Pieces of You (11 page)

Then Denise walked in. There was no mistaking what was in her eyes and on her shoulders.

“Hello, Miss Sunshine,” Steve crooned. “Our favorite lady banker seems to have something on her mind.”

“Don’t you?” she retorted. 

“To be honest, last night was the first time I can remember not being able to slip into unconsciousness as soon as my head hit the pillow.

“
Even the two glasses of wine after making a few phone calls didn’t do the trick but I don’t intend to let a little bout with abject fear keep me from enjoying lunch with my two favorite comrades.”

“You said you made a few phone calls, Steve. Did you learn anything that Denise and I should know? I hope your research yielded some brighter news than what I have to share.” Mark stopped to let that sink in.

Steve ignored his second comment, obviously impatient to reply to the first.

“Here’s the scoop: the commercial real estate market is already beginning to leak but it’s such a slow drip that few are taking notice. According to my realtor contacts, the low vacancy rate in office space cannot continue.

“
One reason is that openings for office jobs are expected to take a deep dive
,
mainly because what we’ve heard about financial institutions becoming larger and fewer is also predicted for other industries.

The second reason is that there’s been a lot of money made in commercial construction and over-building is inevitable. If you find that hard to believe, I can point out several examples of how herds of contractors are following the smell of money. ”

“Are you quite certain these predictions are credible?” Mark said. “Still, I guess your realtor associates would have the inside scoop.”

“That’s what scares me, Mark. These guys know what they’re talking about; after all, they’re among the first victims of market volatility. Do either of you have more promising forecasts?”

Denise was the next person to share.

“Such a dramatic increase in total loans without an increase in deposits or, at least, a reduction in interest paid, seems to be a formula for losses. I’m forecasting a much higher loan-to-deposit ratio than the banking industry has previously allowed. That’s my biggest concern and that’s why I can’t support Jim’s proposition.”

“That makes sense, Denise, but it may not be as serious as you imagine. Remember, banks can now increase the interest rate for deposits. And you know ole Jim.

“
He’ll do whatever it takes to put us in a more competitive position for new accounts.”

“But I don’t expect that to alleviate your concern.” Mark added.

“I’m with Denise.” Steve chimed in. “With the interest ceiling removed, we may see a wild fluctuation in rates. If both our loan portfolio and interest expense grow exponentially, isn’t it possible that the financial well would run dry?”

“I’m hearing the warning bells, too!” Mark returned. “I’ve had some distressing thoughts based solely on human nature.

“
Think this through with me: If we are expected to make so many more commercial loans with no significant increase in staff, what might stall our progress? Hint: what is a frequent cause of denied loans and delayed closings?”

Denise frowned in frustration as she replied.

“I don’t have a single answer. Our stringent underwriting standards are my most frequent hurdle and property appraisals seem to take way too long. More often than not, they come back too low to fit our equity requirements.”

“Thinking logically is your strong suit, Denise, but I’m trying to think like our senior management
.

“
I think their projections are ruled by the vision of a dam of dollars about to break and flow right into their pockets.

“
I fear the ethics of our lending practices are about to take a nosedive into a pool you would not want to enter without waders on. Steve, am I way off?”

“The same image is coming into focus for me, Mark.

“
If we rely less on the borrowers’ ability to pay and more on the value of the purchased property with appraised values showing significant increases
,
loan denials will decrease.”

“Oh my God, this would be taking a huge risk if the commercial real estate market should collapse. Can’t we stop this? But then, aren’t real estate appraisers strictly regulated?”
             

“Dear Denise, I would be willing to bet my year-end bonus that we cannot and they are not. On the basis of several hours of research, I confidently state that there will be no dearth of esteemed economists, locally and nationally, predicting that real estate prices and demand will increase throughout the decade.

“
Our bank president is not going to find it difficult to support his premise that all will be well in the marketplace.

“
The money will pour in and he will become one of the nouveau rich. In his supreme benevolence, he is intimating that his loyal workers will also gain if we play the game!

“
Providing evidence to the contrary will only get us labeled as dissidents.”

After a moment’s thought, Steve agreed. “A better use of our time would be to ponder our individual and collective response to Jim’s assignment.”

“I’m with you guys. Although I’m not ready to declare, I’d be willing to share my thoughts at breakfast tomorrow. How about coming to my apartment for an exquisite soufflé? Are we on?”

Having agreed to meet the others again in the morning, Mark meandered back to his office by way of the public library and then visited an associate at J.P. Morgan & Company. A call to his girlfriend, Peggy, put her on alert that he wouldn’t be available for at least the next twenty-four hours as he would be pulling an all-nighter poring over materials, making lists and analyzing his notes.

In the morning, Mark emerged from his apartment bleary-eyed but semi-confident that he could live with his decision. He never considered the possibility of asking Peggy, or anyone else, for input. His research strategy hadn’t failed him yet. He kept at it until he decoded a logical conclusion that felt right. Could he truly say this felt right? Although satisfied with his process he thought predicting the consequences might require the insight of a prophet. Mark wasn’t acquainted with anyone bearing that title.

