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Under the influence of tough, attractive Lauren Hayward, he bets everything on the survival of a small Chicago manufacturing company ...
Under the influence of tough, attractive Lauren Hayward, he bets everything on the survival of a small Chicago manufacturing company that could, if he can rescue it, be his career-making score. But his quest spawns an attempted murder, suicide, and the prospect of years in prison.
Seth is more than a Type-A, fast trading up-and-comer. He is a loner who increasingly questions what he does for a living after seeing first-hand the consequences of his actions. He finally meets someone who opens him up to love and a life beyond trading and money. Meanwhile, in the background, Wall Street is in turmoil as the economy tumbles.
When Vultures Dance explores themes that are all over today's news: the growing divide between the haves and have-nots, the rule of capitalists over the shrinking blue collar work force, and the stupendous wealth accumulation by a very few. Goodwin's eye for detail brings the headlines to life.
But in a black Lincoln Town Car sloshing through the rain-soaked Greenwich, Connecticut back country, no horrible blare of wrack and ruin sounded. Only the third movement of Rachmaninoff's Concerto no. 2 could be heard through the passenger's iPod headphones. The passenger, Seth Farragut, sat in the backseat, the Financial Times spread out in front of him and his BlackBerry in his lap, vibrating with an unremitting stream of messages. He liked listening to Rach on the way towork. The strident chords, rapid eighth-note riffs and spiraling arpeggios energized him.
Economic turmoil and tribulation were music to Seth Farragut's ears, for he was what was known as a "distressed investor." The term did not imply that he personally was distressed but rather described the companies in which he invested. These companies were bankrupt, about to go bankrupt, or had just emerged from bankruptcy; they were either dead or the walking wounded. Outside of polite company, distressed investors were more commonly referred to as vultures.
The rain came down in long, even strokes, like a woman brushing out her hair at bedtime. The car sped past great, hulking mansions, hunkering within their overplanned landscapes, sulking in their newly minted splendor. Seth had never really noticed these manses, even on sunny days, as his head was usually behind a newspaper or over his BlackBerry. He scrolled through his messages. It was not even seven-thirty am, and he already had over a hundred unread messages. Most of the early-morning messages came from the London offices of Silvermine Capital, the hedge fund that he called home. The car came to his house each morning so that he could scan the Wall Street Journal, Financial Times, and read his e-mails, instead of driving. Those twenty minutes allowed him to hit the office with a running start; and so the Lamborghini stayed snuggled in the cottage house that he had converted into a garage.
The car passed the train station where commuters huddled under their umbrellas. Until about a year ago, Seth had reverse-commuted from Grand Central Station to here. When he had first joined Silvermine several years before, he had felt a little intimidated by his fellow Greenwich-bound commuters. That was the heyday, when bankers and traders had still attired themselves in "power suits." The Thomas Pink shirts, Hermès ties, champagne-glass-shaped cuff links. If the suits weren't custom made, they were at least from Paul Stuart. Seth had stood among the well-dressed in some get-up that he had purchased at Today's Man. Nonetheless, he had never doubted that he would get to where they were and even beyond in short order. Now here he was, there.
The car turned onto Steamboat Road and stopped in front of the unprepossessing office building mostly occupied by Silvermine Capital. The weather obscured Long Island Sound cuddling both sides of the small peninsula on which the building stood. He shut off his iPod, gathered his papers, and stuffed them into his already-overfilled briefcase. His driver, Henry, opened the door for him, an open umbrella in his hand so that Seth wouldn't suffer a few drops as he scurried twenty feet from the car to the building's porte-cochere. He muttered thanks to Henry while looking down at his BlackBerry and scrolling through the onslaught of messages.
He rode the elevator that went directly to Silvermine's trading floor. He quickly hung up his overcoat in the closet and strode briskly past the receptionist, who was ensconced in mahogany. Her arms were quickly fluttering to answer six different phone lines, all trilling at the same time. Of course, she still managed to say good morning to Seth Farragut, one of Silvermine's six managing partners. Gracing the reception area's opposite wall was a large mural, depicting a gang of life-sized great white sharks cruising the turquoise depths.
He strode onto the eight-thousand-square-foot trading floor, heading to the area that constituted his fiefdom. The floor hummed as 123 people got down to the business of making money. Floor-to-ceiling windows wrapped around the trading floor, curving with the building's exterior. Only gray monotony this morning instead of the usual sun-lacquered views of the Sound. But Seth didn't care about the view. His senses came alive on the trading floor, as if an icy gust of wind from the Sound had smacked him in the face. The chorale of ringing phones and shouting traders raised his spirits ... who needs Rachmaninoff? He was as focused now as one of those great whites.
"Good morning, Dirty Dozen," he said to the dozen analysts and assistants already at the contiguous desks arrayed in an X shape. "London looks busy, so we can expect the same here, boys and girls. Asian stock markets down big overnight. One of the big banks in China about to crater. U.S. equity futures dropping like trousers in a whorehouse. We should have some fun today."
