The Banker's Dilemma: She promised him Paris in the spring

by Roman Klee

  But Grenelund held her ground and ordered no scaling back of their positions. It was at that point that the cries of rebellion died down, and the troops quickly fell into line. No one needed to say any more. And if the less experienced on the desk did not get the message, then they could always ask a few of the older heads.

  It was obvious—Grenelund knew something they didn’t, but for a very good reason she was not in a position to disclose it. The boss was holding back valuable information.

  She had top intel. At some point, she would reveal all and then they stood to make a killing—mega bonuses all round! It was an unwritten law of the market, an age-old maxim that for as long as anyone could remember, kept serving Solomon Brothers very well

  The firm had reached the pinnacle of Wall Street because it had access to the best sources of information.

  Of course, there was only one way to go once you reached the top, and Alva Grenelund was well aware of the dangers her firm faced from the competition, to say nothing of the petty politicians in Washington.

  Some of those guys were clearly not on her side. No doubt they lay awake at night, devising plans to topple Solomon from its lofty position. But for now, they did not matter—they only had loud voices but no real power.

  When Grenelund hurried back to her office, she was more eager than ever to arrange her next meeting. Indeed, it was a minor emergency.

  She had successfully bluffed her way through the meeting with her market makers and traders, but that was all it was, a bluff.

  She had no idea what a L.A.Y.D.E.E. was, even if later, Martin Gale would tell her: You’ll know one when you see one Alva. Her second problem was that she no longer knew precisely what trades the guys on the prop desk were running day to day.

  The only thing she did know was that they had been losing money—lots and lots of money.

  At the close of business, Grenelund looked over the daily P&L account and smiled if it was positive, and scowled if it was not. If the losses started to ring alarm bells with Martin Gale’s geeks in risk analytics, the traders would get Alva Grenelund’s undivided attention until the problem was sorted.

  But so far this had never happened. Until now that was.

  She intuitively sensed things were running too fast for her and she needed to get up to speed quickly. She had to assemble as many members of the CID team as possible.

  Then she had second thoughts. Much better to keep this thing smaller and under tight wraps. The faintest rumor could bring about a dangerous loss of confidence and undermine her position within the firm.

  She placed a call to Andy Kissam, and asked him to come over to her Upper East Side apartment at ten o’clock that evening.

  Before her guest arrived, Grenelund had just enough time to read a brief report written by some smart math nerd, which described how the firm’s new L.A.Y.D.E.E. derivative worked. Grenelund appreciated things had moved on since her days on the dealing desk. But she quickly grasped the essential points.

  Then she checked with Martin Gale, the firm’s head risk officer, just out of curiosity of course, and asked if anyone was making a market in Alva Grenelund L.A.Y.D.E.E.s. She was a little disappointed to discover that the answer was no. Well, in some ways she thought that was a good thing, because the market must have realized she wasn’t going anywhere fast.

  Or it could mean, she wasn’t exactly the irreplaceable CEO she thought herself to be. Perhaps no one cared whether she was there or not, the firm would manage just as well, even if she was not sitting in the senior partner’s office.

  But she quickly dismissed the insane idea.

  She was more concerned about how much this new derivative product was costing the firm and the drain on the partners’ capital.

  The firm was taking multiple hits—first, to its hard won reputation. And then to its ability to borrow in the overnight commercial paper market. Plus Solomon’s chief investment officer faced fielding awkward calls from its clearing bank, demanding more collateral before rolling over the firm’s repos.

  Grenelund needed a quick answer, otherwise she faced an uncomfortable meeting at the Federal Reserve. She would be in a very weak bargaining position. Not even the stigma inducing discount window was open to Solomon Brothers.

  But Grenelund was in a very determined frame of mind and she was looking for a workaround. The short-term losses generated by L.A.Y.D.E.E.s were never going to derail her firm.

  Because she was busy working on a rescue plan.

  Δ = T –07,968,240

  Alva Grenelund liked to cut straight to the chase. She needed to know who was behind all the reported false sightings of Budd Wright. The close of the third quarter was coming up soon, and if the numbers showed a large fall in the value of the bonus pool, then the whispers of discontent that had already started on the trading floor, risked turning into a full blown mutinous cacophony.

  Among her many daily tasks, Grenelund regularly monitored how Solomon Brothers was portrayed in the media. Recently, the news had cast her, her fellow partners and the firm in a bad light—a portrayal that she considered was a distortion of the truth and she was not at all happy about it.

  One of the negative consequences was the impact it had on morale. When there was widespread talk of cut backs and pink slips, people naturally started looking across the yard fence to see if it really was greener on the other side.

  For the best part of a year, she’d been hearing all manner of creative excuses from her employees to explain their absences from work—even if everyone guessed they were interviewing at rival firms, lining up fall back positions if the bonus check didn’t meet expectations.

  Grenelund knew, like anyone with similar experience, traders were only as good as their last trade. But this inconvenient detail was never allowed to get in the way of negotiating a deal with a new employer.

