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Overview
When Joe Gallagher goes to work for an energy trading company in Boston , he soon finds that pursuit of his ambition to strike it rich in the markets will plunge him into a whirlwind, literally. As the firm's traders jockey to make bets on the effects of an upcoming hurricane, Gallagher must choose between following the careful dictates his old school veteran mentor, Andrews... Or become a disciple of The Ghost, a newly-hired boss whose maverick trading methods push the envelope, a binary trader's code of supreme wealth or complete ruin...
A voyeuristic tour through the fascinating subculture of high-powered energy traders, Short introduces us to the larger-than-life men and women who run our markets— people who inhabit a world of intense stress, unbelievable gluttony, and the consequences of making and losing tens of millions of dollars in a single day.
Product Details
| ISBN-13: | 9781429927260 |
|---|---|
| Publisher: | St. Martin's Publishing Group |
| Publication date: | 12/07/2010 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 304 |
| File size: | 572 KB |
About the Author
CORTRIGHT MCMEEL is a veteran energy trader, short story writer, and is the co-founder of the literary journal Murdaland, where he has published Mary Gaitskill, Jayne Ann Phillips, Tom Franklin, and Richard Bausch, among others.
Read an Excerpt
Short
By Cortright McMeel
St. Martin's Press
Copyright © 2010 Cortright McMeelAll rights reserved.
ISBN: 978-1-4299-2726-0
CHAPTER 1
TRADING FLOOR
A haiku of fat.
Hutchinson: Three-egg omelet. Double sausage and potato. Order onion rings.
The breakfast list went out.
Miller: Double egg over easy, bacon and tomato on Asiago bagel.
Churchill: Bacon, ham, egg, and cheese on English muffin.
Large: Three pancakes, butter & cream cheese. Side order bacon.
Greenblatt: Two-egg omelet. Chorizo and cheese. Hash browns with applesauce.
The list traveled around the energy desk. A gray Formica tablet of biblical proportion, the desk was forty-five feet long. It housed six traders per side, twelve in all. The senior traders at Allied Power were veterans of the commodities circuit. Most of them had made their bones in big utilities or on the Mercantile Exchange in New York. Of the younger traders, two showed promise. One was a mathematics prodigy who had come up fresh from Caltech. The other was a kid named Gallagher from a Minnesota utility. The list complete, Andrews, the boss, passed it to Sami.
The traders looked up at the mounted flat-screen TV with shifty eyes and quiet interest.
A wild bull was running amok in Kansas City. A train transporting cattle had overturned and one maverick had escaped unharmed, charging off into the urban landscape. The havoc wreaked thus far included a few broken rearview mirrors, the dented hood of a Cadillac, three resultant fender benders, and a five-mile backup to the city-bound lanes of Route 70. A live broadcast from CNN showed the scene, an indignant brown bull taunting commuters as he lowered his head and wagged his short stumps of horns at them.
The traders snorted with contempt. The story said it all. The bull market had gone crazy and now apparently it had no fear for the bull was off in Kansas City, trampling on the hood of some hayseed's car. Andrews didn't laugh, though. He was hungry and thinking of yesterday's botched order.
— Sami, make sure I get double cream cheese this time, demanded Andrews.
It was midmorning on Allied Power's trading floor in Boston. 8:30 A.M. Brokers were already shouting down numbers on squawk boxes even though the New York Mercantile Exchange wouldn't open for another hour and a half.
Gallagher, whose broad forehead and round, cherubic face made him resemble an overgrown toddler, sat at his desk, sipping a carton of chocolate milk. Andrews looked at his newest acquisition and furrowed his brow. Traders drank coffee, black.
Natural gas futures had shot up forty cents overnight. Gallagher allowed himself a tight grin. Miller, the trader who sat across from him, said:
— You got your poker face on, Joe.
Gallagher said nothing. His smile was the smile of a simpleton.
Large, who was Gallagher's neighbor to his left, said:
— He's long as balls.
Andrews stood up and glared across the desk at his young protégé. As broad as Gallagher was, Andrews's powerful girth encompassed two of him. Andrews could have easily made the minimum weight requirement to wrestle sumo in Tokyo. Breakfast was on his mind, but when big money was being made it had a sweet smell of its own, one that trumped even food.
