It's your old pal, Fuzzy.
As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets
than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily
and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great.
What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. I do my bit
to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy
just for you. It's so serious I'm not even going to make a u/pokimane
gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post.
That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets
- spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way.
We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps.
Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy. TL;DR?
Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle.
Ready? Let's get started. 1. The Tao of Risk: Hedging as a Way of Life
The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong
binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third
outcome. If you hedged against the possibility
of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows: Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself
Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part.
You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus.
That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically
. In wallstreetbets
terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it.
Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets? 2. A Hedging Taxonomy
The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now.
A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one.
Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered.
The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game.
I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise
! - the rate gets better
after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging.
There are many
different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested.
Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure).
A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super
boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me.
Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick
for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways.
People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances.
These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them.
No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable
to WSB. Collars deal with options! Hooray!
To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts. (3) All About ISDAs, CDS and Synthetic CDOs
You may have heard about the mythical ISDA
. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated
legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years.
First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA.
Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps
. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire.
Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money
. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking?
Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt
. They're synthetic
because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more
profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in
instruments that rely on that debt and then hedging that
exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama.
Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling
CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying
CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can
take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details.
I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly
taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here.
Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post.
* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
“Hello and good day, gentlemen”, I say. “I am Doctor Rocknocker. You may and will refer to me as ‘Rock’. OK? None of this ‘Doctor’ or ‘Sir’ guff. We green here?”
There was a buzz of voices but no direct answers.
“OK. Let’s get a few things down right here and now.
(1.) Call me Rock.
(b.) Answer me loudly. I will need to hear you loud and clear. Best get used to that now.
(iii.) “We green?” means “Are we in agreement?” It’s a form of shorthand I use here and in the field.
(⍾.) “You diggin’ me, Beaumont?
means you’ve really
done gone and pissed me off; you’ve done something untoward. Pray you never hear that phrase, and,
(∞.) I’m the boss. The top dog. The hookin’ bull. The Maharaja
here. I possess the first, final and only words you’re going to listen to for the next couple of weeks. What I say, goes. Any problem, please let me know now so we can replace you most quickly.”
A gentle buzz, but no replies.
“Gentlemen. Do we agree?” I ask.
“Yes, Rock.” Was the reply.
OK, there might be some form of a societal prohibition against making loud noises. That’s the first thing that has to go.
“Gentlemen, we will be working in the great outdoors where there are wind, rain, waves, and other environmental nonsense making all sorts of unrequited noise. We need clear and proper lines of communication. I need to hear you clearly and vice-versa. When speaking, you will speak slowly, clearly, and loudly. “
“DO WE AGREE!?!
” I yell, rather deafeningly.
“YES, ROCK!” came the eventual reply.
“Outstanding”. I ponder.
“Mr. Sanjay is my de facto
second in command. If I’m out having a smoke, taking a piss, or having a snort, he’s in charge. Listen to him as if I suddenly lost 150 pounds, shaved my beard, and inexplicably become Indian.” I chuckled.
They seemed to enjoy that. I actually elicited a few chuckles.
“Mr. Sanjay will now distribute to you your locker boxes. You will wait until he hands you yours. Do not get up and mill around the room. We green?” I ask.
“Green! Doctor Rock.” Came the noisy reply.
“Progress. Marvelous.”, I reflect.
“I’ll be right back. Mr. Sanjay, the room is yours.” I note. I might need to cut back on the coffee.
I slope off to the loo and it’s just as horrible as you can imagine an outdoor communal shithouse in sunny India attended by 30,000 Indian gentlemen could be.
Fuck COVID-19. I’m thinking hot and cold running dysentery, dengue, and death here. Ick.
Glad I have a highly functioning immune system.
I retrieve a shiny aluminum Halliburton™ case from Headquarters and ease off to an unused office space to change.
I went from my usual field garb to full PPEs. It was quite a sight.
I’ll be telling you about it in mere moments. Contain the excitement.
I’m walking back to Outbuilding #2 and damned if my get-up didn’t elicit a few gasps, shielded guffaws, and a salute or two. I have to admit, to the uninitiated, I was a sight right out of Area 52, the more secret one, west by northeast of Roswell, New Mexico.
