“Nick, I’ll just come right out and say it.” He’s still forcing his smile and I want to knock it off his face. I wonder if I look as angry as I feel. “You’re doing a great job and I want to keep you. I want to make sure the firm keeps you.”
I’m washed over with confusion. “What do you mean, Joe?”
“I got approval from upstairs. I’m prepared to offer you a two-year deal at three point five million per year. Guaranteed. Seven million bucks to commit to twenty-four months.” He slaps me on the arm.
I try not to look so shocked. I put my face in my beer for as long a sip as I can do. It occurs to me that the timing of this and Freddie’s firing is suspicious. “Thanks, Joe. You really went to bat for me, huh?”
“Hey, I’m always supporting you, Nick.” He’s so fluid with his false pleasantness. “So what do you say? I can show you where to sign this afternoon.” Still a salesman trying to close a deal.
“It’s a two-year commit. I can’t sign without running it by the wife.”
“Give her a call. I can step outside if you want a moment.”
“She’s traveling with her parents for a few days.” Now I’m the one fluid with falseness. “Can it wait a few days?”
He shrugs.
“It’s a great offer, Joe. Thank you. I just need a few days.”
“No problem. A few days.”
We finish our beers and get another round, and Joe seems to have something else on his mind that he’s trying to get to. “You a golfer, Nick?”
“Time to time. I like it but I’m not a fanatic.”
“Me too. I’ll tell you, Dale Brown is a fanatic. He’s out on the course whenever he can be. A few times a week probably.”
“Yeah?”
“Absolutely a nut. You ever golf with him?”
Joe looks over with a casualness that doesn’t ring true. This feels like the area he’s tried to get to and the source of all his falseness. “Once, about five years ago.”
“Five years? Not since then?” He seems disappointed with my answer and tries to think of something else to cover his reaction. “We need to get you back out there.”
“Sure.”
“Dale’s a good guy.” His awkward probing for some link between Dale and me tells me the offer of a guaranteed contract didn’t originate with Joe. He’s as confused by it as I was a minute ago, and he wants to know where it came from.
“Great guy.”
“Yeah, great guy.” Joe hates not knowing the political map of the organization. There’s something driving decisions from the top about his team and he doesn’t know what it is. I’m enjoying his frustration. I feel empowered to start calling the shots.
“Well, Joe. Thanks for the talk and the offer. I need to get back upstairs to follow up on a few things.” He has a flash of annoyance that he missed the opportunity to end the meeting himself.
“Thanks, Nick. A few days.”
I do have some follow-up to do and I wonder if a few days is enough. I could put up with a lot of crap for seven million bucks. Maybe that’s enough then finally to leave things behind.
25 | THE NEWS
February 2, 2006
SOME KID WHO LOOKS LIKE HE WORKS IN THE BACK OFFICE walks up to my desk. “Are you Nick Farmer?” he asks in a tone of apology.
“I am.”
“Some guy outside asked me to bring you this.” He hands me a sealed envelope that has “Nick Farmer” handwritten on the outside in block letters.
“Okay, thanks.” I take it and release the kid by now ignoring him. I open the envelope and there’s a single page with a typed message:
Meet me at the deli on the corner of 56th and 2nd ASAP. I’ll be waiting inside.
F. C.
Freddie has lost his damn mind. I put the page back in the envelope and fold it up. I’ll throw it away in a trash can outside the building, just in case there’s a legitimate reason for this idiocy.
It takes me about ten minutes to get to the deli, which is a typical-looking New York convenience store. It isn’t the kind of New York–style deli that people who are not from New York think they should visit for real New York food. It looks like a tiny 7-Eleven that hasn’t been washed in years. I make a loop around the single island of shelving in the small store and see Freddie isn’t there. As I go to leave, Freddie appears in my path, blocking the door on his way in.
“Hey, Nick. Sorry, I wanted to see you go in first.”
“What the hell is going on?”
“Let’s move in to the back of the store.”
I let Freddie pull my sleeve. This is too weird to argue about yet.
“Bear Stearns has had me under surveillance.”
“You’re nuts. Don’t be a moron.”
He pulls out a tiny piece of black plastic.
“What’s that?”
“A bug. A listening device that I found in my apartment after they fired me.”
“That’s crazy. They would never try to pull something like that.”
“Sure they would. They just hire a private investigator to do it for less than five grand. The PI gets money from a third party and he wouldn’t even know he’s working for Bear.”
“You better be careful what you say then.”
“It’s late for that. There’s more.” Freddie looks sick.
“What?”
“They sent me a photograph.”
“Of what, Freddie? Don’t make me draw this out piece by piece.”
“It’s a compromising photo of me.”
“Sex?”
“Just before, but I’m meant to assume they have photos of that too.”
“Okay, so what? You should be pounding the table. You’re not married, so good for you.”
He looks away from me and at a row of cereals on the shelf. “With a man.”
I let this piece together through my history of knowing Freddie. Poor guy is in hell. “So what, anyway? Screw them.”
“I can’t have that find its way to my mom and dad. I just can’t even imagine that.”
