‘Did you do any work to the interior?’
‘Not much needed – we did put in a couple of very large ice boxes.’
Aidan cut to the chase. ‘Thank you. My brokers and I are looking at…,’ he hesitated and picked one of the details of the boats in front of him at random, then continuing almost seamlessly, ‘A seventy-foot motor vessel, currently moored in Sweden. She’ll need her engines reconditioning and my partner doesn’t like the colours of the state room or the master bedroom. How soon could you start work on her? I’m thinking of putting in a bid this afternoon – subject to survey, of course.’
Aidan paused and listened to the shipyard manager, and then said, ‘Oh that would be excellent. You say that the works to Golden Sundancer are completed, yes? So you can start as soon as my boat can be delivered?’
Aidan drew breath. ‘My partner, Johanna, is rather particular. Would it possible for her to fly over, say, tomorrow or the next day to see the quality of your work on the Sunseeker 75?’
He paused again. ‘Oh that is a shame – she’ll be disappointed that Golden Sundancer is putting to sea later this evening. Thank you very much for your time though, you’ve been most helpful. I have your name and contact details, so I’ll ring again on Monday to discuss the refit works.’
With that Aidan gently replaced the receiver, stood up and bowed to a round of applause from Emma.
‘Good work – no – excellent work,’ said a smiling Emma. ‘I knew you could do it. So we now know that the sheikh’s boat is leaving within the next twelve hours.’
Emma did some mental arithmetic. ‘That would tie in with a possible rendezvous with the trawler from Peterhead – off the north coast of Scotland tomorrow night.’
‘Time is running out,’ said Kate. ‘We have got to find the missing locations and the people who are going to fire the missiles.’
Emma walked casually over to Aidan’s desk. ‘I didn’t realise you had a partner.’
‘Ah well, I can be rather deceptive.’
‘You can say that again,’ said Emma, looking a little crestfallen.
Aidan smiled. ‘No you have got it wrong; it is my partner that’s the deception.’
Emma brightened visibly.
‘Emma, I have a problem,’ said Aidan, changing the subject. ‘I could do with some more space. I was wondering if you could help. I’ve printed out the vast majority of the contract notes and I’m swamped with paper!’ He flashed one of his charming smiles in her direction. ‘Any bright ideas where I could go?’
Emma muttered something under her breath which Kate didn’t catch.
‘Thanks,’ said Aidan. ‘But, I need to find a large table or floor: somewhere where I can lay out all this bumph,’ he said, pointing to the piles of paper stacked on and around his desk. ‘I’m almost there, but the lack of space is slowing me down.’
Kate stood up. ‘You two follow me. Pass me some papers to carry.’ They left the room weighed down with printouts.
Kate and Emma returned a couple minutes later to collect the remaining paperwork. ‘We’ve put him in the commissioner’s conference room and asked Beverley to keep an eye on him and to top him up with coffee. The commissioner is out, so he should get some peace and quiet,’ said Kate.
Half an hour later Aidan called Emma. He sounded pleased. ‘Could you, Rafi and Kate come up to look at a few things, please?’
They walked into the commissioner’s conference room and saw it was now almost entirely covered with paper – not just the large oval table but also the chairs, which had been pushed against the walls, and the carpet as well.
‘Thanks for coming.’ Aidan greeted them with a grin. ‘What do you think? Look at all the Post-its Beverley’s given me.’
Emma looked around the room; each pile had a Post-it.
‘Is this entire lot colour-coded?’ enquired Emma.
‘Yep. It hasn’t taken nearly as long as I thought it would. I’ve categorised the contract notes, by colour, into various different types of deal. Things are falling into place,’ he said to Emma. ‘Rafi’s hunch is right: there’s definitely something afoot. Let me summarise where I’ve got to. I’ve been focusing on the long gilt contracts. The trades, individually, are modest in size, but when put together it’s a different matter. Someone has been position building for several weeks. I started with my book at Maine Leadbetter. There are six investors writing – that is selling – put contracts. On the other side of these transactions, Prima Terra have been buying via an offshore account. I then looked at deals done by other brokers and I’ve been able to piece together a relatively complete picture. The other players buying the put positions are using intermediaries, mainly second or third division international banks.’
John stuck his head around the corner of the door. ‘I thought that you might be up to something.’
‘Come on in,’ said Aidan with a smile. ‘I’ve identified a number of investors whose exposures could lead to huge losses,’ he said, pointing to the various piles strewn over the conference room table with pink Post-its. We’ve two building societies, two insurance companies, one local authority and one metropolitan authority… All have been investing the wrong way around: they should be buyers of these put contracts, not selling them! They have increased their risk exposure exponentially. Darn strange, darn silly and darn dangerous!’
‘Their risk management systems should have picked this up, unless the contracts were booked in a hidden holding account,’ continued Aidan. ‘If they were, no one other than the dealers would be aware of the positions. The expectation would be that they would be traded on for a profit in a matter of days.’
‘I’d bet the terrorists have bought off these dealers with large bungs into overseas bank accounts. And with the scale of potential losses you have uncovered, if things go as the terrorists plan -given the delicate state of the financial sector – contagion would rapidly set in, wouldn’t it?’ asked Kate.
Aidan nodded.
‘Sorry – I’ve heard you talk about contagion before, could you possibly explain what it means?’ asked John.
‘If you get measles you’re contagious, right? In the financial markets contagion sets in when the troubles of one player are transferred across to another financially healthy player, who, for their part, gets into difficulty and passes the problem on to more players. We saw it happen in the recent credit crunch when a number of banks that had been financially sound, suddenly found themselves to be short of funds. Basically it’s a matter of there being too many forced sellers and too few buyers. Prices of assets fall dramatically, which leaves the financial sector lacking capital. In our case, the terrorists have targeted six institutions. And they will very quickly become insolvent. Other banks, insurance companies and financial institutions get sucked into the downward spiral, unless the provider of liquidity of last resort, the Bank of England, steps in very quickly and provides sufficient cash to help those in trouble,’ said Aidan. ‘What makes it particularly dangerous is that the losses will initially be heaped on just six players!’
‘The Bank would have to act very quickly and decisively or the downward momentum could become unstoppable,’ added Rafi.
‘I do not think they will procrastinate, given their recent experience with the banking crisis.’ Aidan scratched his head. ‘What concerns me is that the UK Government can’t keep on borrowing vast sums of money to bail out companies in the financial markets. Very soon they will hit the buffers and find that international investors will not lend to them. Or if they do, it will be at massively increased interest rates. And then it will be crunch time.’
‘In addition there could be big costs associated with the missile attacks.’ Rafi looked thoughtful. ‘So part of our plan must be to put across to the Government the downside hazards, in such a way that they can make informed decisions quickly.’