I get back to the outbuilding and enter. Everyone was looking through their locker boxes, chuckling about their good fortune and wondering with Joker-like glee what the hell all these wonderful gizmos were and where did I get them? They all stopped dead in their tracks when I walked in.
Their silence was palpable.
“Gentlemen”, I said, “Here’s how you are going to look at work tomorrow. Revel in its utility, comfort, and extreme fashion sense.” I did a quick spin like I used to on the runway.
At O’Hare when we were doing field geostatic tests. Whatever were you thinking?
I was wearing a pair of size 66-XTall NFPA 70E blaze orange Carhartt Nomex coveralls. I had on a Dax carbon-fiber blaze orange “Coal Scuttle” hardhat with swing-away hearing protection keyed into your personal communications module, and a gold-anodized, pull-down full face shield. The helmet was designed to drain away falling water down over one’s back and not down one’s neck.
I had a pair of ‘wet’ gloves under the snap retainer on my left shoulder, a pair of ‘dry’ gloves on my right. I was wearing an orange CMC Safety 9-point safety and rescue harness, good to well over 1,500 pounds. Over both shoulders, around the crotch, up the front, and around the back, X-style. This popular harness features multiple D-ring attachment points and the patented JackBack removable padding with breathable D-3 cloth, which keeps shoulder straps separated and makes donning and doffing a breeze. It had several catch-points where one could easily and readily attach to the snap carabiners and get bodily dragged out of a nasty situation by rope or chain. The front waist D-ring allows a comfortable, stable sitting position for rappels and the sternum D-ring works well for helicopter or crane-assist hoists. Gear loops offer easy access to equipment, and quick-connect-disconnect shoulder straps and leg loops make the harness quick to don or doff. It could be used for impromptu spelunking on days off.
I had on Size 16 EEE Gear Box 8088 Men's 8 inch Black Leather intrinsically-safe hard-toed lace-up black turned-heel leather work boots with the new self-cleaning, oil-and chemical resistant Vibram soles.
They couldn’t see, but I was also wearing a cotton-Nomex blend wifebeater and boxers as well. Nomex tends to chafe. Best be safe.
I had a powerful Maglite flashlight clipped to my rescue harness, as well as my mini Air Horn; a blaster’s must. I also had a mobile VHF-Commslink™ radio in a pocket on the back of my coveralls on the left shoulder. I had the microphone for it Velcro-ed to my rescue harness within easy reach. Very cop like. Very cool. Very necessary.
I had a traditional Zippo and Bic Butane lighters in my right-hand chest pocket and a brace of cigars, though these were optional, in my left pocket. I carried a bespoke constructed Swiss Army Knife on a lanyard in my right front pocket and had a custom Bears Paw Leatherman hanging on the left of my rescue harness.
Also clipped to the harness was a Silva orienteering compass. There was a selection of NASA
write anywhere pens, Sharpies, and oil-writing chalk pencils in my other front pockets. I had an oil industry tally book in my other front pocket.
Why blaze orange? Well, Red Adair already co-opted bright red, and fluorescent green wasn’t available in my size.
So, we’re now ready to plant explosives in West India or go deer hunting in the Northwoods of Baja Canada.
“Questions, Gentlemen?” I asked.
I explained that in their locker boxes were purchase orders, POs, for every bit of kit I was wearing. They were to take these POs to the Company Store and get, well, kitted out in their own sizes and preferences. I wanted to see everyone back here tomorrow at 1300 hours looking as I do now. Well, maybe skip the cigar and be not quite so large.
I sat down on the table in front of the crowd and had Sanjay bring over the demo locker box.
“OK, gents,” I said, “This locker box is yours and is numbered as such. They will be stored here in Outbuilding #2. Each of you will receive a key for this building as it is now your headquarters. We’ll get back to locker boxes in a minute. Anyone need a break for a few minutes?” I asked.
No one dared answer at this magical juncture in the narrative.
“Well, I do”, I said, “Meet back here in twenty minutes. Sanjay?”
