by Ken Morris
Peter’s fist clenched. “You tell a good story, Agent Dawson, but it doesn’t wash. The Russian guy who bombed Jackson was a day-trader with documented losses. He blew himself up. There’s not enough jack in the world to pay a guy to do that. That drunk money manager was a loser who simply snapped. I saw that one on television. My mother was an accident. An off-duty cop was a witness.”
Peter rose and took a couple of steps towards the exit.
“Neil!”
Peter turned his head.
“You remember those guys in the savings and loan industry who bought all those crappy junk bonds back in the eighties—many in violation of their charters?” Dawson paused to let the question sink in.
Peter recalled Aimie St. Claire’s stories about Drexel, Burnham, Mike Milken, junk bonds, and the collapse of the savings and loan industry. Only now, nothing about what she had said struck him as funny.
Dawson nodded, as if he heard Peter’s thoughts. “These guys—these crooks—got paid in cash, hot deals, prostitutes, and inside information. All of that for swindling investors and causing the loss of hundreds of billions of dollars. You hear about the New York and LA cop scandals? Undercover agents killing informants, stealing drugs, taking payoffs?
“Yeah. You’ve heard. I ask you: how much does it take to bribe a bad cop to fabricate a story about a widow, crashing into a piling, her car bursting into flames? Ten grand? A hundred grand? A million? Is that a lot of money in your world of high-powered investment? Stenman and her cronies have more millions than most of us have brain cells. No sir, it’s not a lot to spend to squash a threat. And oh yeah, whatever you do, don’t call the SEC without clearing it with me first—we’ve got at least one guy who’s crossed the line. And the longer you wait,” Dawson continued, “the harder it’ll be to get you out safely. Have a nice night, Neil.”
Five minutes later—and just twenty-two minutes after leaving the sports bar—Peter was back. Drinking champagne with Kat, he wondered why she kept asking so many questions about the diminutive insurance agent who had accosted him earlier that evening.
CHAPTER FOURTEEN
FOR THREE DAYS, AGENT DAWSON STUMBLED OVER TORN CARPET, watched non-cable television, ate vending machine sandwiches, chewed cinnamon buns with sticky icing glued to cellophane, and drank burnt coffee and warm Diet Coke. He had hoped to hear from Peter Neil before having to return to Washington. It was now clear that such luck wasn’t in the cards. But he had planted a seed, he assured himself. Would it take root in fertile soil? Neil was a bright boy—he’d begin to put the pieces together. The question remained, though: would Neil care? Few people risked everything for principle. Look what happened to his mother. If Neil didn’t come around, could he be blamed?
Such were the thoughts mucking around Dawson’s tired brain during three days of doing just one thing—waiting. Better to leave, he decided. Go back to work as if nothing happened, and be ready to drop everything if and when he got his break.
On the evening of the fourth day, back in D.C., Oliver Dawson wriggled across his kitchen table to hold Angela Newman’s hand. Now that he had made contact with Peter Neil, he needed to ask for her help. Afraid to break the news, he began by beating around the bush.
When Angela couldn’t take any more of his rambling, she said, “Oliver, you have something on your mind. You still like me, don’t you?”
“Yes. Of course. This has nothing . . . It’s just a good thing that . . .”
“Good thing what?”
“A good thing you no longer work for me.”
“I agree, though I suspect you have a new reason.”
“You’re smart, Angie. I need you to be my conduit to Ackerman. Now that this case is heating up, he needs to be updated. We’ll pretend you’re contacting him on behalf of your new boss, Jonathan Tinker. You and I can then meet once a week. You pass on instructions from the Director. I’ll give you an update from my end.”
Angela’s eyebrows looked as if they might slide from her face. “We’ll meet once a week? We see each other every day.”