  For some reason, commonsense flew out of the window, to be replaced by a bidding war whose sole aim was to pump up the money-making skills of a genius top trader: Never a down month since I started. I’m a natural at this game, started off on Fulton Street. Gutting fish was certainly a messier business than gutting a rival market maker.

  Grenelund was painfully aware of the price her personnel could demand when anyone left for a rival firm. The Solomon premium was at its highest on the first job change; better make the transaction count, the second time around and the law of diminishing returns applied.

  Grenelund ordered the Loyalty Police within Human Resources to keep a record of likely traitors. She couldn’t physically stop traders from talking to a rival, but if they did not leave the firm before the next bonus round, they would be in for a mighty big shock.

  However well they had performed during the year, Grenelund made sure the Brothers got their revenge, by offering an insultingly small bonus—the price of disloyalty.

  And then there were the partners themselves.

  Grenelund had the task of making sure they didn’t leave, taking with them valuable capital. Now the firm was bleeding losses every month, many of the older guys who had built up large slices of equity, wanted to take their winnings and move on. They didn’t intend to be left holding the bag, when the firm got wiped out by reckless market bets that turned sour.

  Whatever those goddamned geeks in risk control are saying, I know we’re carrying way too much fat tail-risk, was how one highly agitated partner from the old school of slide rules and paper ledgers explained his decision to pull out.

  Another partner provided a more straightforward explanation, for anyone to understand. He put it in his own characteristically blunt language: Say what you like Alva … short-term greedy, long-term greedy. What the heck, I’m just plain greedy!

  Grenelund needed to use all her charm to get the less committed to stay, and most of the time she was successful. Sure, some of the younger partners wanted the firm to become a listed company. The
y saw an easy route to cash out their stock holdings and retire multi-millionaires before the age of forty.

  For well over a decade, the issue of whether or not Solomon would go public, had consumed the best and brightest minds at the firm. During the last Management Committee vote, Grenelund had carried the day, though it had been a close run thing in the end. She didn’t however get her way on everything. She was forced to give some ground and compromise.

  Against her own judgment, Grenelund was persuaded by her fellow partners to set up a Competitive Intelligence Department.

  Andy Kissam, considered by many as a potential successor to Grenelund, pointed out that for once in its history, Solomon was following in the footsteps of its rivals. Without a CID, the firm would end up hobbled. He considered it an essential modern day tool. The CID would gather important information about what the other Wall Street firms and potential competitors were up to.

  Everyone agreed Solomon had to keep ahead of the game if it wanted to preserve its fat trading profits. Kissam told the Management Committee that if they knew beforehand what areas competitors were targeting, maybe they could develop something better and gain an edge. Or maybe they could prevent an important business line from being undercut. At the very least, it would help long-term planning at the firm.

  Grenelund gave way, but insisted on complete discretion. How the members of CID went about their work, was never to be brought to the attention of the partners. CID would from time to time submit various briefing papers, but the original source of the material would never be disclosed.

  Now the moment had come to make use of a resource she had tried originally to block. The irony was not lost on her.

  Kissam sat opposite Grenelund in her carved walnut paneled library (years earlier, Alva had ordered her husband to have it torn out of the Château de Blois, in the Loire Valley) and listened, while his boss outlined the information she needed about the L.A.Y.D.E.E. derivatives.

  “We must keep this thing tight, you understand?”

  “No problem Alva, I have exactly the right guy in mind.”

  “See, nothing can be traced back home, okay. Everything must be done on a no-name basis. We never talked.”

  “The guy I have in mind is real discreet. And the best thing is, he’s one of us.” Andy Kissam left Grenelund’s apartment via the service elevator.

  Solomon Brothers’ senior partner was hoping to get a better night’s sleep after her meeting. (And it wasn’t just because she had recently obtained her first handgun license.) But she was wide-awake at three o’clock in the morning, thinking about ways to window dress the third quarter 8-K.

  Things could soon prove terminal, her place at the top of Wall Street threatened, in a way it never had been before.

  Her life’s work was about to come apart in her hands, unless she could stop the excessive bleeding on the derivative products desk.

  Without telling any of the other partners, Alva Grenelund had enlarged the role of CID, to include what she liked to refer to as the Protocol Code Unit. She had a cover story prepared if anyone asked her tough questions about what it did.

  But she was the only partner who knew the whole truth.

  Δ = T –07,795,440

  If anyone ever asked what he did for a living, Juan Betancourt always replied he worked as a consultant. This label conveniently meant different things to different people. And over the years he had built up an interesting résumé. Not only had he conducted tense and dangerous kidnapping negotiations with violent hoodlums, he had also worked as a high-end repo man for insurance and jet leasing corporations.

  There wasn’t a private plane he didn’t know how to track down and get back to its rightful owner.

  Betancourt had already found out that the plane, which crashed while leaving Zürich, had missed more than just one scheduled service. A single miss was normally enough to trigger action by the leasing company to send in the repo man.

