The Marketmaker

4

Wednesday morning was foggy. I couldn’t see the Tower as I rode my bike through the East End. Old warehouses loomed up on either side of Narrow Street. With London’s haphazard modern skyline obscured, I could almost believe I was in Victorian England, until a van ran a red light and forced me on to the pavement.

But the trading room was surrounded by blue sky. I was drawn to the window. We were just above the fog, a choppy white surface stretching out on all sides beneath us. The tip of the NatWest tower broke through the clouds like a rock a few miles out to sea. We ourselves were an island far from England, closer to New York and Buenos Aires than Primrose Hill and Shoreditch. I looked around at my colleagues. We were a small band of colonists, immigrants from all over the world, come to seek our fortune in this strange new land.

Well, that was fine, but where were the Argy discos trading?

I switched on Jamie’s screen. Sixty-seven and a quarter bid. I wasn’t in the money. The rest of the market was up a point, leaving my bonds behind them. Oh, God. Maybe I’d picked the wrong issue, after all.

Jamie was out that morning. He had to make a presentation to a large insurance company that was considering investing in emerging-market bonds. It was an important meeting; as Jamie had put it, when these boys played, they played in size. So I spent the morning at my desk.

Except it didn’t feel like my desk. It felt like Martin Beldecos’s. To say that he was haunting it would be too strong. But when I was sitting there, I had a powerful feeling of his presence, even though I’d never met the man, didn’t even know what he looked like. A desk is a private space. In a trading room, it is the only private space, a tiny island of security. I felt as though I was a usurper of someone else’s territory. It wasn’t a comfortable feeling.

Just then, the fax behind me chugged into life. Most of the faxes were for Isabel, but she was engrossed in one of her mammoth phone calls. So I strolled over to the machine, and picked up the two sheets of paper.

It was for Martin Beldecos. From United Bank of Canada. My curiosity got the better of me. I took it back to my desk — Martin’s desk — and began to read.

I stared at the fax.

Money-laundering. That meant, I believed, the recycling of illegally obtained cash through the financial system. Now I remembered from the first fax that this company, International whatever, Panama, had transferred some funds to a Dekker Trust account. And the lawyer who had ordered the transfer was an associate of a suspected money-launderer. Which meant that one of the Dekker Trust accounts might contain laundered money.

So this was what Martin Beldecos had been working on before he died! No wonder Eduardo wanted to make sure that he received Martin’s messages personally, and that no one else saw them.

I picked up the fax and walked over to Eduardo’s corner office. I knocked on the door, and tried to open it. It was locked.

‘He’s not in today,’ said a middle-aged woman, presiding over a corral of desks just outside his office. ‘Should be in tomorrow. Can I help?’

I dithered over giving her the fax. Eduardo had said I shouldn’t let anyone else see any of Martin’s messages. But she was his secretary. But, then, this was clearly an important message. I remembered the implied threat in Eduardo’s voice, and decided the safest thing was to wait until I could give Eduardo the message personally.

‘No, that’s all right,’ I said, and made my way back round the square of trading desks to my own seat.

‘One nil!’ Dave flung his phone down on his desk, and stood up in triumph, his arms in the air, his stomach thrusting out in front of him. He attracted only a quick glance from the other traders around him. Another small victory over the market. Another dollar made.

Suddenly I felt cold. Perhaps Dave had been right. Perhaps Martin had been murdered by a contract killer. If he knew about money-laundering at Dekker, someone might have wanted to shut him up.

No. I was just being fanciful. I returned to my desk clutching the fax tightly. I should just give it to Eduardo and forget about it. He could sort it out.

But Eduardo? Perhaps he already knew all about it. If someone was laundering money through Dekker Ward, it wouldn’t surprise me if Eduardo did know all about it.

What the hell should I do?

I looked round for Jamie, but he was still out at his meeting.

Then I saw Ricardo moving towards me.

‘Still want to keep that Argentine position? They’re lagging the market a bit, aren’t they?’

