The Douglas Kennedy Collection #2

by Douglas Kennedy

  “Give the man your address,” I told her.

  She did so. The cab pulled away from the hotel. Falling to one side of the seat, she suddenly began to weep. But this was no ordinary booze-fueled crying jag. Rather, this was a full-scale lament—loud, primal, agonized. Up front the driver—a Sikh—kept glancing at us in his rearview mirror, his eyes widening. Like me, he was thrown by the desperate sorrow that was emerging from some point deep within her psyche. When I tried to reach out and steady her, she batted me away. So I simply sat there, watching helplessly as this woman fell apart.

  Trish lived in that corner of the city, near South Station, which had been gentrified into a quarter for the monied classes. The cab pulled up in front of a renovated warehouse. As soon as she saw the front door, she brought herself under momentary control.

  “Do you want me to come up with you?” I asked.

  “Go fuck yourself,” she said, then threw open the door and staggered inside.

  There was a moment of shocked silence in the cab—the driver and myself trying to absorb all that had happened here over the past ten minutes.

  “Do you think she’ll be all right?” he asked.

  “I have no idea,” I said and then gave him my address in Somerville.

  When I awoke early the next morning, I was pretty damn sure that, as soon as I walked into Freedom Mutual, I’d be told to vamoose—as Trish would have to get me fired to hide the events of the previous night.

  Another thought also hit me: I’d left all my assorted shopping bags at the Four Seasons and no doubt the duty manager had ordered them to be thrown out, as payback for creating a scene in the bar.

  But when I entered the office that morning, all the shopping bags were piled behind the reception desk. I grabbed them and entered the trading room—where Trish and eight of her colleagues were shouting into phones—and dumped them on my desk. There was an envelope on my chair, with my name written on the front. I opened it. Inside were two $100 bills and a note:

  To cover the damages. Trish.

  I put the money back in a new envelope and grabbed a sheet of paper and wrote:

  I was happy to pick up the tab. Jane.

  Then I walked over and dropped the envelope on Trish’s desk. She didn’t even look up to acknowledge me. I returned to my desk, picked up several of the shopping bags, disappeared into the ladies for a few minutes, and changed. When I turned to face myself in the mirror, the individual staring back surprised me. You put on a simple but beautifully cut black suit with a simple black silk blouse and stylish shoes, and you suddenly think: There’s a grown-up in the mirror. As I had so rarely dressed up for anything, the transformation surprised me. Clothes have a language, reflecting your sense of self, your class and education, your aspirations and the image you wish to present to the world. Maybe Trish was right: I always saw myself as something of an eternal student in hiking boots and chunky sweaters. But now, having changed into that suit, I appeared to be someone with responsibility and money. Much to my surprise, I liked the way I looked . . . even if I knew I had neither the responsibility nor the salary that the suit signified.

  I returned to the desk at the far end of the trading floor. An hour passed, in which I sat there wondering what happened next. When the first hour of being ignored morphed into a second one, I stood up and crossed the floor, approaching Trish at her workstation. She was screaming into the headset at someone. After ending the call with “and fuck you too” (what I came to know as a Trish Term of Endearment), she looked up at me with undistilled contempt.

  “What do you want?” she asked.

  “I’d like to go to work.”

  “That’s the smartest thing you’ve said all day.”

  I could have pointed out that this was the first thing I had said to her since walking in this morning, but thought that such pedantry might not play well. She pointed to the empty chair next to hers and said: “Sit down, shut up, and try to learn something.”

  FIVE

  MONEY. I STARTED to make it. And—best of all—I discovered I was good at making it.

  Hedge fund managers claim that they operate according to a very simple principle: they invest in stocks and hedge their position in such a way that they cannot but make money.

  Rule number one of hedge fund management: position your trade to cover your downside, and always take advantage of a company’s inefficiencies when trading its stock. By this I mean: if you buy a stock always buy, at the same time, an option on selling a stock short. How do you learn such a craft? Practice—and a gambler’s instinct when it comes to working out how to cover your downside. If you play the game shrewdly, the only loss you will accrue is the cost of buying the option. As soon as the stock goes up, you gain. Big time.