— How long are you, Joe?
— Long, he said.
— Shut it down before you give it all back.
— Natty's going to the moon, said Gallagher. — I'll sell when it gets to nine dollars.
— Wrong answer, said Andrews.
Since Gallagher had signed on, he'd had an impressive run and Andrews decided to take the young trader under his wing. He had only one doubt about the newcomer: how he'd take his first loss. In Andrews's mind trading was about two things, taking profits and enduring pain. Gallagher had not yet shown he could take the pain. Gallagher nodded at Andrews, signaling that he would exit the position. Then he sipped at his chocolate milk.
Andrews was at his core a family man. Taciturn, moral, occasionally sentimental after twelve beers, his desk was covered with beach and ski vacation photos of his three children and his wife, a striking brunette. An industrious Midwesterner, he was the first to arrive on the desk, last to leave. And while dedicated to his vocation, Andrews's passion lay with his religious beliefs: Chicago Bears football. His place of worship was his den, every Sunday sitting on the couch in front of his TV, baptizing his thirst with a new cold beer every commercial break. As for actual religion, Andrews believed that was a niche market reserved for women and children. When his Iowa-born Lutheran wife worried for his immortal soul, Andrews would respond that his status as a taxpayer absolved him from sin and any of the other apparent character flaws he might happen to possess.
Andrews and the other traders knew very little about Joe Gallagher save that he recently came up from their version of the minors. He seldom drank with them when he first started, and after one night when Gallagher had drunk too much, he never drank with them again. Andrews had certain insights into the nature of his understudy that the others lacked. He was walking by Gallagher's desk one day and saw a small piece of paper taped to his desktop. On it were cryptic words, words that no trader should tape to any desk:
Both the victor and the vanquished
Are but drops of dew,
But bolts of lightning:
Thus should we view the world.
Many of the other traders left Gallagher to himself. Being a superstitious lot, they suspected from his brooding nature that the residue of a recent misfortune clung to him like bad mojo. Andrews alone reached out to him.
— I don't know if you saw the memo, said Andrews. — We drink coffee here, not milk.
Gallagher nodded, remaining silent. Andrews patted down his cowlick of thick blond hair above his brow with the palm of his hand. It was a habit he had when perturbed.
After this the men got back to business, the business of taking other people's money. Hurricanes, weather, gas draws, nuke plants coming online, nukes coming offline, coal barges and rail transport disruptions, transmission lines that caused price congestion between the hubs, and then again with the weather. On top of all that, one had to throw crude oil insanity in the mix, the terrorists and psychopathic nuke-wielding leaders with a taste for shoving lit firecrackers in the ass of geopolitics. Predicting gas, oil, and electricity futures was an easy job when you happened to be right. It was also easy when you were wrong: You got fired.
Gallagher finished his chocolate milk and pulled up the commodity news service CQG, which also provided natural gas and crude oil trend charts. There was a record amount of gas in the ground. The economy was sagging because the Republicans were fighting wars that no one believed in. Record supply, waning demand.
It was there, while sitting at his desk, that Gallagher felt his third eye coming on. It was a thing he told no one about: Looking at the nat gas bar chart, he sometimes heard a music from the up ticks and down ticks, which arranged themselves like notes on a score. Gallagher gazed about the room and felt a truth that no one yet realized. The market was going to rally, a chocolate milk epiphany.
Still, he had to convince himself. The art of trading lay in good judgment and constant adjustment.
He looked at the candlestick charts: the monthly, weekly, and daily charts all lined up with bullish hammer patterns. As the price of gas ticked higher on the Intercontinental Exchange, an electronic trading platform known as "ICE," Joe had the feeling he imagined a general might have before a decisive victory. Tomorrow and the next day were irrelevant. The battle was now. Others were bleeding on the battlefield. His heavy cavalry and tank divisions rolled over them, massacring legions, driving them into the dirt.
Taste it, as his broker would say.
Take them to the woodshed.
Blood on the walls.
As gas rallied, his adversaries who had sold to him at much lower levels suffered as electronic dollars, their lifeblood, went pouring into Gallagher's trading book. He tried to wear his invincibility with an air of grim silence like he'd seen Andrews do. Andrews, always adept with football analogies, had a line about how to act when making money. He likened it to a trip to the end zone:
— Act like you've been there before.
