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******
When the car pulled up in front of her house, she gathered her things — the purse, the candy collection from the arcade, the stuffed animals, the bear, the lion and other plushes, which required both arms and produced a mont of cody that briefly dissolved the evening's accumulated romanticism in the best possible way — and turned to him before getting out.
"This was the best birthday I've ever had," she said.
"Good," he said.
"I an it."
"I know you do." He held her gaze. "It won't be the last one worth rembering."
She looked at him for a mont with that expression she'd been wearing increasingly throughout the day — the one that said she was trying to identify exactly what category he belonged in and finding that none of her existing categories fit. Then she nodded, once, with the decisiveness of soone filing sothing away for later consideration.
"Goodnight, Marvin."
"Goodnight, Beyoncé. Tell your sister I said happy Thursday."
She laughed — one last ti, the real one — and climbed out of the car.
He watched her navigate her front path with an enormous stuffed plushes, the porch light catching her as she reached the door, and then the door opening and the warm rectangle of the house's interior swallowing her and the pushing in the pushes and the plastic ring and the candy necklace and all the accumulated objects of the afternoon.
The porch light went off.
Marvin sat back in the seat and looked at the ceiling of the car for a long mont.
'Dangerous,' he thought. Not her — she was exactly what she appeared to be. Him. The problem was him. The demon was supposed to observe and calculate and deploy, not sit in a Ferris wheel at the top of its arc and feel the unprecedented sensation of being surprised by sothing as old and well-docunted as a first kiss.
He would think about what that ant later.
"Drive," he said. "Let's head back ho there is much to do."
---
Elena Marchetti's morning call on September 5th was crisp and direct.
"The rupiah book is at thirty million notional. Average entry 2,741. Current spot 3,110. Unrealised P&L on the NDF book is approximately 16.8 million dollars on deployed cash margin of roughly 6 million — that's a leverage-amplified return of two hundred and eighty percent on the margin. Do you want to add to the position?"
"No." Marvin's answer was imdiate. "The position is established and the thesis is tracking. We don't chase a move that's already running. Where do we stand on the exit triggers?"
"The program docuntation has two exit triggers: a target exit at a spot level of 4,000 or above, or a ti exit at the two-week mark before the December settlent date, whichever cos first."
"Confirm the target exit. If we hit 4,000 spot on any of the NDF settlent dates, we execute the exit on the full position within one trading session."
"Understood."
"And update daily on the spot level. I want to know exactly where we are relative to the 4,000 target in real ti." Marvin ended the call to concentrate on his writing once more..
---
In Korea, the situation David Kim had been monitoring accelerated in ways that the early September data was beginning to make undeniable.
The KOSPI opened September at 735, down from 779 at the end of July — a decline of five point seven percent from the pre-crisis level, modest compared to the catastrophic equity market declines across Southeast Asia but sufficient to signal that the Korean exceptionalism argunt was losing its credibility among the international institutional investors who had been the marginal price-setters in the Korean market.
The won was at 907 per dollar on September 3rd.
David's report on the rollover situation was the most alarming of the program cycle so far.
Three Korean comrcial banks — not just two, as in August, but three — had experienced partial rollover failures on short-term foreign currency borrowing facilities in August. In all three cases, the facilities had been renewed, but at spreads between 150 and 200 basis points above LIBOR — compared to the 45 to 60 basis points that had been the market norm six months earlier. The increased spread reflected the foreign lenders' assessnt that Korean financial sector risk had increased materially. The assessnt was correct.
More concerning to David than the spread increase was a single line item in the Bank of Korea's weekly reporting: the gross foreign exchange reserve figure, which had been reported at 34.1 billion dollars in the July report, had fallen to 30.8 billion in the August report. A decline of 3.3 billion dollars in a single month, reflecting intervention purchases of won — the Bank of Korea selling dollars to buy won in the foreign exchange market to limit the won's depreciation. The pace of reserve consumption was faster than the August data alone suggested, because the Bank of Korea's reported reserve figure included liquid and illiquid components, and the illiquid component — deposits with Korean banks overseas and long-dated investnts — was not available for imdiate deploynt in currency market operations.
