Page 214 - harryDEC12_clean.iba

"Make it 01:30 if this is ok"
"Ok - I'll be there"
I replied and left the office at an early hour for the West End. I did not want to be late and the traffic was horrendous at noon. I arrived well before the appointment and found a comfortable chair in the lobby of the noble Hotel. 15 Minutes later Milken appeared in the hall. A tall man with a dark mop of hair, smart from head to toe, and with a sly smile. I had seen his image in the tabloids. He was famous at the time, but this fact did not really captivate me and I wondered what had made him pick me from the crowd. Rather odd - was my thought.
"Fame and riches are fleeting. Stupidity is eternal"
Said the American law maker Don William jr. once - and stupid I was not. So I listened with critical attention. While we sat at lunch Milken told me about his idea.
"You know what I do, Harry and for what I am famous !?"
He opened the conversation without irritating modesty and did not expect a reply from a normal mortal being like me.
"Now what I look for is a safety net for my investors - to insurance against the sovereign risk, in case one of the countries did participate in the 'junk bond scheme' goes bust - you understand Harry"
I understood very well. Though I was an insurance Broker I was no fool.
"What you are looking for Michael is insurance against the sovereign risk - that has never been done before."
"Then find a way Harry - there is big money in it - we roll the premium into nominal value of the bond and the risk is minimal, as we vet each and every country on a scale from 1 - 10 and even if one of the players folds, the bond never looses its full value - the insurer pays the difference and has the right of recovery, When the bond gains value again- bingo "
"What you ask me Michael is for a new definition of political risks ..."
"Well, if you say so, then do it - I give you three weeks to come up with a solution.
Be innovative Harry believe me this is were the money is - look at me!!"
That was a clear speech. Succinctly and without room for discussion. We said goodbye and went our way. On the way back to the office I thought feverish about a way to deal with this outlandish inquiry. Little sympathy could be expected from the insurance Market who took a skeptical view of the banking industry and their "dodgy deals" as underwriters used to describe financial transactions.
213