Opening Belle (28 page)

Over the past three weeks, I've met Henry four times at his office, a sleek forty-ninth-floor corner of a building built of glass and chrome. His personal office looks over Madison Square Park to the north and the Hudson River to the west through floor-to-ceiling glass. His two interior walls are made of cerused oak and have paintings hanging on them that even I, not a terribly cultured person, recognize. Henry's office has professional photographs of his children, all taken on beaches with everyone in the family wearing white and pale blue. Nothing is left to visual chance and everything is perfect. The sole photo of his wife stands tastefully on a low shelf. She's coyly looking away from the camera in her wedding dress, as if dreaming of her future life with Henry. She sits wrapped in silk and satin in some version of a fairy tale that I could never have pulled off.

Henry has a small wine cooler in his office, a private bathroom, and fresh flowers in the corner. Spending most of my day in trading chaos, I inhale the order here, the small stack of aligned papers on his desk and the three large screens that scream the details of markets overseas. When I peek at his holdings screen, it lists the symbols for CeeV-TV, Emergent Biosolutions, and so many names I've helped put in his portfolio. I feel grateful to Henry. Maybe he couldn't be faithful to me as a boyfriend, but as a client he seems to only trade with me.

We meet this morning so I can help him pare down his mortgage holdings. We painstakingly review his inventory the logical way, the way most investment banks don't bother to do in their efforts to move merchandise at sparking speed. We dissect the real humans on the other side of the trade and try to guess the probability of their paying a loan back, and the likelihood that Henry will or will not get screwed on his investments. Henry has given up on Standard & Poor's and Moody's, who have slapped triple-A ratings on bonds that appear to be junk. I've been leaving these meetings with plenty of sell orders and never a buy.

In the afternoon, I will bring the sell orders for unloved mortgages to my trading desk and the traders will try to find a buyer for them at any price. Most likely it will be our own desk that will buy them.

On this Wednesday morning, I've brushed past Henry's secretary, who never ceases to have a bitchy comment for me.

“Again?” she asked while rolling her eyes. She is a stick-thin, model-like woman with long black hair and skin that seems to have never met an ultraviolet ray. Her name is Opal and even though we've spoken almost daily, she always pauses in an attempt to recall who I am. I went right into Henry's office and sat in my usual seat, a tightly pulled crème chenille chair. In front of me hangs a real Roy Lichtenstein painting on the wall. Tim Boylan decorates Cheetah's walls with his personal art collection that he rotates from his home. The Lichtenstein wasn't here a week ago. Opal follows me in and asks in some affected way, “Might you enjoy some sparkling water?”

“No, but can you tell me when Henry will be here? I only have two hours this morning.”

“Mr. Wilkins shall return in ten minutes.” Opal places a hand on the small of her back, adjusts her hips forward, and catwalks back to her desk.

I snap open my laptop and place it on the far side of his sumptuous desk. Using a color-coded system, I begin to group Henry's inventory into three columns, based on worthiness. After a few meetings like this, the enormity of the problem, the futility of trying to make worthless, make-believe mortgages turn into something of value, is apparent. Henry and I seem to be in some slow dance of doom. And because this is our job and because we've inherited this problem together, we go through these motions together.

Henry comes up quietly behind me and I smell him before I feel him look over my shoulder at the red splotches on his screen. He sighs and pulls his French cuffs farther down his wrist, twisting off each cuff link one by one and placing them next to my screen. He folds back his starched sleeves, revealing greatly defined forearms from years of sitting in front of a computer while choking the life out of a squeezy ball.

“Belle,” he says simply.

“Hmm. Hi,” I say softly, getting right to the point. “Look at this one.” I show him a basket of mortgages I'm particularly troubled by. I don't turn around. “A two-hundred-forty-thousand-dollar vacation condo in Myrtle Beach. It's not on the beach but on what appears to be a highway. Second home. B-minus rating. She's a hairdresser.”

