Dear Money (27 page)

And drawing the analogy to publishing was what helped me make sense of how this empire worked. The schmoozing between trader and client was similar to what happened between agent and publisher when the agent tried to peddle her authors. The trader was the agent making deals between the author (the originator) and the publisher (the investor). And it seemed that Win, as the strategist, could do this: take a bunch of aspiring writers earning nothing (subprime mortgages), pool them, put them in a nifty package with bells and whistles, offer it up for trade and make money—loads and loads of it.

Win loved what he did. You could see it in the lightness of his step, in the way he talked about the market, the strategies he schemed, making sure his boys were giving him the most they could. As the head of fixed income, he no longer traded, and he missed it (and if he worried about anything, it was that he'd lose his trading touch), and so every one of the traders was his surrogate. He wanted them to perform as he'd performed. In those first weeks I watched as he got it out of them, quietly asking questions about why they did what they did. His calm voice elicited trust, the words coming out of the corner of his mouth, the mumble that was not sloppy but more of a fluency, the speech of someone completely comfortable with the complexities of his language.

In those first days he also seemed to take great joy in my presence, though he felt no need to explain me to anyone. He seemed to like the speculation. He seemed to relish the unease created by me, the pea beneath the many mattresses.
Who is that chick?
The not knowing psyched them out, and Win understood this, understood how he was playing them, wanted to see how they'd play the situation, if only to see if his hunches about them were correct. And I understood my role without being told. He wanted to see how long it would take the boys to boldly ask. A game of dare, really. Who'd break first? I revealed little. It would have been easy for someone to Google me, of course, but that wouldn't have told them why I was here. Instead, I quietly observed, absorbed, the way I'd done as a writer. In the first days I wasn't on the floor much, so my first impression remained: the floor a well-structured organism, all the parts working together to create the business, its skill and efficiency.

Occasionally Win let me know that the boys were all in now; they'd all placed their bets. Snake was the most direct, cornering me on the way to the bathroom, out of sight of the floor and all the traders, who had me under their microscopes. He laid it out: "He's brought you here because you know nothing and he wants to prove he can teach you everything." Snake, the handsome man with dark skin, tall, slender, a swimmer's taut frame that you could see defined beneath his well-tailored shirts, didn't need a response from me. His expression indicated he had a lot riding on this, but he knew he was right, so he didn't solicit confirmation. "I've raised the ante," he continued. "Now they have to tell me what you do and when he's placing you on the desk." He slipped away, turning his head back to me to add, "I'm rooting for you. If you need any help..." He took a step forward, paused, pivoted, came back to me. He leaned toward my ear and whispered, his breath warm and sweet, "You know this intuitively but know it now consciously. It's all about the bet here. We're betting on every level. We're hard-wired for it, for the win."

I realized it then, just as Snake wanted me to: the bet that Win and Radalpieno were making of me was no different from all the other bets. It was the foundation of the game, describing the casino that this business is. Math is important, but the nuance of bluff, of poker face, is just as crucial. Here, I was a pebble thrown into a pond, and the rings of water reverberating from me only echoed all the other bets being tossed around. Understanding this was crucial. I was a bet for Radalpieno and Win that was turned into a bet for the boys, all of whom were caught up in the action and volatility of the homeowners' gamble—betting that interest rates would keep coming down and housing prices would keep going up, on easy money that would finance dreams (their own and those of others), placing their confidence in the wisdom of Wall Street. And the Street was betting on the fact that homeowners would behave this way, so that by 2005 the headlines in the paper would read: "The Trillion-Dollar Bet: Homeowners Take Risks in the Bid for Lower Mortgage Payments."

This is what I understood in that encounter with Snake: none of this had anything to do with true value. Rather, it amounted to the market's value of it—"what the market will bear," said Win. For that reason it was silly to try to make sense of the flourishing of nonsensical lending practices. They did not matter, just as the outcome of a novelist turned trader did not matter. As long as the market valued the funny mortgages, they were worth a lot; as long as Win valued me, I was worth a lot. Snake understood this measurement and he passed it along to me: the only big tip I ever got from another trader (aside from Win). Snake was like that, confident enough to be generous in this very entrepreneurial world in which people are not going to help you make money because they're too busy making money themselves. And making money at another's expense is the name of the game. Snake handed me the formula: bets and their market worth, not their true worth. Win had quietly, surreptitiously made a market of me, and I was being traded on the basis of his value from traders to analysts to salespeople. And he'd puppeteered the whole show without uttering a word.

