Pieces of You

by J F Elferdink

  Ron had seemed about to object but only asked “Your car or mine?”

  Seated in the passenger side of Mark’s 1982 red Z28 Camaro, Ron appeared to be close to losing his composure.

  “Man, I thought I would be driving a sporty car like this in a couple of years—you know, hard work and its rewards— but if things don’t turn around soon I’ll be using public transportation! I thought I was the luckiest guy on earth when State Farm offered early retirement and I could finally do what I wanted.”

  Mark, keeping his eyes on the road ahead, responded.

  “Ron, when you came to me for a loan last year, I tried to talk you out of buying a candy store but you wouldn’t budge. I cited all the research on why small businesses fail, with ‘lack of experience’ and ‘poor location’ in the top five, but there was something driving you. I hope that same force is still with you. Will you tell me the whole story now, Ron?”

  “Okay. It’s more than a personal passion for sublime chocolates.” Some of the strain went out of Ron’s voice as he replied.

  “I can close my eyes and envision the expressions on the faces of satiated customers; especially my grandmother’s face.”

  “Is Grandma the driving force, the story you never told? I’ll treat you to the best authentic Mexican meal within fifty miles if you’ll tell me,” Mark offered.

  “Please don’t think I’m asking you to reveal family secrets, Ron. I may be wrong but I’m sensing a good story and maybe some insight. I endorse Abraham Lincoln’s philosophy:

  ‘We are not duty-bound to succeed but to live up to our light.’ I’d just like to know where your light comes from.”

  “This could take a while. How much time do you have, Mark?”

  Parallel parking in front of the Gringo Grill took all of Mark’s attention for almost a minute; then he turned to Ron. “Promise me some hope that doesn’t have to be uncorked and I promise you my undivided attention for the next hour. After that, I have to deal with some issues at the office. I’d still like to see your store but maybe we could delay that for a couple of days.”

  “Uh, Mark, you won’t see much there. My suppliers have cut off my credit. The display case of Grandma’s Candy is the only one that’s fully stocked.”

  “Do you really have a case with that label?

  “It conjures up images of peppermints and lemon drops that grandmothers keep in their purses.”

  “Not my grandmother! She was not the peppermint type. In memory of her I display some of the best chocolates that money can buy—candy that she would have never bought for herself.

  I was the only grandchild who visited her regularly, and I dearly loved that woman. With her, I could talk about almost anything.

  “She knew just what I liked to eat and would always serve it, including fudge, chocolate cake and double chocolate donuts.”

  “God, I hope you didn’t eat all that every day! But she does sound like a sweet lady.”

  “My grandma also loved sweets but a few years ago she told me that her mother had never prepared Christmas stockings, birthday cakes or Easter baskets.

  “She didn’t have a lot of money; in fact, when she retired, Social Security was all she had to live on. She still remembered all the kids and grandkids on our birthdays and at Christmas.

  “When I got my first job at seventeen, I surprised her with an Easter basket, one with all the goodies. I remember that she cried.

  “For the next several years, I had a basket delivered in time for Easter, even when I was away at college and, later, on work assignments.”

  “I’m impressed!” Mark said, smiling. “I always chose nice boxes of candy for my mother and girlfriends for holidays, especially Valentine’s Day, although I sometimes thought they would have been happier with a gift card.”

  “Well, I never got that feeling with my grandmother, but shortly after her death I made a shocking discovery. I learned that she never ate more than half a piece of the candy in any of the baskets I gave her. The priest who did her memorial service told this story about her:

  ‘Several years ago I got a call on Holy Saturday from Mrs. Jewel asking if I could come over, either that evening or before the Sunday service, and share communion with her. At 6 a.m. I was ringing her doorbell. When we were seated around her coffee table, she brought out a beautiful Easter basket overflowing with chocolates. When I responded to her offer to take my pick, she cut the chocolate I had chosen in half and asked me to use it instead of communion bread.

  “After we had shared the grape juice and eaten half a chocolate each, she insisted I take the basket with me to the service and offer the contents to members of my little parish, most of them living below the official poverty level.

  “The next year we did the same thing. When I got to the church the second year, there were several more candy-filled baskets to add to her gift. You can imagine the look on the faces of the congregation, young and old, many who had never before received such a token of love.

  “This has continued every year, her basket being combined with many others and all shared freely at Easter.’

  “Well, Mark, now you know why I love the candy so much. Since my grandmother’s death, I sent several baskets in her name, all from the display case of Grandma’s Candy. “

  Ron’s tone became slightly pleading.

  “I’m determined to continue the practice; which means I must have more sales to keep the store open.”

  Mark’s job as a loan officer did not make him a big brother to clients and he was required to be impartial about their ability to repay.

  While empathy caused him to feel a tightening in his chest, Mark could not assure Ron that help was possible. Then again, all the underwriting rules seemed about to change, to meet the outlandish goals that seemed imminent if Mark’s boss got his way.

  When they returned to the bank exactly one hour later, Mark was honest with Ron.

