Devil's Deal

313 Pages·4.444 MB·English

by  Loizou, Andreas

Spine width
16 mm
T
Andreas Loizou enjoys a seemingly
H ‘Filled with suspense and intrigue: a perfect
innocent meeting with a mega-rich
‘A fast paced story with telling lessons in investment and E way to learn what goes on in fi nance.’
client in Zurich. Meanwhile he
fi nance. This is a thoroughly enjoyable way of learning the Patricia Sparacio, Managing Director, receives a mysterious report about
basics and more.’ Alexander Davidson,
New York Institute of Finance an investment opportunity that
financial journalist and author
appears too good to be true.
‘An unbiased and feasible tale of contemporary market
THE
dealings. It highlights the ease with which illicit activities can After the client inexplicably vanishes
be concealed, and greed can overcome sense.’ whilst under investigation for
MHC Russell DL FCT multi-million dollar fraud, Andreas
is implicated in his disappearance.
Photo by John Emmerson
The Devil’s Deal takes you to the heart of the Whilst investigating what happened,
andreas loizou is an expert in fi nancial underworld and exposes the players he begins to question if the fi nancier
fi nancial training. He has over twenty was an innocent victim, a diabolical
and the games they play. You’ll soon begin to
years of experience in the global conman or something even
understand the world of global money.
fi nancial markets. more shocking.
Are the risks being taken with your money really as
Andreas has trained staff at major If you’ve ever wondered how the
outrageous as everyone seems to think? Would your cash
banks and government departments markets work, or been intrigued as
be safer in a shoe box under your bed?
across the world. His client list includes to what international fi nanciers and
Credit Suisse First Boston, IBM, Lloyds, money players actually do, this book
Andreas Loizou has seen the eye-watering deals and the
Reuters, Deutsche Bank, The Financial will tell you everything you need
A
Services Authority and Barclays Capital. audacious risks fi rst hand. The Devil’s Deal is his tale: n to know.
a personal account of the spectacular and shady world d An Insider's Tale of
of elite fi nance. r
He was the highest-rated speaker on
e
the Financial Times ‘Introduction A
How Money is Made
s
to the City’ programme six years in

L
succession. He studied English at Leeds £14.99 o
FINANCE
and Cambridge and splits his time i
z
between London and Madrid. o
ISBN 978-0-273-75797-9
u
AndreAs Loizou
Visit our website at 9 780273 757979
www.pearson-books.com
Cover designed by Two Associates
Visit our website at
www.pearson-books.com
CVR_ANDREAS_DEVIL_7979_CVR.indd 1 27/01/2012 08:58
The Devil’s Deal

The Devil’s Deal
An insider’s tale of how money is made
Andreas Loizou
Pearson education Limited
Edinburgh Gate
Harlow CM20 2JE
Tel: [phone]
Fax: [phone]
Website: www.pearson.com/uk
First published in Great Britain in 2012
© Andreas Loizou 2012
The right of Andreas Loizou to be identified as author of this work has been
asserted by him in accordance with the Copyright, Designs and Patents Act 1988.
Pearson Education is not responsible for the content of third-party internet sites.
ISBN: 978-0-273-75797-9
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available from the Library of Congress
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, without either the prior
written permission of the publisher or a licence permitting restricted copying in
the United Kingdom issued by the Copyright Licensing Agency Ltd, Saffron House,
6–10 Kirby Street, London EC1N 8TS. This book may not be lent, resold, hired out
or otherwise disposed of by way of trade in any form of binding or cover other
than that in which it is published, without the prior consent of the Publishers.
10 9 8 7 6 5 4 3 2 1
16 15 14 13 12
Typeset in 9pt Stone Serif by 3
Printed and bound by Ashford Colour Press Ltd, Gosport
For Maria and Nicolas, with love and gratitude

Contents
Acknowledgements / xi
How it all began / 1
part 1 One-way ticket
1 From Zurich to disaster / 5
The rules of compounding / 9
Whatever you want / 11
Gains and losses / 13
2 Taking risks / 17
Take a chance on me / 18
The business of risk / 21
The luxury gap / 23
3 The leap of faith / 31
Safety and danger / 31
Risk and return / 34
Buys and sells / 38
part 2 Welcome to the jungle
4 Damn clients / 49
The trading floor / 50
Spreadsheet monkeys / 52
Proprietary trading / 53
It’s raining middlemen / 54
viii Contents
5 An equitable solution / 61
Who predicted futurology? / 61
Stock-pickers of the world unite and take over / 63
Value, growth, neither, both / 67
6 Promises, promises / 71
The naked position / 71
The time value of money / 73
Wall Street Blues / 79
Income and safety / 82
7 Very interesting, Mr Bond / 87
The old principle/principal trade-off / 87
The name’s Safety / 89
Ratings measure risk – usually / 90
8 Chinese walls come tumbling down / 95
Deals on wheels / 96
Front running / 98
EBIT doh! / 102
Behind the Chinese walls / 105
part 3 You can always get what you want
9 The meek shall inherit the mineral rights / 115
Essential ingredients – rice, wheat and oil / 116
Why do people buy gold? / 120
Price is where supply shakes hands with demand / 122
10 The numbers game / 125
Yield and time / 126
The interest rate and bond price see-saw / 129
11 A lottery ticket is a contract too / 133
Welcome to World Lotto! / 133
Bringing home the risky bacon / 136
Contents ix
12 Out of the money / 139
Difficult choices about options / 139
Call me / 141
13 In the future when all’s well / 147
Tomorrow always comes / 147
Markets and counters / 149
part 4 All’s fair in love and finance
14 Currency for the devil / 159
24-hour Forex people / 160
The currency banana / 160
Inflation is always the great destroyer / 167
Spread your love / 168
15 Paradigm city / 175
Hedge funds begin with a lie / 176
The scramble to be first / 177
Death insurance / 179
The insurance cycle / 181
Pension funds v hedge funds / 182
16 Confessions of a dot-com faker / 185
Silicon ditch / 185
Burn money / 187
17 The brain game / 193
How do we value our emotions? / 193
Some women are from Mars as well / 195
My investment questionnaire / 196
The right profile / 199
Classifying investors / 200
18 Swaps / 209
Border crossing / 210