A Calculated Risk by Katherine Neville (best time to read books .txt) 📗

We went through the streets between rows of small stucco houses, their fronts stenciled in turquoise and gold, with little gold balconies and flower trellises. At the end of the street stood the two-story structure, long and thick, with a peaked roof like a granary.

“This used to be the sail makers’ barn,” Pearl explained. “It was the only industry in town before we arrived; but we needed shelter at once for our business. So we paid them enough to go build themselves another.”

It was a big, dark building, smelling faintly of mildew and the sea, with high vaulted ceilings in front, and at center a stairway up to the loftlike second floor. At the front desk, I glanced at the sign-in sheet, which bore names of some pretty weighty international firms, presumably doing business there even now.

“European clients?” I asked Tor as our group headed upstairs.

“Middle Eastern … Oriental … you name it,” he said with a smile. “Anyone who wants to avoid taxes and is willing to play by our rules is welcome.”

Upstairs was a long, dark hallway with a small window at the far end. At either side was a row of doors; we entered the first room at left. Pearl went to the large desk across the floor, decorated only by a single lamp, and picked up some papers. Beside the desk was a tiny switchboard of vintage make, and a bank of phones on a table just behind it. Instead of the standard wire service “ticker tape” light panel, Pearl had a blackboard with a piece of chalk, where she’d already scratched up today’s currency rates by the time we’d collected chairs from against the walls and taken our seats before the board.

“Okay, friends,” she said, all business, “we’re trading foreign currency here—‘FX’ to you—and this business has a lingo of its own, like any other. Georgian, when our buyers come in, you’re our seasoned professional trader. The first thing you’ll explain to them is how we make our money. Keep it simple. Show them the rates we use and give a few details. For instance, tell them that each morning you phone up the large money-center banks to check world rates, and then you set our rates against our vehicle currency, which happens to be the gold Krugerrand—”

“What’s a ‘vehicle currency’?” Georgian asked.

“The one against which we compare the others, sweetie—the numeraire.”

“I will explique,” offered Lelia, raising her hand. “You see, chérie, you cannot change dollars against francs and francs against marks and marks for pounds sterling—it will all be too confusing. So you choose one kind of money to make value with, against all the others.”

“Okay,” said Georgian, looking a bit dazed as Pearl began again.

“Once you’ve explained to them how we establish the vehicle rate, you’ll tell them how we—”

“Wait,” said Georgian. “How do we establish the, um … vehicle rate?”

“We set it a few pips above market,” said Pearl. “I’ll show you the formula when we’ve—”

“What are pips?” asked Georgian, sounding slightly desperate.

“Percentage interest points,” said Pearl with controlled patience. She glanced sideways at Tor and me with an arched brow, as if asking whether to continue.

“Why don’t you start by defining all the terminology?” I suggested to Pearl. “That might make it simpler to follow.”

“Good idea,” Pearl agreed. “Now, for one thing, every currency has a nickname of its own. It’s not in any book; it’s just the slang we traders use with one another when making deals. For instance, Italian lira are called ‘spaghetti’ and British pounds sterling are ‘cable’ and French francs are called ‘Paris’ and Arabian riyals are called ‘Saudi.’ When you’re doing a trade, you refer to the size of the deal as tiny or a yard—so one million lira, for example, would be ‘a yard of spaghetti.’”

“I can’t believe I have to learn all this jargon in under two weeks,” Georgian told me under her breath. “I can’t even remember what ‘ropes’ are—”

“Cable,” corrected Pearl, squinting at her with thinly veiled irritation. “But that’s hardly important—I’ll give you a list. The critical thing is that you understand how deals are done. Now, there are two markets in the FX business: the spot, meaning now, and the forward, meaning then. Which leads us into the distinction between hedging and speculating.” She picked up her chalk.

“You see, chérie,” Lelia interjected calmly, “it is really quite simple when you think of this—that you may offer the price the money has today, or instead you may choose to guess the amount you hope the money will have tomorrow. But there are different ways to agree to buy the money, and—”

“I can’t stand it!” cried Georgian, jumping to her feet. “It’s clear that even Mother understands this better than I do!”

“It certainly is,” said Pearl firmly. “Lelia—how would you like to replace your daughter on the trading floor?”

“Oh, I am happy, happy, happy for doing so very important a thing!” said Lelia, glowing with this recognition of her worth. “But one problem I fear—it is my speaking of English. I think it is sometimes too much suffer even for the ears of my friends.”

“That’s okay, sugar,” said Pearl, coming up to put an arm around her. “When I’m through with you, you’ll be such a hotshot, you could be speaking Russkie and no one would notice.”

Pearl asked the rest of us to leave for the afternoon so she could begin Lelia’s intense training alone. So Georgian headed off with relief to take more photos around the isle, and Tor and I headed back to the castle for lunch and a plotting session—until later that day when the time differential would permit us to phone Tavish in New York.

“I know Lawrence is a crook,” I told Tor. “I found a memo from him about parking—he’s planned this gig as long as you have yourself. If only I could prove it before he learns too much about us.”

“I shouldn’t be too concerned about all this,” said Tor as we climbed