The Wangs vs. the World (15 page)

Crack!
Kalchefsky slammed a palm down on the lectern. “And what people want to own, of course, is real estate. So a dental hygienist with bad credit making forty thousand dollars a year felt that she
deserved
to park her ass in a million-dollar home. With a little creative financing, and as long as housing prices continued to rise, she believed that she could
afford
a million-dollar home. And as long as the dental hygienist continued to pay interest on the mortgage for the million-dollar home, as long as housing prices continued to rise, as long as more loan officers approved more loans for more dental hygienists with bad credit who could continue to pay the interest on their overblown mortgages, housing prices would indeed stay stratospheric, and banks could print money based on that certainty. And, like your nursery rhyme, that was the house that Jack built.”

Kalchefsky picked up a marker and slashed at the whiteboard, then moved aside so that the class could see what he wrote.

Our second big mistake—we thought that risk could be quantified.

Our third big mistake—Alan Greenspan.

The class giggled. “Oh no,” he said, shaking his head at them menacingly. “It’s not funny. It’s not something that any of you should be laughing about unless you’re so rich you don’t have to care. Alan Greenspan is going to go down in history as a social-climbing, self-hating, Ayn Rand–loving, Zionist fraud. You just don’t know it yet. But I do.

“But before we break down Greenspan, let’s look at our second big mistake,” he said. “Does anyone know the name David X. Li?”

Andrew looked up. Kalchefsky was writing it on the board:
David X. Li,
which meant that he was probably Chinese. If it was Lee, with two
e
’s, then it could have been a white guy instead.

“Learn it. Remember it. He’s going to go down in the history books as the accountant who took down America.”

Kalchefsky’s losing it,
Andrew typed.

Character? Crazy prof vs. whole world is against him? Recurring. Goes downhill through set, thinks club is lecture hall. Meta, meta, meta.

“Ole David X-marks-the-spot Li. A Chinese swashbuckler who rode into town and duped the entire American financial system into believing that he could lasso risk.” Kalchefsky turned and wrote on the board:

Pr[T
_A
<1, T
_B
<1] = ϕ
₂
(ϕ
^-
1
(F
_A
(1)), ϕ
^-
1
(F
_B
(1)), γ)

Whoa. How did he just reel that off? Impressive.

“You know why the dental hygienist got the mortgage for her million-dollar home? Because of this formula. You know why AIG needed a bailout? Because of the ways that Wall Street tried to profit off of that mortgage. You know why Wall Street thought that they could make millions off of the millions of people across the country with bad million-dollar mortgages? Because of this formula.

“The thing is, no one on Wall Street can make sense of this thing.
I
can’t make any real sense of it, and I grew up in a country that took math seriously, unlike America, where you just study the Top 40 pop hits of math. All you know is the Pythagorean theorem. Avogadro’s number. Eureka and apples on the head. So how can any of your finance guys possibly be expected to understand something even slightly more complex than A
²
+B
²
=C
²
?” He turned around again and skewered the formula on the board with arrows. “This is the Gaussian copula. Named after Carl Friedrich Gauss, one of the greatest mathematicians ever to live. What this particular formula does, as I’m sure none of you know, is correlate variables that seem unrelated, predicting a connection between them. Li didn’t invent the copula, but he did bring it into the finance game, and he was the one who made the crucial second mistake, which we all get to pay for: He made us think that risk could be quantified. And he thought that corporations were like people. Like people! Because before David X. Li rode into the canyons of Wall Street, way back in 1997, he worked on the broken-heart syndrome, which is a very real phenomenon that none of you have the experience to comprehend. True, dedicated love. Love beyond the grave. Take a couple: Whitehairs, oldsters, married for fifty years. One of them dies and odds are the other one is not far behind. They die because their heart is broken and they’re alone, and glorified accountants like David X. Li had to go in and meddle with the beauty of that because they wanted to figure out a better way to price life insurance policies. The antithesis of beauty, no? Those accountants developed a method whereby they could plug in various pieces of information and churn out one number: A likely date of death. David X. Li took one look at this and decided that with a few modifications he could use it to churn out another number entirely: An entity’s likelihood of default.

“If you’ve been paying any attention at all this semester, you know what is at the center of all studies of economics: Risk. Harness the risk and you’re minting money. Let the risk run you and you’re sunk. So, naturally, when David X. Li came along and said that he’d found a way to quantify risk, every hedge funder and bond trader out there was ready to hop aboard the Orient Express. He created a formula that he claimed could solve Wall Street’s biggest problem, without any complications, and set it loose in a field of greedy, shortsighted bastards.”

Andrew’s hand shot up. It was a surprise even to him.

He was all the way in the back of the room, so he shouted. “Professor Kalchefsky!”