Oliver looked down at their hands. He intertwined his fingers with hers. “This is important. People are dead. I’m certain Ranson will be monitoring my activities. He must know by now that I received the report from the FBI. Hopefully he doesn’t suspect I put two and two together and fingered him as the asshole who misrepresented the lab findings. I don’t think anyone in San Diego knows I contacted Neil.”
“This is a long-winded explanation for something. Spit it out, Oliver.”
“We can’t see each other until this is over. Nobody in the office knows for sure about our relationship. If you are to be my back-door to Ackerman, and you’re to stay safe, you must stay away from me most of the time.”
“No!” she said. “Drop the case. That’s asking too much.”
“Please. Here.” Dawson reached into his pocket, removing an item he smothered in his balled fist. “I want to ask you something, Angie.” He got down on one knee, then took her left hand in his. “Will you marry me?”
Inside his now opened hand, he held out an engagement ring.
Angela gasped. Her hand shook as she reached for the diamond, but said nothing. Dawson listened for what seemed a silent eternity. Finally her tender sobs drew his gaze from his shoelaces to her face. Her head bounced up and down, causing her glasses to slide along the bridge of her nose.
“That means yes? Right?” Dawson asked, biting at a snip of air.
“Yes. But this is one heck of a way to get me to agree to do what you ask.”
“Thank you . . . Darling.” The endearment sounded new and strange. “Only one other thing,” he continued.
“Yes, Oliver?”
“Uh, I don’t know quite how to say this . . .”
“What?”
“Well, until this matter is settled . . .”
“Yes?” Angela slipped the ring over her finger.
“Until we are no longer an undercover team, you can’t wear the ring or tell anyone we’re engaged.”
“You have got to be joking.”
“Ranson finds out you and I are—”
“I get it, Oliver. All I have to say is, you better get this case cracked and send the bad guys to jail, soon. Real soon.”
CHAPTER FIFTEEN
PETER DIDN’T QUITE UNDERSTAND WHY HE HADN’T MENTIONED HIS Dawson run-in to Ayers or anyone at Stenman Partners. It wasn’t as if he believed any of the ridiculous accusations tossed around by the agent. And he hoped nothing more would happen if he ignored the whole episode. As it turned out, his anxiety over Dawson’s visit did begin to subside. To placate himself, Peter even phoned Dawson’s D.C. number. When the agent picked up, Peter disconnected, relieved that his tormentor no longer haunted Southern California.
Despite the unpleasantness at Sammy’s Restaurant, Peter passionately loved his job, especially the daily adrenaline rush. That everyone measured their worth by the money they made put them all on an equal footing. Make it or fail. Period. He also appreciated the fact that everyone minded their own business and kept their activities a well-guarded secret. The most successful people on Wall Street had built their personal dynasties on this simple formula. One day he might be placed on one of the pedestals reserved for Wall Street’s legends, if only he stayed the course. And I will, he silently swore to God, stay the course.
Things progressed uneventfully until the end of October. On a Saturday, Peter stumbled onto an opportunity. He decided to buy a personal computer. He went to three separate stores, only to discover PC’s to be in short supply. His frustration sparked a trading idea.
Arriving at the Stenman offices on Monday, he began to work the phones. He made calls to a number of PC manufacturers, assessing inventory levels and accounts payable and receivable. He confirmed that sales had very recently exploded. This revelation flew in the face of dire headlines and a severe price decline in computer makers’ stocks. By midday, he felt confident. He ran his idea by Stuart.
> “Just a few weeks ago, PC manufacturers pre-announced lousy earnings for this quarter. Their inventories grew bloated when retailers began returning units right and left. These companies initiated discounts, and planned to reserve against unsold product—most earnings estimates had these companies losing money over the next four or five quarters.”
“I read the papers,” Stuart said, “and it’s a ten-hankie story. What’s your point?”
“These guys went ahead and lowered prices,” Peter answered. “At first, ten percent. Sales went up, but not much. Then they lowered prices another ten percent. Guess what happened?”
“They lost enough money that half of them are going out of business by year-end?”
