THE TAINTED TRUST (Volume 2 of The King Trilogy)

CHAPTER 30

      New York. Wednesday, June 14, 1989.

The price for July delivery suddenly nose-dived to eighteen dollars and ten cents a barrel. When news of the price decline reached Visconti, he was ecstatic. His investment showed a paper gain of over sixty million dollars. He was certain he was witnessing the beginning of long awaited crash in crude oil pricing. His incredible risk was on the threshold of reward. He telephoned Assif Raza, anxious for reinforcement.

"Good morning, Louis," Raza said, lifting his feet above the tepid bath water in the bathroom of his lavish Manhattan apartment. "How are you?"

"Struggling, but maybe not much longer. I think your prediction of lower crude prices is finally about to become a reality. Would you care to comment on that?"

Raza chuckled. "I think the universe is unfolding as it should."

"Can you be more specific? It's extremely important."

"Would I be correct in assuming that you now have a tangible interest in crude oil?"

"That's putting it mildly," Visconti said, rolling his eyes skyward. "I'm short, big time."

"You have chosen wisely. For all of the reasons I have stated in our previous conversations, my associates and I still think crude is substantially overpriced."

"When does the plug get pulled? You must have some idea."

"Only God has the answer to that. As mortals, we continue to be limited to mere speculation."

"Would you be kind enough to speculate?"

"It would appear that the central bankers of the seven leading industrial nations are acting in consort to dampen inflation. Moreover, we believe they will soon succeed. One of the consequences of their efforts will be a slowdown in economic activity and substantially reduced demand for oil. I'll leave the rest to your imagination."

Raza's words bolstered Visconti's confidence. "Thank you, Assif. You've been most helpful." He put the receiver in its cradle and pounded his desk with both fists. "Yes!" he shouted, his eyes closed and teeth bared.

As the summer of 1989 wore on, Visconti's euphoria and his sixty million dollar paper gain evaporated. The liquidation of his August contracts realized only a twelve million dollar gain. By mid September, he was out of the crude oil complex and virtually no further ahead than when he started, seven months earlier. He glanced at a graph of spot oil prices and shook his head. Instead of crashing as Raza had predicted, the price had fluctuated very little. It was almost exactly where it was when he shorted thirty thousand contracts.

Frustrated and wary of the capricious crude oil market, Visconti was inclined to abandon it. Making a lot of money by virtue of a quick windfall was elusive, but the effort and aggravation involved in making it slowly was totally unpalatable to him. If he chose the slow route, he would have to continue to falsify King's report for what seemed like an eternity. The pain of inaction seemed far worse than the risk of once again shorting crude oil. Finding an investment vehicle as potentially rewarding would require elaborate and time-consuming research. He decided to give crude oil one final shot.

He arranged a meeting with Miles Dennis and placed orders to short fifteen thousand crude contracts in each of the months of August and September, 1990. The average price of the transactions was just north of twenty dollars a barrel.

His timing could not have been worse.