“Put it in the trash,” Henry sighs.

“Who wants a second home on the highway?”

“It's your American dream,” Henry says softly. “You guys just want to own a lot of stuff.”

Sometimes when Henry isn't thinking, he assigns us to different socioeconomic classes. He seems to forget his own simple roots, assuming the fancier childhood of his wife's as his own. He leaves me behind in his calculation. I'm the beauty salon owner with a second home on the side of the highway. And maybe I am. The only difference between her and me was an education that taught me what I can really afford. How was she supposed to resist the offers from a slick mortgage broker selling her a dream home? It's clear that the lenders preyed on the ignorant and the misinformed. How had I become involved in this?

“It's a hundred-fifty-thousand-dollar home in Nowhere, Nebraska,” I continue. “Both owners unemployed. Five dependents. I can just see the sheriff taking some crying babies out of the house.” My eyes well up and we sit there for a moment with something bordering wonder. I never saw things going this way. When I see Henry's face, I don't believe he thought this game all the way through. Or did he? To me, these mortgages were always lines on an Excel spreadsheet and I want to believe he saw it that way too. I want to believe he didn't know what he was buying when he filled his portfolio with baskets of greed and lies.

Henry gives up trying to lean over my shoulder to see what I see. He hikes up a pant leg and slips behind me, straddling me from behind and sharing the wide chair. It's so hard to defamiliarize ourselves.

“You have to separate yourself from this. It's not reality,” he says matter-of-factly.

“But it
is
reality,” I say. “The ride up was the unreality.”

“Nobody thought it through, Belle. Everyone had so much faith in our rating agencies, in the banks writing the loans, and in a government that encourages cheap money so everyone can own a home.”

He gently removes my hands from the keyboard and places them on my thighs. He lets his own hands ring the executioner's bell, quickly dragging and dropping loans into red baskets, as if he were picking berries, but only the rotten ones. I watch him place the soon-to-be-homeless family from Nebraska into the red basket but at least I see a pause, a show of some deference.

“How can you do that?” I ask softly. “How can we do this over and over?”

“I'm tearing the Band-Aid off fast, and yes, I hate how sad this makes you.”

Henry thinks he has found happier news on the screen. “Triple-A, twenty-five-million-dollar Florida mansion that sold with three percent down.”

He puts it in black and I lean over and swoop it to red.

“Read the details,” I say. “A formerly rich guy in a desperate attempt to hang on to something. His personal credit rating sucks. Everyone knows Florida won't take your house in a Chapter Eleven. He's done and the loan is trash.”

I pull up the next one. “Dental practice in Wenatchee, Washington state, became overextended on their dental equipment purchases. They cater to the indigent,” I read.

“Excellent clientele to seek your fortune from,” Henry says sarcastically, pulling it to red. “Maybe migrant farm workers really didn't want to purchase teeth laminates.”

“You sound like an ass.”

“I'm a humor-seeking ass. What we're trying to do here is find a plug for this flood. We aren't here to save humanity. We can't.”

“I'm drowning in the debt of other people, Henry,” I say. “I think of these people and this situation far into the night. These people who were just numbers on a spreadsheet now haunt me.”

Henry puts his hand on my back and rubs the right spot between my shoulder blades. I really shouldn't let him do this, but it feels right to have human contact, possibly the only human not mad at me right now.

“Look at this one,” I say. “Former librarian, has lived in the house for thirty-two years, refinanced to pay for medical care, now unemployed, no income.” The human crisis on the other end of these trades is making it harder to hold it together. The staggering amount of debt that banks have drummed up sits with people who can't pay it back and why isn't anyone talking about this? It isn't possible to bring this stuff up at work without looking like a traitor. The newspapers barely mention it. Henry and Kathryn Peterson are my only outlets and she won't talk about it. That just leaves Henry.

He continues dragging and dropping with his outstretched arms alongside my own, like a father helping a kid steer an amusement park ride that dips and lifts and almost crashes but as of yet has not.