  Other stuff you need to know: hedge fund companies are always investing in all sorts of publicly traded securities: stocks and commodities and foreign currencies. And managers are always talking strategies along the lines of: There’s a British infotech company that’s about to do an IPO in three months. Market indices show a strengthening pound—but not until the next quarter. So let’s put an option on sterling and clean up when it moves three cents upward come September.

  “Two basic caveats,” Trish told me on that first day as her trainee. “Number one is: always have a nose for the next big opportunity, and number two: always work out strategies to lessen risk and maximize profit.”

  A company like Freedom Mutual had, I learned, investment capital of over $1 billion to play with. Brad might have been something of a loose (or, perhaps, louche) cannon in private, but he certainly knew how to make big-time investors want to do business with him. The cool billion consisted of such diverse investors as Harvard University ($120 million), Wellesley College ($25 million), a consortium of German and Swedish venture capitalists ($165 million), and . . .

  Well, the list was a long one—and Brad told me that he was rather choosy about whom he would get into bed with as investors.

  “No Russian shtarkers. No snake-oil salesmen. No chophouse shitheads who have the SEC inspecting their sphincter every ten minutes. And definitely no goombahs who go greaseball when you don’t get them a minimum of fifteen percent return. When it comes to my investor pool, it’s strictly blue chip. Low-renters need not apply.”

  Two for twenty. This was the other great rule of hedge fund life. As in: we take a 2 percent fee of everything you invest with us to cover our overheads. And then we also take another 20 percent of everything we make for you as our remuneration for generating such a big return on your investment. So say we make $200 million for you (on your initial investment of $150 million) in a given year. Are you really going to begrudge us the $40 million we keep as our fee?

  Two for twenty. I quickly understood why Brad lived in a very large town house on Beacon Hill and why Trish had a 3,000-square-foot loft in the so-called Leather District near South Station. The company made absurd sums of money yet shrewdly kept its intense profitability out of the public eye.

  “Do yourself a favor,” Trish said on my third day under her command. “Don’t go buying yourself a Maserati or start flashing big diamonds around the office.”

  “Do you really think I’d engage in such conspicuous consumption?” I said.

  “Trust you to use the big expression.”

  “I’m not into ‘stuff.’ ”

  “So you say—but once you start getting handed a cool million in bonuses every Christmas . . .”

  “Is that what you’ve been getting?”

  “At the very minimum.”

  “And what do you do with it?”

  “Well, I used to put a significant amount of it up my nose. But ever since I made the acquaintance of Jesus—”

  “You serious?”

  “You’ve just failed a vital test. In this business, people are going to relentlessly sell you a bill of goods. ‘I’m gonna be straight with you. I’m gonna cut you the most fantastic deal since . . . I am really a very moral guy who takes
communion twice a week and never goes down on my wife.’ Your job—besides becoming a very big profit zone—is knowing how to detect bullshit at one hundred yards. You detect it at fifty yards, you’re screwed—because you’ve already engaged with it, which means you’ve either committed something to it or you’ve wasted valuable time getting seduced by a lie. In this business, everyone’s a liar. You want to make it here, you learn to lie. You learn how to compartmentalize, how to hide what you’re thinking, how to bluff. And—this is all-important—you call somebody when they’re bluffing. I talk to you about my personal relationship with J. C. and you tell me: ‘How nice.’ The fuck is your problem? You go stupid like that with me again and you’re outta here, get that? Around here we can tolerate mistakes—and, believe me, you’ll make plenty of them. But we can’t tolerate naïveté. Bambi does not make it as a hedge fund manager. Nor does the Big Bad Wolf, because the putz was outsmarted by a bunch of pigs. We want hardened realists here. Read Hobbes, read Machiavelli, and follow the bottom line.”

  Being assigned to Trish was something akin to being dispatched to Marine Corp boot camp and handed over to a particularly vindictive drill sergeant who operated according to the principle that you build character through humiliation. Trish—like all the other managers—was wired to a desk. Her computer screen was awash with numbers. CNBC and Bloomberg played nonstop on two nearby plasma televisions. She wore a headset and speed-dialed numbers (all from memory) at breakneck pace. And she yelled. She yelled at her other colleagues. She yelled at the people on the other end of the phone. She yelled at me whenever I got something wrong or didn’t pick up on one of her riffs. But, most of all, she yelled at herself.