He chucked his briefcase under his desk, which was at the center of the X. He dropped into his padded leather swivel chair, cranked up his computer, positioned himself in front of a bank of monitors, and strapped on his phone headset. He logged onto Bloomberg, the trading world's universal message system. He pulled up his overnight trading positions, scrolled through his internal e-mails, and opened up his trading credit lines while swallowing whole a couple of chewable multivitamins. He was in the cockpit, doing a systems check before takeoff.
Seth had a private office with a fifty-dollar-a-square-foot view, but he liked being on the trading floor where the action was. His office contained only boxes that had sat there unopened since Silvermine had moved here.
"Okay, what do you guys have for me this morning?" Seth said to the young, fresh-faced analysts seated around him. Each analyst then reported whatever news he or she had on the companies that Seth traded. He listened and read at the same time. His pulse quickened when he saw on his Bloomberg screen that UBS in London was offering $10 million bonds of a bankrupt company called Ersatz, which retailed knockoffs of luxury fashion goods, at a steep discount to its par price of 100. With the bad economic times, even knockoffs weren't selling. Silvermine had a large position in the company's bonds.
"Anything new with Ersatz?" he shouted to Josh Goldfarb, the analyst who covered the credit. "UBS is offering $10 million at 63. A half-point off from yesterday."
Goldfarb's eyes roamed over his screens, looking for news and clues. "Nothing," he shouted back to Seth. Seth punched the direct line to UBS London. "Good morning, Simon. I'll pay 62 for the ten Ersatz 12's that you are showing at 63."
"Good afternoon, Seth," the salesman said, his cockney accent garbled by the half-sandwich in his mouth. "Hold it a second, lemme talk to the desk." A few seconds passed. "I can get 'em to you at 62 1/2."
"I buy," Seth responded. "Thanks."
He clicked off the line. He scanned on his computer screens the top financial and economic stories. He quickly checked the various markets that mattered to him: the U.S. Treasuries, currencies, commodities, international equity markets. He quickly checked for any new SEC filings on the seventy-three different companies whose securities he owned. "Louisa, Imperial Manufacturing just filed an 8-K. Get a summary to me on the hop!" Quick. Quick. Quick. He speed-read. He had to hurry, because sometime around eight-thirty, brokers covering him in the U.S. would be descending on him like a cloud of mosquitoes onto a naked baby.
David Economos, his analyst in the energy sector, ran to Seth and leaned over him. "Just heard a rumor that Texoil is doing a private equity offering," the analyst said breathlessly.
"So they're doing a PIPE, huh?" PIPE stood for "Private Investment in Public Equity," often a quick and easy way for a company to raise cash. "How many shares?"
"Five hundred thousand."
"Wow. So that's how they're going to take care of drilling needs this year. The stock's going to get crushed." He knew that the extra supply of stock would cause the shares to trade down. "How reliable is this info?"
"Very, very." Economos wanted to say "inside" but knew better; he had to protect Seth from accusations of insider trading, provide him with a shield of deniability.
Seth considered Economos his best analyst. "Echo," as everyone called him, always had his ear to the ground and his eyes on the horizon.
"Okay, Echo ... you're a master of PIPEs, or is a bong more your style?" Seth kidded in his usual dry, wry way. Echo grinned. Seth hit the direct phone line to Morgan Stanley. "Hey, John, is there a borrow on Texoil equity?"
"Let me check, Seth," the salesman answered.
"Hurry up. I want to put a short on at the open."
A few seconds later, John told him the borrow was two hundred thousand shares. In other words, Seth could borrow the shares, sell them, and then buy back the shares at a cheaper price and return them to the lender, pocketing the difference between the price where he sold them and the price where he bought them back. The price had to drop for him to make money. Two hundred thousand shares at $25 a share came to a $5 million investment.
"You got a market order to sell two hundred thousand shares. And I'll need Morgan Stanley's borrow." He decided not to bother with a limit order, since all indications called for a lower stock market open.
The axe runs from the brokers were lighting up his Bloomberg screen. Since Seth dealt with more than fifty brokers, by now his unread message count was over four hundred. Seth scanned the markets while perusing a research report that Goldman Sachs had just e-mailed him on a bankrupt company in the packaging sector. Seth liked what he read.
"Jim, you see this Goldman report on Cap Solutions?" he asked Jim Gutterman.
"Yeah, just go it, Seth."
"What's your financial model say?"
"Haven't got one."
