In the Light of What We Know (39 page)

What about Forrester?

No.

Might be worth a try.

If the big ones won’t touch it—

Not being the biggest might mean they’re hungry.

Maybe.

What happens to the lowest tranche? That has to be a hard sell, I said. I had a few technical questions about what she’d told me. And, besides, I rather enjoyed trying to test her.

The sponsor holds on to the equity tranche; shows the sponsor’s got some skin in the game.

How do you deal with the risk?

What do you mean?

What if the mortgage market goes belly-up?

Really?

Humor me.

Well … you can use a credit derivative, a credit default swap—you could even use it just to enhance the credit of the securities.

Who writes those credit default swaps?

Anyone could. Insurance companies have the stomach. AIG will want a piece of the pie.

Here’s a question for you. What’s to stop the sponsor taking the equity tranche—you called it equity tranche presumably because it behaves more like equity than a bond?

Right.

What’s to stop the sponsor taking the equity tranche, funding it, and getting it off their books?

Using it as collateral to borrow against?

Yup.

The market wouldn’t like that. Potential investors will get jittery about the sponsor’s valuations. Then there’s the fact the sponsor will still be on the hook for services to the SPV, so that means investors will want the sponsor to keep a dog in the fight.

But what’s to stop my bank helping the sponsor fund the equity tranche, once the securities are issued?

Nothing. Just bad risk management. Why would a bank want to take on that risk? Especially a bank advising on the issue. Anyhow, you like it, don’t you?

Very attractive. Incredible it’s not been snapped up already.

The ratings agencies are a bottleneck, for one thing. It’s new, and new always scares the accountants.

All this must be keeping you busy.

Keeps me off the streets.

Can’t leave you much time for other things?

If I wanted a part-time job, I’d run for office or shine trophies for the Red Sox.

What I understood from Payne was that getting one ratings agency onside was the next step. I knew that putting the structure together and gaining the market’s interest would take some time, but, of course, I was already thinking of Forrester.

Just when I thought the whole thing was a wash, Payne Cutler surprised me.

You wanna get a cocktail tomorrow night?

Sure.

I’ll call you when I leave the office.

Sounds good.

I stayed late at the office, but I didn’t hear from her until a half hour before midnight.

It’s Payne, she said. Heading out now. See you at the Soho Tavern in fifteen.

*   *   *

By the time my father arrived, the evening had ended and the guests had left. We were tired and after a nightcap we all turned in. The next morning, the three of us had a long breakfast of bacon, eggs, and French toast, after which my mother left for the Sunday farmers’ market.

Zafar once told me that his parents had never asked him if anything was troubling him, never asked what the matter was. He had wondered in later life if that was because
he
had never let on or because
they
had never picked up on anything, or because, despite picking up on something, they could not bring themselves to ask. I found this last proposition difficult to grasp, when it seemed to me that the natural instinct of parents—biological or otherwise—was to respond to the faintest distress of those they rear. That basic level of sensitivity and solicitousness is something one finds even in good friends.

It was noon already, and my father suggested we go to the pub. If we stay there long enough, he said, your mother can join us and we can all have a Sunday roast together.

We drove out to the Trout in Wolvercote, north of Oxford, right on the water. My father came back to the table with two pints of bitter and a broad smile. The man doesn’t like bitter, but when I pointed it out, his reply was that he likes having bitter in an English pub: when in Rome.

Quite the Englishman, I quipped.

Look out the window, he replied.

And?

I didn’t grow up with this, you know.

With what?

What do you see?

The river.

He smiled.

I’m not mocking you, he said. But your answer is funny.

I should see electrons and photons and so on?

That you could do, but I see something else, the river, yes, and also a cold blue sky, autumn leaves, the episodic retreat of life, the willows mourning over the water.

Quite the poet this morning.

If you are not familiar with it, you notice the weir in the brook or the brook in the weir. I have no idea what the words are for such things. God bless them, they have these Anglo-Saxon words that show up nowhere but in places like this. I’ve read T. S. Eliot, a lot of Rudyard Kipling, and something of Thomas Gray, and so I see England in the manner of a foreigner, a place forever defending the past, doing quiet battle with the future, and in its very own way a country of charm. But if all that you see is what you saw in your youth, the prospect of Eton an unnoticed backdrop of an adolescent boy, the antique towers that crown the watery glade, as Gray said, then you see something else. Like breathing air, English air. What do you see?

