Q&A with H.T. Narea, author of The Fund

The global economy grows more interconnected with each passing day, so it’s fitting that a new author making a splash in the financial thriller genre has lived in five countries and speaks fluent English, Spanish and Portuguese. H.T. Narea’s debut novel — “The Fund” — was released in May by Forge/Macmillan. I talked to him about his father-in-law, Wall Street, and how he hooked up with a publishing powerhouse.

ALEX: Your father-in-law, Paul Erdman (“The Crash of ’79”, “The Billion Dollar Sure Thing” and “The Silver Bears”), is considered the father of the financial thriller. (He passed away in 2007.) What made you decide to follow in his footsteps? Did you get any advice from him before he passed away? Do you think his novels influenced you as a writer?

H.T.: I knew Paul Erdman since I was a freshman at Georgetown University, when I met and was smitten by his eldest daughter, Connie, now my wife. Through the years, I spent countless hours talking with him about the world’s economy — its strengths, weaknesses and challenges. In fact, I help research and edit several of his books. That’s when I got the first taste for writing what he called ‘fi-fi’ — financial fiction.

The most important lessons I came away with from Paul with respect to writing in this genre were:

” Have a clear understanding of the world and its dynamics — step back and take a forest from the trees point of view to see how even seemingly disparate parts are connected.”

What helped me in this respect were my international studies at Georgetown, my career as an international banker and more recently, my teaching experience back in that international community of Georgetown.

For example, in today’s global environment, one can step back and begin to understand how a man who sets himself on fire in Tunisia can lead to the toppling of an autocratic ruler of 30+ years in one country and the copycat self-immolations in Egypt that bring to question not only Mubarak’s rule but that of others in the entire region. And then, in the short run, how these political crises impact commodity prices, prompting market traders to scramble to either cover open positions or take advantage of price movements, all of which impact companies and consumers all around the globe. Equally, in the long run, how an opening of democracy can create opportunities to build new societal structures, which then surface a host of new challenges. We live in a very complicated and connected world.

“Boil down economic and financial matters to their clear, understandable essence.”

Economics is often termed a ‘dismal science’ however it touches all our lives, each and every day. The challenge and opportunity of that is to make economic and financial dynamics relevant in people’s lives — framing them in an approachable manner. No suspense novel would survive with pages upon pages of economic statistics and financial charts.

ALEX: You’re living the dream right now of every first-time author. Talk about how you ended up signing with Macmillan.

H.T.: After I graduated from Georgetown University, I headed up to Manhattan to embark on a career in international banking. At the time, banks here and in Europe were reeling from the Latin America Debt Crisis, and I became very active on a professional level, flying with finance ministers around the world, to help solve what essentially was a sovereign debt crisis, something we’re facing in places like Greece and Spain today. At the time, we dealt with official government solutions to stave off wholesale collapse of foreign economies and their creditors, U.S. and European global banks. We bantered around terms like ‘too big to fail’ years before another book captured that term to apply to our current crisis.

All to say, that by the time our current global financial crisis exploded, I had experienced many of the same warning signals before in other crises, and I had already written a great chunk of my novel. In fact, one of the reasons I got traction was because there were aspects of my pages that prognosticated some of the unfolding events — chock it up to those years of experience as an international banker.

As a result, my manuscript was passed around certain circles in Manhattan (including the editor of Foreign Affairs magazine), and to my grand surprise, it eventually landed on Lynn Nesbit’s desk at Janklow & Nesbit. Within a week of her reading, she signed me up and I was thrilled to be in the hands of such an experienced agent, joining her illustrious client list. Lynn made some critical recommendations, which strengthened my manuscript, and then had the foresight to match me up with the publishing team at Macmillan’s Forge imprint, which had published several of my father-in-law’s financial thrillers. They understood the genre I was writing in and knew exactly how to position it for reading audiences.

As it turns out, my editor, Bob Gleason, had been Paul Erdman’s editor on several of his books, and I had met him years before with Paul for drinks in Manhattan. I couldn’t be more pleased by my fortune of having his guiding hand as I entered the world of publishing. And as Bob said to me, recognizing his work with Paul Erdman, “the circle was now closed.”

ALEX: Until recently for many people, financial Armageddon was a plot point in a James Bond movie. Then the global meltdown of 2008-09 occurred and we finally woke up to the potential for catastrophe. “The Fund” explores what could happen if someone manipulated the markets with the intent to deliberately destroy a country’s economy. How did you come upon your story?

H.T.: Storylines have a funny way of surfacing when you least expect it. I was on another overnight trans-Atlantic flight, unable to sleep, when a Financial Times story I was reading made me recall Warren Buffet’s famous lines to his shareholders:

“The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

In thinking about a convincing story line, I took Mr. Buffet’s statement one step further: If legitimate players in financial markets can abuse these instruments for the sake of their own 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 to fulfill terrorist objectives — financial terrorism.

In “The Fund,” a U.S. defense intelligence operative, Kate Molares is investigating a suspicious international money trail. Her instincts place her at the center of a high-stakes economic warfare plot 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 D.C. to Venezuela; from Cuba to Greenwich; from the UN to the Iberian Peninsula. She’s in a race to piece together this global puzzle … or risk the catastrophic end of the world’s financial markets.

