Free What the Nanny Saw by Fiona Neill

purchase of the olive grove the previous year was Bryony’s idea to lift his spirits and give him a new project. Everyone was under strict instructions not to mention fish of any kind.
    “That smoked salmon is paying your school fees,” said Foy. “Don’t knock it. Just wish I’d thought of pickling it in formaldehyde and selling it to Tate Britain.”
    “Actually, I’m paying the school fees,” Nick interrupted loudly.
    He was standing on one side of the long, thin island that dominated the other end of the kitchen, examining bottles of wine he had brought up from the cellar. He looked like a lonely plane that had fallen off the edge of a runway. It was the first time he had spoken since his father-in-law had come into the kitchen. Now it was his turn to admonish himself. What was he trying to prove?
    “Hello, Nick, how’s business?” Foy asked, moving swiftly toward the end of the kitchen island to shake his son-in-law’s hand. For a man of sixty-eight, he moved remarkably fluidly. “Is it a bull or a bear?”
    Nick laughed loudly, as though it were the first time Foy had ever posed this question. Over the years Nick had tried to explain to his father-in-law that the vagaries of the stock market didn’t have any impact on the daily rhythms of his work, but Foy simply ignored him because he liked the sound of the question.
    “Actually, we’re still benefiting from the fall in interest rates. Means people aren’t getting a good return from government bonds or savings,” said Nick, putting down the bottle of wine he had been examining. “We’re making a killing on these investment products called collateralized debt obligations. It’s like a never-ending party.”
    Foy looked at him quizzically, because Nick wasn’t following the established routine. Foy’s question was usually the cue for Nick to ask him about his latest news.
    “Sounds fascinating,” said Foy, unable to disguise his lack of enthusiasm.
    “It is,” said Nick, deliberately misreading his father-in-law’s tone. “House prices are rising, people are taking out loans to spend on cheap goods made in China. Everyone is getting rich, especially the Chinese, and they’re keeping interest rates low by buying U.S. treasury bonds.”
    “Are you going to open that bottle of wine, or do you want me to?” asked Foy jovially, stretching toward the Girardin Puligny-Montrachet that Nick was holding. Nick possessively held on to the neck of the bottle. The bottle opener remained on the worktop.
    “We’re pooling debt, adding it together, and selling it on as bonds paying different interest rates depending on the risk,” said Nick. “Most of it is subprime mortgage debt but it could be credit-card debt or emerging-market debt, doesn’t matter, really. We sell it on to a company we’ve created to buy it so the risk is off our books, and then it gets sliced and diced. We get a fee on every deal, and there’s revenue from repayment.”
    “Who buys debt from people they don’t know?” asked Foy incredulously.
    “People like your pension fund, for example, or your bank,” said Nick. “They’re looking for the best return on their investment.”
    “Surely you need to know who’s borrowing the money in case they can’t pay it back?” pointed out Foy.
    “We have formulas to assess risk, and agencies like Moody’s who rate the debt,” Nick said, and shrugged. “It’s practically infallible. Anyway, as long as people are making money, they don’t ask questions. They’re riskier for investors, but the returns are much higher.”
    Foy shook his head and picked up the bottle opener. It was clear from the way he kept turning it in his hands that he had no idea how to use it.
    “The more leverage, the more potential return. That’s our mantra,” continued Nick. He knew from meetings with investors that there came a point in the discussion where people were unwilling to admit they didn’t understand and simply capitulated to his