By the time I was seated at the desk, had taken the Series 63 and Series 7 exams (which you need to pass in order to get licensed by the National Association of Securities Dealers so that you can trade—exams that test your knowledge of technical stuff, on settlements, equities, munis and ethics), New York had gone wild on its own bets. (Remember the party?) Firms all over the city, the country, the world, were expanding, multiplying, hiring at an astonishing rate, betting on the money to be made in the housing market. Radalpieno bet that Snake would ignite the already well-ignited subprime, so he wanted to move him to head that desk. Snake refused. He was betting that turning down the chairman and chief executive officer of the company wouldn't matter, that it would prove his mettle: "I don't like what I smell over there."

And Snake was right. He knew his value and stayed put. Instead, to head up subprime Win brought in June Scarpetti from Silver Brothers, betting on her (one of only a handful of women on the Street to trade subprime, the daughter of a New York City policeman, raised in Canarsie, a stylish dresser with a penchant for speaking about her personal shopper) to outpace B&B's stellar record, allowing her to leverage (compounding exponentially both her risk and her reward) in a way the company had not allowed before. Maxi had lost all bets, one too many Model T's, so was out of a seat altogether. He went back to Chile and his racehorses, and I took his seat.

So this is how the desk looked by June 1, 2004: Snake, the boss, twenty-eight years old, on the Street for six years, former Stanford swimming champion, mathematical genius, boyfriend of a woman four years his senior, a trader too, and the talk of the town, not for her considerable talent as a currency trader but because she'd robbed the cradle; Tiger, with his sexy girlfriend who loved to send him photographs of his cat in cute positions (sipping milk from a baby's bottle and the like) and his fondness for exotic waters; Sam, a former lacrosse star, who, I discovered, was more of a renegade than a carbon copy of Tiger, whose parents (both artists) had steered him toward an artistic, bohemian life that he couldn't abide, and he'd let them down by going to Wall Street; Josh, with his
FREE WINONA
photo and a lot of talk about girls, always a new girl—"I'm shorting Lynette because, you know, there's a lot of overvalue here"; Gus, the Korean, whose intensity served to mask a shyness that he was right to try to disguise, since you could not be shy in this line of business; and me, out of the closet now, shadowing Snake more than Win for firsthand experience with trades, stepping in from time to time for small trades when Snake was too busy with big ones.

After six months I was successfully integrated, like a car merging from an on-ramp onto the main artery. I was in, part of the organism, no looking back, millions, billions being par for the course. But my feat was not accomplished by time alone. Rather, it was showing these people that I could do it, that I could be one of them. Over the six months, the façade of the floor had been lifted, like rolling back a sod field, exposing what's going on below all that grass—the worms and the slugs and the ants and the grubs and all the rest, busy with the routines of their lives and work, the routines that define them individually. To change the metaphor, it was a locker room down in the pit, everyone in various stages of undress, happily revealing his true self, doing that which men do in locker rooms: belching, farting, snapping towels, psyching each other out. That famous coach's line stood as the only truth: Winning isn't everything, it's the only thing.

Betting, at the core, was simply an expression of competition, and so, as Snake had promised, bets were everywhere. I had not quite known how competitive I was until I went to Wall Street. But I wanted to win at all costs and just as much as the other guy. In those first months, I entered every kind of competition you can imagine. It was the way to let off steam, training for the big leagues, the multibillion-dollar deals. I was in a water-tasting test. Twenty-to-one odds that I couldn't blindly taste-test and identify six of Tiger's bottled waters. I did. There were bets on how many home runs a player would hit in a season, on how fast one of us could run a mile, on who could eat Snake's mother's spicy curry without breaking a sweat, on who could dip his head deepest into the tub of melted ice that had held the day's supply of sodas—water that everyone's dirty hands had plunged into all morning long.

