"India," Cavelli said in his Locust Valley lockjaw, drawing the name out as if it had been minutes and not years that had passed since we'd last spoken. "India," he said. "I'm beyond fascination, my girl. I'm dying to hear more about this Wall Street experience of yours. Fascinating! Brava!" What was there to say about creatures like Cavelli, who, as someone once said of a certain charming President from Arkansas, always had one arm draped around you in an embrace while the free hand was busy pissing down your trousers? "Leonardo," I said, "what a surprise."
"Now don't be cross with me, dear girl," Cavelli said. I could hear him smile as he fired a mild warning shot across my bow, just in case I was angry at him—which I wasn't, of course—for being out of touch with me. I knew as well as he did the way things worked. I'd left him, after all. But he was always hedging, always in control, even when he held a bad hand. There was something to be said about watching the man, as a kind of human spectacle, operate. "The whole fucking business is going to hell," he said, "and you had the sense to get out when you could. Well done."
"It's always going to hell."
'Well, you've got a point there," he said. I could hear the creaking leather of his swivel chair as he leaned back, this habitué of the always oncoming season of new things under the sun. Not so for the author, for whom, after publication, although she'd poured every fiber of her soul into the enterprise, the future of her book stretched no further than the expiration date on a gallon of milk. Cavelli's office was a testament to the processional sway of the future—the desk stacked high with fresh manuscripts; the ceiling fan, its blades furred with dust, slowly circling above his head; the morning light aslant through a pair of windows that looked out on a wooden water tower. "You've got a point," Cavelli repeated, as if this were the first time he'd considered the notion. "When, my dear girl, do I get to hear about this excursion of yours?"
In a world filled with capricious sentiments, Cavelli had managed, by comparison, to approach a kind of dignity. He had stood by me when he was my publisher, no matter what. After I left him, he'd call, keep his hand in, as it were, with me. Wanted to know what I was up to, until seasons came and went and time swept us farther and farther apart. I'd always thought that I would try again with him, that he'd give me a fair reading, that if I was willing to take a small advance he might be willing to buy my book. For me, though, it was pride. I'd been stupid, perhaps, easy to believe in retrospect. If I'd stayed with him, my career as a writer could have had a much more certain and favorable face. Now, with his exaggerated diction, his elided rs, Cavelli wanted a one-on-one with me, wanted me to explain what was happening in the mortgage universe, wanted me to explicate high finance. I didn't have the time for such a visit just then, but of course I made the time. I wasn't as immune to his summons as I had hoped to be if ever the time came.
"What do you propose?" I asked. The floor was buzzing around me. Cavelli, with his slow, cool attitude, had no idea what he was asking of me. It was eleven in the morning. The markets were insane. Some banks were showing signs of trouble, hedge funds going under, others beginning to fracture, billions of dollars in write-downs. Two hedge funds at Paul, Smart & Smith, Will's old firm, had shuttered their windows. Cavelli wasn't wrong to call. It was a curious time.
How did this mess get started? Where was it headed? I was the one with the crystal ball on this fine day in the middle of 2007—or so Cavelli thought. Perhaps I could predict what might go down, but in truth I was just trying to ski ahead of an avalanche. Not much time to speculate on the long view. Short term was all a trader had time for. And now came the roller coaster ride of volatility. One week of free fall. The next week you were back where you started, as if the previous week hadn't happened. As a joke, somebody left a parachute in the office kitchen. The guys in subprime were writing lyrics like this one, sung to the "American Pie" tune:
A long, long time ago,
I can still remember
How that yield spread used to make me smile.
And I knew I had my chance,
Those CDOs I could finance,
And maybe pay my bills for a little while.
But February made me shiver
With every press release Bear delivered.
Bad news in my e-mail—
Would I collapse that last deal?
I can't remember if I cried
When I saw the CFC slide,
but something touched me deep inside
The day the subprime died.
So bye, bye, repo money supply.
Sent my collateral to four dealers
But they all asked me why.
