by Ricardo Kaulessar, Reporter
What is about hedge funds that bring out the creative writing juices in some Wall Street veterans?
H.T. Narea, a 20-year investment banking veteran, says looking at the dark side of the hedge fund industry was a helpful muse in crafting his new thriller, “The Fund” (Tor and Forge, May 2011) about a U.S. intelligence agent trying to bring down a Middle Eastern hedge fund mogul who is using profits to fund terrorism. “While a great portion of the industry operates on the right side of regulations, there have been many cases — some very public ones– when hedge fund managers cross the line and either lose it all or are found to have broken the law,” Narea tells HedgeFund.net. “In the end, these stories become very human dramas of individuals in very high places, falling down and falling hard.” “The Fund” has a provocative premise but Narea, who lectures about international finance at Georgetown University, says what sounds like a shocking scenario is being taken seriously by U.S. authorities. “Recently, I got my hands on a study commissioned by the U.S. Department of Defense titled ‘Economic Warfare,’” Narea says. “Eerily, as I read it, I realized that the Government had spent considerable time studying the exact same threats outlined in my novel!”
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H.T. Narea’s ‘THE FUND’ exposes derivatives as financial weapons of mass destruction with potential to be manipulated in terrorism plot
The financial markets and world economy are showing every sign of slow and steady recovery two years after one of the worst economic meltdowns in history. But the financial instruments that played a key role in the economic downturn still have the potential to wreak on the markets and, left unchecked by regulators, open the door for financial terrorism that threatens Americans’ economic safety, as much as their physical safety has been jeopardized in the past decade.
That’s the premise of a new novel penned by international banker H.T. Narea that debuts in bookstores this week. The book, titled THE FUND, follows a U.S. Defense Intelligence Agency operative investigating the suspicious money trail of plotters seeking to implode the world’s financial markets. The story is set amidst current real-life challenges to global stability – a weak U.S. economy, the turbulence of the Middle East, undiscovered terrorist cells, radiological weapons, the powerful rise of China and for good measure, Hugo Chavez and Fidel Castro. The author follows in the footsteps of his father-in-law, Paul Erdman, the former MarketWatch.com columnist and New York Times bestselling author who invented the financial fiction genre.
“I could have written all of this in the form of a weighty economic tome with lots of statistics, charts and graphs,” said Mr. Narea. “But I decided to tell a story in the form of a novel to enable readers to more easily grasp the risks we still face.”
Narea’s novel also parallels a U.S. Department of Defense-commissioned report, titled “Economic Warfare: Risks & Responses,” which investigated exogenous threats that may have contributed to the 2008 economic crisis. After recently reading the report, Narea said: “Like my novel THE FUND, it lays out a scenario leading to the complete failure of our financial markets, pointing to the need for greater regulatory oversight. Right now in fact, there is a heated lobbying battle in Washington, particularly with respect to derivatives, between lawmakers and the four ‘too big to fail’ institutions, JPMorgan Chase, Citibank,Bank of America and Goldman Sachs, who together control an astounding 95% of the U.S. derivatives market.”
Nelson DeMille, New York Times bestselling author, calls THE FUND “a disturbing peek into the future, revealing a new front in the war on terrorism and a new challenge for the defenders of Western civilization. Read this as a cautionary tale and a wake-up call and hope that it’s being read by the right people in Washington and the capitals of Europe.”
Narea has focused his career on global emerging markets, advising governments, companies and financial institutions around the world on debt restructurings, infrastructure projects, M&A, private equity, debt trading and syndicated finance. He is a graduate of Georgetown University’s School of Foreign Service, where he also lectures on international finance.
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Congratulations to the short-listed entries for this year’s competition:
A Burial Place for Strangers — Sharon Hunt (Canada)
A Quiet Night at Entebbe — Peter Wynn Norris (UK)
A Vicious Indulgence — Annie Hauxwell (Australia)
Biographies of a Victim — Gunnar Lange-Nielsen (Norway)
Hide and Seek — Sarah Darby (UK)
Men of the Rose — Jessica Ramage (UK)
The Boy Who Loved Penguins — S W C Webb (UK)
The Greengrocers and Fruiterers’ Convention — Martin Ungless (UK)
The Outrageous Behaviour of Left-handed Dwarves — Graham Brack (UK)
The Temp — Luke Melia (UK)
Unveiled Threats — Stephanie Light (UK)
What Hidden Lies — Michele Rowe (South Africa)
There are more details of these shortlisted entries and their authors here on the CWA website.