I dropped the fax on to my desk, and wrenched my brain back to the market. ‘The reasons we bought the bonds still hold good,’ I said. ‘So yes.’

‘OK, fine. We’ll see what happens. Now, what are you doing at the moment?’

The fax to Martin Beldecos was right there, face up on my desk, partially covered by my left arm. Now was the time to tell Ricardo about it. Just give it to him, and forget it.

But something made me hold back. I think it was because I couldn’t foresee the consequences, although I was sure they would be important. I needed time to think it through first.

So, keeping my arm on the desk, covering Martin Beldecos’s name on the title sheet, I said simply, ‘Reading.’

‘Uh-huh. Don’t you think it’s about time you got involved in a real deal?’

‘Yes. That would be great.’

‘Good. Isabel is going down to Rio tonight to sort out this favela deal. She’ll need some help. Can you go with her?’

‘Of course.’ My pulse quickened at the prospect of working closely with Isabel. Besides, this was a great opportunity; my first business trip at Dekker, and a big deal. One that Ricardo was personally interested in. Although I had to admit he seemed to be personally interested in every deal.

I glanced towards her. She was leaning back in her chair talking on the phone, but she had seen Ricardo with me, and gave me a quick smile of encouragement.

‘Good. I’d like you to see how we operate in the markets we know well before I set you on to Russia,’ Ricardo said. ‘See what you can do.’

A voice interrupted. ‘Ricardo! Vasily Ivanov from the Russian Finance Ministry on twelve!’

‘Ah, the Russians are coming.’ Ricardo smiled, and returned to his desk to take the call.

Isabel put down her phone. ‘Pull up a chair,’ she said. ‘I’ll tell you what we’re doing.’

‘Just a second,’ I said. I picked up the fax, and looked at it once again. Then I opened the bottom drawer of my desk, which was still empty, and tossed the fax inside. I’d deal with it later, when I had had a chance to think about it.

I pulled over the chair from my own desk, and sat next to her. I could just smell her perfume. Concentrate!

‘I said all this would get easier once you started doing it, rather than just reading about it, didn’t I?’ She smiled, a shy flash of teeth that came and went. ‘Well, I may be proved wrong. This deal isn’t a good one to start on.’

‘I’ll do my best.’

‘OK. Let me tell you the story. First of all, do you know what a favela is?’

‘It’s some kind of a slum, isn’t it?’

‘That’s right. In Brazil there’s been massive migration from the countryside to the towns over the last forty years. People arrive in the cities without anywhere to live. So they find some empty ground, and build a shelter there. They make them out of pieces of timber, corrugated iron, things like that. As more people come, their homes become a bit more substantial, and these areas grow into large communities, some of them with thousands of inhabitants. These are the favelas.’

‘They sound grim.’

‘They are,’ said Isabel. ‘They have no sanitation, open sewers run through the streets. No running water. No garbage collection. If there’s a fire, the fire service can’t get in to put it out. There are very few schools or clinics. There are drugs and gang wars. They’re horrible. No humans should be allowed to live in those conditions.’

‘So why don’t the authorities do something about them?’

‘They’ve tried. Whenever they move the residents on, they just build a favela somewhere else. Sometimes the city will build cheap housing for some people, but then these are replaced by thousands more. And you know how little money Brazil has to spend on anything, these days.’

‘OK, so what’s the solution?’

‘Well, the Municipality of Rio de Janeiro think they’ve found one. It’s called the Favela Bairro project. Bairro means neighbourhood. The idea is that instead of trying to move or replace the favelas, they will try to change them. Turn them into proper neighbourhoods. So they will build roads, health centres, schools, parks, water systems, electricity. But, most important of all, they’ll give the inhabitants of the favelas title to their properties.’

‘What, ownership?’

‘Not quite. But a long leasehold, which is more or less the same thing. This should make a big difference. Once these people know they’re not going to be turfed out of their homes they’ll improve them. And, just as importantly, they will have an incentive to stop newcomers building on their land. It should make a big difference. They should turn into proper bairros.’

