‘Which the bank has to pay for?’
‘Effectively, yes.’
‘So what is Zorn paying for these options?’
‘Ah, Sam, that is a very complicated question… But it can be reduced to a pair of very simple elements: time and risk. The greater these are, the more an option costs. Imagine, for example, that you want to buy “put” options on the price of a house, betting that its value will decrease. A six-month option on a house made of straw will cost you much more than a week-long option on a house made of brick.’
‘Unless you know that the big bad wolf has a wrecking ball.’
‘Precisely… in any market, exclusive information is the most valuable commodity of all.’
Carver took a long drink of his beer, using the time to get his head around what he had just learned. ‘You know, what I really don’t get about any of this,’ he said, putting his drink back down on the table, ‘is what’s the point of it all?’
‘It’s business. It makes money. What other point does it need?’
‘But it doesn’t make money, does it?’ Carver pointed out. ‘You said it yourself. Every time there’s a winner on a trade, someone else loses the exact same amount. So nothing new is created. Oh, no… wait
… Something tells me that if a trader does a deal to sell one of those swaps, or “put” options, he puts that down as new business and he gets a slice of that business as his bonus. Am I right?’
‘Sure,’ Koenig agreed. ‘Bankers’ pay is based on a percentage of the profits they generate, so yes, in theory…’
Carver was feeling the excitement that comes when you suddenly get an insight into something new. ‘OK… so then a couple of years go by and — uh-oh — turns out that swap was a bad idea. Lehman’s go bust. Now that swap Zorn bought has cost millions, even billions… does the guy who sold the swap, or the option or whatever it was, pay for that loss? No, of course he bloody doesn’t! He probably doesn’t even work at the same place any more. But the bank certainly has to pay.’
‘Of course, it comes off the balance sheet.’
‘Exactly! So the bank’s profits fall, or maybe it makes a loss. Either way its shares lose value, so the shareholders lose money… and those shareholders are mostly pension funds who invest the money for ordinary people who don’t have a clue about any of this. So now those pensions are worth less… and basically what’s happened is that poor people have lost money so that rich idiots can gamble with their cash and never have to take any of the losses themselves.’ Carver shook his head in surprise. ‘Razzaq was right, after all…’
‘I’m sorry, who is Razzaq?’
‘Someone I was talking to. He said Malachi Zorn’s deals ultimately made ordinary people poorer. And he was right. He just forgot to mention that all those other bastards’ deals have exactly the same effect.’
Koenig laughed nervously, trying to defuse the intensity in the air. ‘Calm down, Sam, really… I have never seen you like this before. My God, it’s a good thing you don’t have a gun on you right now. This bar is full of investment bankers. You might try to shoot someone!’
‘Yes,’ said Carver. ‘I just might.’
Custer County, Nebraska: six months earlier
Seen from the air, the valley that stretches to the north-west of the town of Broken Bow looks like the remains of tiles on a crumbling wall. The mottled, dusty-brown and olive-green earth is dotted with perfectly square fields, in which sit circular splashes of emerald caused by the rotating water sprayers that irrigate the cultivated land thereabouts. The dusty, dead-straight roads that bisect the flat valley floor even criss-cross one another like grouting.
Of course, that’s only in the summertime, when the corn is growing. In the middle of winter, the rock-hard earth is as dark as bitter chocolate, dusted with sugar-white snow. Jed Rogers grew corn on land that ran along County Route 92, land that his father and grandfather had farmed before him. He had been a local celebrity for the best part of twenty-five years, ever since his final two years at high school, when he’d quarterbacked the Broken Bow Indians football team and been voted Homecoming King. Maryjane Rogers had been his pretty blonde queen. The eldest of their three children, Jed Jnr, was only in his sophomore year at Broken Bow High, but already folks were saying he’d inherited all his daddy’s talent and more besides. And his two little sisters were just as cute and pretty as their mom. The Rogerses were a popular family, good people. They worshipped at the First Presbyterian Church, and never missed a Sunday service. They contributed generously to local charities, and Maryjane was the kind of PTA stalwart who could always be counted on to help out at school events or bake a tray of cookies at a moment’s notice.
Custer County, like much of rural Nebraska, has less than half the population it did a century ago. There are barely eleven thousand souls spread across its two and a half thousand square miles. In a place like Broken Bow, people know one another and lend a helping hand when they can. So when Jed Rogers was found in his barn, with the back of his head blown off by the shotgun he’d placed in his mouth, his death was not officially noted as a suicide, but as an accident. No one wanted Maryjane and the kids to lose the insurance money. And it wasn’t as if the insurance company had really been cheated or anything. Jed Rogers was suffering from Huntington’s disease. There was no hope of a cure. All he’d done was spare his family the pain and expense of caring for him as his mind slowly decayed into dementia and his fine, strong body fell apart.
Sometimes it was right and proper to turn a blind eye to the truth.
17
Sunday, 26 June
Lambeth, London SE1 and Chinatown
Carver flew to London on Sunday, taking the 12.15 a.m. British Airways flight. He had no intention of staying anywhere that required payment by credit card, so Grantham had arranged a one-bed apartment for him: a safe house halfway between Waterloo Station and the Imperial War Museum, a couple of miles from MI6 headquarters.
‘I’m sorry if it’s not your usual style,’ said Grantham, sarcastically. ‘The public-spending cuts have shot our interior-design budget to pieces.’
Carver had been in some pretty rough billets in his time. His sanity had been all but destroyed in a blinding white torture chamber. But this place took some beating for sheer, gut-churning awfulness. The walls and woodwork had been painted in borstal tones of rancid cream, murky green and excremental brown. The windowless bathroom had grime-encrusted units surrounded by floor-to-ceiling tiles that gave all the warmth and comfort of a municipal public toilet. Carver did not feel housed so much as institutionalized.
‘I’m going to take pictures and tell my decorator to give me just the same effect at home,’ he replied.
‘Just as soon as you’ve sorted out Malachi Zorn,’ said Grantham.
‘Yes,’ replied Carver. ‘Just as soon as that.’
Thanks to technicians in Beijing, who had hacked into the systems through which Carver placed his calls, Derek Choi had been able to have his target tracked from the moment he landed at Heathrow to his arrival at the surprisingly modest apartment where he was staying. This was, Choi noted, situated on the top floor of a development shaped like a hollow square. Vehicle access was only possible through a single arched entrance, and the apartment, which had windows on two sides, overlooked both the road that ran up to the arch and the inner courtyard to which it led. Access to the place was via an external door, followed by a narrow flight of stairs that led up to the front door of the flat itself. It was, in other words, a very easily defended position, and though it would be possible to overwhelm Carver by sheer weight of numbers, the casualties that would be sustained, plus the time that such an attack might take and the unwanted attention it would inevitably attract, made it unrealistic to hit him there.