Dear Money (41 page)

What has changed most for her? "The grueling 16-hour days. The intensity, the pressure of being absorbed into competition. Oh, yes, and all the silly office pranks and the side bets that go on here."

Side bets?

"Everyone bets on everything. It's like being stuck with a bunch of numerically gifted gambling addicts who will bet on absolutely anything. What tastes better, Perrier or Pellegrino? That was a recent office bet. Who can eat the most hamburgers—I won that one—not the betting part but the eating part. People were betting on—or against—me, and I won. That victory sort of put me on the map, in terms of accelerated hamburger consumption," Palmer said with a grin, "as someone to be feared." All of the silliness, Palmer confided, is about building morale. "High jinks are a needed contrast to the intense pressure. It's all very locker room," she explained, "but I don't know what would happen if we didn't have that kind of pressure-release valve."

Still, it was hard to imagine the author of
Scion
gulping down burgers. I wanted to know if she missed writing, missed the process of working through one of her gorgeous chapters. "I had a professor whom I adored in grad school," she said. "He used to say to the class all the time—a bit too much—that if we could imagine ourselves doing anything else, anything at all other than writing, we should do it." She looked me squarely in the eye. "So, the short answer is no. I don't miss it at all. I found something else I liked doing as well, perhaps better."

I also couldn't resist asking, "What does this say about our culture?"

Rolling her eyes, she dismissed me: "I don't know. Ask an anthropologist. Or a novelist, maybe."

C
AVELLI'S CALL,
which came a day after the latest article about me hit the newsstands, arrived like a kind of fickle but predictable weather. Caller ID announced
Piccadilly Publishers.
At any other time in my life, my heart would have skipped. Such calls could tilt the balance of things ever so slightly in one's favor.

"India," Cavelli said in his Locust Valley lockjaw, drawing the name out as if it had been minutes and not years that had passed since we'd last spoken. "India," he said. "I'm beyond fascination, my girl. I'm dying to hear more about this Wall Street experience of yours. Fascinating! Brava!" What was there to say about creatures like Cavelli, who, as someone once said of a certain charming President from Arkansas, always had one arm draped around you in an embrace while the free hand was busy pissing down your trousers? "Leonardo," I said, "what a surprise."

"Now don't be cross with me, dear girl," Cavelli said. I could hear him smile as he fired a mild warning shot across my bow, just in case I was angry at him—which I wasn't, of course—for being out of touch with me. I knew as well as he did the way things worked. I'd left him, after all. But he was always hedging, always in control, even when he held a bad hand. There was something to be said about watching the man, as a kind of human spectacle, operate. "The whole fucking business is going to hell," he said, "and you had the sense to get out when you could. Well done."

"It's always going to hell."

'Well, you've got a point there," he said. I could hear the creaking leather of his swivel chair as he leaned back, this habitué of the always oncoming season of new things under the sun. Not so for the author, for whom, after publication, although she'd poured every fiber of her soul into the enterprise, the future of her book stretched no further than the expiration date on a gallon of milk. Cavelli's office was a testament to the processional sway of the future—the desk stacked high with fresh manuscripts; the ceiling fan, its blades furred with dust, slowly circling above his head; the morning light aslant through a pair of windows that looked out on a wooden water tower. "You've got a point," Cavelli repeated, as if this were the first time he'd considered the notion. "When, my dear girl, do I get to hear about this excursion of yours?"

In a world filled with capricious sentiments, Cavelli had managed, by comparison, to approach a kind of dignity. He had stood by me when he was my publisher, no matter what. After I left him, he'd call, keep his hand in, as it were, with me. Wanted to know what I was up to, until seasons came and went and time swept us farther and farther apart. I'd always thought that I would try again with him, that he'd give me a fair reading, that if I was willing to take a small advance he might be willing to buy my book. For me, though, it was pride. I'd been stupid, perhaps, easy to believe in retrospect. If I'd stayed with him, my career as a writer could have had a much more certain and favorable face. Now, with his exaggerated diction, his elided rs, Cavelli wanted a one-on-one with me, wanted me to explain what was happening in the mortgage universe, wanted me to explicate high finance. I didn't have the time for such a visit just then, but of course I made the time. I wasn't as immune to his summons as I had hoped to be if ever the time came.