The overall winner will be announced at the CWA Daggers’ Reception on Friday, 22 July 2011 as part of the Theakston’s Old Peculiar Crime Festival. If any of you would like to attend the reception you can find details by going to this page on the CWA website, or go to the home page (www.thecwa.co.uk) and click on the ‘Tickets on Sale’ button on the left-hand side.Uncategorized | Tagged "economic Warfare", "Financial terrorism", "H.T. Narea", "Paul Erdman", "The Fund", Mystery, Thriller | Leave a comment
By Anne W. Semmes
Reprinted from Greenwich Citizen
Published 05:05 p.m., Wednesday, May 18, 2011
A Harvard graduate converts to radical Islam and runs a multibillion dollar hedge fund for Al-Qaeda and other terrorist organizations. His mission? To manipulate the global economy and bring it to its knees.
While this could be a story ripped straight from the front pages of any newspaper, it actually is the plot of a new financial thriller, “The Fund,” by Greenwich resident H.T. Narea.
An investment banker, Narea knows the ins and outs of the hedge fund world. Originally from Chile, Narea moved to Greenwich 16 years ago with his wife Connie and their two daughters. Formerly with JP Morgan Chase, Narea presently advises emerging market clients and lectures on international finance at his alma mater, Georgetown University and he brings his real-life experience to his novel.
The Citizen talked to Narea to learn more about his new novel, its timeliness and how his financial know-how played a role in his writing “The Fund.”
Describe the story line briefly.
My story line centers on how subversive political forces can make Warren Buffet’s famous warning that derivatives are weapons of mass destruction actually come true. A U.S. defense intelligence operative, Kate Molares, investigates a suspicious international money trail, which places her at the center of an economic warfare plot perpetrated by a suave, handsome, Middle Eastern hedge fund mogul. His goal is to bring the global economy to its knees. Kate’s mission takes her from the defense intelligence command center on the outskirts of Washington, D.C. to the oil-fueled economy of Caracas, Venezuela; from the beaux arts buildings of Old Havana in Cuba to a hedge fund king’s backcountry estate in Greenwich; from the U.N. to the site of a deadly Islamic conspiracy in the Iberian Peninsula. Along the way, she meets up with titans of finance, senior government officials and a European royal or two. As one reviewer put it, the book combines Tom Clancy with “The Big Short.”
Where did the story idea come from?
I’m an avid listener of podcasts, follow the twitter feeds of journalists, and regularly read the Financial Times. At one point, several stories coalesced into my asking the question: If legitimate players can manipulate markets with instruments such as derivatives for the sake of profit, why couldn’t someone with subversive political motives do the same? That’s how I created the central plot theme in which derivatives are used as a deadly weapon in a new kind of terrorism — financial terrorism.
My international storyline incorporates the multiple political, security and economic threats facing the U.S. in the second decade of this century — including the turbulence in the Middle East, terrorist factions in several countries, financial markets that continue to be a regulatory nightmare and the fast and powerful rise of Chinese global power and influence. I framed these issues around characters who in their actions display greed, pride, love and revenge — all of which make their motivations not only believable, but also intrinsically human. The ideological pursuit of money and power are at the heart of why financial markets can become `weapons of mass destruction’.
How long did it take you to write it?
It took me nine months, writing from 5 to 8 in the morning. To keep me on track, I started with a detailed outline, a trick I learned from my late father-in-law, Paul Erdman, the economist who authored a number of financial thrillers. I showed the first 50 pages to my wife and her review was, “This is pretty good.” And since she’s a former defense intelligence officer, involved with the first Libyan bombing, she has an informed opinion. After a few months of revisions, I gave the manuscript to a good friend whose husband is editor of Foreign Affairs magazine. She read it, loved it and immediately showed it to her friend, Lynn Nesbit, the legendary literary agent who represents the likes of Barbara Walters, Michael Crichton, Tom Wolfe and President Jimmy Carter. Shortly thereafter, I got a call from Lynn ushering me to her office on Park Avenue for a meeting — an offer not to be refused in publishing circles. In the end, she matched me up with Bob Gleason, the executive editor of Macmillan’s Forge imprint. It turns out he was Erdman’s editor. Bob’s words when I signed up were, “The circle is now closed”.