"How much is actually deployable?" Marvin asked.
"Our estimate is that the rapidly deployable portion of the BOK's reserves — cash, Treasury bills, deposits at the Fed and other major central banks — is approximately fifteen to seventeen billion. Against a won rollover requirent that we estimate could reach forty to fifty billion if the full rollover stress materialises, that's insufficient."
"What's your revised tiline for the won devaluation crisis?"
"October," David said, without hesitation. "The October rollover cycle is going to be the critical test. If the foreign lenders decline to renew at any price — not just at higher spreads but decline entirely — the banking system faces a liquidity crisis that the BOK cannot resolve from its own resources. That triggers the IMF conversation, which the Korean governnt has been categorically refusing to have publicly, but which—" he paused "—our Seoul team is indicating has been happening privately. There have been preliminary technical contacts between the Korean Ministry of Finance and IMF staff."
"The Korean governnt knows it's coming," Marvin said.
"They know it might co. They're hoping to avoid it. The political cost of an IMF program for a governnt whose legitimacy has been substantially built on the story of the Korean economic miracle is extrely high."
"The market is going to force the conversation regardless of the political cost."
"Yes," David said. "The market will force it. Our job is to be positioned for the forcing."
"Build the won position to over twenty-five million notional over the next ten trading sessions. Starting from today. Weight the book toward October and November settlent dates."
---
The program team expanded by three people in the second week of September. Not on Marvin's instruction — on Grant's, who had identified specific capability gaps in the Korean equity short component of the program and had recruited two additional specialists: a Korean equity derivatives specialist nad Jin-ho Park, seconded from the program's Korean brokerage relationship in Seoul, and a credit analyst nad Rachel Torres, who had spent seven years at Moody's covering Korean financial sector issuers and whose knowledge of the specific covenant structures and debt docuntation of the major Korean banks was, Grant had told Marvin on the phone, "precisely the kind of thing that will matter in November."
Rachel Torres arrived at the Century City offices on September 9th. Grant introduced her to the program at the daily morning call. She spoke for twelve minutes about the covenant structures of Hanil Bank, Korea First Bank, and Comrcial Bank of Korea, and about what financial ratio triggers would force each institution to accelerate debt repaynt or seek additional capital. When she finished, Marvin asked her three questions in sequence, and the quality of the questions made his father, who was sitting in the sa room as Rachel and watching her face, think of a sentence from a conversation he'd had with his father so years ago — a sentence his old man had used to describe Marvin's great-great-grandfather: *the man had a way of asking a question that was actually an answer wearing a question's clothes.*
Rachel Torres looked at the speakerphone through which Marvin's voice was coming and said, "How old is he?"
"Eleven," Grant said, sounding quite proud.
She looked at the speakerphone for another mont. Then she said, "All right. I can work with this."
---
As Marvin imrsed himself in his writing books, scripts, and drawing manga, delving deep into the intricacies of the Asian currency market, he barely noticed the hours slipping away. Each mont was consud by his pursuit of knowledge and understanding, which kept his mind engaged and focused.
It was on September 16th Pri Minister Mahathir Mohamad of Malaysia delivered a speech at the World Bank and IMF annual eting in Hong Kong that would beco, in the subsequent history of the Asian financial crisis, one of the most extensively cited and most extensively debated statents made by any head of governnt during the entire episode.
Standing before an audience of the world's most senior financial officials and institutional investors, Mahathir called currency trading "unnecessary, unproductive, and immoral." He nad Soros directly. He accused international currency speculators of deliberately engineering the destruction of Asian economies for little profit, characterised the activity as the equivalent of stealing from the poor to enrich the already wealthy, and called for the restriction of currency trading to legitimate comrcial and investnt purposes only.