* * *
— Here's the goat, said Miller, shaking his head.
— Sorry, said Sami, out of breath, holding a cardboard box with eleven white paper bags.
— Beatings, said Miller. — You being late every day isn't the way to get off breakfast detail.
— He's pledging for life, chuckled Large.
Sami walked around the desk passing out the breakfast sandwiches. As he handed them out, Sami would recite each order with an exasperated optimism.
— Miller: Double egg over easy, bacon and tomato on toasted bagel!
— Churchill: Bacon, ham, egg, and cheese on English muffin!
— Large: Two pancakes wrapped with cream cheese, bacon side!
— Hutchinson: Double sausage and potato three-egg omelet. Side order onion rings!
Gallagher, who was too cheap to order take-out, was eating his second peanut butter on a bagel, which he'd brought from home. Sami went down the rows reciting and handing out the orders, wondering the whole time why he bothered to get an MBA from Yale. This bullshit was the kind of attitudes that his Pakistani father had warned him about.
Sami gave his least favorite coworker, Andrews, his order last. Once this task was done Sami returned to his desk, and got back to work, thinking, defeat is only temporary.
Today it was not.
— Yo, Goat. What the hell? said Andrews. — I ordered double cream cheese on these. You blew it again.
Sami stood up and approached the angry veteran trader. Andrews held out the bag and without another word handed it over to Sami. As Sami made his way off the trading floor toward the elevators, he heard Andrews bellow:
— Pledging for life.
As Andrews lambasted him, Sami moved toward the door of the trading floor. Gallagher held out his hand and took the breakfast order from Sami.
— I'll go get it, said Gallagher, standing.
Sami put a hand on Gallagher's back.
— Thanks, Joe.
As Gallagher left the floor, Andrews shouted:
— Two goats are better than one.
* * *
When Gallagher returned with the two double cream cheese and bacon bagels, he noticed the absence of chatter. Leslie Moran had wafted in and taken the buzz of the trading floor to zero. She worked in legal and usually her presence signaled evil tidings like Sarbanes-Oxley regulations and time-consuming HR seminars on trading ethics. However, her beauty quieted the traders, although she did cause some like Dave Vern from Mississippi to scratch themselves and others to sniff the air for her scent. The traders tried to make her something of their own and secretly they called her Max Gen. This referred to "maximum generation," a phenomena that occurred on extremely hot summer days when all available power units on the grid had to run to cover demand. On this morning Max Gen was wearing a tight-fitting white blouse. A whisper went across the desk.
— Joe, said Miller. — You see Max Gen today? That shit is printing.
With the prospect of making a killing in the market, Gallagher was keeping to himself. As Max Gen breezed by, his head was the only one in the row that did not turn her way. He was thinking about covering his position. The markets were not always rational, and often moved violently. They were after all a product of the people who traded them.
Thinking about the violent, irrational nature of traders, Gallagher recalled that day seven years ago when he had just started in the biz, working in the pits of the MERC in New York. It was a cautionary memory, a visceral illustration of the emotional nature of markets and how sometimes the machinery that comprised the market could go insane.
Some Greenpeace activists had attempted to disrupt the oil market, to make a statement against fossil fuels and the damage they caused to the environment. Gallagher was just a runner at the time. The activists were mostly average-sized, bearded men. They had the wiry tough builds possessed by rock climbers and mountain bikers. The activists were not weaklings. They came in with their placards and protest signs and two had bullhorns and they were chanting slogans about oil companies and capitalism.
For a moment it seemed as if they were going to break up the trading that day on the exchange. But once the pit traders and brokers realized it was not some TV gag but an invading foreign body trying to disrupt their work, they reacted efficiently and violently, like a market that has decided to run or plummet and not stop until there were bodies lining the meat locker. The traders shoved the activists off the steps and hurled them into the center of the ring.
The red-faced, hypertension-afflicted traders kicked and punched anyone who tried climbing back out of the pit. Then the real devastation began. Traders began ripping their own computer screens and phone sets off the walls of the exchanges and began hurling them, along with garbage cans, full bottles of soda, coffee mugs, anything they could get their hands on, down onto the heads of the Greens. One activist was carried out on a stretcher with part of his skull showing.
