REKT - Chapter 6

Frankfurt Bank

This fucking bank. This regional, basic bitch, mercantile bank thought it could crash the club and swim with the sharks. Morgan, Barclay's, Goldman, UBS. Those institutions spent decades, centuries in some cases, prowling the murky depths of money. They knew where to eat, where to shit, and how not to eat where they shit. Most of all they knew how to do it quietly, discreetly. They banked generational wealth and when they took on new business, it was good business, clean business.

This bank? These fuckers from Frankfurt. They spent their days lending to sprocket manufacturers. Good steady business, but no glitz, no glamor. Globalism changed the game. Late capitalism opened the doors to monetize the entire fucking world. The sharks were ready for it, because they erased the borders. They ran laps around the bank that stayed in Germany. That bank preached patience. Strength at home. Secure business. Steady returns.

Money filled the belly of the sharks. The Germans ate fine, but they didn't eat like the others. Silver chopsticks, silk napkins, sushi spread across naked flesh. Endless unlimited expense accounts. These were the pleasures of London, the table stakes of New York. Frankfurt ate boiled sausage on long picnic benches. That had once been enough, but not anymore. They were being left behind. Patience was at an end. There was a world to plunder, if only they were a shark.

The temptation impossible to resist, the order inevitable when given. Leave Frankfurt. Cross the Channel, cross the Atlantic. Swim with the sharks and show them that the Germans can do this too. It was the Go-Go Era of the Aughts when anyone with money could make money. Frankfurt got fat. They filled their belly. The Germans thought they were a shark, but they didn't know where to swim. They didn't know what to eat. They ended up with the leftovers. They scooped up the toxic fish others left alone. They ate down the poison, only it took them a decade to realize it.

Poison is starting to gut them, and they are retching up one bad decision after another. Synthetic Swaps. Russian Money Laundering. The Trump Organization. Ponzi Schemers. Libor Rate Fixers. An audacious display of idiocy. Staggering levels of stupidity. All banking with Frankfurt because no one else would touch them.

They were so fucking stupid, they even signed us. They took us on after paying billions in fines. I guess they were too busy to do their homework, or they hadn't fired all their idiots yet. Give credit where credit is due, Andy sold them good. How easy it is to make up an imaginary hedge fund. Especially one that handled an obscure corner of the market and only worked with family offices. Truth is, before crypto we were a convenient work around to get money into online sports books. Bettors bought coins from us that could be used to wager on games. If they had anything to cash out, they did it through a website that used PayPal, Venmo and a dozen other ways to pay them back. The ones with the real money, the online casinos, set up trusts that acted as fund shareholders. It was all so easy.

"These wire transfers, our risk desk has flagged them."

Fritz, our latest banker, holds a stack of printouts in his pudgy right hand. He is our fifth relationship manager since we opened the account. They are culling their ranks. No more Hot Shit Erica from Wharton. Her boss, the older guy that lived out on the island, is gone too. He hated this bank, but they still paid after the real sharks fired their elder middle managers. The Germans eventually caught on and let Vikram in his late fifties go. After the names left, we lived a few blissful years with interim paper pushers overseeing our accounts. Those nobodies were in so deep they barely reviewed our balances.

We should have been smarter. We should have stayed smaller. We tripped a threshold, too much money. Flagged as a risk, so the account was transferred upstairs. When everything filling turns out to be laced with poison, success becomes looked at with suspicion.

"Fritz, I’m disappointed that this is where our relationship stands," Andy begins. “It used to be that people here understood our business. We spent extensive time with Erica, then after that Vikram, explaining the unique nature of our precious metals fund. Please, tell me we don't need to do that again with you. This is not how we are used to being treated."

Andy was on the offensive. This move, all bluster and bravado. Assume we know more than he does. Use the unknown to our advantage.

"You are a commodities trading firm. I have it here in the notes." Fritz speaks in German accented English. Frankfurt keeps getting closer to home, closing ranks, sending trusted lieutenants to hold what little remains.

"Precious metals hedge fund." Andy corrects him. "Your notes are lacking."

"We don't have a code for that. Commodities are what the system accepts." Fritz was a true systems guy. I could see it on his face. Bald, smooth, slightly plump but lacking imperfection. He never needed hair. What an odd thing to be beyond.

"Fritz, why are we here?"

"Because your recent account activity is highly irregular."

I look up from my laptop. As a signatory, I'm required to be present, but this isn't my side of the house. Andy manages relationships, he rides the money train. Neither Andy nor Fritz cut over to me. I return to managing our operations.