You speak about the timeliness of this book. Explain what you discovered.
When I created my plot outline for “The Fund,” I could not have predicted how very real the threat I wrote about could be. After all, I was merely writing a novel. However, recently I got my hands on a study commissioned by the U.S. Department of Defense titled `Economic Warfare.’ Eerily, as I read it, I realized that the government had spent considerable time studying the threats outlined in my novel! The thrust of the defense study sets forth alarming conclusions about the vulnerabilities faced by the U.S. economy to offensive acts of `financial terrorism,’ both before and after the collapse of Lehman Brothers. It describes how unregulated hedge fund activity coupled with easy access to complex financial derivatives instruments create opportunities not only for exploitation by profit-seeking capitalistic market players, but also by ideologically driven parties with more surreptitious goals to weaken, if not destroy, the U.S. financial system — just like one of my characters, who develops a plan to manipulate financial markets via derivatives.
The study sees the accumulation of oil-derived wealth through price spikes, particularly on sovereign wealth funds and Islamic finance funds as the necessary funding to create manipulative market strategies. Similarly, my character creates the world’s largest Islamic Shariah-compliant fund, with unwitting assistance from a fee-hungry U.S. investment bank. I could go into more detail but I would be giving away too much — but I hope I’ve piqued your interest to read the novel!
By the way, I met the author of that report, Kevin Freeman, in Washington recently. He’s been testifying before Congressional committees on issues of financial regulatory control. Kevin and I are going to be on an upcoming panel talking about my book and these issues in Washington next month.
What in your banking experience has fed the story line of the book?
I’ve been involved with risk my entire career. One type of risk is `excessive concentration risk’ and the derivatives market is a prime example. The Bank for International Settlements in Basel estimates the global derivatives market at U.S. $582 trillion last year — that’s 10 times the value of the global GDP. Four U.S. banks control a whopping 95 percent of the U.S. derivatives market: JP Morgan Chase (controlling a third), Citibank, Bank of America and Goldman Sachs. These are the so-called `too big to fail’ institutions, and this type of concentration in derivatives is what worries regulators. On average, the derivatives risk exposure of these institutions equals almost three times their capital base. Is the U.S. taxpayer ready to once again bolster their balance sheets if another market calamity hits? I’d say that our national pocketbook is not as deep as it was before 2008, so better regulatory oversight is required. And, also, remember there are actors on the international stage who haven’t `friended’ us on Facebook. Who is to say that `economic warfare’ scenarios are not being planned right now when we’re still struggling to recover? That’s where my book, “The Fund,” steps in.
Are you working on a sequel? Do you see a movie option headed your way?
As soon as I finished this book, my agent told me I needed to get started on the next one, so yes, I’m working on two projects at the moment. As far as Hollywood, I was very excited to hear that my good friend, Fred Bernstein, the former president of Columbia TriStar/Sony Pictures, had read my manuscript and thought it was very `cinematic’. He’s currently in discussions with producers on a movie treatment. If I had my druthers, Angelina Jolie is perfect to play the female lead of Kate. She’s definitely got the look and the verve to play an agent on the hunt of some dangerous international plotters.
H.T. Narea can be reached via his website: www.htnarea.com
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International banker, H.T. Narea, author of the financial thriller novel, The Fund, says the American financial system has several fundamental problems and vulnerabilities that need to be addressed. His novel tells the apocalyptic story of what could happen if these risks are not mitigated. Interestingly, he says the most fundamental issue is the education and skills of the American workforce. A highly skilled workforce is the engine of the American economy that powers financial markets, he says.
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THE FUND by H.T. Narea — U.S. defense intelligence operative Kate Molares is investigating a suspicious international money trail. Her instincts place her at the center of a plot involving a terrifying new kind of terrorism — financial terrorism — perpetrated by a suave, handsome Middle Eastern hedge fund mogul. His goal is to wreck the West by bringing the global economy to its knees. Kate’s mission takes her from the outskirts of Washington, D.C., to the site of a deadly Islamic conspiracy in the Iberian Peninsula.
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