LUKE RHINEHART
* * *
THE SEARCH FOR THE DICE MAN
Accident is the creator of life.
Charles Darwin
Life is at best a tenuous and hazardous enterprise, but mankind’s puny efforts to protect himself from its instability and randomness seem worse than futile. It appears the best course is simply chancing it.
Emerson
It is necessary to resign from the human race – with a forged signature, of course.
Luke
CONTENTS
Cover
Title Page
PREFACE
SECOND PREFACE
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
EPILOGUE
BY THE SAME AUTHOR
Copyright
About the Publisher
PREFACE
You don’t know about me unless you’ve read a book by the name of The Dice Man, but no matter. That book was made by me and I told the truth, mainly. There were things which I stretched, but mainly I told the truth.
In my fashion.
The book was all about how I came to make all my decisions by casting dice, to convert and pervert my psychiatric patients into the dicelife, and to blow my previous life to smithereens.
Now the way that book winds up is in the middle of a sentence, with me dangling on a vine over a cliff. That was in the seventies.
This book you’re browsing through now doesn’t pick up the story then. It skips a bit – about twenty years. It’s mostly about my son Larry and his quest to locate me and give me a piece of his mind. He runs into a lot of my friends and followers and gets a little confused. He tells some of the story himself and I tell some, and to keep the intellectual reader awake, we’ve thrown in some excerpts from my journals. It’s a good read.
Luke Rhinehart
SECOND PREFACE
The man is an incorrigible liar. He and his followers are utterly untrustworthy.
Larry Rhinehart
1
I might never have gone on a quest for my father if it hadn’t been for an unexpectedly light rain in Iowa. I was long three hundred futures contracts of December wheat based on a forecast of torrential rains in the Midwest. I expected the heavy rains to ruin the harvest and raise the price of wheat. Unfortunately, the rains didn’t fall mainly in the plain. They fell primarily on Cleveland, Chicago and Detroit, where very little wheat is grown. The price of wheat plummeted the next day and I lost about two million dollars for my clients. My employer called me in for a chat. My clients phoned me for chats. My employees and colleagues avoided me. The only people who phoned or dropped by were people who wanted to shoot me.
I’d lost big money for my clients a few other times, but somehow having to explain that ‘I thought it was going to rain harder’ was the sort of explanation that incites rather than soothes. And it didn’t help matters that the rains that didn’t fall mainly in the plains hadn’t been my only recent miscalculation. For almost three months I’d been on what is charitably called a losing streak. If my indicators said corn and wheat were going up, corn and wheat immediately changed their minds and took a dive. If I took a long position in the stock market, some unexpected inflation report or mad Iraqi dictator would set stocks spiralling downwards.
For three years I’d been something of a trading hotshot – ever since at the tender age of twenty-five I’d accidentally made a name for myself. I happened to be short several stock market futures on that lovely day in October 1987 when the stock market dropped six hundred points. While all around me friends, colleagues and strangers stood shell-shocked at the monitors watching the value of their stock holdings nosedive, I stood beside them watching myself and my clients grow richer and trying desperately to repress giggles.
In the fickle ways of Wall Street, that day I made my name at Blair, Battle and Pike (BB&P). At dawn I’d been a mere associate trader, given minimum leeway to dabble at my own ideas for trading. At dusk I was a Vice President and Senior Trader.
Mr Battle, the firm’s esteemed leader, knew that he would feel more comfortable being able to tell people that his Senior Trader had been right on that infamous day rather than wrong, so he adroitly changed Senior Traders. In the morning the previous Chief Trader, Vic Lissome, had been king and I merely a peon. In the evening Vic was sitting blank-eyed in a local pub wondering how the market could have clobbered him so badly, and I was humbly thanking Mr Battle for his confidence – and trying desperately to remember why I’d decided to go short those futures.
And from then until the summer of 1990 I’d been a consistent winner, but in the last few months I’d begun to lose money. So when my father began to intrude again into my life after a fifteen-year absence, it came at a time when I was in a vulnerable position – financially, socially and emotionally.
My troubles began when I arrived back at the office after lunch. On a Friday afternoon in September, trading tended to be on the slow side, and this Friday was no exception. Jeff Cannister, a short, dynamic fireplug of a man who always greeted me with shades of nervousness ranging from nail-biting tension to total panic, announced that gold had gone down over a dollar and a half in the ninety minutes I’d been gone. Jeff always managed to report such market movements as if my personal absence had led to the fall in gold – or the fall in the yen, etc. – and that had I stayed in my office staring at my monitor I’d have held up the price and saved the firm money.
With Jeff tailing along behind, I continued to stride through the mass of open cubicles at which brokers and traders sat in various states of controlled frenzy. I was aware of how incongruous the two of us were, my tall and lanky frame towering over the squat Jeff so that backbiters, as I knew, sometimes referred to us as ‘Mutt and Jeff’
So gold had fallen slightly when I thought it was about to rise; at least it hadn’t fallen through the floor, as wheat had done the week before.
