Ed McBain - Another Part of the City

“Oh. sure. But you want it simple, right?”

“Right.”

“Well...” She sipped at her wine. “Okay. Let’s say there’s going to be a county fair in May...”

“A what?”

“A fair. Cows, pigs, chickens, apple pies. You know. A fair. This is a metaphor,” she said. “To make it simple.”

“Okay, a county fair. Next May.”

“Right. This is now December, and I’ve arranged for a booth at the fair where I’ll be selling... kisses, let’s say. At a dollar a throw.”

“Sounds a bit low,” Reardon said, and smiled.

“Thank you. But, actually, you’re beginning to catch on.”

“Am I?”

“Next May, I’ll be selling kisses for a dollar apiece. But I look things over, and I see there are going to be three other booths selling kisses, and I think maybe I won’t get any customers at a dollar a throw. Maybe they’ll only pay fifty cents, maybe only a quarter...”

“Who gave you the dime?” Reardon asked.

“Everybody!” Sandy said. “I love that joke. But that’s just the point. I decide that by May my kisses may be worth only a dime. But if I contract now. to sell them at the current price, a dollar each kiss, that’s what you’ll have to pay me for them in May, when I deliver. In other words, I’ll have made a ninety-cent profit on each kiss. Got it?”

“No.”

“No?” Sandy said, surprised. “Well, okay, let me take another run at it. I am selling short — I am taking what’s called a short position — when I contract now to sell something at a price that’s higher than I hope it’ll be when I deliver. You contract to buy my kisses at a buck a throw in May, do you see? You contract for them now. The kisses are worth only a dime in May, but you’ve got to pay me a buck, ’cause that’s what you agreed to. I’m selling short. I’m taking a short position.”

“Okay, what’s a long position?”

“Okay, you’re on the other side of the booth. Or you will be in May. And because you think I’m so desirable and beautiful and such a good kisser, you decide that the price of my kisses will go up by May... let’s say to two dollars each by the time the fair rolls around.”

“Inflation,” Reardon said.

“Whatever,” Sandy said. “The point is, if you contract to buy the kisses now, at a dollar a throw, you’ll be saving a dollar for each kiss you take delivery on in May. That’s if the price actually does go up.” She shrugged and said, “That’s a long position. That’s buying long.”

“In other words, were both gambling on what the price of those kisses will be in May, five months from now.”

“That’s why it’s called the futures market. We’re betting on future prices.”

“You’re betting the price will go down ...”

“So I’m taking insurance, right. Selling now at the higher price...”

“And I’m betting it’ll go up.”

“Which in real life — never mind kisses — could net you a big bundle of money in five months’ time.”

Reardon was silent for several moments.

“So if I bought heavily and long...” he said.

“You’d be contracting for a lot of kisses, and you’d be praying the price went up. ” She grinned suddenly. “And if, by chance, you happened to corner the market...”

“What does that mean?”

“Cornering? It means you’ve bought contracts from all the girls who’ll be selling kisses. All the contracts, all the kisses — for delivery in May. If any of the guys there at the fair want to buy a kiss or two, they’ll have to deal with you.”

“Because I own all the contracts.”

“All the kisses, in effect. And if you own them all, you can charge whatever you want. A dollar, two dollars, five dollars, the sky’s the limit.” She grinned again. “It’s known as having the world by the kisses.”

“Has that ever been done?” Reardon asked.

“Not with kisses.”

“How about silver?”

“The last time was by the Bank of England... in 1717. The Hunts tried it in... 1979? 1980? Whenever. It’s pretty much impossible to do nowadays. Too many regulations, too many requirements for reporting and disclosure. It’s safer to speculate in kisses. And a lot cheaper.”

She lifted her wine glass.

Sipping at the wine, she looked over the rim at him.

“Do you... uh... think you might be interested?” she asked, and put down the glass. “In... uh... cornering the market on kisses?” Almost shyly, she said, “ My kisses?”

“Well, I... uh...”

“Here’s a sample,” she said, and leaned in closer to him, and kissed him on the mouth. “What do you think?” she said.

“I think I might be interested,” he said.

From Nelson Hyde’s corner office in the World Trade Center, you could look down onto the construction site of Battery Park City and beyond that to the Hudson River and the Jersey shore. This was Tuesday morning, the twenty-third day of December, two days before Christmas, and the construction workers had erected a Christmas tree on the site below. There was no Christmas tree in Nelson Hyde’s office, and the carpeting here at the Commodity Futures Trading Commission was a wear-guaranteed wool-nylon, and the furniture was metal, but the view was splendid. Rothstein and Phelps sat facing the view. Hyde had his back to it. He was a man in his late fifties, graying, soft-spoken. Phelps suspected his mild manner concealed a suspicious nature and a bear-trap mind. He watched as Hyde riffled casually through a sheaf of papers on his desk. Rothstein watched, too.

“How’s the traffic out there?” Hyde asked. “Pretty heavy?”

“We walked over,” Rothstein said. “We’re just around the corner.”

“I really appreciate your taking the time to see me,” Hyde said, and looked up, and smiled. “So,” he said, “how’s business?”

“Comme ci comme ça, ” Phelps said.

“Flurry of activity, this time of year, I expect,” Hyde said, still smiling. “All those customers looking for tax losses, eh?”

“Plenty of buying and selling, that’s for sure,” Rothstein said.

“Reason I asked you to come by...” Hyde said, and began looking through the sheaf of papers again. “I got a call from Comex here in New York last week sometime — she never puts anything where I can find it — ah, here. December nineteenth, that would’ve been last Friday.”

A tugboat sounded on the river.

“Yes, last Friday,” Hyde said. “It seems you reported quite a bit of silver activity that week.” He began riffling through the papers again. “Three separate accounts buying... now where the devil... yes, here we are. General Business Ventures purchased... nine hundred lots, is it? Between Tuesday the sixteenth and Friday the nineteenth. Same time period, we have Quandax Corporation buying nine hundred and forty lots, and Vandam Investment buying nine twenty-five. That comes to...” He scribbled some figures on a pad, did his multiplication. “Two thousand, seven hundred and sixty-five lots. At five thousand ounces a lot, comes to...” More scribbling. More multiplication. “Thirteen million... uh... eight hundred and... uh... twenty-five thousand ounces. That’s a lot of silver.”

“We’re bullish on silver,” Rothstein said, smiling.

Mr. Outside, Phelps thought. Smooth as glass.

“Which at current silver prices...” Hyde said.

“Well, the prices fluctuate,” Phelps said at once.

“Yes, but at the close Friday...”

“Mr. Hyde, forgive me.” Rothstein said, and leaned forward in his chair, “but surely this isn’t an unusually high number of futures contracts for a firm our size. Actually, I imagine our silver purchases will go even higher before the end of the year. For some reason, silver always ...”