  “Stupid fucking cunt cow.”

  This was a typical Trish self-criticism—and one which she would blurt out if she missed a “sell” opportunity, if she was thirty seconds late on a trade and lost one-quarter of 1 percent, if she hadn’t been able to gauge the momentum of a currency, if she didn’t know that a major pharmaceutical company was about to release a hot new antidepressant that allegedly didn’t play havoc with the libido, if she wasn’t up to date with German car-manufacturing statistics, with Spanish inflation figures, with the state of the Norwegian krone, with the interior monologues of the chairman of the Federal Reserve, with . . .

  “Dumb! Dumb! Dumb! Look at this clown, everybody. Harvard Ph.D. and can’t figure out a simple trading differential. Should be off teaching Jane Austen to future cheesehead housewives.”

  My sin, in this instance, was to be unable to calculate—in ten seconds flat—20 percent of $2.34.

  “You moron, you loser, you baby!” she screamed at me. “Forty-six-point-eight cents. You know how you calculate that in your head?”

  “Double the sum and move the decimal point one number to the left?”

  “The bitch has got talent, ladies and gentlemen. Too bad she hasn’t figured out how to use it yet.”

  No one in the trading room was quite as appalling as Trish. There were just twelve managers, three of whom—Cheryl, Suzy, and Trish—were yellers. The men also yelled, but never with the insane vitriol of the women. Ted Franklin always had a box of pencils on his desk and seemed to chew through six of them a day. When he messed up an option purchase on some new Swiss foodstuffs company that had just beat out Nestlé for the UNICEF dried-milk concession, he actually snapped the pencil in two with his teeth. Anatoli Navransky—Tony the Russian as he was known on the floor—also had a “wooden substance in the mouth” addiction. His thing was interdental toothpicks, minted, which he bought by the case. His dexterity when it came to conducting multimillion-dollar trades while picking his teeth was mesmerizing—especially as he always shoved the interdental so deep into the gum line that blood would begin to leak out, forcing him to spit it into a mug on his desk. Tony the Russian was thirty-one, but appeared to be crowding the big five-o, largely owing to his habit (as I learned from Trish) of downing at least one bottle of Stoli every night. He worked sixteen-hour days, never took a vacation, needed serious pharmaceuticals to sleep, consistently maintained a three-day growth of beard, and always looked as though he’d sat up in some damn basement all night drinking potato hooch from a still. He also had a habit of screaming (for no more than five seconds) in an amalgamation of Russian and Hebrew whenever things didn’t play his way.

  At least Tony the Russian wasn’t one of the smokers. There were three of these: Phil Ballensweig, overweight, bald, notoriously flatulent, and the biggest “rainmaker”—Brad’s expression—in the company, with over $18 million net profit tagged to him last year; Morrie Glutman, Orthodox Jewish, seven kids, ultraserious, ultrastraight, no excessive habits bar a two-pack-a-day cigarette addiction; and Ken Botros, Egyptian-American, little goatee, lots of bling—a huge gold Rolex, pharaonic cuff links—and a habit of wearing sunglasses indoors. Between the three of them, they got through seventy or so cigarettes a day. Smoking indoors in Massachusetts was definitely against the law. Considering how tar and nicotine were essential to the trading skills of Ballensweig, Glutman, and Botros, Freedom Mutual had decided they needed an “environment” in which to maintain their toxic habit, as it fueled their ridiculous profitability. According to Trish, Brad actually paid over $300,000 to build a small air-filtration plant in a custom-built cupboard next to the glassed-in room where they congregated. The filtration system sucked the tobacco cloud out of the room, managed to clean it of impurities, and then voided it through the usual outdoor vent without it giving off telltale smoke signals. Of course, this was all highly illegal. But Freedom Mutual paid out an additional $50,000 in bribes every year to keep building staff and local health inspectors on side.