“That’s what I thought, until I tried to buy a PC this weekend. They hit a price point where elasticity of demand was huge.”
“Elasticity of demand? You read too many fucking books, dude.”
“I’m saying sales went through the roof. Inventories are down—way down. Ergo: no write-offs as previously announced. Soon, as early as next week, we’re going to get an about-face on those profit warnings.”
“No way, Peter. In fact, Howard has a huge short position in these stocks and he’s tight with someone at Guerren, Clark in San Francisco. Between you and me—and I mean only you and me—his contact’s head of Corporate Finance. The guy’s information is perfect ’cause Guerren, Clark underwrites half these companies’ stock deals. If what you say is true, Howie-Boy would know.”
“Maybe not,” Peter said. “None of these companies is contemplating selling stock to the public—not with their share price in the shit-can.”
“That’s true,” Stuart conceded.
“That means corporate finance business is at a standstill. Muller’s guy might not be up-to-date—when there’s no business pending, these guys are lazy assholes—you’re the one who told me that.”
“If I said so, it’s true.” Stuart leaned back and chomped on a stick of gum at a hundred miles an hour.
“Also, this is a rapid turnaround,” Peter continued. “That last price cut was recent. The stock-out’s recent. I called several CFOs. They confirmed inventories are historically low. And as they sell add-ons to all the computers moved in the last few weeks, the current Street estimates for next year will also go up. These shares are going to double—no, when this news hits the marketplace, they’ll triple in price.”
“You sure, Petey? If you’re right, Howard’s going to get his ass handed him. He’s not used to losing money, and not even heaven’s gonna save the guy at Guerren, Clark.”
“I’m certain,” Peter said, his body coursing with excitement.
“You gotta run this by Muller. He’s got a position, and you can’t go long the group while he’s short stock.”
“Do I call him?” Peter asked.
“He’s not going to be a happy camper, dude. You better go knock on his door. Say something nice about Robert E. Lee to cut the ice . . .” Stuart grinned.
“Why are you smiling?”
“No reason. Go.” The smirk grew.
A moment later, Muller grudgingly beckoned Peter into his office. When Peter explained what he’d told Stuart, Muller exploded, “Fundamental research is for losers. I have my facts first-hand. Sit down, shut up, and try not to shit in your pants.”
Muller phoned Stratton’s second floor analyst on the PC industry. The man confirmed: “The industry is in deep financial shit.”
Next, Muller phoned an unidentified contact. Thanks to Stuart, Peter understood this was Muller’s inside connection at Guerren, Clark. He too scoffed at Peter’s analysis. “These companies are hopeless losers,” he confirmed. “We’ve written them off as clients until this cycle turns, and that might take two years.”
“Now, Neil,” Muller said at the end of this second call, “get out.”
In the past, assuming he was wrong, Peter would have hung his head in shame. This time, feeling he was on solid ground, Muller’s dismissal merely pissed him off.
“What did Fat-Head say?” Stuart asked.
“Sadistic bastard threw me out.”
“You sure of your facts?”
Peter nodded his head while rage created a moist steam over his eyes. “That’s one ass I’d love to kick.” He pointed his nose at Muller’s office.
“Go to Morgan. She has an open-door policy. She’s a bright bulb, knows Muller’s a jerk. But beware, dude, if you’re wrong, you’re road kill.”
“If I’m right?”
“If you’re right, and it makes as much money as you say it will, you get beaucoup kudos from Morgan the Great. I myself would never take the chance, nor do I understand enough about balance sheets and income statements to create a credible analysis. As I told you, my greatest skill is trading money for information. That’s all any of us do—except you, of course. Go see Morgan, if you dare.”
“What does Muller do if I back-door him on this?”
“Whether you’re right or wrong, he hates you.”
“He already hates me. He hates everyone.”
“Wrong. He has a hard-on for everybody. You haven’t seen hate yet. He’ll make Sherman’s March through Georgia look like a cake-walk.”
