Turning Point
John Francis Kinsella
THE TURNING POINT
in the beginning
2007-2008
Banksterbooks
LONDON-PARIS-NEW YORK
The Turning Point
Copyright John Francis Kinsella 2012
John Francis Kinsella has asserted his right under the Copyright, Designs and Patents Act, 1988
to be identified as the author of this work
This novel is a work of fiction. Names and characters are the product of the author’s imagination and any resemblance to actual persons, living or dead, is entirely coincidental
All rights reserved. No part of this publication my be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electrical, mechanical, photocopying, recording, or otherwise, without the prior permission of the publishers
This book may not by way of trade or otherwise, be lent, resold, hired out, or otherwise circulated by telecommunication or other means without the publishers consent.
Cover image Massimo Catarinella (wikimedia commons)
To Tilla, Selma, Eléonore, Noé, Xaver, Elyas,
Adélé & Camille
CONTENTS
1 Prologue
2 2007
3 Spring
4 Summer
5 The City of London
6 The Basque Country
7 London
8 2008
9 February
10 North Atlantic
11 A Tourist
12 Spain Phuket
13 Notting Hill Gate
14 Bangkok
15 Miami
16 Phnom Penh
17 Oil
18 April
19 Rehabilitation
20 June
21 England
22 Kennedy
23 July
24 Santorini - Greece
25 The New World
26 Wall Street
27 New York – Miami
28 August
29 Dominica
30 The City
31 Pondok Indah Dominica
33 The Emerald Pool
34 The Commonwealth of Dominica
35 September
36 The Basque Coast
37 A Journalist
38 Russians
39 France
40 Babkin
41 The Crisis Grows
42 Dublin
43 Transformation
44 New York
45 The Celtic Tiger
46 Local Cuisine
47 Ireland
48 Hendaye
49 Bloomberg
50 Offshore Paradise
51 Black Monday
52 Iceland
53 An Optimist
54 Biarritz
55 Surrey England
56 Sergei Tarasov
57 Guarantees
58 A Fateful Weekend
59 Collapse
60 October
61 Liquidity Shortfall
62 Marbella
63 November
64 Investment Banking
65 Antigua
66 Globalization
67 Hedge Funds
68 Dubai
69 Scams
70 Governance
71 A Last Fling
72 December
73 Back in Town
74 The Villain
75 The Viking Feast
76 Iniquity
77 A Banana Republic
78 Home
79 New Years Eve
Economics was invented in order to make astrology look respectable.
John Kenneth Galbraith
For a number of diseases, 20% of the population account for around 80% of the disease spread. The present financial epidemic has broadly mirrored those dynamics.
Epidemiology provides a second key lesson for financial policymakers – the importance of targeted vaccination of these 'super-spreaders' of financial contagion. Historically, financial regulation has tended not to heed that message.
Andy Haldane Bank of England
The story of its ruin is simple and obvious; instead of enquiring why the Roman Empire was destroyed, we should be surprised it lasted so long.
Edward Gibbons
PROLOGUE
After the champagne and fireworks, the toasts and good wishes, came the almost inevitable hangover. The twenty first century got off to a bad start with the dotcom bust. Barely a year later the world was shaken by the events of September 11. The monstrous and unexpected attack on the World Trade Center, a senseless tragedy for so many Americans, saved George W. Bush from a trivial destiny, elevating him to the role of self-appointed saviour of the Western World, or the narrow world of the Midwest and its Bible-punchers.
Launching his war on terror, Bush galloped, accompanied by his faithful sidekick, Tony Blair, to create a different version of Bush the father’s post-Soviet New World Order, where, in Winston Churchill’s words: the principles of justice and fair play...protect the weak against the strong — or was it the other way around?
The widely hailed New World Order held a number of unexpected surprises in store for those who had acclaimed it. The neo-liberals had won the battle, through deregulation and by abandoning state control and protectionism, allowing the world to continue its path towards the economic and political model preached by Reagan and Thatcher. Market forces replaced governments in determining economic direction, whilst the world, and more especially China, discovered that liberalization could exist without democratization. The consequence of these changes tilted the balance of economic power inexorably towards the East.
Under Bush and Blair interest rates were slashed and a loose monetary policy was pursued to compensate the loss of business confidence and weak share prices. This led to a global credit and property boom, signalling the start of an uncontrolled race for wealth by the world’s investment bankers and financial institutions.
Unwittingly the leaders of the rich nations had started a count down to what was, by its very scale, the greatest financial crash in all history, the consequences of which led to a historical turning point, a momentous loss in the relative wealth and economic power of the nations that had ruled the world for more than a century, and more significantly that of Great Britain.
As the summer of 2007 approached its end anxious savers formed long queues outside Northern Rock branches all over the UK to withdraw their savings. What had commenced as a temporary liquidity crisis signalled the beginning of a long series of convulsions that announced a pivotal change, a catastrophic shift, which was to transform the lives of countless millions of people.
There would be winners and losers. One of the winners was China; the UK an also ran. The former appeared poised to claim the lion’s share of the global economy, and the latter to finally admit the remains of the predominant global influence it had built over two centuries in industry and finance were gone — forever.
As this modern tragedy was played out certain actors congratulated themselves, perhaps prematurely, for having avoided the worse and even profited from the changes that had been forced upon their world.
Spurred on by the encouragement of the West’s compelling leaders, many determined men had grasped the chance that destiny had unexpectedly thrust upon them. Michael Fitzwilliams was one of them, his dream was that of transforming his relatively modest bank into a global finance and investment institution, with quite naturally a deserving place in the adrenaline driven heart of the London’s square mile.
2007
Spring