The class wandered out and I conversed with Sanjay. We found the maps I had ordered.
They were an aerial view of the breaking yard and it was split into 6 zones, all a different color. There was one master for the wall and 28 copies for the guys. I also had a log-in/log-out board made. Vertically numbered 1 to 28. There were also 7 vertical bars labeled Zone 1 through Zone 6, and one for ‘in dispose’; i.e., in Latrin-e Land. This was so I’d know where my guys were at all times.
There was a hook for each one of these areas to log in, and to let anyone know where a certain person was during the day or night. You’re number 10? And you’re going to be wielding a torch over in Zone 5? Your brass tag goes right there. You’re going to skip over to Zone 3? Get your ass back here and swap it over to where you’re going. There is no excuse for being where you haven’t said you were, short of active accident or dismemberment.
Everyone shuffles back in and I explain the tote board.
“Notice there’s no spot to leave your brass chit if you’ve gone off the reservation?” I asked. “Why do you suppose that is?”
Confused looks all around.
“Because you keep that brass token with you when you’re not on the job. Lose it, lose your job. Sounds harsh, but so is getting your fucking hands blown off. Think of it as an exercise in discipline.”
There was a very little rebuttal.
“When you are on location, your brass token will
reflect where you are. You are off-site, put the brass token in your wallet next to your lucky ‘circular impression’.
There were several knowing grins in my cadets.
Wear it around your neck on a chain. Keep it on your keyring. You can wrap it up in ribbons, you can slip it in your sock; I don’t care. Thing is, it is your ticket to this job. Hold on to it, there will be no replacements. We green?”
“Now, locker boxes. Gentlemen”, I continued. “These are your personal boxes that will be archived here. They will contain everything that you will need to carry out the job initially and help you with training the next crew that comes through after I leave. Keep them neat and tidy. I like to pull unannounced locker box inspections, gentlemen. Be forewarned.”
The sound of active scribbling is music to my tinny ears.
“Now, as such”, I continue, “Each locker box, at this point, is identical. Please follow along with me as we do inventory: Each gets locker box will contain (as I pull out the item for identification):
• 1- set Purchase Orders (POs) for PPEs
• 1- Galvanometer
• 2- Blaster’s pliers
• 1- Custom Leatherman
• 1- Metal clipboard
• Various Pens, pencils, paper, etc.
• 5- Sharpies
• 1 copy: Blasters Protocols Handbook, 15th Edition
• 1 copy: Blasting and explosives safety training manual by the IEE.
• 1 copy: Theory and practice of blasting, by Hino (A classic)
• 1 copy: Blasters Handbook, 17th Edition
• Various Explosives catalogs
• 1- Custom Swiss Army Knife
• Several Butane lighters
“Are we in agreement, gentlemen?” I ask. “Please check to be certain you have what the manifest states.”
“As long as we’re going over locker boxes, let’s look at our set of PPE purchase orders. Each locker box will contain POs for:
• 1 pair Orange Nomex coveralls, in your size
• 1 Dax carbon-fibre blaze orange hardhat with ear protection, gold face shield
• 1- CMC Safety 9-point extraction harness with carabiners
• 2- pairs Safety Glasses
• 2- pairs of gloves –wet & dry
• 1- pair Gear Box 8088 hard-toed intrinsically safe 8” work boots
• 1- Silva Orienteering Compass
• 3- pairs of cotton WaterWick socks
• 1- CommsLink™ VHF radio with microphone
• 1- Maglight power flashlight
• 1- Rain suit – also Nomex, bibs and outer shell
• 1- Mini Air Horn Power Tootler
• 1- Pair cotton/Nomex blende underwear – anti-chafe, wifebeateboxer: 3 sets.
• 1- 16-ounce container ‘Babies Bottom’ Talcum powder. Nomex chafes.
“Well, that’s a lot of gear; you best become real familiar with it as soon as you can. You are responsible for your PPEs. Lose them and replace them at your own cost. Wear them out? No problem. We will replace them. Get caught on location without your proper PPEs? Alavida
. Goodbye. There is no second try. Fuck up once, and you’re gone. I am here for a limited time to try and teach you characters how to blast boats. I am not here to be your wet-nurse or mother. We green?” I ask.