"Nothing is regular about cobalt, palladium, or vantium. You understand what precious means?"

The balls on Andy. He's pushing Fritz, trying to find the point at which he flusters. Andy needs to know where a person crosses into the irrational. That's where he really runs wild. Get a man to stop making sense and the possibilities are endless.

"Mister Andy." Fritz is not having Andy's shit. At least not yet. Fritz is following his own script. He has a protocol to complete. I can respect that. Dump harmless errors, continue executing the program.

"It's Doctor Andy."

"I don't have that in the files. You are a doctor?" Fritz asks.

"It's an honorific, from the University of Nairobi. Our charitable work in the region is well recognized. Honestly, it is a shame we cannot bank more in places where we are known and respected. Of course, this bank used to treat us that way. Fritz, perhaps we should go out for lunch and try to get back on the right foot?" Andy asks.

Ah yes, the old let's be friends. Maybe Fritz just needs an invitation to love.

"My apologies, Doctor Andy, but my schedule does not permit lunch.”

Fritz does not want to break bread. A shame, it’s easier to kill with kindness. He continues, “Let's just get to the heart of the matter. These wires to Kinshasa, the recipient companies have connections to militia organizations. The US government has flagged them for review. We need explanations." Fuck, fuck, fuck. Our side hustle, the blood diamonds. I knew we shouldn’t have sent that from Frankfurt. Money was supposed to go to Cyprus and Nikola was going to funnel it through her people there, but it would have added three days to the transaction. Our man in Rotterdam said they’d be gone by then. Act fast or miss out. Now we are fucked. How is Andy going to talk our way out of this? Andy has that look on his face. He's changing tactics, expanding horizons.

"Fritz, have you ever purchased cobalt?"

"Of course not."

"Well you have, but you just don't know it." Andy reaches into his pocket and pulls out a silver iPhone. "It's in your phone, your computer, and television. Tiny amounts in all sorts of critical machines. Cobalt comes from precious few places in the world. That is why I asked you earlier if you understood what the word precious means. Cobalt comes from Sub-Saharan Africa and if we wish to purchase it for investment sake, then that is where our money must go. I would love to take you there, show you how it's done.”

He's acting disappointed in Fritz, gentle belittling shrouded as education. Andy goes on.

“It’s very basic stuff. They got small boys in big pits digging with their hands, trying to find blue chunks in the dirt. Those chunks end up in gold rush towns where middlemen deal only in cash. That isn’t the safest situation for our money, so we work with security firms to make our purchases. Military men all have pasts, I am sure some were on the wrong side once upon a time. Now though? They are all commercial. There is no issue there.”

Andy pauses, waits for a reaction. Fritz is playing poker, using silence as his offense. Andy continues, “Fritz, we are in competition with the Chinese. They are the big buyers in the market. One reason is that their banks don't haul them in for questioning like ours. They are free to do business where we must be hesitant. It’s a disadvantage for us. We need good banking partners to succeed, so if you wish to see us as a continued growing customer whose reserves are buffeting this bank in its time of crisis, then stop forgetting our fucking business and vouch for us to the US government."

"Doctor Andy, we apologize for any past interruptions and inconsistencies with our account management. I will endeavor to learn your business better. Still, we will need documentation on these transactions. The government needs assurances of your actions."

Ah, this is a promising line. Andy triples down now. "Fritz, I've answered these questions too many times for you people. It all ends the same way. We'll have Rotterdam send over papers verifying the metals stored on premise. They will match our account activities. Will that do or should I walk across the street to First American or someone sensible?"

Fritz is backed up, but he's not going to fold this easily. They didn't kick us upstairs to have a softie rubber stamp our shenanigans. I feel his eyes on me. He knows Andy has all the momentum, so he's going to try this guy here.

"Ryan, you have been quiet."

"Just busy Fritz. Please don’t mistake it for rudeness. There's a pricing irregularity in the Asian exchanges. Urgent matter. I need to determine if there’s bad data or an arbitrage opportunity." "Ryan, what are the fund's model parameters on vantium?"

Ha. This fucker thinks he's going to get me on technical matters. Wrong avenue buddy. Technically, I'm hard as steel.

"We accrete until the price hits eighteen dollars an ounce. Our max position is seven percent of holdings assuming the aggregate exchange volume maintains or exceeds a baseline threshold of twenty thousand metric tons."

"Is that daily, weekly, or monthly?"

