‘He’s a real jerk,’ said Tommy emphatically. ‘He thinks he is the smartest thing on earth. To hear him talk, you would think he was personally responsible for half this firm’s income. But he and Cash are good buddies. Go back a long way. Lloyd thought the sun shone out of his ass.’
‘Did he? I wouldn’t have thought Lloyd suffered bullshit gladly,’ I said.
‘He sure doesn’t. He’s not very smart though, so he doesn’t always recognise it. But he’s tough. He can be a real asshole. He is going places in this firm, and that’s because anyone who stands in his way gets mowed down. It’s not talent. Management by fear is his style. Every now and then he’ll fire someone, just to encourage the others.’
‘But not you.’
‘No, not me,’ Tommy smiled. ‘He’d love to. He doesn’t like my attitude. Too Californian. Not gung-ho enough. But he can’t afford to fire me. For some strange reason, I’m the top salesman on the desk. And I don’t even lie and cheat to achieve it.’
I looked at Tommy and could believe him. I had no doubt that his friendly, frank manner encouraged people to deal with him. And, unlike Cash, I doubted whether he would betray their trust.
‘We can’t sit around here chatting all day,’ said Tommy. ‘You’ve got lunch at one o’clock with Lloyd, haven’t you?’
‘Yes, I think so,’ I said.
‘OK, well it’s twelve thirty now. Tell you what. It’s the ten-year auction today. The US Treasury are auctioning nine billion dollars of new ten-year government bonds at one o’clock. Do you want to see the Bloomfield Weiss machine in action?’
I certainly did. Bloomfield Weiss were renowned for their trading muscle in government bonds. He took me over to the other side of the room and introduced me to a grizzled grey-haired man in his fifties.
‘Fred, have you got a minute?’
‘For you Tommy, always,’ he grinned.
‘I’d like you to meet Paul Murray, one of our clients from across the ocean. Paul, this is Fred Flecker. He is our head government bond salesman covering New York accounts. He has been in the market for ever. I bet the first long bond you sold matured long ago. Right, Fred?’
‘Just about,’ replied Fred. He held out his hand and I shook it. ‘Have a seat,’ he said. I found a small stool, and squatted between him and the other men frantically working the phones around him. I felt a bit like just another rubbish bin, there to get in the way. ‘Do you understand what’s going on?’
‘No,’ I said. ‘Tell me.’
‘OK. At one o’clock our firm, together with all the other investment banks on Wall Street, will be bidding for a certain amount of ten-year treasuries at a certain yield. There are nine billion dollars’ worth for sale. The bidder who bids the lowest yield will be sold bonds first, then the next lowest bidder, and so on.
‘We will be bidding on our own and on our clients’ behalf. Obviously, the more demand we see for the bonds, the more we will bid for on our own behalf. My job is to talk to the major New York clients and reflect their bids to our head government bond trader, John Saunders. He is sitting over there.’ He pointed to a thin man frowning with concentration, at a desk thirty feet away. People were constantly hurrying up to him, passing messages and hurrying back.
Just then the squawk-box on his desk crackled into life. ‘Fred, what are you hearing?’
‘That’s John,’ Fred said to me. And to the squawk-box, ‘It looks good. We’ve received bids for six hundred million from New York alone. People seem to like the market.’
‘Yeah, I’m hearing that from Chicago and Boston,’ John’s voice crackled.
‘Are you going to take this one?’ Fred asked.
‘I’m sure thinking about it.’
I watched and listened as Fred took calls from several more clients, most of whom placed orders for the auction. Given the sums at stake, I was amazed by the calmness of Fred’s voice. Quiet and measured, it inspired confidence and trust.
At twelve fifty-five, only five minutes before the auction, John walked over and whispered something in Fred’s ear. He smiled. He looked at me and said, ‘What you see now, you keep to yourself. Understand?’
I nodded. ‘What’s going on?’ I asked.
‘We’re going to make a shut-out bid,’ he said. ‘We will bid for most of the auction at a yield so low that none of the other dealers will buy any bonds. Most of them have sold ten-year bonds short with the hope of buying them back during the auction. But they won’t be able to because we will own them all. As they scramble to cover their short position, and as other customers realise that their orders will not be filled, everyone will be trying to buy the bonds. The market will go up and Bloomfield Weiss will clean up. Now, I must make a couple of calls. We want to cut our friends in.’