‘Any news to cause it?’ I asked Jeff.
‘Nothing I saw,’ said Jeff. Despite his thick solidity, Jeff was totally unfit for the traumas involved in making and losing large sums of money in short periods of time. Still, he was good at what we did and I was happy having him as an associate trader – until he burned out, got hooked on coke, discovered religion or ceased to sleep. Then he’d have to be pensioned off – at the age of twenty-nine, probably.
‘The grains are rallying now, especially beans,’ announced Jeff gloomily – as if all over the country corn and wheat and soybeans were bursting upwards in a personal effort to thwart Jeff and his firm.
‘Just maintain our stops and let me know if they get hit,’ I said, flinging my s
uit jacket over the back of a computer monitor and throwing myself into my swivel desk chair.
As Jeff left I began examining my main monitor, which had quotes on all the stocks, bonds and futures I was actively trading. My phone line buzzed.
‘Yes?’ I said.
‘Hi, darling, I miss you,’ came the lovely voice of my fiancée. Honoria, who also happened to be the daughter of the head of the firm, Mr Battle. Oh, I was a winner in those days.
‘Hi, sweetheart,’ I said, leaning back in my chair and smiling.
‘Daddy’s house guests this week are two inscrutable Japanese bankers, one of them with a conspicuous interest in sex. When the tall one first met me he was masterful and flirtatious and eyeing all the more protuberant parts of my anatomy, but when he learned I was a VP at Salomon Brothers and engaged to you he lost interest and spent the day with an old issue of Playboy.’
‘Say,’ I interjected, ‘what are two Japanese bankers doing as Mr Battle’s guests, anyway?’
‘I asked Daddy that and he was strangely secretive. I think he may want them to invest in the firm.’
‘Not likely unless they actually buy him out. He’s not thinking of selling, is he!?’ I added with a brief flash of panic.
‘Of course not, dear. He’s grooming you to become head of the firm as soon as he retires at the age of ninety-nine.’
I frowned at the thought of Mr Battle’s longevity. ‘You know,’ I said, ‘I’d just as soon not see any more than I have to of your father and these Japanese this weekend. Maybe we can spend the day on my sailboat.’
‘No, no sailing, dear. When I want to be bored and seasick at the same time I’ll let you know.’
‘Oh, yeah, right.’ Honoria only liked water that was as flat and predictable as concrete.
‘However, we can take a walk down to the river. When are you coming?’
‘On the early train tomorrow morning. And I’m really looking forward to being with you this weekend.’
‘Me too, darling. Oh, oh, big call coming in, have to say bye-bye. I miss your cock.’
And she hung up.
Her abruptness was typical. She enjoyed wealth and style, but liked to mask her enjoyment by sudden small eccentric acts of rebellion which made her seem detached and cynical. She was really a sexually conservative woman, and her saying that she missed my cock was one of her tiny acts to épater les bourgeois. When we were actually making love she somehow rarely seemed to notice my cock.
After I replaced the phone I let my gaze wander to the photograph of Honoria and myself on the bookshelf beyond my desk and complacently admired the handsome couple we made: me tall, dark and broodingly good-looking – a sort of gangly Richard Gere; she slender, blonde, nicely proportioned, exquisitely coiffed, flawlessly complected, and rich – an elegant Cybill Shepherd.
From the first time I met her, about a year earlier, I loved being with her, loved exchanging Wall Street gossip and admiring each other’s trading coups, loved telling people we were going to get married, loved calculating our yearly income. A check of all the technical and fundamental indicators rated Honoria triple-A – a definite ‘buy’ I knew that I, a poor orphaned nobody, was lucky to be where I was, if only I didn’t blow it.
Another incoming call.
‘Mr Potter on the line,’ said Miss Claybell, my secretary. ‘I believe he wants to talk to you about his investment in the BBP 21st Century Futures Fund.’
‘I’ll bet he does,’ I said. ‘Put him on.’
The BBP 21st Century Futures Fund was my personal brainchild, a mass of money – currently about eighteen million dollars – which we invested in various futures markets. The fund was unique in that we guaranteed a return of at least 2 per cent, even if the fund’s value shrank and showed a loss. In effect, the company was promising to absorb any losses that the futures trading would show over a one-year period. This unique gimmick made the selling of a futures fund to conservative investors much easier. After all, how many investments – other than treasury bills and bonds – were guaranteed against loss? And the BBP Futures Fund promised it might return anywhere between 15 and 50 per cent per year. Since its inception two years earlier, money had come pouring into the fund, money from both speculators and more conservative investors like Mr Potter. And the fund’s value had increased about 32 per cent a year. I had every right to be proud. Except for the last three months.
‘Hello, Larry Rhinehart speaking,’ I said in my dynamo trader voice.