The speech produced several distinct responses simultaneously. Among the audience in the convention hall in Hong Kong, there was a quality of uncomfortable stillness that Mahathir's subsequent critics would characterise as embarrassnt and his defenders would characterise as complicity.
Among the financial press, the speech was received as a gift — vivid, quotable, provocative, the kind of material that writes the column for you. Among the currency markets, the ringgit fell further, because the market's assessnt of the speech was that it combined analytical error with political volatility in proportions that made Malaysia less attractive to the international capital that was already considering exits.
In Los Angeles, Marvin read the speech transcript at seven-fifteen in the morning Pacific ti and called Patrick Yuen at seven-twenty.
"Exit the ringgit position," Marvin said. "All of it. Today."
"The current spot is 3.22," Patrick said. "Average entry was 2.72. The position is up significantly."
"I know. Exit today. The capital control risk has elevated from possible to probable. Mahathir's speech is not analysis — it is the prelude to a policy action. He is building public and political cover for capital controls. The tiline for that action may be days, not weeks, and if controls are implented while we're holding the position, the exit becos either impossible or punitive." He paused. "Exit at current levels, bank the gain, and consider the Malaysian thesis complete."
"Understood. I'll execute in the morning Asian session."
"One more thing. Once the exit is confird, I want a full written account of the Malaysian position from entry to exit — entry levels, sizing, carrying costs, exit levels, net P&L. Include it in the program record."
The full Malaysian ringgit position was exited on September 17th at an average spot rate of 3.19 ringgit to the dollar. The position had been entered at an average NDF level of 2.72. The net gain, after accounting for the NDF carry costs and execution fees, was approximately 5.1 million dollars on ten million dollars of notional exposure — a return of approximately 51 percent on the notional, and a considerably more dramatic figure when expressed relative to the cash margin deployed. The exit was clean and complete, as Marvin had instructed.
In the future on September 1st, 1998 — less than twelve months after the exit — Malaysia imposed comprehensive capital controls, fixing the ringgit at 3.8 to the dollar and prohibiting the offshore ringgit NDF market entirely.
Positions that had not been exited before the control implentation were, in several cases, effectively frozen. Several funds that had remained long the ringgit depreciation thesis past the control implentation date experienced significant difficulties recovering their capital.
---
The mid-September air sweeping through the sprawling grounds of the San Marino estate carried the first, faint, crisp hints of autumn, but inside the sunlit drawing room, the atmosphere was thick with the suffocating friction of Hollywood bureaucracy.
Marvin sat perfectly still in a wingback leather chair, bathed in the afternoon light. He wore a simple, tailored charcoal sweater that sohow managed to make him look both impossibly young. His golden-brown hair caught the sun, framing a face sculpted with such flawless perfection that it routinely made hardened executives lose their train of thought.
Opposite him, Jeff was pacing the length of the Persian rug, his usually slick, unshakable CAA agent persona currently fraying at the edges.
"Jeff," Marvin purred, his velvety baritone cutting smoothly through the agent's frantic pacing. "Let us dispense with the dramatic tension. How is the circulation of my new script coming along? Has any major film company demonstrated the foresight to invest in *The Sixth Sense*?"
Jeff stopped pacing, letting out an exhausted sigh. He unbuttoned his suit jacket and dropped a thick stack of manila folders onto the glass coffee table.
"I have pitched it to the entire town, Marvin," Jeff said, rubbing his temples. "And the town is completely terrified of it. They don't know what to do with a psychological horror film that relies on atmosphere instead of blood, especially one written by an eleven-year-old who just starred in a Disney family cody."
Jeff pointed to the folders, ticking off the failures.
* **Disney:** "Rejected outright. They said the script is brilliant, but the thematic elents of death and psychological trauma absolutely do not fit their established, family-friendly brand architecture. They won't touch it."
* **Warner Bros. & Paramount:** "Radio silence. They haven't even dignified us with a formal pass yet, which ans it's trapped in developnt hell on so junior executive's desk."
*****
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