The first was to one of the largest corporations in America.
‘Hallo, Steve, it’s Fred,’ he said. ‘You put in a hundred million order for the ten-year auction. I think you should consider increasing that.’
‘Why?’ asked the voice at the other end of the phone.
‘You know I can’t tell you that,’ Fred said.
There was silence. Then, ‘OK, I’ll play. Put me down for five hundred million.’
‘Thank you,’ Fred said, and rang off. They had obviously done this many times before.
He made a similar call to another large institution, which agreed to increase its order to three hundred million dollars.
I was intrigued to see Cash hovering over by John Saunders’s desk. He must have heard something, because suddenly he rushed over to a nearby empty desk and made one phone call. I could guess who it was to.
At two minutes to the hour Fred got a call from a firm called Bunker Hill Mutual.
‘Hi, Fred, how’s it going?’
‘I’m fine, Peter. But I don’t think this auction will be. None of my customers are interested.’
‘What do you think Bloomfield Weiss will do?’ the man called Peter asked.
‘I don’t know of course, but I think we will bid to miss.’
Peter grunted his thanks, and put the phone down.
‘Why did you tell him that?’ I asked.
Fred chuckled. ‘Oh, he always rings round all the investment banks just before an auction. He is as leaky as a sieve. If I told him what we are really up to, it would be all round the Street.’
The whole trading room lapsed into silence as the clock moved to one o’clock. It could be up to ten minutes before the results of the auction would begin to be known.
The minutes ticked by.
Then the squawk-box crackled into life. ‘OK, it looks like Bloomfield Weiss owns all nine billion of this one. Get on the phones and tell your clients what is happening. Let’s scare out those shorts.’
I looked around me. Smiles everywhere as salesmen eagerly phoned their customers to tell them the result. Within seconds the green numbers on the screens on Fred’s desk started winking as the market began to move up.
Bloomfield Weiss, and its most favoured customers, made a lot of money that day.
I was a few minutes late for lunch, which was in one of Bloomfield Weiss’s dining rooms. It was spectacular. Forty-six floors up, the dining room was high enough to peek over the building between it and the harbour. I had never seen such a view of New York Harbour. The sun shone off the light grey sea, ferries bustled back and forth between Staten Island and the terminal directly below. The Statue of Liberty thrust her torch defiantly up towards us, taking no notice of the two helicopters buzzing around her ears. In the distance the elegant curves of the Verrazano Bridge lay astride the horizon, a focal point for the dozen or so ships making their way out towards the ocean.
‘Anywhere else, you’d have to pay a couple of hundred dollars for a meal with a view like this,’ said Lloyd, as he approached me.
Silly me, for a moment I hadn’t appreciated the dollar value of the view.
Cash was behind Lloyd, and next to him, a short balding man of about thirty-five
with thick glasses.
The sight of Cash made me feel sick. I was furious with myself for ever being deceived by all that good humour and amiability. But I would have to talk to him as usual, forget what he had done to De Jong, what he might have done to Debbie.
‘Hi, Paul, how are you doing?’ he boomed, holding out his hand.
I hesitated a second before shaking it. Then I pulled myself together and replied, ‘Oh, I am fine. Your colleagues here have been very kind in showing me round.’
‘Good, good,’ said Cash. ‘Now, you met Lloyd this morning, but I don’t think you have met my old friend Dick Waigel.’
The short, balding man shook my hand vigorously, and gave me an unnatural smile reeking insincerity. ‘Pleased to meet you,’ he said, ‘Any client of Cash’s is a friend of mine.’
‘Now, why don’t we all sit down?’ Lloyd said. ‘What would you like to drink, Paul, iced tea?’
I had forgotten that lunches in Wall Street investment banks were teetotal. I had found it difficult to get used to the American habit of drinking cold tea at lunch, but I supposed they found the English warm beer just as confusing. I thought I ought to enter into the spirit of the thing. ‘Iced tea would be very nice, thank you,’ I said.