“YES! Green! Rock!”
We spend about an hour going over the various contents of the locker boxes and I answer general questions about blasting and explosives.
“We will use Primacord by the mile and tons of C-4 primarily. I might introduce you to binary explosives if there’s time. We might also get into PETN and RDX. Dynamite for training. But that’s about it.”
“We will use demolition wire and electrically fired blasting caps and boosters. We might have some time to look at set-pull-forget mechanicochemical fuses. But you’ll all learn some basic electrical wiring and how to design a circuit.”
“Tomorrow, given it doesn’t rain and the creek don’t rise.”
“Time, gentlemen!” I said. It’s been a long day and I’m a bit jet-lagged knackered. Besides, I wanted to give that Jacuzzi a spin.
“OK, remember: get your PPEs tomorrow morning at the Company Store. I expect to see each and every one of you here tomorrow, kitted out and ready to go, at 1300 sharp. That’s it. See you tomorrow. Susandhya
. [Good evening.]” I said.
Locker boxes are locked and stowed in an orderly fashion. Each and everyone one of my 24 acolytes come to me before he leaves work to thank me personally and shake my hand.
“This might just work out”, I say to no one in particular.
Sanjay and I head back to the Raj for the night. I’m really tired, finally feeling the jet travel hit, and not the least bit hungry.
However, I do ring up the 214 cigar dude and relieve him of a selection of fine smokes. I drop by the bar for a couple of barley-pops before I retire to my capacious room for the night.
“Sanjay”, I say, “I’m knackered. If anyone wants me, head them off until tomorrow. It can wait. I’m going to get some kip and don’t want to be disturbed. No maids, no Majordomo, no butler. I just want to get unconscious for a while.”
“No problem, Rock”, Sanjay assures me, “I’ll tell them you’ve gone bush and haven’t left a forwarding address.”
“Good man”, I say, patting him on the shoulder. Hell, I must be getting old. Shit like teaching a band of newbies and whooping a little ass would have never as much as caused me a short breath. Then again, it’s probably not the years, it’s really the mileage…
After a quick light breakfast come morning, Sanjay and I are back on location. I’m being given a tour of the place by the day-shift foreman, one Mr. Vikramaditya Shrivastava.
“Yikes”, I say to Sanjay, “You characters really go for your 11-syllable names.”
“Call him ‘Vik’, Rock”, Sanjay smiles, “Good thing you’ve never asked about my last name.”
“Probably is”, I snicker back. I’m not getting roped into this little tussle.
Vik speaks fairly passable English, but I’m still glad Sanjay is here. The first order of business is to see the explosives bunker I sent plans for and how that’s coming along. They tell me it’s almost finished and ready to be stocked with what I’ve ordered.
“Outstanding, let’s have a look,” I say.
Into the Citation Golf Cart, we go. None of this plebian walking shit. We’re MIPs, Monstrously Important People
Plebes walk, we ride.
We drive around the piles of rusty scrap, huge hunks of bulkhead, and disconcertingly quickly through polychromatic puddles of who-knows-what to slide to a stop in front of a large canvas tent.
Think M *A *S *H-type mess tent.
“What’s this?” I ask, “Commissary? First Aid?”
“No, Dr. Rock”, Vik explains, “Here are your explosives.”
My eyes grow large.
“What do you mean?” I ask. What the fuck do you mean? I mean.
“Building of your bunker is taking more time than we expected what with your design imperatives. But your order was filled most expediently. We are storing it here until the bunker is complete.” He smiles in that inimitable Indian manner that is so irritating when they don’t realize the major fuck-up they’ve just committed.
“OK. Simmer down, Rock.” I say to myself. “Sanjay, ask him again what’s in that tent. That bottomless tent that’s just a sheet of tarpaulin held up by metal poles.”
“He says that’s your explosives order, Rock,” Sanjay says. His demeanor went from perky and helpful to terrified as he saw me turn several shades of crimson and begin to emit wisps of steam.