"Monthly. Annual Vantium consumption is projected at one hundred eighty thousand metric tons. The market can support another twenty five percent in stockpile."

"Thank you, Ryan."

I look up from my laptop, eyes steady, but pulse up. I can feel my insides tightening, if he continues, I’ll start sweating under my shirt.

"Are you satisfied Fritz?" Andy knows it's time to get out of here. I do too. This sniffing of butts has run its course, and we aren't in a position to pee on their fire hydrant.

"Almost. One more thing, what is your performance on the year?"

I don't have to look up to know that Andy has that king of the world smile across his face. I don't have to look up to deliver the news either.

"YTD, we are up thirty-five percent."

"I see. That is very good. And this um, precious metals fund, is it open to new investors?"

Oh my God. Fritz is a fucking idiot too. This fucking bank. This regional, basic bitch, mercantile bank cannot stop shooting itself in the fucking foot. Fritz wants sushi before they call him home for sausage supper.

"Ryan," Andy asks, knowing the answer already, "when are we open to new investors?"

"October 31st. Given our relationship with the bank, I am sure we can waive any minimums for Fritz should he want to participate."

Andy smiles. "Of course, we can waive any minimums. We can always make accommodations for friends." Fritz walks us to the elevators. He is still waving his thick sausage hands as the stainless-steel doors shut. It's amazing what dominance and opportunity can accomplish. Once we put ourselves above Fritz, he began looking to benefit from his submission. Gifts for compliance. Tale as old as time. This is one of dozens of relationship dynamics Andy has taught me. He studied them all in a book, but I suspect they had been handed down to him before that. The book only codified what he'd learnt under a master, it gave name to the manipulations that propel his everyday life.

I know the elevator is empty, that we are alone and free to talk, but I turn and double check anyway. All it takes is one simple slip. Vigilance is the watchword when in the belly of the beast. "Vantium doesn't exist." I say to Andy, my eyes are studying the weather on the elevator TV. I am helpless to resist a screen in action. How I hate the endless attention theft that assaults me.

"Are you sure? Vantium sounds very real and very precious."

“Does it? Describe it for me. Sources, uses, value.”

Andy’s big wolfish face lights up. I’ve given him an opportunity to prove me wrong. I’m rarely wrong and don’t invite questioning.

“It comes from the Ural Mountains. Crystalline structure, but similar to other conducting silicates. The strength of vantium is its ability to maintain transfer rates across huge temperature swings. That’s ideal for use in control systems in foundries. Its rarity is due to the fact that the richest veins are located in areas where the Soviets did underground nuclear testing. Too many of the remaining deposits are radioactive.”

“Nice try. Vantium doesn’t exist.”

“Are you sure?” Andy asks again.

"I'm sure."

"How can you be?" Andy asks, fidgeting a bit, not ready to let me have hold of the truth. "As the Chief Investment Officer of a precious metals hedge fund, I have a fiduciary duty to understand the reality of our investments."

"But we aren't a real hedge fund."

"That doesn't mean we can invest in fake metals."

"But we have. You just said so yourself. We are buying vantium until it hits eighteen bucks an ounce."

"It's not real. The price will never get there. Since it's fake, we’ll never hit the threshold either."

"So, we are going to spend the rest of our lives buying fake metal for our fake fund? What poor fool mans that desk?" Andy asks.

“Rosencrantz and Guildenstern.”

“Do I know those guys?”

“They aren’t real.”

Andy didn’t have a strong humanities education. I let it go.

It would be so much simpler if we really did run a precious metals hedge fund. There really are boys digging chunks of blue rocks out of the dirt in the Congo. There really are heavily armed Chinese buyers carrying duffel bags of cash through market towns. Rotterdam really does store loads of the shit in secure, fully audited locations. For a variety of reasons, metals are really purchased in Cyprus before being shipped to Eastern European component manufacturers.

Instead, we perform fake banking services for fake money.

"We'll have to cut Fritz in," Andy says.

Back to reality. Andy needs to talk the lie through to completion or else he'll forget our later obligations. I'm sick of Fritz, but I must respect my partner's process.

"Definitely. Shouldn’t be much."

"No, he's a tightwad. I bet we'll get twenty thousand from him. How many real people are in the fake fund now?" Andy asks.

I start counting them up. There's the guy in Rotterdam that verifies our fake metals. He obviously knows there's no fund but understands how we have to pay him through it. There's the commercial insurance broker. Without him we couldn't open our bank account. There are the people in Cyprus where the money pops in and out of. There’s the woman at the other bank we briefly had. My poor father who sold some of his Lockheed stock to back his boy. This is getting complicated. Thank God, we just invent our annual return. Most reinvest their fake earnings back into the fake fund anyway. Imaginary metals don’t pay out often.