The Fund incorporates the 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 China’s global power and influence. I framed these issues around characters who display greed, pride, love and revenge — all of which make their motivations not only believable, but also intrinsically human. The pursuit of money and power are at the heart of why financial markets can become “weapons of mass destruction.”

ALEX: Derivatives are the weapon of choice for your villain. How did you translate the finance part of the novel into language that readers could understand?

H.T.: The language of financial risk can be very arcane and as if by design, can be a barrier to entry for the general population. Many argue that Washington regulators and lawmakers didn’t understand the true nature of the markets they were supposed to be overseeing. In truth, finance can be often boiled to a very simple relationship between someone with money to lend and someone who needs that money. But my objective was not to make this a textbook that only 10 people would read, but rather a thrilling story that would capture a reader’s imagination.

As an example, in my book, I boil down the problem of financial derivatives to a clear visual. For me, they resemble a bowl of tangled spaghetti and it is close to impossible to see exactly how they are inter-connected. And that was precisely the biggest threat our government faced in dealing with market panics like Bear Stearns, Lehman Brothers and AIG — who held the other end of those institutions’ derivatives trades?

I was pleased to read that The New York Times rated my description of derivatives as their favorite financial simile. So in the end, yes, international financial markets provide the fodder, but they don’t overpower the underlying human dynamics of the story. If in the process of developing a believable plot line, a reader ends up understanding a little bit more about the world we live in, that’s great — but it’s not required and there certainly won’t be a quiz afterwards!

ALEX: The reputation of investment bankers has taken a big hit since the meltdown. (Goldman Sachs has been described as a “great vampire squid wrapped around the face of humanity.”) Did that level of disdain influence you in any way to make your hero a government agent instead of an industry insider, like in “The Firm” by John Grisham?

H.T.: The reason why I selected a U.S. intelligence officer, Kate Molares, as a protagonist was because she straddled both the worlds of Wall Street and Washington. The fact that the Defense Intelligence Agency could be involved in a mission like in “The Fund” takes the story to an elevated level. It no longer is just a relatively simple issue of regulating a bank or the derivatives market (which falls upon others in U.S. government to oversee) — but rather one of national security, economic warfare and financial terrorism. Through my sources in intelligence circles, I know that key personnel are in charge of looking after such risks. They understand that threats to our national security can come from a variety of fronts and not just through the front door. Right now, some of my biggest fans are sitting in the Treasury Department, Homeland Security and intelligence precisely because I’m bringing the discussion of these non-traditional threats to a broader audience.

ALEX: Which do you think will happen first? A terrorist (1) Explodes a nuclear bomb in a major city like Washington, London or Paris or (2) Cripples a first-world economy through financial terrorism or cyberterrorism.

H.T.: First off, it can be a terrorist or a rogue state that can attack us. We have a whole host of enemies in the world seeking to inflict chaos on us. I won’t give you a more complete answer because it would tell you too much about the next novel I’m working on. However, in many respects, many of the things I wrote about in my first draft of “The Fund” have come true; it’s why I had to keep doing re-drafts of my manuscript! The invisible hand that pushed our economy to the brink was caused by the excessive thirst for economic gains in our financial markets. I don’t know anyone who hasn’t felt terrorized by that!

ALEX: Do you think Wall Street has learned its lesson? And are we adequately regulated to prevent this from happening again?

H.T.: Wall Street’s raison d’être is to make money from money. They are not in charge of looking after society’s well-being. That is the job of people we elect to represent us in Washington, and they should be held accountable to identify weak links in our society that expose all of us to threats. So the question is more aptly asked of our Washington lawmakers. Unfortunately, I do not believe they have learned their lesson. For one, derivatives are now at a higher level than before 2008, and still concentrated in a few firms — 95% held by just five banks, and still opaque as ever. It is up to our lawmakers to both understand the risks of financial market excesses and impose a balanced level of regulatory oversight. Importantly, that regulation has to be a carefully crafted balance that avoids future financial Armageddon scenarios. That balance should also encourage the continued healthy growth of our financial industry on our shores as opposed to foreign jurisdictions.

ALEX: What’s next for you?

H.T.: Every morning, when I read the Financial Times, ideas spring forth to me about suspense story lines. Money, financial markets, governments and the real people behind them are incredible fodder for me in developing stories. The combination of money, greed and power always make characters do extraordinarily interesting things, essential for building a suspenseful, yet credible, plot.

At the moment, I’m writing a story that takes up where “The Fund” ends. Without giving up too much, I pick up some of the more important characters in this book and put them in a new situation of international intrigue. The idea for this book came to me because of some dangerous trends I’ve been following in the international black market and the rise of new global powers to challenge the heretofore monolithic preeminence of the United States. I’m enjoying putting unexpected pieces together to build suspense. And yes, I’m reading the Financial Times as I go along!

Author Information
Website: http://htnarea.com/
Macmillan: http://us.macmillan.com/thefund
Facebook: http://www.facebook.com/HTNarea
Twitter: http://twitter.com/AuthorNarea

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If you would like to learn more about my new novella,
you can read here about “Signs and Wonders.”

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