“Sanjay”, I said in calm, calculated terms. “You are telling me there are over 9 tons of high explosives, blasting caps, boosters, demo wire, and ANFO sitting on wet sand in this heat under a sheet of fucking tarpaulin?”
“Yes?” he stammered, with a squeak.
“OK.”, I said. “We need to keep very calm and not go completely apeshit; and I’m telling you, right now, that’s taking Augean-level effort. We have a situation here, Mr. Sanjay. A very, very dangerous and very deadly situation. Let’s above all, remain calm.”
“Right, Rock”, he replies.
I turn to Vik and say in a calm and collected tone, “YOU STUPID MOTHERFUCKER! WHAT HAVE YOU DONE?
“Calm and collected, right, Rock?” Sanjay smirks and Mr. Vik withers under my verbal assault.
“Sorry, I had to get that one out.”, I apologized, “Mr. Vik. You have created a real blockbuster here. Quite literally. I figured, erroneously it seems, that you would not take delivery of over 9 TONS
of high explosives before you had a very safe and secure place to store such.”
“It arrived sooner than we thought. We got a good price on it,” he explained.
You did? Fucking great! Holy mothering fuck!
Now I was even more worried. One does not get discounts or bargain-basement deals on quality
“Pray, Mr. Vik”, I entreated, “From where did you source these detonic components?”
“From Best Blast and Supply Llc of Hong Kong Enterprises.” He replied, “Bulk discount quantities, quick delivery bonus. Saved crore
No. I was wrong, it could get worse.
Not only 9 tons of high explosives, 9 tons of counterfeit, knock-off, and non-regulated manufacturer explosives.
“OK”, I said, “Let’s take stock here. My bunker isn’t finished yet? Correct? So you and the company meatheads ordered 9 tons of knock-off explosives from some shady and cheesy Chinese dealer and you stored them on wet beach sand, in this heat, under a tarp? Have I got all that right?”
“Oh, yes Doctor Rock.”, he smiled.
“Sanjay”, I said in a low, firm tone, “We have a…situation. We need to cordon this area off and build an exclusion zone as far as we can around it. No one, and I mean no one, gets within what, 10 kilometers? of the tent. This thing goes off, it’s going to leave a much larger than that cone of devastation. Then we need to visit with the management of this place and have a few thousand well-chosen four-letter words. Then I can think about what the fuck we’re going to do about this situation. I’m struggling to remain calm so everyone else will, but this is just a wee
bit tetchy. Find me some red flags and start planting them around the tent, working our way out. Let’s go. Calmly, collectively, and with purpose.”
We find a source of 2-meter poles with red pennants. Sanjay also finds a few miles of yellow “Danger: Stay The Fuck Away” tape. We gather then and head back to the tent. We start to spiral out from it planting flags and running tape.
We did the best we could, but we were disrupting daily business activities. Good. Let the head idiots in charge know they’ve fucked up and grandly.
Back at headquarters, I’m fuming. I’m damn mad. I’m loud and being all extremely American about all this.
“You fucking idiots! 9 tons of cheap-shit high explosives? From China? Stored on wet sand in this heat? Under a benchod
tarp? Why the flying fuck do you think I sent such detailed plans for a storage bunker? Do you assholes even think?” I railed on like this for at least half an hour, going all Gene Wilder in ‘Young Frankenstein’.
“Yes, Doctor”, one Mr. Karam Kanungo, the local boss and company president said, “That is all true and steps will be taken to redress the situation. But that doesn’t address the issue at hand. What do you suggest?”
“I suggest you are all taken out and given hot coffee high colonics to clear out your thinking processes”, I spit, “But that still leaves us with a nine-ton headache out there waiting to bloom into something even more aggravating.”
The entire assembled board agreed.
I calm down a bit and have a think. Fuck your boardroom, I’m having a cigar.
“You need a licensed, certified, master blaster to go and sort that out. Do you happen to have one handy?” I asked, sweeter than clover honey.
“Ah, yes, you are…oh.”, was the collective realization.
“Yeah, I know. It’s me. I’m the only one that can sort this shit out. We can’t even wait until we find someone from the world to assist. We are sitting on a literal time bomb, gentlemen.” I reply.
