Spivs, sharks and why the champagne corks were popping on Meltdown Monday
On Sunday night, at Le Caprice restaurant in central London, a group of men in expensive suits - drinking even more expensive champagne - were sitting at a table in the corner.
Each had a BlackBerry hand-held computer.
'They were looking at the screens with obsessive interest as if they were waiting for something huge to happen,' said a member of staff.
And, of course, they were. News of the impending collapse of the world's fourth biggest investment bank was filtering through from New York.
High life: City traders known as the Flaming Ferraris enjoy the boom in 1998
The fall of Lehman Brothers will eventually hit thousands of savers, pension investors, and home owners in Britain.
But not everyone was a loser, and some of the 'winners' were sitting around that table at Le Caprice.
The restaurant is in the heart of Mayfair, which itself is at the heart of the hedge-fund industry. The men with the BlackBerrys are part of this exclusive club.
Unlike almost everyone else, they wanted Lehmans to crash; hence, the febrile atmosphere around their table. By the time they had drunk their last bottle of bubbly they knew they were about to make a killing.
For hedge funds, and the people who control them, specialise is an activity called short-selling.
'Shorting', as it is known, means selling a share that you don't actually own (a quirk in the trading system means this is perfectly legal) with a view to buying it back at a later date at what you hope will be a lower price. The investor's profit is the difference in price.
In other words, if it goes down, you make money - the very inverse, both practically and morally of normal share trading. In the case of the behemoth of Lehman Brothers, the profits from 'shorting' raids in recent days has run into millions of pounds.
How do we know the diners at Le Caprice worked for hedge funds? Well, they were familiar to staff, and on Sunday night there was only one story: the imminent fall of Lehmans.
Some say those who make money in this way are performing a vital safety valve function. More, however, compare them to 'financial vultures'.
Either way, they bring to mind Gordon Gecko, the fictional financier of the 1987 film Wall Street whose mantra of 'Greed is Good' captured the rapacious mood of the boom years of that decade.
Their activities were the talk of the City yesterday.
One message on a share-trading chatroom bulletin board read: 'We are never going to be able to do without oil and gas, but we can do without hedge-fund managers... let's do away with short-selling.'
The anonymous author added: 'The City was mayhem [on Monday night after the collapse of Lehmans]. Never been so much champagne drunk.'
Now, of course, a lot of it was being sunk by Lehman employees who had just lost their jobs and their careers and were drowning their sorrows.
At Smollensky's wine bar, just a short distance from the the bank's Canary Wharf headquarters, former staff were throwing back £65 bottles of Veuve Cliquot and Moet with Sambuca shots. But there was anger as well as despair at the short-selling traders who were cashing in on Lehman's miseries.
'Greed is good': Michael Douglas as ruthless financier Gordon Gecko in director Oliver Stone's 1987 film Wall Street
One said: 'The only real winners are the hedge fund guys who have been short- selling Lehman and Merrill Lynch (another venerable bank which is now the subject of a cut-price takeover by the Bank of America). Some of them have made an awful lot of money.'
Another (now 'ex') trader in his 30s added: 'Some of the hedge fund traders have been spreading false rumours that clients had stopped dealing with Lehmans to drive the price down.'
Now, of course, hedge fund traders were not responsible for the banking crisis, which could spark a cull of tens of thousands of jobs across the financial sector and drive Britain deep into recession.
Yet many ordinary people who live in the real world - whose pensions and savings will be adversely affected in the aftermath of Meltdown Monday - might find their behaviour hard to stomach.
The evidence is not just anecdotal. Data Explorers is a company which specialises in tracking the buying and selling of shares. Its analysis of Lehmans over the past few months is devastating. As of last Thursday, the latest day for which data is available, nearly 20 per cent of its shares were held by 'short-sellers' - almost double the level of the week before.
Clever - and, to some, ruthless. We already know the identity of one individual (American trader David Einhorn, who runs Greenlight Capital, who has admitted short-selling Lehman shares) and it's not hard to hazard a guess at who his British counterparts might be, or at least where they are based - in the vicinity of the 'alternative Square Mile', near the Caprice, in Mayfair and Knightsbridge.
They work in - and run companies - with names like GLG and Cheyne Capital, rather than investment banks such as Goldman Sachs.
They are among a 500-strong club who control an astonishing £1trillion. Much of this is held in off-shore accounts, largely away from the eyes of the regulatory authorities.
GLG Partners is based in a glass-fronted building. One of the men who runs GLG is Noam Gottesman, who in his mid-40s. He lives in a six-storey £18million mansion near the office. He likes to charter customised Boeing 737s, although he is said to use a top-of the range Gulf Stream jet for his fortnightly business trips to America.
Mr Gottesman summed up his skills to a prospective buyer: 'I make money.' He was less bullish when the Daily Mail called his office last night. 'He won't comment,' said a spokesman. 'They do not discuss individual positions.'
There was a similar response from Cheyne Capital and the Man Group, the world's largest quoted hedge fund, run by Stanley Fink and Crispin Odey. Mr Odey and wife Nichola have made £28million from the credit crunch.
The key to the success of Mr Odey, a 49-year-old, has been betting against banks - and their thousands of shareholders.
A year before the first cracks appeared in the global financial system, he spotted the gathering storm that was the 'sub prime' crisis in the United States.
Since then, his company, Odey Asset Management has been gambling on bank shares falling - as they have been doing spectacularly. While ordinary shareholders saw their stocks plummet, Mr Odey's foresight helped his firm record an annual profit of £64.6million, out of which he has paid himself £28million.
Mr Odey denies trading in Lehman shares. They all do.
Charlie Elphicke, a City expert for the Centre for Policy Studies, compared those who are short stocking and those who have profited from Lehman Brothers' collapse to circling vultures.
'They start by making a bet on the Options Market that a particular company's stock is going to collapse. They then buy stock in that company and slowly sell it off, to add to impression that everyone is selling. This can lead to a collapse in confidence and pretty soon the fall in stock takes on a life of its own.
'When the business starts to fail, there's a ripple across the whole market. It's like the scent of death from a wounded beast, as soon as vultures get a whiff they start circling and then the end is almost inevitable.'
What's the betting, then, that after the events of the past two days, champagne corks will be popping in several hedge fund offices in central London. They know the damage they have profited from. All there is left for them to do now is count those profits.
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