"What do you propose?" I asked. The floor was buzzing around me. Cavelli, with his slow, cool attitude, had no idea what he was asking of me. It was eleven in the morning. The markets were insane. Some banks were showing signs of trouble, hedge funds going under, others beginning to fracture, billions of dollars in write-downs. Two hedge funds at Paul, Smart & Smith, Will's old firm, had shuttered their windows. Cavelli wasn't wrong to call. It was a curious time.

How did this mess get started? Where was it headed? I was the one with the crystal ball on this fine day in the middle of 2007—or so Cavelli thought. Perhaps I could predict what might go down, but in truth I was just trying to ski ahead of an avalanche. Not much time to speculate on the long view. Short term was all a trader had time for. And now came the roller coaster ride of volatility. One week of free fall. The next week you were back where you started, as if the previous week hadn't happened. As a joke, somebody left a parachute in the office kitchen. The guys in subprime were writing lyrics like this one, sung to the "American Pie" tune:

A long, long time ago,
I can still remember
How that yield spread used to make me smile.
And I knew I had my chance,
Those CDOs I could finance,
And maybe pay my bills for a little while.

But February made me shiver
With every press release Bear delivered.
Bad news in my e-mail—
Would I collapse that last deal?

I can't remember if I cried
When I saw the CFC slide,
but something touched me deep inside
The day the subprime died.

So bye, bye, repo money supply.
Sent my collateral to four dealers
But they all asked me why.
And good old boys were on a crack-induced high
singin' "This'll be the day the loans die,
This'll be the day the loans die.
"

Did you write swaps on B/C loans?
Did you blow bucks on new iPhones?

Did that nut Cramer tell you so?
Now do you believe in rate control?
For a Fed cut, would you sell your soul?
And is response to your bid list mighty slow?

Well, you try to widen that spread, my friend.
Your sales force has gone off round the bend.
And Bernanke's on the news,
But Greenspan lit the fuse.

I was a paper-rich middle-aged broncoin' buck
With a master plan and a lot of pluck,
But I knew I was out of luck
The day the subprime died.

So bye, bye, repo money supply.
Sent my collateral to four dealers
But they all asked me why.
And good old boys were on a crack-induced high
singin' "This'll be the day the loans die,
This will be the day the loans die.
"

I was waking up almost on the hour to check where the markets were overnight. Every day was like going to war, and I had the sense that things were going to get worse. But it was only a sense. We traders didn't have the larger, universal picture of all that was under and on top of us. It didn't work that way. All the songs and high jinks were just fun, as if by acknowledging the ominous with a wink we could keep it at bay. Simply, you had to be quick, nimble, decisive. I'd listen to playlists the girls and Theodor would make for me to psyche me up—
Come As You Are, Don't Forget to Dance.
(I never actually saw the family, had no time to miss them.) Some days would end and everyone would stand there like zombies, shaking their heads. The terror of the abyss followed by the exhilarating comeback.

On the other end of the telephone line, in his publisher's cocoon, with a fluorescent light ballast buzzing somewhere off in eternity, the pressure, the flop-sweat swamp of the trading pit meant nothing to the Dashing Cavelli. He would want to know, like everyone else, if I'd seen this coming. And of course I'd think of Win, of his departure for the hedge fund, all of us in Rates feeling betrayed—he'd seen it coming. But what was
it,
really? Was Win poised in his short position? Cavelli, like everyone else, would want to know what we'd do about it, how we'd manage it. It was all over the news since February: "U.S. Investors Worried about Subprime"; "As Mortgage Crisis Begins to Spiral, Casualties Mount"; "Crisis Looms in Mortgages, Upbeat Analyses"; "The American Dream's Rising Cost"; "Prospering in an Implosion"; "Debtor Nation; Big Investors Jumping Back into Shaky Home Loans"; "When Does a Housing Slump Become a Bust?"; "Another Crash of '29?"