‘Ah, yes, Mr Rhinehart,’ said the gravelly voice of the filthy-rich Mr Potter. ‘Arthur Potter here. I see the net asset value of the fund fell for the third straight week.’
That’s right, sir.’ I was tempted to say, ‘I purposely let it fall again so we could have a chat,’ but knew the irony would be either resented or lost.
‘Markets tend to go both up and down,’ I continued aloud, ‘and our BBP Fund is no exception.’
‘Since I put that million in eight weeks ago the value of the fund is down about 7 per cent,’ Mr Potter went on. ‘If the fund goes bust how do I know –’
‘The fund is not going to go bust, Mr Potter. You’ve seen the record over the full two years. Does it look like the record of someone about to go bust?’
‘Those figures could have been fabricated.’
I sighed. The trouble with Wall Street was that since so many people cheated it was hard for an honest man to be trusted.
‘Then why haven’t we fabricated the figures for the last eight weeks?’ I asked. ‘If we’re cheating, why stop cheating?’
‘I don’t know,’ said Mr Potter. ‘Perhaps you’re just being clever.’
‘Mr Potter, sir,’ I said, ‘for you to lose your money the firm of Blair, Battle and Pike would have to go bust. You don’t seri –’
‘Like Drexel, Burnham. Lambert,’ said Mr Poner.
With the phone gripped between my right shoulder and ear, I snapped a wooden pencil in two and resisted the urge to throw the fragments across the room.
‘Normally, as you know,’ I answered coldly, ‘we ask clients to commit their funds for one full year. If you wish to withdraw your money I’ll personally recommend we make an exception, but you’ll have to take your 7 per cent loss. If you want your guaranteed 2 per cent profil you’ll have to wait the full year.’
The silence on the other end of the line made me know I’d scored a direct hit.
‘Mmmm,’ said Mr Potter, and within thirty seconds he had hung up, having indicated he wanted to stay in the fund.
I finally smiled and dropped the two pieces of pencil into the metal waste-paper bin. The other thing that made the BBP Fund unique was that BBP, in return for guaranteeing the investors against losses, was taking one-third of the investors’ profits, the highest profit percentage in the industry.
I tipped back in my swivel chair and felt a little angry at Potter and his ilk. No one seemed to appreciate what I’d accomplished since October 1987.
Up until that month – all through the 1980s – BB&P had made money the way most firms did – the old-fashioned way: by doing nothing. That is, they bought and sold stocks for other people and themselves, using all sorts of interesting theories or no theories at all, and despite all their efforts or lack thereof they made money.
For most of the eighties if you had money you made money. You bought a condominium – you were clever. You bought a stock, any stock, you were a genius. You bought a house, any house, you were sharp. It was an era when rich dumb guys finished first and richer dumb guys finished even firster.
Until October 1987, anyway. Then a funny thing happened. Almost everyone who for at least five years had been a genius was suddenly in one calamitous day a jerk. Seldom in human history have so many bright wealthy men awakened in just one day to discover such an unambiguous truth: that they were neither so bright nor so wealthy. Their clever condominiums became rather quickly empty and unsellable. Their genius junk bonds became ungenial junk bondage.
We humans
don’t take kindly to such awakenings. I suppose that when you lose several trillion dollars in one day you can be pardoned for not saying the obvious: all the wisdom of the previous five years had just been normal human stupidity. I’d happened to bet right on that horrible day but later I’d come to wonder whether if I’d been more mature and less cocky I might have examined 19 October 1987 a lot more carefully. Its most obvious lesson, I, like everyone else, never learned: what the market does on any given day may bear no resemblance to what it has ever done before.
Then my secretary marched into the room without buzzing. Miss Claybell was a chubby middle-aged woman who consistently wore clothing that looked as if it had been collected from church bazaars, applied too much make-up and never had an original thought. However, she was everything I wanted in a secretary – reasonable, unemotional, efficient, obedient and totally dedicated. Her very unemotional efficiency meant, however, that her slipping into my inner office unannounced must mean something was up.
‘There are two gentlemen to see you,’ she announced. ‘They say they’re FBI agents.’
2
At first I felt nothing; I just stared back at her, tipped forward in my chair and lowered my arms from behind my head.
‘FBI agents?’ I echoed vaguely.
‘They won’t say why they want to question you.’
I looked up at Miss Claybell neutrally, but with my heart now pumping panic and my mind desperately searching for the crime I must have committed. But since I was compulsively honest in all Wall Street financial dealings, my mind was filled with unpaid parking tickets, with a nineteen-year-old Goldman Sachs broker trainee I had seduced and abandoned, a 1987 income tax return that contained several creative deductions.
‘Should I show them in?’ Miss Claybell asked, watching me with that bland composure that made everyone else at Blair, Battle and Pike seem slightly panicky.
I came slowly to my feet, still staring at her uncertainly. I had an urge to pace, but managed to hold my feet to the floor, although my upper body rocked back and forth and my right hand was wrestling with pocket change.
The Search for the Dice Man Page 1