"All told there's twelve. I'll alert Nikola of the possibility of Fritz," I say.

"Of course, you will. Are you two still snogging?"

I can't remember if snogging is real English slang or not. This fucker spent a year in London, mostly in a blackout, and managed to incorporate all the dirtiest, oddest bits of the queens into his vocabulary. "I've been busy with our end of the business. Right now, Niko and I are just friends."

"Say no more squire."

I brace for the inevitable nudge-nudge from Andy. He catches me in that high rib, the one I broke falling down a flight of stairs. It's a gentle ribbing as they say, but it still stings like fuck. Another one of those relationship dynamics. Remind people you know where it hurts.

Andy is thirty-eight, but his knowledge of pop culture goes back decades. He's spent endless hours accumulating arcana and making sure he knows exactly where my tastes and his quotable recall overlap. This is how we bind ourselves together. As the inhabitants of an imagined reality, things like Monty Python anchor us to the world we walk through.

"Are you coming to Deacon's FinFuture event or not?" Andy asks.

"After Fritz? I'm tired of adulting. That meeting took the wind out of me. Are you guys partying later on?"

I reach up and release the choking button around the collar. My clip-on tie doesn’t like that. It tumbles to the floor. I should have had my grownup clothes shipped to Manhattan, I left them in Europe because we are due back there soon. I wasn’t counting on multiple meetings with bankers this week. "It's a Deacon Joe event. I'm sure we will."

Even if they don’t, I know Andy will. He’s having a hard time making it to happy hour lately. I’ve noticed a few days when he’s gone hard over lunch.

"Let me know who and what the chems are,” I say. “I'll fire something off in the hotel room and try to come in on the same wavelength."

The elevator doors open, and we are ushered into a lobby. Vaulted marble, all red and speckled. Frankfurt Bank in polished silver letters. This muted design is supposed to project confidence. The automated security gates hold us for a moment, letting their cameras capture a nice clean parting shot. Silent, the gates open and a green arrow signals clearance to leave across the great glass concourse. There's a mobile suspended in the air, the arms rotate slowly, abstract shapes hanging from them. The bank spent seventy million on the piece. It's back on the market for far less. Far, far, less.

"I'm going back to the hotel to change. You want to split a car?" Andy asks, never wanting to be alone. "No. I want to walk through ten thousand people and pretend I don't exist. Catch you around." Andy opens his mouth, but it's too late. My earbuds are in, I don't hear his words. This morning has taken from me. I need solitude to recharge the battery.

***

This room is cocaine. Compulsion, conversation, closed crowds one wink from conspiracy. This is the new Brooklyn of one-bedroom condos starting at a million five. The place is filling up with shitheads, their eyes on art school majors. Fancy girls on a cleanse whirling around with macchiatos instead of martinis. Andy's full of Bolivian booger glue. All back slaps and high fives. Bro’ing the fuck out.

I don't see Deacon Joe. He doesn't do aggro chems, so the rats all play while their hipster shaman is away.

I'm entirely wrong for this room. Buzzy and fuzzy, filled with benzos and edibles. There was supposed to be a yurt tonight. I heard talk of a cuddle puddle and tarot cards. The night took a hard-right turn somewhere after I entered my Lyft. My driver wanted to go off shift, but I kept changing the location. Five-star slavery. Sorry, but these lunatics take priority over his family. Getting here now, I feel guilty. I would have been better off saying my name was not at the door, grabbing another car, and slinking back to the comfort of Netflix and room service.

We used to match our moods, but Andy and I aren't so good at that lately. He's more. I'm less. It makes me nervous that our not-so-secret secret will slip out into the wrong hands. There's a sea change coming, the cryptocurrency party is just getting started, but we aren't meant to be the big shots. We are the stable coin, the thing that makes the markets function efficiently. Cocaine Andy and Benzo Blues Ryan are supposed to be surety, a settlement service while you jump between speculative bets on Bitcoin and Ethereum.

Every other coin can fluctuate wildly, but our coin called ICA always equals one US dollar. If you want to turn a coin in, we redeem it for a greenback from our account at Frankfurt. That's the deal. There should never be more ICA circulating than there is cash in our bank. We pin fake money to the floor of reality and earn only interest. That’s why the side hustles. We thought being the picks and shovels of crypto was the smart play, now everyone else is getting rich with their fake magic money, and we are seeing our vision of bridging fiat cash and digital coins slip away.