"Why the hell not?" Seth shouted. "It's a company in your sector! Get on it ASAP. Have it to me by lunch." Seth shook his head, once again thinking that Jimmy was not going to work out. Jimmy was a 280-pound slob, and Seth had a hard time suffering slobs. A bit of a neat freak, Seth's desk stood out on the cluttered trading floor for its tidiness. No loose paper on his desk, everything filed in his desk drawers in labeled folders. Open the top drawer and you would find everything-pens, calculator, stapler, aspirin bottle, business cards-in its assigned, ordained place. Moreover, Seth viewed Jimmy's obesity as a lack of discipline. Seth believed in discipline. His motto was "Without discipline, talent is useless and luck won't last." He had made that up himself, and had it typewritten on a strip of paper taped to his Bloomberg monitor. He was disciplined enough himself that he kept his six-foot-one frame down to 185 pounds. He was disciplined enough himself that he could play Rachmaninoff at the age of fifteen.
Just then he saw that J.P. Morgan was bidding 86 (eighty-six cents for each par dollar) for some crappy company that owned movie theaters, Cineaste Inc. Looked like a good bid. Seth had bought a bunch at 69 less than a month before. The bonds had run up on speculation that the private equity firm Felt Fein & Co. was considering buying the company. He quickly scanned his messages to see if any other broker had a market in the bond. He checked and saw that the bonds had last traded the day before at 85 3/4. Some of the hundreds of messages coming to him this morning told him that the high-yield bond market was weakening. More offers than bids. He wanted to get out of this position at a good price but didn't want to dick around too much, given that the overall market was softening.
He messaged back to the salesman at J.P. Morgan, asking how many bonds their bid was good for. The answer was $2 million face amount, maybe bigger. Maybe bigger ... Seth knew how that worked: He would sell the bonds and find out afterward that the guy was really looking for ten million, but didn't want to spook the sellers and so bid for only two million. Seth didn't want to sell $2 million face amount of bonds and then see that that the bid had gone up another half-point immediately after the trade. He offered six million at a price of 86 1/2. He told the salesman AON, "all or none"; in other words, the bidder had to take all of Seth's Cineaste bonds, or there would be no trade.
"Seth, I dunno know if the guy can take that many. He's a small fry."
Yeah, right. The standard broker line when they got a size order from a whale and wanted to get it executed without moving the market. "AON, Chuck."
A few minutes later, the salesman came back with an improved bid, 86 1/4 for all six million. Seth whacked the bid and sold his bonds. That one trade had netted Seth and Silvermine $1,035,000 of profit in three week's time.
"Yes!" Seth shouted as he yanked off his head set and pumped his fist in the air a la Tiger Woods. He gave a high-five to Louisa Emory, the analyst on the credit. His glee didn't prevent him from mentioning to her that he was still waiting for that Imperial 8-K summary ... "Let's go, team! There's gold in them thar distressed bond hills today!"
Seth's phone was ringing non-stop now. If it wasn't one of the dozen direct lines that he had to the major brokerage firms, he checked the caller ID before answering. If it was some bucket shop calling, he let his assistant, Angela, take a message. Meantime, he had one conversation after another with salespeople and traders, trying to get their input as he developed a read on the market. "The market's feeling as limp as my cock, Seth." The data tsunami was washing over him, and he nearly drove himself batty thinking that he had missed among the flotsam and jetsam some key piece of information that would either make or cost him a ton of dough.
The stock market opened and he kept his eye on Texoil, the stock that he had shorted. The stock opened thirty cents higher. Not good. A few minutes later, Morgan Stanley called to say that Seth was done on a sale of a hundred fifty thousand shares at $25.30, still working one hundred thousand to go. He thought about putting a limit price on the sell order but decided not to. The stock traded up another ten cents, and he slid down in his chair and put his fists to his chin. His computer screens were hyperactively blinking and the phone lines singing. How was this piece of shit stock up while the overall market was down? What he didn't know made him a lot more nervous than what he did know.
"God damn it," Echo hollered so loud that his voice carried across the trading floor.
"What's the problem?" Seth asked.
"Look at the tape, Seth. Motherfucking Blackstone just made a bid for Barnett Petroleum. They're paying a 20 percent premium."
Seth hurried to pull the news story up. He ground his teeth as he read. Barnett was similar to Texoil, almost an exact replica. As word had leaked out about the Blackstone bid (and word always leaked out before the public announcements of such events, making a travesty of insider trading laws), investors had figured that Texoil would be next on the hit list and so had bid the stock price up.
Echo stood up and shouted, "Seth, let's close the short. We're going to get our asses handed to us. Let's take the hit and move on. This stock's going to the moon." The stock had, in fact, moved up another twenty-five cents even as he spoke.
Excerpted from When Vultures Dance by Michael Goodwin Copyright © 2009 by MICHAEL GOODWIN. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Posted January 31, 2010
WHEN VULTURES DANCE is basically a Wall Street thriller that involves insider trading. The novel couldn't be more timely. The novel also has a romantic element that gives it some real heat. I found the main characters to be believable, especially the antagonist, hedge fund maven Colt Murdock. It gives a fascinating peek into the privileged hedge fund world. The book is solid and filled with a lot informative and downright cool procedural details.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.