  He alerted Cunningham to the possibility of an insurance scam. Not so long ago, one of his jobs was to recover a Boeing 720 from Haiti.

  Everything had been going to plan, until the local army chief was alerted. His forces intervened with armored vehicles that blocked Betancourt from using the runway.

  He was very nearly captured, but right at the last minute, a friend came to rescue him in a Learjet and they took off in a near vertical ascent.

  Although in the end, he failed to recover the plane, everything worked out fine, because his clients could claim the insurance money. The Boeing only had a market value of nine hundred thousand dollars, but was insured for nearly two million.

  Everyone was happy with the outcome and Betancourt got a lot of extra business from other firms eager to cash in on his expertise. He liked to call it a win-win for all concerned.

  So Betancourt was the natural choice. The disappearance of Budd Wright’s plane bore a number of similarities with cases the guy had worked on previously.

  And it wasn’t long before his suspicions were confirmed—a search party found several brightly colored parachutes, hidden close to the lac de Salanfe, not far from the point of impact on the Swiss-French border. Further detective work had uncovered that a few weeks before leaving for Switzerland, Wright had taken para-gliding lessons in Tennessee—a surprise birthday present from his wife.

  There was no longer any doubt in Cunningham’s mind that the Trust was dealing with a well organized opponent, or at least that was what he would tell Nathan.

  Cunningham had a surprise arranged for the new junior partner, just as soon as he returned from his extended stay in Europe.

  But there was one thing troubling the boss of the Banderbilt Trust. Juan Betancourt had not been in contact for the best part of a month.

  And Cunningham had no idea where the guy was.

  Δ = T –07,536,240

  Nathan was looking forward to seeing Thom again, because after the wait, it felt like he was about to be reunited with a long lost friend. They had come up with the idea together and it seemed like the perfect solution.

  The only way to keep Nathan’s prized Maserati out of the money grabbing hands of his ex-wife, was to remove it to a faraway place. The solution required some imagination and quite a lot of negotiation. Nathan’s name could not appear on any of the invoices or the bill of lading.

  At first, this appeared to be an insurmountable stumbling block. He had no idea how to disguise the paperwork, especially as they needed a copy of his passport. He imagined that if he handed over all his personal details, it would not take long for even a bad private detective to trace the shipping transaction.

  Once something appeared on a government computer, it was always best to assume anyone could access it.

  The shipping company was not unused to special requests, just so long as they received a large enough cash payment up front. And then from out of nowhere, Thom produced a passport that made him a citizen of the New Hebrides.

  He gave his address as the Waldorf Astoria, and said he was only on business in America for a few months every year, but he could always be contacted by leaving a message with the hotel’s concierge.

  The paperwork showed that Nathan had transferred the ownership of the car to a debt collection agency which then sold it to a luxury car distributor in Milan, Italy.

  And that was it. They were good to go.

  Nathan was so concerned with getting his Maserati sent away, that he had thought nothing about mundane things like insurance. If something happened to the transporter half way across the Atlantic, then he would have lost everything.

  But on the other hand, he had already lost everything. Nathan was only trying to salvage the last object that he associated with pleasure.

  It also demonstrated that he could get his own way, because his wife had been so annoyed when he bought it. She hated the car’s color, the shape, the smell of the thin
g and refused to be seen in it.

  Great, he thought at the time, all the more for me to enjoy on my own.

  His wife was only mad because he had not bought her a new diamond necklace or the latest outfit from the Chanel fall collection. She had her own money and could buy over priced dresses herself.

  Thom collected Nathan from the hôpital Saint Roch in his Porsche Cayenne V8 Turbo and they headed north in the direction of Saint Martin-du-Var.

  The road was getting increasingly narrow and though the views across the Alpes Maritimes were spectacular, Nathan couldn’t help but notice that the Porsche was often just inches away from a sheer drop.

  He hoped the SUV’s traction management system was not about to pack in.

  Then without warning, they took a sharp right turn and were soon heading for what looked like a dilapidated barn at the end of a dirt road. Nathan’s first reaction was to wonder where in the world they were going. Maybe Thom had forgotten the way.

  But it was Nathan’s turn to be surprised again.

  Thom stopped the SUV when it reached a small mailbox attached to a metal pole, some fifty feet in front of the huge barn doors. He removed a key from his pocket and Nathan naturally assumed the guy was hoping to find something important.

  Instead of pulling out a whole pile of junk mail and utility bills, Thom retrieved a remote keypad. He flicked open the cover to reveal a biometric fingerprint sensor underneath. He placed his forefinger over the polished oval glass surface and after a short delay, both the barn doors magically slid open.

  Thom slowly drove the Porsche forward and then stopped on the hydraulic turntable of the car elevator. Nathan was about to get out, when his friend said no. The SUV suddenly moved through one hundred and eighty degrees. It now pointed in the right direction for when the time came to drive it out of the garage, no need for any reversing practice.