  “I have to study your financials some more, but I don’t think you need me to tell you that we need a miracle or, at least, some creative genius in repackaging your loan. All I can guarantee, right now, is that I will do all I can. You’ll hear from me at the start of the week.”

  “Thank you, Mark. You are an unusual banker; you make me feel like you care about what happens to me. I didn’t want to put you on the spot, but neither do I want to lose my life savings or cancel my goal.”

  Much later that evening and just before Mark left his office, he made a note on his calendar for the Saturday before next Easter Sunday:

  ‘Order Easter baskets to be delivered to the northern Baton Rouge Parish of the Sacred Heart.’

  Lugging an armful of reading material and with a heavy heart, Mark unlocked the door to his apartment.

  Burning the midnight oil, he gradually began to see a very different economic picture to the one that had been painted during the morning meeting.

  He hoped that he had missed something or that his colleagues were coming to different conclusions; otherwise, there was surely trouble ahead.

  With sleep came a new set of nightmares but which shared a theme with the one before: disaster and desperation; was this the consequence of an overworked mind or an early warning?

  ***

  Promptly at 1:25 p.m. Mark trudged into the Thai restaurant; concern weighing him down so much that his feet had to adjust their pace accordingly.

  He could see Denise, just stepping out of her three-year-old BMW, a vehicle she often said she wouldn’t trade even for the perfect guy.

  He couldn’t see her face clearly enough to gauge her mood.

  As he looked around for Steve, he spotted him at a corner table engaged in animated conversation with the Barbie-doll waitress.

  He slipped into the seat across from his friend. Steve raised his hand in his traditional hello salute, stared at Mark for two heartbeats and then turned back to the waitress. Harboring the sensation that he might be the only concerned one in this crowd, Mark tried to calm himself with a few d
eep breaths.

  Then Denise walked in. There was no mistaking what was in her eyes and on her shoulders.

  “Hello, Miss Sunshine,” Steve crooned. “Our favorite lady banker seems to have something on her mind.”

  “Don’t you?” she retorted.

  “To be honest, last night was the first time I can remember not being able to slip into unconsciousness as soon as my head hit the pillow.

  “Even the two glasses of wine after making a few phone calls didn’t do the trick but I don’t intend to let a little bout with abject fear keep me from enjoying lunch with my two favorite comrades.”

  “You said you made a few phone calls, Steve. Did you learn anything that Denise and I should know? I hope your research yielded some brighter news than what I have to share.” Mark stopped to let that sink in.

  Steve ignored his second comment, obviously impatient to reply to the first.

  “Here’s the scoop: the commercial real estate market is already beginning to leak but it’s such a slow drip that few are taking notice. According to my realtor contacts, the low vacancy rate in office space cannot continue.

  “One reason is that openings for office jobs are expected to take a deep dive, mainly because what we’ve heard about financial institutions becoming larger and fewer is also predicted for other industries.

  The second reason is that there’s been a lot of money made in commercial construction and over-building is inevitable. If you find that hard to believe, I can point out several examples of how herds of contractors are following the smell of money. ”

  “Are you quite certain these predictions are credible?” Mark said. “Still, I guess your realtor associates would have the inside scoop.”

  “That’s what scares me, Mark. These guys know what they’re talking about; after all, they’re among the first victims of market volatility. Do either of you have more promising forecasts?”

  Denise was the next person to share.

  “Such a dramatic increase in total loans without an increase in deposits or, at least, a reduction in interest paid, seems to be a formula for losses. I’m forecasting a much higher loan-to-deposit ratio than the banking industry has previously allowed. That’s my biggest concern and that’s why I can’t support Jim’s proposition.”

  “That makes sense, Denise, but it may not be as serious as you imagine. Remember, banks can now increase the interest rate for deposits. And you know ole Jim.

  “He’ll do whatever it takes to put us in a more competitive position for new accounts.”

  “But I don’t expect that to alleviate your concern.” Mark added.

  “I’m with Denise.” Steve chimed in. “With the interest ceiling removed, we may see a wild fluctuation in rates. If both our loan portfolio and interest expense grow exponentially, isn’t it possible that the financial well would run dry?”

  “I’m hearing the warning bells, too!” Mark returned. “I’ve had some distressing thoughts based solely on human nature.

  “Think this through with me: If we are expected to make so many more commercial loans with no significant increase in staff, what might stall our progress? Hint: what is a frequent cause of denied loans and delayed closings?”

  Denise frowned in frustration as she replied.

  “I don’t have a single answer. Our stringent underwriting standards are my most frequent hurdle and property appraisals seem to take way too long. More often than not, they come back too low to fit our equity requirements.”

  “Thinking logically is your strong suit, Denise, but I’m trying to think like our senior management.

  “I think their projections are ruled by the vision of a dam of dollars about to break and flow right into their pockets.

  “I fear the ethics of our lending practices are about to take a nosedive into a pool you would not want to enter without waders on. Steve, am I way off?”