They all agreed and were relieved I was going to take on the challenge.
What else could I do? That stuff lights off and we’re talking easily hundreds if not thousands of fatalities and countless injuries. Fuck that. Not on my watch.
I tells ya’ what. The fucking Karma Fairy better shower me with gifts and accolades, blowjobs and candy corn after all this.
In a metaphorical sense, of course.
“OK, Mr. Sanjay, you’re with me.” I say, “Now look, Herr Macs”, I address the collective board, “Before I had carte blanche
. Now, if I even think we might need something, it appears. We’ll sort out our honoraria and bonuses for this after we get back.”
Everyone present agreed most hastily. Handshakes all around and apologies from the board cemented the issue.
“OK, Sanjay. I need a bus. At least 24-seater. With a driver than knows how, when, and where to stop. OK?” I ask.
“24, Rock?”, Sanjay asks, “You’re not thinking of including the recruits now, are you?”
“Yes I am, Mr. Sanjay.”, I replied sternly, “On the job training. Meet me at outbuilding #2 at 1300 as per plan. Order a bus and arrange the largest forklift that can manage beach sand, about 100 wooden pallets, plastic wrap, and sandbags. Lots and lots of sandbags. Have them stockpiled away from the tent in a muster area. OK. You got all that?”
“Yes, Rock”, he said, “I’ll be there in a couple of hours. It will only take a few phone calls.”
Not even 1000 in the fucking morning and I’m facing life and death decisions once again. I dig an emergency flask out of my field vest. If this doesn’t qualify as an emergency, what the fuck does?
A tot or two later, I change into my PPEs, and light a cigar. I catch a tap-tap to the region of the tent. I need to reconnoiter the area and figure out what sort of dragon I have to slay and the best way of going about slaughtering the sumbitch.
I’m standing alone, about 250 meters from the tent of death.
I’m puzzling and puzzling; but I can’t allow for my puzzler to go sore. Not this early, anyway.
“OK, me ol’ mucker”, I sigh, “It’s me or thee. Pucker up, Buckwheat. Here I come.”
A blast suit like the ones bomb disposal dudes wear wouldn’t help in the least. All it would do is hold the mashed body parts together to make for easier disposal. I’m anywhere within a kilometer or so of this pile of Chinese counterfeit boom-makers and it decides to let go; I’m lunchmeat. That’s it. Alive one second; kerpow, splat, instantaneously zonked into component particles the next. That’s the long and short of it. No ‘thank you’s. No ‘good bye’s. Just existing here one minute and in an alternate dimension the next.
Doesn't that just take the biscuit? Funny old thing, life.
I trod onwards.
For a moment, nothing happened. Then, after a second or so, nothing continued to happen.
I was walking up to the tent, clearing a path for the forklift. No fucking way I’m schlepping nine tons of dodgy explosives out of here, over wet beach sand, by hand and hoof.
Sand. I’m with young Anakin on this one. I hate sand. I hate walking in dry sand, hiking in wet sand. It makes for a wonderful oil reservoir and I love its porosity and permeability at depth. But at the surface, forget it. Yow! Let me tell you about the time I was out in the Rub al-Khali desert. The great Sand Erg. Wind blowing a force 9 gale! Seif dunes 1,000 meters high…
Yeah. I know. I’m stalling.
I’m approaching the tent. Carefully. I pause to light a new cigar. You might think that daft, but it’s really not. None of the stuff inside is heat-sensitive; let me clarify. None of the stuff is going to go off if hit by errant ash or even a sustained flame. But sitting out in the 30C+
heat? OK, that makes it twitchier. Cigars do the opposite for me. Give me something to concentrate upon and it calms me down.
I need calm now. By the bucketful. Where’s a monsoon when you really need one?
OK, I made it. I’m at the tent. Got to hand it to the workers around here, they respect authority and don’t come anywhere near the tent. They also don’t apparently give a shit as there no crowd gathered filming me with their iPhones to post to You Tube© if the tent decides to go all detonic.
Good. I couldn’t yell anything at them they’d understand to clear out anyway.
I open the hole in the side of the tent and pause. I’m hit with a wave of hot air. And the heady redolence of onions, sewer gas, and dog farts.