I see a river, I said, smiling at him.

Tell me what you wanted to talk about.

How do you know I’ve got something to talk about?

When you don’t have something to talk about, you don’t avoid talking.

He gave me a wink and took a sip of his beer.

I began by telling him what had been happening in the world of finance, giving him some detail, most of which I had the impression he knew because he had been following the news carefully, not for his own sake, I think, since he’d never paid much attention to finance before, but because of what the turmoil might mean for me and Meena. When I got to telling him that I thought the firm was about to let me go and would possibly even try to hang me out to dry, my father did not make reassuring sounds, did not contradict me with the groundless optimism of someone reassuring himself as much as another—that was never his way. He simply listened. (Some years ago, he explained to me his belief that that kind of hollow consolation was disrespectful because it presumed that the person being consoled wouldn’t see or care about the absence of reason. The thing to do first and foremost, he believed, was not to talk but to listen, and listening, like anything difficult, is easier said than done.) I talked for some time, finding more and more details to tell him. Even things I hadn’t consciously thought much about I brought up, understanding then how much they had actually been weighing on my mind. I set out my analysis and explained that I’d spoken to a couple of friends also in finance, and they couldn’t fault my reasoning. Congressional subcommittees, now sprouting like weeds, were identifying witnesses to call to hearings. They know two things. Of all the people closest to structured products, mortgages, and securitization in my firm, I was the most senior; and my firm would cut me loose faster than I could say scapegoat. If the firm saw even the slightest benefit for them in front of Congress, they’d pin everything on me. That’s the point of blaming a rogue trader: It’s the trader that’s rogue, not the bank’s checks and balances, not the bank.

At a certain point I stopped talking. I felt I’d poured out everything, everything I’d been holding in, even when I didn’t know I’d been doing so.

What does Meena think? he asked me.

My reply did not come immediately. I had not mentioned Meena once. My omission must have been as obvious to him as it now was to me.

As you must know, things aren’t going well there either.

I’m sorry to hear that. We’d love to see her.

She spends a lot of time away right now.

How is your health?

Fine.

That’s good. I’m glad. So at least you have your health.

He smiled. Dear me, don’t lose your sense of humor!

I forced a grin.

I’d appreciate any advice, I said.

Eat more vegetables. And whole grains.

My father, who had been sitting opposite me, got up and took the chair beside me, at a right angle to mine. It was how my mother liked to sit. There’s something less confrontational this way, she’d said. This way you see the person’s good side.

The view is different from here, he said, taking another sip of his beer as he looked out over the river. He took his time, collecting his thoughts, it seemed, before resuming.

There is a funny little story about Charles II and the Royal Society, said my father. The king was regarded as rather pompous and obscurantist, an idiot, really, and one not to be duly impressed by members of the esteemed society. At a dinner to mark the founding of the society, he put a question to them that quite confounded the great scientists. Why, he asked, does a dead fish weigh more than a live one? Despite their great and learned efforts, the members failed to arrive at a compelling answer, when finally someone pointed out that they did not in fact have different weights. Perhaps the king was a buffoon, or perhaps he wasn’t quite so dumb after all.

It is possible, continued my father, that we accept premises more readily than we should. False dichotomies are the stock of politicians only because too many are ready to accept the premises as given. Anyhow, that is by the by. Before I make good the point I’m groping to make, which really, after all, is not an especially significant one, let me say that I don’t presume your woes can be resolved by recourse to reason alone or even with reason in the mix at all. Everyone knows in the intimacy of his self, if not his reason, that when the soul is under siege reason is not up to the fight.

What’s going on?

What do you mean?

Why do you sound like a classics professor?

A bit stuffy?

You said it, not me.

Maybe I’m not sure of what I’m saying. I don’t think I’m unsure. Am I unsure?

He chuckled.