We’re quiet for a while. “I’m really sorry, Freddie.”
He picks up with what seems to be the main point of coming to see me. “Did you read my full report to Dale?”
This should come as no surprise. “No.”
“I want you to understand exactly what happened. What the report means. They think you understand it anyway, so you should.”
“Are you putting me in danger?”
“I think you’re okay. At this point, having the information would protect you. Several people are already saying what I’ve been saying. Some hedge fund guys, even a senior trader at Deutsche Bank is saying anyone holding these positions is screwed. The only thing Bear cares about now is that nobody can point to a person inside Bear who was saying early on that Bear had the facts and knowingly pushed around toxic securities. That way they can just claim stupid instead of evil. I think either one is criminal, but they’d still prefer stupid.”
I’m pissed I’m getting deeper in this with Freddie, but there’s nothing else to do. “Fine, go ahead.”
“Here’s the sequence. The government passes legislation that facilitates and encourages every American to own a home. This may be the only well-intentioned piece of it. Well-intentioned but stupid because that set the table. Everything else is greed. Lenders start lending because that’s how lenders make fees and profits. They lend recklessly and irresponsibly. There’s a whole category of loan called a no-doc loan, meaning the borrowers didn’t show any documentation at all about how creditworthy they are. The lender just wrote the loan and charged a fee. So now you have a bunch of bad loans out there. Really bad.”
“Okay.”
“Then guys like the ones you work for get involved. They take all these loans and bundle them into a security and claim the diversity of a thousand loans or so makes the overall security of a higher quality. Nobody actually looks at the individual loans within the security, but if you do, you see the security i
s going to be a mess. Normal default rates are two to three percent. If ten percent of the loans were to default, the security would blow up. If anyone actually does the analysis, they’ll see these are geared for forty percent default rates.”
I nod. It’s incredible an entire industry could be in on something this extreme. I can imagine individuals doing crazy stuff, but not institutions all at once.
“The worst is yet to come. So far you have lenders making bad loans because they’re greedy and shortsighted. Then you have banks packaging bad loans together and reselling them because they’re greedy and stupid. Finally you get credit default swaps. These are so complicated, it took a while for me to understand, but they’re basically like insurance and allow two things. First, people who have positions in these mortgage securities that tie up their need for collateral will buy insurance for cheap on the securities so they free up collateral for more leverage. The second thing is more interesting. It allows people to make a bet against the mortgage market. Right now, for about a hundred grand, I can buy insurance on a one-hundred-million-dollar security. If it fails—when it fails—for a hundred-grand bet, I get paid a hundred million.”
I kind of know this but hadn’t thought it all the way through.
“There are a bunch of hedge funds catching on to this already. And the guy at Deutsche Bank too. Part of the reason this can happen is the guys at Moody’s and S&P are asleep. They should be rating these securities as high-risk, but they’re putting A ratings on them. These may be the worst idiots of all.”
“What am I supposed to do with this?”
“Nothing for now. There are a few people who know all this, but mostly people who refuse to believe it.”
“Like Dale.”
He nods. “One thing more. You’re sitting on a time bomb. Most of the bad loans started the first half of 2005. These loans typically had a two-year teaser rate on the interest. At the end of two years, the real and much higher interest payments kick in. I’d say around May 2007 the bomb goes off. Things won’t be the same around here after that. You should be prepared.”
“What are you going to do?”
“I’d like to invest in one of the hedge funds betting against Bear, but I don’t care enough about making money to get involved and risk what might happen if I do. I could talk to a journalist, but I won’t for the same reason. I’m going to swallow it and walk away just like they want me to.”
Somewhere, someone at Bear has sized Freddie up and knows he’s not a fighter. They know he studies risk for a living and never takes any. They didn’t care if he discovered his phones were tapped. All the better. That and a compromising photograph from an anonymous source would send him under a rock. “I’m sorry, Freddie.” He looks battle-weary but not broken. “Is there anything I can do for you?”
“I just need someone to know. It doesn’t matter if it’s only one person. I just needed someone to know the things I’ve told you.”
Thanks a lot. “Okay, Freddie.”
I walk back to the office realizing that I shouldn’t be surprised that an industry made up of sleazy people would act sleazy on an institutional level.
I get back to my desk feeling exhausted before the day has even begun. Jerry is in my personal space before I can sit.
“Nick, Jesus. I have the story of the week for you. Maybe the year.”
Jerry never has good stories. I don’t know if it’s in his retelling or if he just isn’t clever enough to recognize the truly good ones. He grabs the back of a chair with one hand and rolls it around in a wide arc toward me in the motion of a rodeo cowboy getting a lasso started, and he plops into the chair flush-faced. All his movements and expressions are happening in double time. “What have you got?”
“You know Oliver Bennett? Investment banker?” Something odd happens in my stomach. The muscles of my midsection grip down tight on whatever it is, trying to control it, like hands clenching a slippery snake.
“Yeah, sure. I know who he is.” I feel confident that whatever is happening to my expression Jerry will interpret as my effort to recall the name Oliver Bennett and put a face with the name.