Sorry, that’s just me. Weird midnight snack last night. Frozen durian. What a treat.
I smell kerosene. Old wood pulp, like musty magazines. And an undercurrent of almonds.
“Oh, treble fuck me,” I say to no one within 100 square kilometers.
Kerosene is sweaty C-4. Old wood pulp is dynamite. Almonds? My old friend, nitroglycerine.
Things, if possible, went from real to super-uber major-league holy-fuck real.
“OK”, I say, as I dig out my phone and begin to snap pictures at a frantic rate.
Luckily, all the ordnance was piled like-with-like. Blasting caps? All over here. C-4, all along this ‘wall’. Dynamite? All over here. Non-explosives? Right over here.
I was mentally running like a squadron of overclocked Crays, wondering what I need to do to sort out this little situation. I’m so deep in thought, someone would need to throw me a rope to get my attention.
Or, just tap me on the shoulder.
Once I returned from low earth orbit, I turn to see a little wisp of an Indian feller, who had to be at least 27 years Methuselah’s senior.
“What? THE? Actual? Fuck? Are? You? DOING? Here?” I screamed.
“A thousand pardons, Sahib.”, the ancient one said, “I saw you working alone. Salim wonders if you need some help? Salim is good helper. Salim will help you good.”
“Yes, Salim. Oh, hello by the way.”, I said, calming a bit, forcing myself to smile so I didn’t kill him on the spot, “I do need your help. I need you to go, very slowly, out of this tent and to where the flags begin. Stand there and allow access to no one. OK. We green?”
Salim smiles broadly revealing both teeth. I slowly usher him out and remind myself to order a few new pairs of boxers before the day is out.
Back to the problem at hand. There are some salvageable items here. But the most the C-4, all the dynamite and every sack of ANFO has to go. And by ‘go’, I mean be disposed of. How?
By blowing it up, how else?
An idea creeps into my skull. I puff and puff while it grows and finally, I’ve a plan of attack.
I close the tent and slowly walk away. I hand Salim 1000 rupees and tell him that no one, I don’t care if it was Mahatma Gandhi reincarnate, goes anywhere near that tent.
“You savvy?” I ask.
“Oh, Sahib! I savvy! Thank you! Salaam! I savvy!” he is beside himself with joy, 13 bucks, and a task.
I look at my watch. It’s just gone noon. Good. I need a sandwich, some fluid replacement, as I’ve probably literally sweated off 5 kilos in the last hour and a half, and some time to jot down my plans.
I catch a tap-tap, geez, these things are everywhere around here. They form an unsanctioned, but necessary, sort of intradepartmental transport system here. I tip a couple of hundred rupees for every trip. They see blaze orange and they have this Pavlovian reaction. I sometimes need to break up fist-fights over which driver arrived first.
“Commissary”, I say, sit down, let the tap-tap, which is really nothing more than a glorified golf cart, adjust to my Western bulk and away we zip.
Salim is waving to me as we depart.
I shudder to think if I hadn’t had a tot or two and was a bit jumpier from the morning’s caffeine. Here's to alcohol: the cause of, and solution to, all of life's problems.
At the commissary, I grab a tall iced, fruit cocktail juice; a slurry of mixed dragon fruit, kiwi, carambola, blood orange, green apple, watermelon, bitter melon, sweet melon, & bailan melon fruity essence. I’m incredibly thirsty and I need some calories, but not in bulk and not from onion bhajis, mutton kabobs, or something claiming to be grilled chicken on a stick.
The last thing I need today is a case of the trots or even sharp gas pains in the next few hours. I add about 5 fingers of Old Fornicator Vodka to the juice and sip it slowly as my biometric rhythms return from the ionosphere and back to more normal levels.
Remember, I’m EtOh-based. I need to control my various fluid levels very carefully.
The blasting muse is upon me. In less than 30 minutes, I have a plan. Both a written out procedure and a map of what needs to be done.
I finish off another tall, icy glass of potato and various fruit juices, venture outside feeling almost like I’ve once again regained the illusion of control of the situation and my life.
I fire up a heater and decide to walk