A hamburger-eating contest. This was the kind of thing that lurked beneath the surface of the incredible machine. The hamburger challenge had started a few years before I came to B&B. Earlier winners and losers had achieved almost mythic status. The task was to eat more than twenty hamburgers in an hour. A guy in EDM (emerging domestic markets) had eaten twenty-two. The next year a guy from Australia, a rugby star, a six-foot-four blindside flanker, took up the challenge. He ate six and then stopped because he didn't like the taste of the onions—a huge failure in the eyes of those who'd bet on him. "Onions? He gave up because of goddamned onions?" He moved on to Dallas, to work at a firm that handled private wealth; it was widely believed that the burger contest had done him in.

Such were the stories that circulated. There was an actual, bona fide yet unwritten reason for their existence. For the fact was that nothing prepared you for life on the trading floor. No degree however fancy, no amount of advanced training, no IQ test existed that could predict whether you would be any good at this stuff. The only way that Win had discovered to find talented people was, in essence, to cast a wide net. And then winnow. The way was wide, in other words, and I was proof of that to everyone here. And so, as part of that narrowing process, and for other reasons that had to do with teamwork and trust, I knew that if I was ever going to be allowed to make a serious bet on the market, I would one day have to pass through an office door, and behind that door would be a long table, and on that long table would be a stack of hamburgers, around which would be a group of guys grinning from ear to ear.

This is how it happened: A bunch of us from fixed income are at a Memorial Day party at the Boat Basin in Central Park, and someone mentions the hamburger-eating contest, and June Scarpetti starts telling everyone about the time she ate an entire large pizza by herself. It's easy to see how someone falls into this behavior—none of us ever really wants to leave high school, I suppose. Tiny June Scarpetti, her dark hair bobbing at her shoulders, her blue eyes as sharp as a lizard's, a straight-A record and a degree in economics, a designer of prepayment equations and formulas that could beat any index—that was the hope anyway. She's wearing a chiffon dress with water lilies so numerous their image becomes splashes of color. She's young and intelligent, and before me she's boasting about how she was able to eat a whole large pizza.

"I gulped it down," she says. "Four big bites." She takes a sip of beer. Her cheeks are flushed. Everyone knows she's talking shit. "Four bites. Right," someone scoffs. The flowers fill the air with their fragrance. I think of writers at parties—a different breed. But I'm not bored. I'm long past that, though I still note the differences. I look around at this well-dressed crowd and there isn't a person who makes less than $300,000. "It's true," she says. "One large pizza, four bites," she says. The conversation turns to tales of strange things that people have eaten, everyone knocking back drinks and talking about dog in China and cat in India and snake in the swamps and raccoon and bats. It's a warm afternoon. Families out with their kids, drifting about in the boats. Scarpetti has reached a balmy sort of drunkenness, her guard down. Sober, she'd have just let go of the Large Pizza Incident, but now she's insistent and won't let it rest. "You don't know," she says. "A large pizza, that's really something else."

"June," I say, pointedly using her first name. She's about ten years younger than I, but her authority is greater. She's been in the business six years already, makes well over a million a year. She can demand to be called whatever she pleases, and she likes being called Scarpetti. I break a tacit rule in saying her name, but I go ahead and say it again. She's making me nervous. "June," I say, "you're going to talk yourself into something." She looks at me and her face shimmers for a second between an expression of a guileless younger sister in search of a confidante and the mask she usually wears—"the Man-Eater," the boys call her. She wraps her arm around me. "A contest?" she says with a grin.

As if on cue, Snake steps forward, appearing from nowhere, relaxed in jeans but with a white-collared, ironed shirt, tucked in and buttoned at the wrists the way he likes, as if he's hiding some problem with his arms, covering them up. He's going to call for an ante. That's clear in the mischievous smile circling in his eyes. "You know what would be really interesting?" he says, loud enough so a few people can hear, and they stop what they're doing to pay attention to him. "A head-to-head competition: trader versus trader, woman versus woman, Writer Chick versus Man-Eater."