“You telling me to back off?” Peter asked, more a challenge than question.
“No. That’s not what I’m saying. Morgan Stenman’s respect is worth any amount of Muller-fallout. You do what you gotta do, dude.”
“Then I do it.”
From the privacy of the conference room, Peter phoned Stenman. He explained that he wished to outline a trading opportunity.
“What might that be?” she asked.
He reviewed the highlights.
“And you spoke to Howard?” she asked.
“I did.”
“His reaction?”
“He phoned our in-house analyst, then a secret contact. They both said I was nuts.”
“Are you?” she asked.
“I’m expected to carry my weight. Make money. That’s what I’m trying to do. Is there another way to be successful at Stenman Partners?”
“No. Meet me in room 202 at five o’clock. I have been meaning to have a little chat with you anyway.”
Peter put the silent phone down. “Short and sweet,” he mumbled.
Before returning to work, Peter experienced a vague worry. Why, he wondered, had Stenman “been meaning to have a little chat . . . anyway?”
Stenman Partners’ second floor was divided into two sections. The first consisted of offices for analysts. From the elevator or stairs, one had to pass by a male receptionist who resembled a well-dressed paratrooper. Once past this humorless protector, a person had to input a six-digit pass-code to enter.
Inside the main floor, ficus trees and hyacinths lined and deodorized the hallways. Besides the hum that accompanies silence, Peter noted that the office trappings tended to get more luxurious and expensive as one progressed down the halls—as did the prestige and incomes of office occupants. At the end of this high-rent alleyway, the head of research had his corner suite. This individual’s income went beyond Peter’s ability to compute: twenty million dollars in a bad year, a hell of a lot more in a good one.
A right turn at the head of Research’s office yielded another set of doors. This led to the Promised Land: Morgan Stenman’s hallowed turf.
Stenman shared her half of the second floor with the executive dining rooms, of which room 202 was one. A second set of cameras, infrared detectors, and expressionless men greeted him.
Sign in, metal search, pat down.
“Hiding the Crown Jewels,” Peter quipped. The two men could have been deaf.
Once beyond the heavy metal door, the digs got really fancy—even more opulent, in fact, than Peter’s unschooled imaginings of New York’s white-shoe investment banking houses. Impressionist oils hung from the twelve-foot paneled walls. The hallway—illuminated by crystal chandeliers suspended every twenty feet—had deep carpet that Peter likened to a wal
l-to-wall yellow-brick-road. He carried with him an intertwining of anxiety, excitement, privilege, and fear—but mostly fear. For the first time since making the call two hours earlier, he began to doubt the wisdom of his action. He suddenly didn’t want to jeopardize his position.
Too late? Maybe not, he thought. He’d re-run his hair-brained idea by Stenman, then apologize for the insipid stupidity—admit he had made an arrogant miscalculation. Tell her how much he admired Howard Muller, how much he loved working as a trader. He practiced his verbal backtracking as he looked for room 202. Once he found the door, Peter had his revised strategy ready. He’d bow his head and make a joke about his ignorance—maybe repeat the comment he’d made at their first meeting about putting his foot in his mouth so often that he was good at getting it out.
With his left hand inside the pocket of his sport coat, Peter rubbed his index finger against his thumb, wishing he had his moonstone. He knocked.
The door opened automatically.
Peter glanced to the small video-cam mounted in the corner of the hall. He entered and saw his blurred image on a screen, one of many electronic devices built into a cabinet along a far wall. Beside Stenman was a second woman. At first Peter thought she was a child. She stood small, but had rounded hips and breasts, and showed no affect through blue eyes. Her forehead rode a bit too high, but led the eye to the complex white-weave of a widow’s peak—an imperfection that added to, rather than detracted from, the overall impression. Peter had a difficult time diverting his attention, as if looking at her was addictive. Had this been a poker game, Peter would have folded at the ante.