“My wife’s best friend and her husband live next door to Bennett and his wife. Somewhere on Fifth Avenue. And this gal and Bennett’s wife have become pretty good friends. They’ve shared a wall for a bunch of years.”
“Yup.” I try to sound impatient for the story to end but am hanging on each word.
“So late last night my wife’s talking with her friend because the friend had just spent a few hours with Bennett’s wife, who was beside herself.”
The snake is squirming fiercely in my clenched fists. I know vomiting would help me feel better. “At some point this story starts to get interesting?”
“Believe me.” He leans forward as though someone put a strip steak in front of him. “Bennett’s wife gets home last night and there’s a voicemail from Bennett calling from his cell phone. He says all the normal stuff—honey I miss you, I love you, be home late tonight, don’t wait up. Then he says bye and hangs up the phone, only the moron doesn’t hang up his cell phone. The line’s still connected and he has no idea.”
This is starting to get good. No wonder Jerry’s so excited. He’s come across his first good story. “And so he started reading out loud from Verizon’s income statement.”
“No. He was with another woman.”
I feel the blood drain from my face as though an SOS had been sent and all the blood raced back to my heart to try to save it. I let out a low whistle and lean back into my chair. I’m light-headed and have lost my balance and need the support of the seat back.
“Not only was he with another woman, but he starts getting into it with the other woman. Immediately.”
Like a punch-drunk prizefighter after a blow, I try to keep my hands up and recover before the next words put me down for good. “Everything into the wife’s voicemail?”
“Yup.” Jerry nods, satisfied that he’s impressed me.
The image of Oliver with Julia that comes to me is so real and vivid that I know it had to have happened. There is a level of detail in the clothing and the placement of limbs that I couldn’t have painted myself but had to come to me from across the universe. For a moment I wonder if Jerry knows the identity of the other woman and he’s come here to torture me or to find out if I even know I’ve been made a cuckolded man. I look at him with a new interest, as though discovering the rumor of something extraordinary about an ordinary person. But all I see is genuine enthusiasm for chaos. Jerry isn’t so sinister as to come torture me under a pretense of ignorance. He doesn’t know the woman is Julia. For the moment only I hold that information. “What happened?”
“Right after the dope does his non-hang-up, there’s some rustling around and some kissing, heavy panting.” I think of a split screen on TV capturing the simultaneous moments, one side with me at the Cedar Tavern behind a ring of empty pint glasses and the other side of the screen with Oliver and Julia throwing their clothes into piles around the room. I manage to say, “Huh.”
“Then they go on to say they wish they had all night and it’s the best sex they’ve ever had.”
For Oliver this I can believe. Whatever Julia said had to have been just bluster. “This whole thing sounds like an urban myth.”
“Bennett’s wife played the whole message for the neighbor.”
“Really.”
“Over and over.” Now Jerry leans back, swallowing the last bite of his strip steak, contented.
“What did the wife do last night?” I’m careful not to say the name Sybil.
“She dead-bolted the door and put a note outside that said, ‘I hope you had fun tonight and don’t bother coming home again, you can speak with my divorce attorney.’” Jerry’s laugh is the kind of full, loud laugh you hear at a comedy club, with his body rocking back and his hands moving up as though trying to grab something for balance. Nobody turns to look though. There’s already plenty of yelling and other nois
es on the trading floor.
This story is less than twelve hours old and already is racing around Bear. Jerry is so focused on the telling and not on my reaction that I’m in no danger of being identified as a character in this drama. And even so, the story is so bizarre that there is no inappropriate reaction. I could have passed out cold or jumped up and down on the table or anything between and Jerry would have laughed along with it. “Doesn’t sound like there’s any coming back from that. It’s already playing out in public.”
“This guy Bennett is screwed. This is going to be like lead around his neck.”
“An albatross,” I mindlessly correct, for some reason wanting accuracy.
“Exactly. It’ll be the first thing anyone thinks about him the rest of his life. It’s that good a story.”
It is sensational, I think. Except for the part about my wife, it’s sensational in every way. Oliver blew himself up, but I’m collateral damage.
I don’t want Jerry in front of me anymore. I try to think of something to end our conversation and make him go away. “Wow, mission accomplished, Jerry. Good story.”
“Incredible. And the moral of the story is don’t be a moron. Hang up your goddamn cell phone.”
Really? Is that the moral? “Yup. It’s a new age.”
“Okay, buddy. See you later.” He starts his waddle back to his desk and I swivel my chair to change my view. I make several attempts to process the information and to conclude how I feel so I can pack it away like a fact I would write down and put in a filing cabinet where it can’t touch me, but I can’t reach an answer. I try more scientific approaches to solving the puzzle—if-then statements, and a plus b equals c. If Julia slept with Oliver last night, then I am angry. Then I am depressed. Then I am suicidal. Then I am homicidal.
But every time I start down a train of thought, it is obliterated like a TV screen going to white fuzz. My mind isn’t functioning right. It’s compromised and I notice I’m sweating and my heart is beating fast but not hard. It’s beating with quick and tiny pumps that don’t seem to move the blood but just blow on it lightly.
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