I’d heard this argument before somewhere. ‘Sort of like Margaret Thatcher selling off council houses in this country?’

Isabel smiled. ‘That’s right.’

I thought about it. ‘Will it really work?’

‘It should do,’ said Isabel. ‘It’s certainly worth a try. We have to do something.’

‘And how will all this be financed?’

Isabel leaned forward, eager to explain. ‘That’s where we come in. Although the World Development Fund are happy to help, organizing the financing for these projects can be quite a problem. Usually it has to go through the Municipality. There, it can be mixed up with funds for other projects, and all kinds of budget-related bureaucratic restrictions have to be met. In the past there have also been accusations of contracts being awarded at inflated prices in return for kickbacks. Also this project could be partially self-financing from taxes raised from the favelas, but the Municipality is not allowed to pledge tax revenues to any specific source. So the whole idea got bogged down.’

‘Sounds like a nightmare.’

‘It was. Until we thought of the idea of a trust.’

‘A trust?’

‘Yes. A trust will be set up to fund the project. It’ll be called the Rio de Janeiro Favela Bairro Trust. It’ll be funded with one hundred million dollars from the Municipality, and two hundred million dollars from a ten-year bond issue guaranteed by the World Development Fund.’

‘And arranged by Dekker Ward.’

‘Precisely.’

‘And this trust is responsible for financing the project?’

‘That’s right. There will be trustees from the Municipality, from the favela, and from the World Development Fund.’

‘Very neat.’ I thought a moment. ‘How will the money be repaid?’

‘The trust will receive the rental payments under the long leases. Because they’re rental payments, not taxes, they can be applied to the bond issue. Of course, if that isn’t sufficient, then the Municipality or the World Development Fund will make up the difference.’

‘I see. But won’t the Rio authorities be unhappy about losing control of the funds?’

‘That’s been the problem,’ said Isabel. ‘But the current mayor of Rio really does want to do something about these places. And he and the new Finance Secretary are quite strict about not awarding contracts to political allies. This will help them clean the whole thing up.’

‘So everyone gains?’

‘That’s the intention. Brazil needs foreign capital. This is a way of making sure it gets to where it’s needed most.’

I was impressed. ‘Was this your idea?’

‘Yes. Or, at least, the trust structure was. I’ve wanted to do something like this for a long time, but no one took any notice. Then Ricardo put his support behind it, and it looks like it will finally happen. If we can squeeze it through the Brazilian bureaucrats, that is.’

‘What are they like?’

‘You’ll see.’

I left the office at about six, early by Dekker standards. I had to go home and pack before making my way out to Heathrow airport. I was excited at the prospect of the trip, but also nervous. Things were moving fast. Only three days into the job, and I was already on my first trip! Normally, I was confident in my ability to pick things up quickly, but I was afraid that I would be way out of my depth in Rio. I hoped Isabel would be patient.

I caught sight of Jamie at his desk on my way out. He waved me over.

‘How did it go with the insurance company?’ I asked.

‘Great! They’re going to commit a hundred million pounds to the emerging markets. And that’s just for starters. If they like the experience they’ll stump up more. And, have no doubt about it, I’m going to make this a wonderful experience for them.’

Then he noticed my jacket was on, and my battered briefcase bulging. ‘Where are you off to?’

‘Brazil. Ricardo asked me to help Isabel with the favela deal.’

‘That should be interesting. Isabel’s good. You can learn a lot from her. Her father’s some big-shot banker out there, so they all listen to her. But remember. Don’t touch.’

I smiled.

‘Oh, Jamie. Just before I go. I got a fax for Martin Beldecos I wanted to discuss with you. I’m not sure what I should do with it—’

Just then Jamie’s phone flashed. He picked it up. ‘Robert, hallo. It was a good meeting this afternoon, don’t you think?’

As he listened to the response, he mouthed to me, ‘Later.’

I could tell the conversation would last a while, and I didn’t want to hang around and risk missing my plane, so I waved goodbye to him and left.