Paul Murray - The Mark and the Void

‘Wait,’ I say, as his meaning dawns on me. ‘You’re talking about debt? Subprime lending? That’s what you’re basing your fund on?’

‘There’s not much you can sell to a world full of poor people, Crazy. So instead you make them the product. To be fair, we didn’t invent the idea. The real visionaries were the boys on Wall Street. They’re the ones who first saw this vast, untapped resource out there, these millions of Americans who were shit poor but who nobody trusted enough to loan money to. They saw that if they could get these deadbeats into the debt market — well, it’s like the oil under Alaska, right? Billions and billions of dollars just waiting to be released. I mean, the sheer audacity of it!’

‘But they were wrong,’ I interject, fighting away the whiskey-fingers tickling the base of my brain. ‘Their model didn’t work. They brought down the whole financial system.’

‘Well, sure, of course.’ Howie is unfazed. ‘They were working off the Gaussian copula, which was bullshit. But the instrument we have is tight as a drum.’ He takes a sip from his tumbler and grins at me. ‘Lack is the last great gold rush, Claude. The world is poor and getting poorer. But we can turn that to our advantage. When someone’s got nothing, does he care how much debt he gets into? When he’s walled in, and someone offers him a way out, does he stop to read the small print?’

‘And what happens if he can’t pay you back?’

‘This is what I’m telling you. You work out the correlations and you set it up so the losses don’t register.’

‘How could they not register?’ I’m starting to feel like I’m dreaming. ‘How can a loss not be a loss? That’s impossible.’

‘In conventional terms it’s impossible. In conventional terms, two and two is always four and a triangle always has three sides. But there are fields of mathematics where that is not the case. There are fields, largely unknown except in the maths departments of certain obscure Russian universities, where two and two is never four, where a triangle, a square, a circle have the same number of sides.’

Over in the shadows, Grisha’s head snaps up. ‘Non-Euclidean geometry,’ he says. ‘Topological, differential, affine. Every level give greater symmetry, more and more figures becomes equivalent to each other. Metric spaces no longer exist, values are translated into their opposite, at this moment we apply providential antinomy, then break symmetries again, return to metric space.’

Leaning against the guard rail, Howie takes this in with the mercenary satisfaction of a carnival barker watching his star turn. ‘We’ve tested the model up and down,’ he says, when the Russian has finished. ‘Every investor we’ve presented to has his chequebook out before we get halfway through. This is the new wave. Soon it’ll be the only wave.’

Can it be true? The whiskey is making everything swim — or maybe it’s the cigar smoke, burning my eyes …

‘See, you’re too cautious, Claude.’ Howie’s voice seems to come from a distance. ‘That’s always been your problem. You need to remember they’re numbers. They’re not real. You can make them do what you want.’

‘That’s what they said the last time,’ I rasp.

‘This is different. But for it to work you have to forget everything you know. Such as don’t put all your eggs in one basket. That’s the first thing they teach you about investment, right? The basket falls, everything’s wiped out. The genius of the subprime guys was to realize that if you put in enough eggs, and stack them just right, then even if the basket falls, the number that break will be insignificant.’

‘But they did break,’ I croak, as words, numbers, mathematical functions scroll unreadably before my eyes. ‘They lost trillions. They almost destroyed the whole of civilization.’

‘Yes. They were thinking counterintuitively, only not quite counterintuitively enough. We’re taking it to the next level. We’re saying, instead of minimizing the breakages, get rid of the fall.’

‘The fall?’

Grisha is muttering something — Russian? Geometry? — from the corner. Beside me, Kevin stands utterly motionless, as if his soul’s been charmed out of his body.

‘That’s what our fund does. The maths is complicated but the concept’s very simple. We use non-linear methods so that numerical losses are automatically self-cancelling.’ Howie holds up his whiskey glass, as if he is about to toast me. ‘Gravity, so to speak, is annulled. Meaning that even if you drop the basket, it never hits the ground.’

He lets go of the glass. For one bewitched instant it seems to hang twinkling in the air — even to float infinitesimally upwards. Then it hits the floor and shatters into pieces.

‘Get someone to clean that up,’ Howie says to Kevin, and goes back into the bar.

I have had enough. Before leaving, I do one last sweep of the bar for Ish; at my side, Kevin chatters on excitably about how groundbreaking Howie’s fund is, how it will revolutionize capitalism, and so on, until I lose my temper and tell him that counterintuitiveness has clearly got out of hand if actual nonsense is now being taken for holy writ.

Kevin looks surprised, even a little hurt. ‘It’s not nonsense, Claude. It’s non- linear .’

‘Come on. Losses that magically disappear? Risk without risk? This makes sense to you?’

‘I’m not a mathematician, am I? It’s already paying out at 16 per cent! That’s one of the highest returns in the whole industry. And they’ve got like thirty million in investment — shit, that means Howie’s already made …’ He disappears into a little reverie of calculation. Hedge funds have a different pay structure from banks, a ‘two and twenty’ model: from the money invested with them they take 2 per cent straight off as their management fee, and then 20 per cent of any profits. Therefore, even if his fund doesn’t make a cent, Howie could still walk away with millions.

‘It seems to me that he’s investing a bit too much with his Bulgarian friend,’ I say.

Kevin shrugs. I am the old guard; what I think is not important.

Ish arrives at work late the next day, in what appears to be an even worse mood than me.

‘You disappeared last night,’ I say.

‘Ran into somebody,’ she says curtly.

‘ Somebody , eh?’ I say, arching an eyebrow.

‘Fuck off,’ she says.

I throw my hands up in surrender.

‘Sorry,’ she says. ‘Sometimes going out in this place’s worse than bloody work.’

‘You think?’

‘It’s all right for you, you’re a bloke. You’re not spending a small fortune to keep your hair blonde and your pits waxed, for the benefit of some fucking drunk who can’t remember your name when he wakes up.’ She shakes her head. ‘I swear, if I hadn’t bought that sodding apartment I’d be so out of here.’

‘You could still go if you wanted to,’ I say.

‘How would I do that, Claude? I’m up to my neck in fucking debt.’

‘You could get a transfer. To HQ, for example.’

‘New York?’

‘No, Torabundo. Then you would be able to visit Kokomoko at weekends. See your old friends.’

She gives me a look that I can’t quite decipher. ‘Is that what you want?’

‘Me? I am talking about what you want. If you are not happy here.’

‘Oh, I’m just having a moan,’ she sighs, dismissing her own words with a wave of the hand. ‘Here, get out the Carambars and tell us a joke.’

I open my drawer, unwrap a couple of toffees and scan the jokes — hit by a flashback from my childhood as I do so, my father chasing me around the kitchen and tickling me — If it’s not funny, why are you laughing? Claude? If it’s not funny …