The art on the walls of Denise’s apartment was primarily black and white prints of photographs she had taken herself. The living area was furnished in Ikea ‘dorm room’ designs, simple but comfortable with oversized pillows on both loveseats.

Books were plentiful, organized by topic on wooden shelves that lined two walls. Candles of various sizes and fragrances were placed artfully throughout the living space and lit frequently judging by the lingering scents. Mark and Steve were paying more attention to the smells drifting through from the kitchen.

Removal of the delicate vanilla soufflé from the oven occurred precisely as planned
.
Denise adhered to the principles of the Madame Saint-Ange that a soufflé can be waited for but it can never wait; with all guests conforming to it, showing neither impatience nor surprise.

Sitting around the square kitchen table that doubled as a desk, they had just begun to focus on the official purpose for their meeting when the buzzer sounded and talking ceased. 

“Denise, if you are even one-tenth as good at addressing our current dilemma as you are at creating a masterpiece of gastronomy, my worries are over,” Steve managed to utter when his mouth was not behaving as though it were a steam shovel, programmed to clear a debris-strewn lot at speed.

“I’m sorry to inform you that your deliverance won’t come from me. The difference is in the ingredients; my soufflé is made with the best ingredients I can buy but our situation is produced by the worst human traits I can detect.

“
I can separate the yolk of an egg from its whites but I am no good at separating greed from the human character. What Jim is asking of us is merciless.

“
Making more money, even a lot more
,
is not worth the personal pressure or the potential cost to the bank and its customers.

“
About 3 a.m. I decided not to support more than a twenty-four percent increase in our commercial portfolio.” 
             

Both men stopped chewing simultaneously. Mark was the first to respond.

“Please, don’t commit employment suicide. You represent the best and rarest of this institution
:
a professional who’s ethical and smart.”

“And beautiful.” Steve added

“You’re both dears. But flattery won’t help with this one, gentlemen.”
             

“I know it won’t help to preach to you,” Mark conceded. “I agree with you in principle
,
but I found something last night; something that may change your mind.”

Mark grabbed his notes from the previous night’s exploration. One word leaped off the page: DERIVATIVES.

“What the hell is that?” This time Steve was the first to respond. “Have you lost it before the fun has even begun?”

“It’s not gibberish or voodoo. It’s a way to manage risk that goes way back. Listen to Aristotle’s description as recorded in Politics:

‘There was a poor philosopher, Thales, who used his forecasting skill to predict an exceptionally good olive harvest during the coming season.

Because his belief was strong, he gave the little money he had to the olive-press owners as payment for guaranteeing him exclusive rights to use their presses at harvest time; this was possibly the first options contract.

His contract cost relatively little because the owners could never be certain of a good yield and this gave them assurance of some income.

If Thales had been wrong in his prediction, he lost what he paid for the contract but no more. Since he was correct, he made a lot of money by selling his rights to use the olive-presses to growers who had no choice but to pay his high price because Thales had been granted exclusive rights and they were desperate for access to the presses.’

“From what I’ve read, derivatives were created to manage risk by reducing future uncertainties.

“
According to an essay by a senior economist at the Federal Reserve of Dallas, derivatives can help banks contend with the volatility of financial markets; especially interest rate fluctuations.  

“This seems to be exactly what we need. If Aristotle advocated options contracts, shouldn’t we? I vote to recommend that our New Products department develops a derivative instrument; probably interest rate swap contracts.

“
If they agree, then I vote we support our boss’s outrageous demand…oops, his apt request.”

Even as Mark was addressing his friends so convincingly, he was struggling with doubts. Could it be that disaster was lurking in the same bushes that smelled so sweet? The mental battle was exhausting.

Mark thought: Why am I fighting against the inevitable? This policy change is going to go through and if we play the devil’s advocate, we lose.

“Maybe you should just forget about my suggestion and go with your instincts.”  Mark poured himself another cup of coffee before measuring his friends’ reactions.

Mark saw disbelief written all over Steve’s face. Denise seemed relieved, but a shadow quickly passed across her features and stole that notion.

“Derivatives may have merit, but they may also be time bombs. Could you please be clearer about why we should feel secure?”

Mark nodded and launched into his explanation.

“It works this way: our bank agrees to pay a dealer a fixed rate for Treasury bills with the return based on a floating rate: the T-bill rate minus a percentage.

“
If rates rise, the bank’s margin will still decline but not as badly as it would without the swap.

“
We aren’t eliminating all risk, just managing its outer limits. The bank is, in essence, Aristotle’s olive-press owners.”

Realizing that he had failed to convince his friends, Mark opened his briefcase to retrieve the notes he had written the night before.

Maybe he had been too quick to take the word of his sources. How did he know that some of them might not be biased?

‘If only someone could tell me what to do
,
’
H
e thought, miserably. ‘I wish prophets existed in the 20th century!’

***

At that moment, the older Mark suddenly found himself looking into Zachri’s face. 

“I... I thought I was with Steve and Denise. Where are they?”

“Let me explain why you’ve re-emerged into 2007. Young banker Mark is struggling with two distinct options: follow one’s conscience or take the fast road to wealth.