And good old boys were on a crack-induced high
singin' "This'll be the day the loans die,
This'll be the day the loans die."
Did you write swaps on B/C loans?
Did you blow bucks on new iPhones?
Did that nut Cramer tell you so?
Now do you believe in rate control?
For a Fed cut, would you sell your soul?
And is response to your bid list mighty slow?
Well, you try to widen that spread, my friend.
Your sales force has gone off round the bend.
And Bernanke's on the news,
But Greenspan lit the fuse.
I was a paper-rich middle-aged broncoin' buck
With a master plan and a lot of pluck,
But I knew I was out of luck
The day the subprime died.
So bye, bye, repo money supply.
Sent my collateral to four dealers
But they all asked me why.
And good old boys were on a crack-induced high
singin' "This'll be the day the loans die,
This will be the day the loans die."
I was waking up almost on the hour to check where the markets were overnight. Every day was like going to war, and I had the sense that things were going to get worse. But it was only a sense. We traders didn't have the larger, universal picture of all that was under and on top of us. It didn't work that way. All the songs and high jinks were just fun, as if by acknowledging the ominous with a wink we could keep it at bay. Simply, you had to be quick, nimble, decisive. I'd listen to playlists the girls and Theodor would make for me to psyche me up— Come As You Are, Don't Forget to Dance. (I never actually saw the family, had no time to miss them.) Some days would end and everyone would stand there like zombies, shaking their heads. The terror of the abyss followed by the exhilarating comeback.
On the other end of the telephone line, in his publisher's cocoon, with a fluorescent light ballast buzzing somewhere off in eternity, the pressure, the flop-sweat swamp of the trading pit meant nothing to the Dashing Cavelli. He would want to know, like everyone else, if I'd seen this coming. And of course I'd think of Win, of his departure for the hedge fund, all of us in Rates feeling betrayed—he'd seen it coming. But what was it, really? Was Win poised in his short position? Cavelli, like everyone else, would want to know what we'd do about it, how we'd manage it. It was all over the news since February: "U.S. Investors Worried about Subprime"; "As Mortgage Crisis Begins to Spiral, Casualties Mount"; "Crisis Looms in Mortgages, Upbeat Analyses"; "The American Dream's Rising Cost"; "Prospering in an Implosion"; "Debtor Nation; Big Investors Jumping Back into Shaky Home Loans"; "When Does a Housing Slump Become a Bust?"; "Another Crash of '29?"
Plenty of indictors: smart friends, friends who should have known better, didn't know the details and fine print of their mortgages. Shorters circled B&B like so many hyenas around a wounded animal. (Win left us alone.) The bets were on that many of us would go down—that our leverage was too high, that our exposure was too vast, that Radalpieno's risk threshold would send us down. (I recalled Win's leverage warning when I'd made my big trade, no one paying it heed.) Here's an analogy: You're a family, mom and dad. You own a house. You believe the value of it will keep going up, so you renovate the kitchen, send your kids to private school, take those biannual vacations�
�spring break and Christmas. It's assumed you'll get a raise, get a bonus. (Bankers are like waiters; the big pay is the tip.) There's only one direction at this age (midlife), and that's up. So you don't mind the debt you've racked up; you'll pay it off with the bonus, start paying it down with more frequency, take out a home-equity line of credit.
In short, we'd been fools, the whole lot of us. But it's hard to predict when things will fall apart. And then, when it does, you're just trying to stay alive in the avalanche. You have to know when to face off against the market. According to Win, women can make great traders because they are more sensitive to their own weaknesses and failings. They are likely to objectively reevaluate a position and get out of a bad trade rather than stand against an avalanche. But there were only a handful of women trading on the Street. Now the avalanche was coming down the chute and Cavelli wanted to chat.
"What do you propose?" I asked.
I knew what he wanted. There was only one thing a publisher could want.
"Can I lure you to my offices?"
