More from THE FUND

By Kevin Freeman
October 01, 2011Oct 01, 2011

Previously, we shared that investment banker turned novelist HT Narea has written a novel based on the concept of financial terrorism. A couple of days ago Mr. Narea was interviewed regarding the novel. Here are some excerpts:

Financial Thrills: A Conversation with H.T. Narea

September 29, 2011

The stock market is often a scary place these days, and today, we talk to someone who knows just how frightening finance can be. H.T. Narea is the author of The Fund, a thriller about a new kind of terrorism: financial terrorism. A Middle Eastern hedge fund mogul is trying to destroy the West by wrecking its economy, and a U.S. intelligence operative must follow the suspicious international money trail before its too late. Narea has been an international investment banker for more than twenty years. We talked to him about his novel and how it relates to the real financial world.

Your novel The Fund is about a new kind of terrorism—financial terrorism. Do you think there is a real threat of terrorists using finance as a weapon?

When I created my plot outline for The Fund, I could not have predicted how very real the threat could be. After all, I was merely writing a novel. But then as the 2008 crisis unraveled, I could see certain real-life parallels with my book, and my agent, Lynn Nesbit, was somewhat spooked by the predictive aspects of the storyline.

Then, a couple of months ago, through my contacts in Washington, I got my hands on a study commissioned by the U.S. Department of Defense titled "Economic Warfare."  Eerily, as I read the report, I realized that the U.S. Government had spent considerable time studying certain threats—the very ones about financial terrorism outlined in my fictional plot!

The Defense study was recently made available to Congress, and it set 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.

The study 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, Nebibi Hasehm, who develops a plan to manipulate financial markets via derivatives!

Per the study, the 1st phase of these attacks has already taken place—namely the accumulation of oil-derived wealth through price spikes, particularly in sovereign wealth funds and Islamic finance funds. The study sees this wealth as the necessary funding to create manipulative market strategies. Similarly, my character Nebibi creates the world's largest Islamic Shariah-compliant fund, with unwitting assistance from a fee-hungry U.S. investment bank.

The 2nd phase centers on aggressive derivatives trading strategies focused on weakening the liquidity position of select U.S. financial institutions. My book, The Fund follows on that theme, with my characters flying between New York, London and Greenwich, a world-recognized center for hedge fund activity.

The 3rd phase delivers the coup de grâce of attacking the strength of the U.S. dollar and its position as the world's preeminent reserve currency. This threat is now all the more real for people with this summer's U.S. debt downgrade. Other countries will now begin to look for long-term alternatives to the U.S. dollar as the world's reserve currency. I would be giving away too much if I continued talking about this parallel from my book, but I hope I've piqued readers' interest to read my novel.

By the way, I recently met with the analyst who developed that Defense Department report, and he was pleased to see that my novel reflected so many of the same issues he had researched. From his perspective, a work of fiction can be an equal if not greater vehicle to educate people about the risks we're both concerned about

Is The Fund based on your experiences as an investment banker? Are there elements of your experience in the book?

I've been involved with risk my entire career. I spent over two decades at J.P. Morgan Chase arranging deals for corporates, financial institutions and governments around the world. In that time, I pocketed my fair share of hard-fought tombstones and signing pens for some pretty interesting and challenging transactions, and traveled around the world with CEOs, CFOs and Finance Ministers.

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