Gallagher recalled the look in the pit that afternoon. Men's eyes were glazed over with something that was usually reserved only for special times when there was an extreme bull rally or a bear plummet. In the pits, everything was hyperreal. You were only alive in moments of pleasure or pain. Euphoria or terror.
Now, today, as the money poured into his trading book, Gallagher felt as if his survival depended on remaining calm. He took a deep breath. Thinking about the brutalized activists always reminded Gallagher of how not to act. Markets punish ignorance and feed on fear, he told himself.
Ten-thirty A.M. After option expiration the market quieted down. All the cash traders were in their midmorning lull and, along with the term traders, awaited "the nooner," or the midday weather report that took the newest satellite models out to a fifteen-day forecast.
The meteorologist, Bill Rector, had the most thankless job on the trading floor. When he was right, he didn't get paid. When he was wrong, large fat men who were losing millions of dollars wanted to destroy him. Today he had been wrong again about the upcoming blast of heat rolling across the Plains states, known as a "heat dome."
Meteorologists had their own lexicon of doomsday terminology, something that could penetrate even the thick skulls of nonscientists. In the summer it was the dreaded heat dome and in the winter it was the "polar pig." Yesterday in the weather meeting Rector had promised that the heat dome would dissipate as it moved east into a low-pressure system traveling north out of the Gulf of Mexico. But the low-pressure system had skated due west and pushed the heat dome even farther east.
Andrews had been hoping against hope that Rector's "heat dome" would get diverted by the system in the Gulf. Now, as gas and power prices skyrocketed, most of Andrews's traders, who had been somewhat short, were ready to unleash their fury on Rector. The clever, rail-thin meteorologist was no novice to the trading floor. For the nooner weather chat he sent down his new minion out of Nebraska, a well-meaning, gawky kid named Sykes who had a haircut that made him look Amish.
Sykes started his nooner with the backpedaling, relativist technique that the meteorologists used when they were wrong. It was probably similar to the modifications and excuses of misconstrued meaning that had been employed thousands of years ago by witch doctors and oracles. Only instead of a couple of chicken bones scattered across the floor, Sykes had the religion of science to legitimate his tale.
(Continues...)
Excerpted from Short by Cortright McMeel. Copyright © 2010 Cortright McMeel. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of Contents
Contents
Cover,Title Page,
Dedication,
Acknowledgments,
Part One,
Trading Floor,
In the Cards,
Milt the Broker,
Milt in Florida,
Office Graffiti,
The English Major,
The Traders' "Thirsty Thursday",
The Ghost Arrives,
Champ in the Box,
Milt Gets Funding from a Local,
The Ghost in Action,
Andrews Gets Sized Up,
Milt Among the Czars,
Meeting of the Minds,
Fold,
Famous,
Gallagher Shorts the Market,
The Colonel,
Hutch Goes Home,
Part Two,
Milt Shoots for Par,
Stan Couch's Xanadu,
The Ghost and the Executives,
The Mariner,
Google,
Pizza Parlor,
Polka Band,
Andrews Eats a Jab,
The K-Wave,
Weather Derivatives,
The T.U. (Tighten-Up Session),
Expense Account,
The Track,
The Colonel in North Dakota,
Bullish,
The Red Lion,
Cape Hatteras,
Another One Gets Away,
The Sandpiper,
The Weather Hedge,
Art Gallery,
Vegas,
Hard Rock Pool,
Good-Luck Charms,
The Colonel and His Manservant,
Hitting the Tables,
The Marksman,
The Wives,
Sam's,
Attack! (Day 1),
Attack! (Day 2),
Late Night with Milt Harkrader,
The Dorm,
Hurricane (Thursday),
Hurricane (Friday),
Hurricane (Saturday),
Hurricane (Sunday),
Hurricane (Monday),
Piss Poor,
The Place,
The Feds,
A Trade,
Baboons,
Tae Kwon Do,
Part Three,
The Bid/Ask on Milt,
The Lot,
The Lanes,
Atlantis,
The Sporting Element,
Notes on Trading; or How Energy Trading Works,
Trader's Glossary,
Copyright,