“Ryan.” Andy’s hand is on my shoulder. He’s leading me through the crowd, pushing me deeper into the room, not caring about the little people in our way. His grip is too tight, he’s clenching, digging in. I try to turn and look back at him, but we are bumping into people, about to cause a scene. There’s a bottleneck as we approach the door to the terrace. He’s not driving me through that crowd. I stop, lift my heel and when I feel his toe against the bottom of my shoe, I press down, dig in and bring the crazy train to a dead halt. A drink splashes against his back. Someone was using us like an ambulance to get through the crowd.

Andy turns.

“It’s you,” he says.

I peer around Andy’s shoulder. It’s Katy the bartender from yesterday. She grabs a beer out of some guy’s hand, rears back and splashes it all over the front of Andy’s shirt. The hoppy suds blast past him and catch me across the face. Quite the shot.

“I said I never wanted to see you again.”

She turns and storms off. I guess that’s how Andy and Katy turned out. We didn’t talk about the rest of yesterday. I thought it was because the Fritz meeting caught us off guard, I’m sure that was a big part of the reason, but the rest is obvious now.

The slippery lather of suds coats the scabs left from Gabby in Barcelona. Andy pushes me into the line out to the terrace. People are getting out of the way for us. Bad news travels fast. No one wants to catch our collateral damage. I can see the big men in black blazers putting fingers against their earpieces, training eyes on us. This scene is thin ice over curdled milk, and we are well past our expiration date.

The humid air welcomes our soggy sodden selves. We are dank as the night. Andy leads me through a fog of vape clouds and glowing screens to an emergency stairwell in the far corner. “What’s so fucking urgent Andy?”

“Fritz called.”

Those two words make it clear to me how tenuous our position is. A number of bad scenarios flash through my mind. The fake fund. The US government. Blood diamonds. Account termination. Two hundred million dollars from Kila that’s about to be wired in. Our crypto identities. We’ve put a lot of eggs in that basket. Too many points of exposure. We’ve got to get out of this position.

“What did Fritz say?” Word spittle escapes my lips, soft as a whisper in this heavy aired night.

“He’s sorry, but our account has been frozen pending further review.”

“That son of a bitch,” I say.

“We need to see him tonight.”

“That’s a bad idea Andy. Look at us. We’re high, we stink of beer, and it’s after midnight.”

“Right, right, right. Not tonight, but in the morning. We need to make an ally of Fritz. This isn’t his doing. It’s coming from above.”

“How do you know?” I ask.

“He felt terrible about our situation. He could have done more, had we just met earlier. Next time we cut people in from the jump. That was our mistake here. Fritz needed to be working for us the entire time. He could have buried that inquiry. Handled it before it was flagged for review,” Andy says.

Next time? Defrauding banks isn’t something I plan on making a career out of. How did it come to this? Scope creep. That’s what happened here. We were doing a little sports book thing. It was a bit gray, pushing the edges, but nothing all that serious. Then Bitcoin happened and all the cryptocurrency speculation. We didn’t approach the early exchanges. They came to us asking to use our betting coin to settle their crypto trades. Such a small piece of the business at the time, but it grew quick. One exchange, then another and another. It grew so quickly we tried to make something big of it. Cash in on an opportunity. How different is that than Airbnb or Uber? Break some rules and then come in from the cold. Same thing all the tech companies do. Only it doesn’t work for crypto because banking has strict rules with real consequences. Fucking drug cartels, tax cheats, terrorists and money launderers. They ruined it for guys like Andy and me.

“Andy, this is starting to unravel. We need to consider the liquidation plan.”

“Frozen assets don’t liquidate,” he replies.

He’s got me there. “You’re right. We’ll need to turn Fritz, and then we need to head for the exits.”

“Let’s not go that far. This could be all cleared up once Rotterdam confirms our activity.”

“Andy, you see how exposed we are and for what? Without legitimacy, there’s no fucking money in this settlement business.”

Andy looks out at the East River, the Manhattan skyline bright and endless. There’s so much money out there, and we are having the hardest time getting a piece of it. Icarus needs to be legit, otherwise it has no value.

“You’re right about that. A lot is coming at us fast. We need to solve Fritz, unfreeze our account, and then take a hard look at the future.”

“Let’s call it a night Andy. This place is bad shit.”

“Yup. Know when to walk away, know when to run.”

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