For a while the conversation followed the usual tedious paths of these occasions; discussions were had on the weather in England, which was the best airline these days, how the market was quiet and how difficult it was to make money.
I looked around the restaurant at the other diners. They were at odds with the breathtaking view around them. Either big and beefy, or short and wiry, they ate their food rapidly, spearing errant pieces of steak with forks and shoving them into mouths lowered as close as possible to the table. They didn’t look at all comfortable in the hushed surroundings. Conversation was not the relaxed murmur of a normal restaurant, but rather a series of staccato whispers. I could see a number of other clients amongst the Bloomfield Weiss executives, the difference in levels of aggression between them and their hosts was obvious from twenty feet.
As I scanned the room, my eye caught the profile of one of the men at a small table in the corner opposite us. He had his back to me, but was turning to talk to the man on his left. I knew that profile. Joe Finlay.
One of the people at his table must have seen me stare, because Joe turned round and stared straight back at me. He twitched the corners of his mouth up in that same quick false smile that he had used on me at the boat, and turned back to his food.
What the hell was Joe doing here? It was bad enough having Cash to deal with in New York, the last person I needed to see was Joe.
I leant over to Cash. ‘Isn’t that Joe Finlay over there?’
‘Yeah, that’s him,’ said Cash.
‘What’s he doing here?’
‘Same as all of us. Spending a few days in New York and then going to the conference in Arizona.’
‘But you didn’t tell me he was coming,’ I said.
Cash looked puzzled. Then he laughed. ‘Hey, Paul, I can’t tell you the names of everyone going to this damn conference. You got me and Cathy looking after you. What else do you want?’
Cash was right of course. But Joe’s presence still unnerved me.
Waigel looked over towards Joe’s table. ‘That guy sure is a good trader. Or at least he has a hell of a reputation. Speaking of which, how’s your boss Hamilton McKenzie? I haven’t seen him for years.’
I tore my eyes away from Joe’s taut frame and on to the pudgy, oily face of Dick Waigel. ‘Very well indeed. He is doing a great job at De Jong. Our clients like him. The money is pouring in from investors impressed by his performance.’
‘He always was a bright guy,’ said Waigel. ‘We were at Harvard Business School together. When he went off to join De Jong, I joined Bloomfield Weiss.’
‘And what did you do here?’ I asked.
Waigel took a deep breath, clearly pleased with the opportunity to talk about his favourite subject, and began. ‘Well, I used to be a salesman covering accounts in the Southwest. I did well at it, but I didn’t feel it was providing the right challenge for my talents. Selling is a rather narrow activity, you know.’ At this the two salesmen sitting at the table stiffened. But Waigel went on.
‘So I took a job in Corporate Finance, responsible for private placements. We find that sometimes a particular investor will want a bond issue tailored specifically to his needs. So I find a company to issue such bonds, and place them privately with him and perhaps one or two other investors. That’s how I came to work with Cash here. Since he has such good relationships with his customers, we do a lot together, trying to structure transactions which fit their needs.’
This was Waigel’s connection with Cash on Tremont Capital, which had been a private placement.
‘I am not too familiar with private placements,’ I said, ‘but isn’t it true that they give investors less protection? Normal bond issues in the United States have to be scrutinised by the Securities and Exchange Commission. Who does the due diligence on private placements?’
‘Oh, we do. And I would say the investor is better protected with a Bloomfield Weiss private placement. We have very high standards, Paul, the highest on Wall Street. I can assure you that nothing irregular has happened, in any of our transactions.’ With this, Waigel looked me straight in the eye through his thick glasses, and gave me another one of his insincere smiles.
‘I don’t think we have ever bought a private placement from you since I have been at De Jong,’ I said. ‘Did we buy any before I arrived?’
Waigel opened his mouth, and closed it again. For a rare moment he seemed at a loss for words. Finally he said, ‘No, I don’t believe you did.’
Cash interrupted, ‘Come on, Dick. Don’t you remember that Tremont Capital deal. The triple-A bond with the huge yield. A sweet deal. I sold half of that to De Jong.’
‘Oh yes, I remember,’ said Waigel. ‘Yes, that was a good deal. Have you looked at it, Paul?’
