di Roma really didn’t care what happened to the yen, their trader wouldn’t have prompted Luigi to keep the discussion going. Luigi now had a choice. He hesitated so briefly that Matthew, who was following the conversation intently, only just noticed.
‘Amico mio,’ said Luigi, ‘the market didn’t move because the data was bullshit.’ He quickly summarised the reasons why the yen hadn’t moved. ‘If you try to get out of your position too quickly, my friends in the market here will stiff you. You do need to close out your position because there are more big numbers coming out in Tokyo and Rome next week and God knows where rates will be by Friday. But you need to go slowly and use your head.’
The Banca di Roma guy almost audibly relaxed. He asked a couple more questions about last night’s number and then a whole lot more about how to exit his position, which was in fact very large. Luigi talked him through it and promised to stay in touch through the day. Then a call came in on another line and Luigi hung up to take it.
Matthew spent the day doing what he could to sift out the nuggets which mattered from the flood of information which roared through the bank. As he picked them out, he made sure that his increasingly frenzied team of traders got them quickly and clearly. He worked so intently that it had got to eleven thirty without him going out for the coffees. When Luigi noticed, he picked his half-eaten bagel from the dustbin and threw it accurately at Matthew’s head.
‘You’re still only here for the coffees.’
At five thirty that afternoon the market fell quiet. The frenzy which had raged across London for nine hours had moved on to New York. New York would pass the baton to Chicago and San Francisco. Then the West Coast would hand the baton on to Tokyo and just a little later to Hong Kong and Singapore. The Asians kept long and lonely watch as the sun rolled over the endless miles until once again European traders woke up to play the everlasting game.
Matthew helped his traders tidy up after the day, making sure each trade was properly documented with a complete and legible trading note. Thanks to his help, Matthew’s team finished its paperwork fifteen minutes after the close of the market. All around other traders were cursing and fidgeting as they grappled with the unwelcome slips of paper.
Luigi had to rush off to a dinner date, or so he said. The crude comments thrown at him by Anders and Cristina suggested that anything he wanted to do in the hour and a half before dinner time was likely to be done lying down, and not by himself. Matthew grabbed Luigi before he left.
‘I’d like to ask you a question. Why didn’t you stiff the Banca di Roma guy earlier on today? I could see he’d have let you if you’d wanted to.’
‘Matteo, Matteo,’ said Luigi, patting his cheek, ‘if he wanted to get out of his position quickly, he would have tried to spread his trades among as many banks as possible. We’d all have stiffed him, but he’d have felt better about it that way. As it was, he trusted me. I did maybe sixty percent of his trades today at a rate which was fair to me and fair to him. He is grateful to me because he was scared this morning and I didn’t shit on him when I could have done. The Banca di Roma does a lot of business, and right now they love me. Signor Matteo, you can make a lot of money by stiffing people, but you only make it once. Give your clients a good service and they come back.’
Luigi started to walk off to his ‘dinner date’, then turned and added with a wink, ‘And you never know. If you stiff even your best clients perhaps once a year, they are probably too stupid to notice.’
7
Ichabod Bell greeted Zack with a glass of sherry.
‘Decided to drop all that tripe about money, I take it. Damned if I can name a single ancient Greek millionaire, but I can think of a good few philosophers whose credit is still good today. Anyway, blast you, you’re nowhere near good enough to make the grade. You want to be an accountant, right? I forget. No, silly me. Too exciting. An actuary. Much better. Less stressful. Very reliable pension arrangements. How’s your rowing?’
‘I’ve studied nothing else for two weeks. Am I allowed to know why?’
Ichabod ignored him.
‘Gong’s already sounded. Let’s go in to dinner. Mind you taste the wine. Tonight’s a fund-raiser and the Dean’s serving only the best.’
Upstairs in the dining hall, panelled in six-hundred-year-old oak, Zack found his place in between a history lecturer he had liked when a student, and a Sir Robert Grossman, whose name rang a bell but nothing more. Once everyone was seated, the chaplain rose.
‘Surgete,’ he said in Latin, indicating with his hands that the company should rise for grace.
Everybody did so except for Ichabod, a fierce atheist. A long Latin grace followed. Zack took the opportunity, as did most others, to squint downwards at the menu card on his plate. Trout, beef, chocolate mousse, cheese. The ingredients would be good enough, but Zack knew that the college kitchens were of the traditional British school. The chef’s idea of a luxurious gravy was to stir a bit of wine in with the stock granules. Vegetables would be boiled into surrender, the beef roasted into submission. At least the wine would be first-rate.
The first two courses passed in agreeable banter with