"When?" I thought flirting with the notion could be a curious way to spend some time. I had enough of the writer left in me to want to peer down an old alley. Call it a hedge. Maybe I was looking for an alternative way in which this story of mine might finish.
"This evening? After work, that is. I imagine you might be quite busy."
"How's Thursday afternoon? I'm taking the day off."
"Divine, my pet. A date."
The company's offices had been in the same building since the 1940s. The elevator let you off on the fourth floor, the entirety of which was Piccadilly's—a labyrinth of manuscripts stacked in small towers and books and unopened boxes and piles of papers—a firetrap, and to think that once upon a time the place was blue with cigarette smoke. Black-clad assistants darted about. Nothing fancy, nothing glamorous. Fancy happened at Dino's, Cavelli's Italian watering hole around the block, where he had his table and his usual order of oysters or mussels and his bistecca alla Fiorentina with a spritz of lemon and his two carefully measured glasses of Barolo, where he held court with his authors and other editors and agents in his dapper suits. Here in the offices, his editors sat hunched at their desks, in their cubicles, bent over books, the phone. A strong smell of coffee permeated the air. A wall was devoted to plaques for various awards—the Washington, the International, the Eiseman, the Nobel. And, of course, books from the recent past faced outward along the halls, some behind glass, others stacked hip-high in the reception area.
Miss Barthelme appeared, a white-haired elderly woman, poised and elegant in a lavender summer skirt-suit, who, though older than Radalpieno's Miss Lane, seemed to be cut of the same cloth, from a forgotten time when women prized the job of devoting their lives to holding up a great man.
"India," she said, kissing me lightly on the cheek. "It's been far too long." She led me through the maze. I followed, obedient as a schoolgirl. Then, stopping, Miss Barthelme turned to admire me, as if in afterthought, as if, as we made our way through the stacks of papers and books, an image of who I'd been came to memory and jarred with who I was now, in my expensive jeans and crisp linen blouse, expensive sandals, pretty jewels, finely cut and colored hair.
"You don't look like a bond trader," she said, "whatever that is." And she continued on to the outer reaches of the floor and Cavelli's office. Again, books and all the rest smothered the waiting area outside his door. The door was closed, but I could hear his voice, rising, lulling, rising as it penetrated the thin wall. "May I get you a drink—some wine, water, coffee, tea? I suppose it is teatime." She held me with her hazel eyes, Miss Barthelme—a good, sound literary name. She extended her hand, gesturing to a frayed leather couch on which I could wait. I obeyed, gently moving aside some books. She vanished with a warm smile.
As soon as I sat down, Cavelli's door opened and there he stood, a little hunched, a little older, but graceful still, in a linen suit, his dark, peppered hair slicked back, his brow furrowed into a confident smile. "India," he intoned, long and full and sweeping me across time and continents. "India. So good of you to come."
He kissed me on both cheeks and we entered his crowded office. On his desk sat a 1940s-style black telephone, reminding me of the one Radalpieno had on his desk. Yet I was certain that Radalpieno's was a retro model and Cavelli's the genuine artifact, which had been ringing on this desk since Piccadilly opened its doors.
He sat down in his leather chair across the desk from me, moved some books aside and shuffled some papers. The enormous water tower outside his window seemed comically proximate, like some sort of artist's statement about the importance of drinking water in our modern world. It partially blocked the windows of another office building, in which I could make out a few people meandering about their business—dressmakers or makers of curtains. Large swaths of fabric held up and measured and studied. Bolts leaned against the walls. But the water tower obscured a better understanding of their endeavors. For all I knew, they could have been making confetti for the party everyone was going to have when the world came to an end. On the floor above, a man approached a window and stared out of it. Light squeezed between the two buildings, splaying itself frugally.
I remembered coming to Piccadilly for the first time, feeling a sense of arrival in the hunkered, dimly lit but official hive and manufacturing hub of American literary stardom, feeling buoyed up by it, chosen, rescued.