  “The same image is coming into focus for me, Mark.

  “If we rely less on the borrowers’ ability to pay and more on the value of the purchased property with appraised values showing significant increases, loan denials will decrease.”

  “Oh my God, this would be taking a huge risk if the commercial real estate market should collapse. Can’t we stop this? But then, aren’t real estate appraisers strictly regulated?”

  “Dear Denise, I would be willing to bet my year-end bonus that we cannot and they are not. On the basis of several hours of research, I confidently state that there will be no dearth of esteemed economists, locally and nationally, predicting that real estate prices and demand will increase throughout the decade.

  “Our bank president is not going to find it difficult to support his premise that all will be well in the marketplace.

  “The money will pour in and he will become one of the nouveau rich. In his supreme benevolence, he is intimating that his loyal workers will also gain if we play the game!

  “Providing evidence to the contrary will only get us labeled as dissidents.”

  After a moment’s thought, Steve agreed. “A better use of our time would be to ponder our individual and collective response to Jim’s assignment.”

  “I’m with you guys. Although I’m not ready to declare, I’d be willing to share my thoughts at breakfast tomorrow. How about coming to my apartment for an exquisite soufflé? Are we on?”

  Having agreed to meet the others again in the morning, Mark meandered back to his office by way of the public library and then visited an associate at J.P. Morgan & Company. A call to his girlfriend, Peggy, put her on alert that he wouldn’t be available for at least the next twenty-four hours as he would be pulling an all-nighter poring over materials, making lists and analyzing his notes.

  In the morning, Mark emerged from his apartment bleary-eyed but semi-confident that he could live with his decision. He never considered the possibility of asking Peggy, or anyone else, for input. His research strategy hadn’t failed him yet. He kept at it until he decoded a logical conclusion that felt right. Could he truly say this felt right? Although satisfied with his process he thought predicting the consequences might require the insight of a prophet. Mark wasn’t acquainted with anyone bearing that title.

  18

  FOUND! A WAY TO JUSTIFY RISK

  The art on the walls of Denise’s apartment was primarily black and white prints of photographs she had taken herself. The living area was furnished in Ikea ‘dorm room’ designs, simple but comfortable with oversized pillows on both loveseats.

  Books were plentiful, organized by topic on wooden shelves that lined two walls. Candles of various sizes and fragrances were placed artfully throughout the living space and lit frequently judging by the lingering scents. Mark and Steve were paying more attention to the smells drifting through from the kitchen.

  Removal of the delicate vanilla soufflé from the oven occurred precisely as planned. Denise adhered to the principles of the Madame Saint-Ange that a soufflé can be waited for but it can never wait; with all guests conforming to it, showing neither impatience nor surprise.

  Sitting around the square kitchen table that doubled as a desk, they had just begun to focus on the official purpose for their meeting when the buzzer sounded and talking ceased.

  “Denise, if you are even one-tenth as good at addressing our current dilemma as you are at creating a masterpiece of gastronomy, my worries are over,” Steve managed to utter when his mouth was not behaving as though it were a steam shovel, programmed to clear a debris-strewn lot at speed.

  “I’m sorry to inform you that your deliverance won’t come from me. The difference is in the ingredients; my soufflé is made with the best ingredients I can buy but our situation is produced by the worst human traits I can detect.

  “I can separate the yolk of an egg from its whites but I am no good at separating greed from the human character. What Jim is asking of us is merciless.

  “Making more money, even a lot more, is not worth the personal pressure or the potential cost to the bank a
nd its customers.

  “About 3 a.m. I decided not to support more than a twenty-four percent increase in our commercial portfolio.”

  Both men stopped chewing simultaneously. Mark was the first to respond.

  “Please, don’t commit employment suicide. You represent the best and rarest of this institution: a professional who’s ethical and smart.”

  “And beautiful.” Steve added

  “You’re both dears. But flattery won’t help with this one, gentlemen.”

  “I know it won’t help to preach to you,” Mark conceded. “I agree with you in principle, but I found something last night; something that may change your mind.”

  Mark grabbed his notes from the previous night’s exploration. One word leaped off the page: DERIVATIVES.

  “What the hell is that?” This time Steve was the first to respond. “Have you lost it before the fun has even begun?”

  “It’s not gibberish or voodoo. It’s a way to manage risk that goes way back. Listen to Aristotle’s description as recorded in Politics:

  ‘There was a poor philosopher, Thales, who used his forecasting skill to predict an exceptionally good olive harvest during the coming season.

  Because his belief was strong, he gave the little money he had to the olive-press owners as payment for guaranteeing him exclusive rights to use their presses at harvest time; this was possibly the first options contract.

  His contract cost relatively little because the owners could never be certain of a good yield and this gave them assurance of some income.

  If Thales had been wrong in his prediction, he lost what he paid for the contract but no more. Since he was correct, he made a lot of money by selling his rights to use the olive-presses to growers who had no choice but to pay his high price because Thales had been granted exclusive rights and they were desperate for access to the presses.’