Plenty of indictors: smart friends, friends who should have known better, didn't know the details and fine print of their mortgages. Shorters circled B&B like so many hyenas around a wounded animal. (Win left us alone.) The bets were on that many of us would go down—that our leverage was too high, that our exposure was too vast, that Radalpieno's risk threshold would send us down. (I recalled Win's leverage warning when I'd made my big trade, no one paying it heed.) Here's an analogy: You're a family, mom and dad. You own a house. You believe the value of it will keep going up, so you renovate the kitchen, send your kids to private school, take those biannual vacations—spring break and Christmas. It's assumed you'll get a raise, get a bonus. (Bankers are like waiters; the big pay is the tip.) There's only one direction at this age (midlife), and that's up. So you don't mind the debt you've racked up; you'll pay it off with the bonus, start paying it down with more frequency, take out a home-equity line of credit.

In short, we'd been fools, the whole lot of us. But it's hard to predict when things will fall apart. And then, when it does, you're just trying to stay alive in the avalanche. You have to know when to face off against the market. According to Win, women can make great traders because they are more sensitive to their own weaknesses and failings. They are likely to objectively reevaluate a position and get out of a bad trade rather than stand against an avalanche. But there were only a handful of women trading on the Street. Now the avalanche was coming down the chute and Cavelli wanted to chat.

"What do you propose?" I asked.

I knew what he wanted. There was only one thing a publisher could want.

"Can I lure you to my offices?"

"When?" I thought flirting with the notion could be a curious way to spend some time. I had enough of the writer left in me to want to peer down an old alley. Call it a hedge. Maybe I was looking for an alternative way in which this story of mine might finish.

"This evening? After work, that is. I imagine you might be quite busy."

"How's Thursday afternoon? I'm taking the day off."

"Divine, my pet. A date."

The company's offices had been in the same building since the 1940s. The elevator let you off on the fourth floor, the entirety of which was Piccadilly's—a labyrinth of manuscripts stacked in small towers and books and unopened boxes and piles of papers—a firetrap, and to think that once upon a time the place was blue with cigarette smoke. Black-clad assistants darted about. Nothing fancy, nothing glamorous. Fancy happened at Dino's, Cavelli's Italian watering hole around the block, where he had his table and his usual order of oysters or mussels and his bistecca alla Fiorentina with a spritz of lemon and his two carefully measured glasses of Barolo, where he held court with his authors and other editors and agents in his dapper suits. Here in the offices, his editors sat hunched at their desks, in their cubicles, bent over books, the phone. A strong smell of coffee permeated the air. A wall was devoted to plaques for various awards—the Washington, the International, the Eiseman, the Nobel. And, of course, books from the recent past faced outward along the halls, some behind glass, others stacked hip-high in the reception area.

Miss Barthelme appeared, a white-haired elderly woman, poised and elegant in a lavender summer skirt-suit, who, though older than Radalpieno's Miss Lane, seemed to be cut of the same cloth, from a forgotten time when women prized the job of devoting their lives to holding up a great man.

"India," she said, kissing me lightly on the cheek. "It's been far too long." She led me through the maze. I followed, obedient as a schoolgirl. Then, stopping, Miss Barthelme turned to admire me, as if in afterthought, as if, as we made our way through the stacks of papers and books, an image of who I'd been came to memory and jarred with who I was now, in my expensive jeans and crisp linen blouse, expensive sandals, pretty jewels, finely cut and colored hair.

"You don't look like a bond trader," she said, "whatever that is." And she continued on to the outer reaches of the floor and Cavelli's office. Again, books and all the rest smothered the waiting area outside his door. The door was closed, but I could hear his voice, rising, lulling, rising as it penetrated the thin wall. "May I get you a drink—some wine, water, coffee, tea? I suppose it is teatime." She held me with her hazel eyes, Miss Barthelme—a good, sound literary name. She extended her hand, gesturing to a frayed leather couch on which I could wait. I obeyed, gently moving aside some books. She vanished with a warm smile.