Cavelli regarded me for a moment, smiling. "How's Theodor?"
"Terrific," I said, showing off a pair of earrings he'd made me.
"Very nice," he said. "Patel says Larson Designs has arrived." Patel was Aruna Patel, his Indian success story and wife. He always referred to her by her last name. I took note of the fact that he and his wife had discussed us. I warmed to that fact.
"He's pretty busy," I said. "But tell her I can get her a good deal."
"Hmmm," he answered.
"He's testing the commercial waters too," I said.
"Isn't success lovely? In the beginning, artists always underrate money. How many times I've seen that scenario play out."
I could have spent an afternoon listening to Cavelli enumerate every last writer of that description, if only to feel the pleasure of their company, but I asked instead, "And your boys?"
"Splendid. Rambunctious. Testosterone, you know."
I can't say I felt nothing, sitting there. The words of the best writers in the world rested on his desk, in the bookshelves lining his office walls. But it was Cavelli's business acumen that I appreciated most—how he turned his imprint into the brand authors sought, so much so that when a recent Nobel laureate asked for too big an advance, Cavelli responded with a simple "Fuck you," knowing full well that his author would dine out on that story for the rest of his life. "And your girls?" I was touched that he'd remembered their gender.
"They're well, but I don't see much of them these days."
"Is it worth it?" he asked, suddenly and sharply. I was taken aback.
"Is it worth it for you?"
"Touché," he answered.
"I haven't had time to ask if it is," I conceded. "I'm just trying to keep up, stay over my skis, you know."
"The story is that you knew nothing about Wall Street, that this escapade was a lark between two bankers with too much time and money on their hands."
"That about sums it up."
"Was writing that bad?"
"Don't get me started."
"Your mentor in all of this, Johns—he won the bet?"
"That's right too. But from my point of view the bet is history, water under the bridge. I mean, yes, I suppose they can call it to mind if they want to, or if it serves a purpose. Then I'm a story that burnishes their image, which is important in that world. At that level, money as a marker of distinction has almost no value. There's just so much. But, I guess, as a story to trade on, it's going to be hard to top what they did with me."
"I don't suppose you had anything to do with that."
I noticed that Cavelli's head had developed a bit of a palsied wobble. He raised his chin to me and smiled serenely. I shifted in my seat and, out of nowhere, felt a strong desire to light up a cigarette. "Leonardo, why am I here?"
"Let me ask you something. Is Johns a good man?"
"He's a smart man. He's left B and B. He believed we were going to hell. And yes, he's good."
"Are you—good?"
"Am I good? Are you kidding? I'm as good as I can be, considering." My BlackBerry was vibrating away like a dark little gremlin in my purse. "Win would recommend cash positions for investments."
"It's that bad?"
Cavelli's phone rang. He picked it up and said his name, then said no and put the receiver back in the cradle and looked at me. "You know why you're here."
"Do I?"
"Of course you do."
"The bubble is bursting," I said.
"They've burst before. How will this time be different? What's the story?"
"Do you want optimistic or catastrophic?"
"I suppose catastrophe makes for the better tale. Doesn't it? When you're writing a story, where's the fun in optimism? Everyone getting along and having a jolly grand time? Of course, you need a touch of that at the end."
He seemed to have all the time in the world for me. I could feel my BlackBerry vibrating again. With anyone else I would have responded to the messages. But maybe this was the last time I'd ever be here, talking with this man.
"You know our mutual friend Will Chapman?"
"How's Will?" I asked.
"Writing as well as ever, but he's having a little mortgage trouble. Seems he got in too thick with the place in Maine and needs to sell."
"You don't say?" This was news. I thought of Emma. I thought of how much she loved Maine, remembered her telling me that Will had been furious with her for spending so much on the renovation. I remembered the exotic loan. It had come due. I felt a jolt of fear for them and then relief for myself that this was not my concern. But I'll confess, I also felt an instantaneous justification in my own belief that you couldn't want such things and also want to be a writer.
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