“
Since he wants both, he’s looking for justification for doing well on the terms laid down by his boss.”

“Zachri, you nailed it. That decision was even harder than making my mind up whether to marry Peg.  But I found a third way; by introducing derivatives into the proposal.

“
Since they were an unknown quantity, I certainly could have been pleading for some assurance. Is that what you’re offering?”

“
No, Mark, I could never tell you which choice to make. I can only give you the truth about specific factors. The truth may influence your decision but it doesn’t disrupt you
r
free will.”

“All right, I’ll try to frame my questions so you CAN help me. First, are derivative contracts a rational solution or a bogus justification for the risks of deregulation?”

“It could be either. Many things that are created for a good purpose are corrupted. Consider Agent Orange.

“
You know how it was used in the Vietnam War but that wasn’t the inventor’s intent. The mixture of two herbicides was meant to speed the growth of soybeans in regions with a short growing season.”

“That’s a horrible comparison! So, you’re saying that the proper use of derivatives reduces financing risk
.
I was right!

“
Here’s my second question, one that’s haunted me for years. If I had not supported Jim, how would it have altered my future? Would I have been fired and maybe changed my mind about marrying Peg? If I hadn’t married her, would I still have become a father? If I didn’t have a son to push me into that matchmaking service, would I still have met Janie?”
             

“It wouldn’t have changed what was meant to be, Mark. You were meant to be a father to Martin and you were meant to meet Janie. A different route wouldn’t have altered that. They are your reality.”

“Zachri, how do you know so much about me? Do angels maintain some kind of celestial database to keep track of their subjects? ”

“I’m not an angel. I never said I was.
But
I
am
a spirit
,
sent by your Maker,
and I’ve been assigned to you.”

“Assigned to me for how long? Why didn’t I know you sooner? I could have used your psychic powers a number of times.”

“You didn’t see me because you were preoccupied
. Think of
when you’re on the road and so engrossed in yourself that you miss the spectacles along your route.”

“You got me there. But even if I didn’t acknowledge your presence, couldn’t you have whispered instructions in my ear?”

“I would never usurp your will; that would alter your destiny and set off a domino effect.”

“Sounds like something out of ‘It’s a Wonderful Life!’ Are you saying that author Philip Van Doren Stern who wrote the short version of the 1946 film was prescient?”

Zachri replied, “Stern was given truth to work with.”

“I have to tell you; this is the most confusing situation I’ve ever been in. I’m talking to a spirit, not another person, about getting help with a decision I’ve long since made although, when I go back into the scene, it will be occurring in the present. Is that about right?”

“It may be a little easier to grasp if you consider those uncanny feelings you’ve had when you visited a place for the first time,
the feeling
you’d been there before;
or
when you were sure that you had already met a stranger you were meeting for the first time.

“Like when I said you looked familiar, the first time you appeared to me in the hospital?”

Zachri barely nodded and went on.

“A human body only occupies the present. For most of people’s lives, their spirits too, remain trapped like fireflies in jars. But a firefly can be confined to the jar only temporarily; it must either die or break free.

“
You could think of your current situation this way: your jar has been opened. Your spirit has been temporarily freed to travel through time and into the minds of some of the people you meet.”

“I wanted to explore outer space
ever since I saw the original Star Trek series but even in my most right-brained moments
,
I could never have conceived of a trip like this one.”

“It’s not a journey of your mind only, Mark. Your spirit, linked to me, is taking you to places to which your mind would deny you entrance.”

“Before you return me to that part of my past, could you give me a hint of the future
,
something that will help us to make this decision? I’m not asking for advice, just a peek. I’ll take it from there.”

“You don’t give up easily, do you, Mark? I can only reinforce what I’ve already said. Derivatives are not inherently bad, but when they’re misused, and when it’s easy to hide their abuse, the havoc can be enormous.

“
The consequences can touch every level of society, throughout the world.” 

“That’s a strong statement! But, provided our managers don’t succumb to greed, we have the guarantee we needed. Thank you, Zachri! I’m ready to announce my decision.”

“I wonder why you’re so quick to dismiss the probability of greed. Stay a few more minutes and I’ll give you that peek you requested. ”

From some place deep within, images forced their way into Mark’s consciousness: signing a note for a 38’ sailboat; swinging open the doors of spacious Swiss and Florida homes; sipping expensive liquor.

Impressions started to appear faster and less distinctly than the first few but produced direct hits to his conscience. Parking lots filled with super-sized vehicles; food dumped in quantities so great that dumpsters take up much of the right of way along city streets; tons of bagged spent tickets stamped with the names of cities, concerts and lotteries.

Finally, the clothes: myriad masculine and feminine sizes, colors and styles; brand names that would sell for a great many times what their production cost.
At last he cried out:

“Stop it. I’m getting a headache.”

The images disappeared as Zachri spoke again.

“Let me explain why I don’t think you or your colleagues are immune from these temptations. Avarice and greed
—
lust for material gain—are rampant among human beings, although they always lead to division and chaos.