Philosophers talk about solving problems, continued my father, but also about
dissolving
them. Wittgenstein, for example. Sometimes, when properly regarded, the problem in front of us is understood to be no problem at all, or at least not of the kind we believe it to be. We tend to favor the status quo. It seems to me we see every adverse situation as a challenge to restore ourselves to the status quo ante. You know the refrain: I just want to go back to how things were. This seems shortsighted. How things were might well have led you to the way things have woefully become.

Are you doing any theoretical physics these days, or are you just reading cognitive science papers?

As physics goes, I’m past my prime. Besides, one must play to avoid Jack’s fate. If I were setting out on the academic road today, I’d go into cognitive science. Don’t get me wrong. I love theoretical physics, but right now, meaning at this point in human history, we’ve finally got to working on the brain using those precious scientific methods that we’ve been using to work on everything but, and cognitive science is where … is where it’s
at
, as you Americans would say. You laugh, and maybe I set too much store in science, but I do believe cognitive science really is where it’s at. Granted, some of these chaps claim more for their science than their science has earned. But it’s still early days, and in the excitement of finding something new, one has to expect a degree of overreaching. Look at the Internet: Not so long ago everyone thought it was the beginning of a new kind of economy, but now one can quite legitimately doubt this is true. Nevertheless, the Internet has brought about great changes. If we give the new cognitive sciences a little time, it seems very likely, to me, at any rate, that their ideas will also translate into applications in daily life. There’s a cognitive scientist here in Oxford who told me that he and his wife now spend much less money on
things
and prefer to spend on
experiences
, such as interesting holidays, because, he says, research has established that it’s the experiences that have an enduring effect. Material things appear to be swallowed up by the hedonic beast in us and all too soon lose whatever power they had—or we believed they had—to give us pleasure. He and his wife have changed the way they live.

Do you really need cognitive science to reach that conclusion?

Well, that’s a whole other ball game.

Couldn’t he have come to the same conclusion in therapy?

Now what possible reason would he have to go to therapy? Do you know something I don’t? Let’s not deviate too much. I have a question for you. You know what the most dangerous thing in the world is?

What? I asked.

A story, replied my father. I’m not kidding. Stories are dangerous. And I don’t mean stories whose messages are capable of endangering. I mean that the form itself is dangerous, not the content. You know what a metaphor is? A story sent through the super distillation of imagination. You know what a story is? An extended metaphor. We live in them. We live in this swirling mass of stories written by scribes hidden in some forgotten room up there in the towers. The day someone thought of calling pigeons flying rats was the day the fate of pigeons was sealed. Does anyone who hears them called flying rats stop to ask if pigeons actually carry disease? Or Plato’s cave. If a fellow knows nothing else about the man, he knows something about a cave and shadows. You’ve heard that good fences make good neighbors, but did you know that when Robert Frost wrote those words he meant the opposite of what that phrase has come to stand for? Frost was being ironic; he was talking about the things that divide us. But the image contained in the bare words
Good fences make good neighbors
—that image is so good, so vibrant, that in our minds, in the minds of so many, it’s broken free of its unspoken ironies.

My father paused.

My mother told me, some years ago, that when she first met my father she was charmed by the way this young physicist treated everything in such an ethereal, abstract way. But quite soon she came to find it annoying, especially when she wanted to talk to him about things that couples talk about,
private things
, she said to me. As my mother saw it, either he was not taking things seriously or he was not inhabiting the moment; he was somehow not only abstracting whatever they were discussing but also abstracting
himself
out of it. But I came to see, she said, that it was precisely his tireless distancing and questioning that brought him, for instance, to a view of Pakistan’s behavior in 1971 that cost him—cost us—his friends and much of his family. At the time, I must tell you, I thought him rather too quick to judge our country so adversely, even though he would have told you he thought himself slow. I thought him rather selfish as well. In the end, I was the slow one; it took me a little longer to shed from my eyes the scales of a rather phony patriotism. I came to understand that your father was not in fact a disembodied mind, which can be charming in the way they are whose heads float in the clouds. Thinking for him was purposive because it clarified the root of action.