Bloomberg News

Quant Uncovers Deadly Trade, Energy Desk Rides Heat Wave: Books

July 18, 2012

Cortright McMeel

Cortright McMeel is the author of "Short." Photographer: Sam Holden/Thomas Dunne Books via Bloomberg

Take one Manhattan hedge-fund boss who exults in Cristal-soaked bacchanalias. Add a disillusioned quant who made billions for the fund before turning 30.

Throw in a kickboxing U.S. Treasury agent in Hong Kong who tracks down financial terrorists by day and plays Texas Hold ’Em in a slinky black dress by night.

The characters in “The Last Trade” by James Conway come straight out of central casting, even if the author is “a hedge-fund insider” writing under a pseudonym, as his publisher says. The result is a pacey if predictable thriller.

As the story gets under way, it’s Monday, Oct. 17, 2011. Drew Havens, a boy scout of a quant who sips diet cola amid revelers snorting coke, is preparing to quit the Rising hedge after pocketing his bonus.

Though Havens made himself and his boss, Rick Salvado, rich by predicting the subprime meltdown, he lost his marriage and something of his soul along the way. To make matters worse, his models and numbers don’t support Salvado’s latest investment blitz, an all-in bet on a U.S. economic recovery.

Havens’s sleep-deprived protege -- a Clash-loving quant with a taste for hacking -- has meanwhile picked up the digital spoor of bets being placed against the same American stocks that Salvado is piling into. Someone, presumably in the U.S., appears to have used a Berlin middleman to funnel a massive wave of these trades through a Hong Kong broker named Patrick Lau.

Killer Trades

The hacked middleman’s server in Berlin also shows that similar onslaughts are being ordered through a broker in Dubai. As Havens’s protege digests this, he spots an ominous message on the Berlin computer: “Kill Patrick Lau.”

When Lau is found with a 9-mm bullet blown through his skull, Havens and Treasury agent Cara Sobieski find themselves racing against the clock to stop a sequence of deadly trades being placed with a different broker in a different city each day of the week. The evidence -- such as it is -- suggests that the trades will climax on Friday with a bloodbath.

The narrative is marred by cliches (think “scantily clad”) and geek bravado (“Every model ends with me in jail,” Havens intones after roughing up a bad guy). There’s also a jarring reference to Libor as the London Interbank “Overnight Index,” instead of offered rate.

Yet the plot hums along as it cuts back and forth between Sobieski hopping from city to city, Havens fleeing a killer with a shaved head and brokers being hunted down after executing trades. Just the thing for a flight from JFK to Johannesburg.

Noir ‘Short’

If you’re looking for a financial thriller with more literary chops, pick up an older book, “Short” by Cortright McMeel, an energy trader whose writing crackles with authentic dialogue and noir humor.

McMeel takes us inside Allied Power in Boston, where rogues and gamblers gather round a 45-feet-long Formica slab to trade, shout down squawk boxes and torment the staff “goat,” Sami, who wonders why he bothered getting an MBA from Yale.

The unlikely hero is Joe Gallagher, an oafish trader who looks like an “overgrown toddler,” eats and drinks with a Rabelaisian appetite and gets “a chocolate-milk epiphany” from his daytime beverage of choice. He’s a new kid on the desk, the protege of a sumo-sized head trader called Andrews.

Andrews is a natural bull who puts his faith in “the process of eternal consumption, progress and expansion,” like a railroad baron of old, McMeel writes. He believes in “taking profits and enduring pain.”

Ghost Trader

The hurt soon arrives in the sinewy shape of Randall Jennings, a.k.a. the Ghost, a trading legend brought in over Andrews’s head because the bosses are greedy for even bigger profits. The Ghost wears tinted glasses to mask the nystagmus that makes his eyes flick back and forth involuntarily.

Resolved to eliminate rivals and recruit venal henchmen, he sizes up his new charges through a monocular. He wastes no time in laying a trap for Andrews, whose probity would prevent the Ghost from deploying legally questionable trading strategies.

McMeel sketches his crowd of misfits -- including a loudmouthed pig of a New York Mercantile Exchange broker wearing a Stetson -- in bold strokes and a harsh satirical light. Then he eases them into an all-too-plausible plot.

As the mercury rises and the hurricane season approaches, traders fixate on a possible “heat dome,” a blast of heat across the Great Plains that would make gas and power prices surge. Serious money and reputations will soon be made and lost.

“The Last Trade” is published by Dutton (395 pages, $26.95). “Short” is from Thomas Dunne (295 pages, $24.99). To buy these books in North America, click here for “The Last Trade” and here for “Short.”

(James Pressley writes for Muse, the arts and leisure section of Bloomberg News. The opinions expressed are his own.)

Muse highlights include Ryan Sutton on dining and Jorg von Uthmann on Paris arts.

To contact the writer on the story: James Pressley in Brussels at jpressley@bloomberg.net.

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.


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