Trigger Point by Matthew Glass Page B

return it to the bank that had lent it. In other words, you were betting on the stock falling. The difference in the price when you sold and the price when you bought the stock back, less the fee for borrowing the stock, was the profit. Or the loss, if the stock price rose. In the meantime, the longer you held the stock, the greater the fee you paid.
    And Malevsky, of course, had no idea when this correction of his was going to happen.
    ‘Strickland’s testifying to Congress next Tuesday,’ said Malevsky. ‘That’s his last testimony before the midterms. We could borrow for a week. Worse case, we lose the fee. What will it be for a week? Nothing. Best case, Strickland says something and we get the dip.’
    ‘Wrong,’ said Evangelou. ‘Worst case, Strickland says the opposite because he thinks the president wants him to boost the markets and we get a spike. No way he’s talking the market down a month before the midterms.’
    ‘No way he’s talking it up. That’s not something he does and that’s not what the president wants. If anything, he wants Strickland to push things down a little. Wall Street will yell and Knowles’ll make political hay with his rectitude-and-trust spiel.’
    ‘Before an election? I don’t think so.’
    ‘Why not? Doing that before the election is exactly what Knowles wants. He wants to show he’s tough. The markets can’t push him around. There’ll be no bubble on his watch. If he has to take action to stop one developing, he will.’
    Evangelou looked at Grey. ‘Ed, this is all a hunch about the psychology of what Strickland’s going to say. This is bullshit.’
    Grey was inclined to agree. He had hoped there was something more that Malevsky knew but it looked as if he was all hot air. ‘Boris,’ he said, ‘I don’t think–’
    ‘There’s one more thing,’ said Malevsky.
    Grey stopped.
    ‘I heard something when I was at Morgan. Not something in the public domain.’
    Grey raised an eyebrow. This was it.
    ‘I heard something about one of these banks needing to raise some capital. Something about losses they need to declare.’
    Now Grey understood. Malevsky had been hoping to present his idea as the result of some great psychological insight and analytical research. In fact, there was a nugget of very valuable – and very confidential – information underlying it.
    Malevsky shrugged.
    ‘How much capital will they need?’
    ‘I don’t know. Enough to make people interested.’
    ‘A couple of billion?’ Grey paused. ‘Five billion?’
    ‘I don’t know. I really don’t. But I do know they’ve got losses they need to declare and they’re big enough to make them come to the market for funds.’
    ‘So that was all bullshit?’ said Evangelou. ‘All that stuff about Strickland and the correction and everything?’
    ‘No, I believe it’s going to happen. That’s the context. Strickland’s going to keep talking hard. Maybe before the election, maybe after. I’m not sure when. But when you get this bank coming to the market for more capital in that context, suddenly there’ll be pressure on banks. The other ones, the other three I’ve identified, are the ones I think most likely to take a hit. I’ve done the analysis on them.’
    ‘Would you have identified the first bank from your analysis?’
    Malevsky shook his head. ‘That’s what’s so beautiful about it. No one’s going to expect it.’
    Grey looked at Evangelou. ‘What do you think?’
    Evangelou shrugged. ‘It’s a little more interesting, that’s for sure. It’s not exactly kosher.’
    Grey didn’t say anything to that. Rumor was rife in every market. In most cases, unless you went about it extremely stupidly, the difference between insider information and informed speculation was almost impossible for an investigator to make out.
    Malevksy watched him hopefully.
    ‘It’s chickenshit,’ said Evangelou. ‘Ed, what is it? What are we going to make? One bank. Who knows what the others