People who dont know anything about this business are always talking about important psychological barriers when it comes to indices. So, a 14,000 Dow becomes one of these barriers in the minds of the puerile hacks who couldnt find a real job so got into journalism instead. Market guys, on the other hand, do not worry about such artificial obstacles to making a lot of money. We have been trading for months, if not years, on the assumption that, sooner or later, it was going to break 14,000, so today has not found us psychologically ecstatic. It is simply a validation of everything weve been doing, and a next step on the ladder to what Stanley describes as dinero serioso. He thinks that means serious money in Spanish but then he also thinks that absolute return is what happens when you drink too much vodka.
As it happens, Stanley is still hustling and Im still passing bits and pieces of business to him, but its not like the old days and he knows it. His heart really isnt in it any longer, and he wants out. Do I know anywhere? I know hes angling for a chair at Lehman, but Im not sure I want him there. Frankly, his best days are behind him. He needs to go and sell Florida real estate to Bostonian retirees and fledgling snowbirds.
The guy covering us at Lehman is good without being too aggressive. I do have one problem with him. His name is Julio Csar Prez Jerez. All of it. Guess hes Mexican or Puerto Rican or something and I think those Hispanics like to load them up with names a few guys even get their moms name too. Go figure.
Lehmans are incredibly bureaucratic so, even if I wanted Jules to take me out to a ball game and look for some action afterwards what Stanley charmingly refers to as fur-hunting – hed probably need to get Dick Fulds permission. I can live without that.
In any case, prime brokers are not on my radar today. I have seen Brian and Brad, and we have scoped out a deal. These two guys have brains the size of Wyoming, but no idea of how to make money out of them. Thats where I come in and maybe, if theyre super-nice, my partners at Curveball. But I am setting the pace here, and that will need to be recognized when the deal kicks off.
The next question is how to pitch it to the partners. They have to have the imagination and the ambition to go with this one. We need to get out of the whole continuum of long, short, long/short, arb all the fiddling at the margins that keeps us out of trouble but never quite shoots the lights out. If Revis wants to buy a bigger place in Hingham, complete with a dungeon and live-in dominatrix, he needs to get with the program my program. I can make us all hugely wealthy, and it would all be totally legal. All they have to do is say: Sure, Larry, sounds sweet. Go do it. Yeah, kiss my ass.
The deal is there to be done for someone, and damned if Im going to miss out on it. Brian and Brad and their geeky little outfit, Commodity Kinetics, are on to something really hot. Ive done my research on this one. Graham, Hayek, Kaldor Ive read their papers, studied the theory, done the math, and it all adds up. The Brits didnt make Kaldor a Baron for no good reason. The man was a genius. It was a pity he just missed out on seeing some of his best ideas made real by Lawrence E. Podolsky.
Weve even come up with a name. CCUs: Collateralized Commodity Units. Sweet. We Googled it and nothing unpleasant came up we dont want to find out its an acronym for some deviant sexual behavior or a racist redneck outfit. The boys wanted to go for something clever like SPDRs, but I want something that looks and sounds more weighty. CCUs are the type of thing a government might issue.
Except were going to be the ones doing the issuing. The whole deal revolves around us being issuer and market-maker for a bunch of CCUs. Brian and Brad provide the intellectual stuff, with all the software to calculate index and collateral numbers. Curveball adds the kudos of a house with an unblemished record, the highest fiduciary standards and the market muscle to issue and distribute the units. Thats us, to a T. When do we start?
Lots of details to thrash out, but were closer than ever to doing something. The market isnt going to know whats hit it. A whole new currency class now that is something to get excited about. I was there at the birth. Goddam it, I was the midwife!