  “Fifty grand, just to let a couple of guys smoke?” I said when Trish first told me about the smoking-room set-up.

  “Fifty minimum,” Trish said. “From what I heard, one of the health guys—a short little Irish fuck—strong-armed Brad last year, demanding a fifty percent increase. Brad told the guy to go down on himself. The guy ratted us out to his superior. The superior called Brad—who offered him the same sweetener that he’d been paying the cheezy Irish fuck. The superior accepted it and then fired the cheezy Irish fuck on the pretext that he’d never reported such illicit goings-on. And Ballensweig, Glutman, and Botros continue to smoke and make us a lot of money.”

  Trish didn’t like Ballensweig, Glutman, and Botros. She didn’t like Tony the Russian. She found Ted Franklin “nothing less than depressing.” And she despised Cheryl and Suzy, whom she considered her archcompetitors.

  Cheryl was from Jersey, with big hair and clawlike fingernails. Suzy, a woman in her late thirties from the San Fernando Valley, was mousy and highly strung. Her dad was a mortician. Accordingly, she’d been dubbed by Trish and the others as “the Stiff.” This also had something to do with her legendary rigidity when it came to her personal decorum. Though she was brilliantly hyperanalytical when it came to tracking a market movement, she went ballistic and abusive whenever there was a setback or if an underling displayed any human fragility. If you wanted to throw her into a rage, the worst thing you could do was to leave a document, a newspaper, even a paper clip on her desk. I made this mistake my second day as a trainee manager. Trish told me to deposit some company report on Suzy’s stand. So I placed it on her keyboard, first making certain that her computer terminal was off. Cheryl noticed this—she was at the adjoining station—but said nothing. Ten minutes later, Suzy came storming over to where I was sitting and proceeded to fling the report at me.

  “You never, never interfere with my space again,” she said, her voice low, controlled, spooky.

  “Having one of those bad mornings, psycho?” Trish asked.

  “You put her up to this!” Suzy screamed. “You knew—knew—what would happen if she put the report directly on my desk.”

  “Know what I just love about you, Suzy?” Trish said. “The fact that you make me feel relatively sane.”

  “The in-tray,” she said to me, her eyes alive
with danger. “You want to walk out of here alive, you leave everything in my in-tray.”

  “She’s my bitch, not yours,” Trish said. “And if you can’t control your temper tantrums—”

  “You don’t think I can have you fired? You don’t think—”

  “I know what Brad thinks—that you are certifiable. The sort of control freak who gives anal retentives a bad name. But hey, go on and make trouble, Princess Mischkin. See how our boss decides that you aren’t the most profitable zone in the organization.”

  “You cross me, you’re going to find out.”

  It was like watching two kids in a playground, engrossed in that game called “I dare you to cross that line.” What I discovered very quickly was that everyone at Freedom Mutual acted out a variation on this theme. Just as everyone was also, in some way, either damaged or perennially the outsider. After a few days on the trading floor I began to understand that Brad’s employment policies were largely based on finding unhappy or awkward people with something to prove, training them into the laws of the marketplace, and then turning them loose in an unapologetically Darwinian environment. Brad himself encouraged such survival-of-the-fittest antics, just as he also had a natural sense of corporate combustion. Competitiveness wasn’t the only driving force behind all the aggression on the trading floor. Rather, it was also rooted in our boss’s instinctive eye for the troubled idiosyncrasies of others.

  “You don’t get a job here,” Trish told me over the late-evening drink she insisted on every night after work, “unless you’re superbright and superdamaged; someone with a score to settle in the world.”

  “But not everyone here—” I heard myself saying.

  “Is as screwed up as me?” Trish said.

  “That’s not what I was about to say.”

  “No—what you were about to say was: ‘Not everyone here is screwy,’ the implication being that you’re Little Miss Nice and Sane. Allow me to let you in on a little secret, kiddo. Brad was onto your inadequacies, your sense of being abandoned by your asshole father and having to fend for yourself courtesy of your ineffectual mother, and still mourning the one-time big-deal professor whom you still consider the love of your life, even though he’d never leave his dreadful wife and treated you as a convenience, especially as you were happy to spread your legs for Daddy—”