W
HEN I RETURN
to the office, I find even fewer buyers for CDOs and CMOs than even one week ago. The stock market has been having intraday swings that are abnormally large only to finish up close to where it started.

Back when I first started working, the Securities and Exchange Commission enforced something called an uptick rule, a rule that had been around since the 1930s. Any trader who was selling short, meaning taking a bet that a stock was going to fall, could only add to a short position after an uptick in the stock price, meaning the stock price moved slightly higher on the last trade. This severely lessened the chances of a stock collapsing. If a stock ticked up once, meaning there was a buyer out there, then someone else could sell that stock without owning it. Now stocks can be sold uncovered, nothing borrowed against the sale, all day long and I recall watching Muriel Siebert, the first woman to own a seat on the New York Stock Exchange, speak on a news show. She was railing against the possibility of this rule being taken away. Less chaos in the market means fewer trades, but yes, a woman seemed to be the only one who could foresee that market order is more desirable than more money in her account. In just a few months the uptick rule would be tossed to the curb.

I notice the number of uncovered shorts we own, the stocks that are sold that nobody really owns, is ticking up quickly. The stock market seems poised to do something dramatic and not good.

To keep maintaining a somewhat active market, Feagin Dixon buys back the CDOs and CMOs that Henry and other institutional investors owned. Granted, we're giving him less than he wants but still, it's a lot of money and we're left with possibly worthless bonds. I try to calm myself, telling myself stories of these things having AAA ratings and insurance and backstops in the event of a calamity, but my mind can't still itself when I look at these screens.

With Henry's enormous trades, I'm earning commission both when they are bought and when they are sold and that should make me, Stone, and Kathryn happy. I think of the truckloads of returned inventory and how many other subprime players have the same issue. What about the really big banks, the Merrills, the Bear Stearns, and the Lehmans? What are they doing with their inventory? What if every pension fund and investor wanted to sell this stuff all at the same time and we had to return everyone's money simultaneously? Does Feagin have that sort of money in its account? Do any banks? Banks don't actually sit there with the cash in a vault. We sit with electronic notes and promises of an ability to tap cash when needed, but what if everyone demanded it at the same moment?

Kathryn Peterson isn't rattled by this turn of events. Whenever I go up to her land of make-believe money, the floor has the nervous hush of people waiting for their flight to be canceled. Everyone wants words of assurance from someone in charge, but nobody's in charge. The traders on her floor are subdued and their moronic antics seem forced, almost melancholy. Monty's birthday party seemed to have happened years ago. Tension is making people jittery, with the exception of Kathryn, but when I try to meet with her, she claims to be busy.

When I review the McElroy escape account, the lack of liquidity we have is almost incomprehensible. I have Feagin Dixon stock I'm not allowed to sell. I have a CeeV-TV position in a deal that hasn't closed. My salary is paid by a bank with extreme risk on its balance sheet. If Feagin had to pay out cash to everyone trying to sell subprime back to us, what would that do to our own stock price?

All employees are supposed to pretend that it's business as usual. When a client calls and asks questions about our liquidity we have a party line about insurance and backstopping and repeat that there's nothing to worry about. The tension is tight like an overstretched guitar string.

I have a gripping need to speak to someone in the real world, someone in a job not related to this. I need a girlfriend who teaches or runs a bakery but I have none. The closest I have is Elizabeth, who works for a start-up where I don't understand what she does, but I'm desperate. She was my best friend from college, though she gave up on our getting together months ago. I ask her for another chance and hope she'll pick up the phone.

O
N SATURDAY MORNING
Elizabeth offers me a limited chunk of her time on neutral turf. She's not one to spend an endless afternoon in a germ-infested indoor gym or on a cold playground. We meet at a high-end brunch place filled with beautiful people who all seem to be experiencing some kind of postcoital
tristesse.
I'm bringing the only kids who will be in this place and as any parent of young kids can foresee, this is a commitment to failure.