‘I have seen the bond in our portfolio,’ I said, ‘but I am not familiar with the details. Can you tell me more about it?’
Waigel looked uncomfortable, but Cash bailed him out. He enthusiastically told me all about the deal, and how the Honshu Bank guarantee made the transaction creditworthy. ‘One of the best deals I ever sold,’ Cash finished off.
‘Very interesting,’ I said. I turned to Waigel. ‘How do you go about putting a deal like that together?’
Waigel looked even more uncomfortable. ‘One of the problems with corporate finance is that you owe a duty of confidence to everyone involved. We make it a rule never to discuss the details of a transaction, even after it is completed.’
‘Baloney, Dick,’ said Cash. ‘There is nothing you like to talk about more than one of your own deals.’
Waigel didn’t find this amusing. ‘Cash, you can be as indiscreet as you like, but to me it is unprofessional. My predecessor may have been unprofessional, but I am sure I am not going to follow him in that.’
Lloyd interrupted, suddenly finding himself on a subject close to his heart. ‘Aw, Greg Shoffman wasn’t unprofessional, he was just a wimp. He had no guts. We had some great junk bond deals which he refused to do because he said they were unethical. Unethical! What did he think we were running, a charity?’ Lloyd pulled himself up as he remembered my presence. ‘Now, Paul, don’t get me wrong, all the deals Bloomfield Weiss do are above board. But in today’s markets you have got to be a tough competitor to survive, and this fellow Shoffman just wasn’t tough enough.’
Shoffman! I had heard that name before. I riffled through my memory. That was it. The man from Honshu Bank had said a Mr Shoffman had called him a few months before Debbie.
‘This Mr Shoffman was your predecessor?’ I asked Waigel.
‘Yes,’ he replied. ‘He was a nice enough guy. But as Lloyd says, he didn’t have what it takes. You need the killer instinct to get things done, especially against the competition out there. That’s som
ething I have and he hadn’t.’
Somehow, I could believe Waigel had the killer instinct. ‘So, what happened to him?’ I asked.
‘About two years ago he was transferred to our documentation department, and Dick here took his place,’ said Lloyd.
‘Is he still working for Bloomfield Weiss?’ I asked.
There was a silence. The others looked to Lloyd to break it. Eventually he obliged them. ‘No,’ said Lloyd. ‘One day several months ago, he didn’t come into work. He just disappeared. The police couldn’t find any trace of him. He probably ended up in a back alley somewhere. You know what this city is like nowadays.’
‘Did they find out who did it?’ I asked.
‘They don’t even know for sure he is dead. The police think it’s most likely he was murdered in the streets for his wallet.’
The police might think that. I thought it strange that both the people who had called Honshu Bank about the Tremont Capital guarantee were now dead. With a shock I remembered that there was now a third person who knew about it.
Me.
‘That’s what you get for living in the city,’ said Waigel, waving a finger at me. ‘I used to live in the city until it got too dangerous. Now I live in the ‘burbs. Montclair, New Jersey. Life is much safer now. Mind you, it takes a whole lot longer to get to work these days.’
The conversation drifted on to commuting times and then back again to how talented Waigel was. When lunch had finally finished, I went back down with Lloyd to the trading floor. I strolled over to Tommy’s desk.
‘Have a nice lunch?’ Tommy grinned.
I made a face.
‘You could hardly pick a nicer bunch of guys,’ said Tommy. ‘Lloyd Harbin, Cash Callaghan, and the odious Dick Waigel.’
‘I must admit I found him very unpleasant,’ I said.
‘One of Bloomfield Weiss’s finest,’ said Tommy.
I smiled. I gestured to Tommy’s phone. ‘Do you mind if I watch you at work?’ I asked.
‘Sure.’ He picked up the phone and motioned for me to take a second earpiece.
I heard him through a number of phone calls. He was good with his clients. He sounded friendly and helpful with all of them, but he changed his manner subtly with each one, hearty with one, nerdish with another. He gave his clients plenty of information quickly and efficiently, he seemed to know exactly what bonds they were holding at the moment even when some of them were doing their best not to tell him, and he made no attempt at all to sell the position in Macy bonds that Bloomfield Weiss had picked up by mistake and were desperate to get rid of. A good salesman.
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