The professor paused. Looked up at Andrew. A poisonous, tired look.

Andrew stood up. “Why is it David X. Li’s fault? I mean, I don’t think it’s his fault. He didn’t force anyone to use it, right? The . . . what’s it called? That formula? He just wrote it. He didn’t say that everyone had to use it.” Andrew paused, waiting for the professor to agree with him. He was right, he knew he was right.

“Force? No, he didn’t
force
anyone to use it. And no one
forces
children to pester their parents for the sugared cereal that’s packed with their favorite action figures; no one
forces
young women to starve themselves anorexic so they can look like a billboard. No, Li just created a formula he claimed could solve Wall Street’s biggest problem. But he’s perfectly innocent, perfectly. You know what else he’s innocent of? Besmirching Carl Friedrich Gauss’s good name. Gauss deserves to be remembered as the prince of mathematicians—his work impacted the fields of astronomy, optics, differential geometry, all the ways in which we observe and understand the physical world—but in democratic America, his name will forevermore be associated with financial ruin. And that’s not the inscrutable David X. Li’s fault either, is it?”

Andrew rolled his eyes. He couldn’t help it. Inscrutable was such a lame dig, it was barely worth protesting. “Are you getting scared yet? Are you finally sitting up and thinking about something besides keg parties and sexting? You know that Li was trained in China’s most respected university, the Harvard of Tianjin, and that the Communist government encouraged him to set sail for North America? How do we know that he wasn’t working for them from the start? Right now China owns 8 percent of America’s debt. How do we know that this wasn’t all a plot hatched in the honorable Deng Xiao Ping’s official opium den?”

“Oh come
on!
” The voice came from somewhere on the edge of the room. Andrew turned, along with everyone else in the class. As Professor Kalchefsky got more and more riled up, the guy next to Andrew had taken out his cell phone and started recording surreptitiously—now he held it up, tracking the room like a periscope, trying to figure out who was talking.

The voice kept on going. “Okay, let’s just say that it was a plot, right? Doesn’t the West deserve it? Maybe this is just payback. Fact! In the year five hundred something, Christian missionaries stole China’s silkworms and used them to prop up the Byzantine Empire for a thousand years. Fact! In the late thirteenth century, Marco Polo went to China and learned about pasta, and now everyone thinks the Italians are the last word on spaghetti.”

It was Mark Foo. He was a militant Asian kid, not the kind of guy Andrew usually hung out with. Foo Man Chu was always organizing protests and group dumpling dinners; he was the kind of guy who made up names for those Asian girls who always dated black guys (the current frontrunner seemed to be “chocolate banana”) or white guys (“lemonhead”); he was president of the Asian American Student Association.

“Payback for ancient crimes. Alright, let’s call it that. A karmic kung fu kick to the balls. But you know who’s getting kicked in the balls? Is it the descendants of those missionaries? The Anglo-Saxons who profited from that original theft? No, they remain in their Martha’s Vineyard mansions, eating lobster and fighting over who gets to give Bill Clinton handjobs. And who really gets jacked off?
ME!
”

The professor grabbed at the newspaper that he’d held up at the beginning of class, crumpling it in his fist. “Do you know that I make as much each month tutoring rich junior high schoolers in calculus as I do as an adjunct professor? The whole economic mindset of America is warped. Your parents are willing to pay five hundred dollars per credit hour to get you through a good college—if this can be considered a good college, which it isn’t, which means that your particular parents probably didn’t open their wallets wide enough—and the actual professors you came to learn from are barely being given a living wage. In fact, there are so many people who want to go into academia that they could just as reasonably not pay us at all, yet here I am, training my replacements. Academia begets academia. Yet, despite my paltry pay, I managed to accrue a plump little nest egg and now, without warning, it is
gone.
Wiped out.”

Andrew leaned over to his neighbor. “Isn’t this dude, like, thirty or something? How much could he have saved?” A quiver of anger ran through him. Would Kalchefsky still be such an asshole about their parents if he knew what was going on with the Wangs? “And on a freaking
professor
’
s
salary.”

Kalchefsky stopped talking and stared up at Andrew. “Is there something you’d like to share with the class? Did you, maybe, have a funny comment about my retirement savings? You’re the comedian, aren’t you? I remember you from the freshman show last year.”

Glee. That was how Andrew felt whenever someone mentioned the finest seven and a half minutes of his life. A rush of pure sensate pleasure that brought him back to standing onstage and receiving that first laugh, and then a slightly guilty glow of “This is what it’s like to be famous!”

It took a moment to pull himself out of that greedy joy and remember that Kalchefsky had actually called him out.

Andrew shook his head. “No,” he said, “nothing.”

“That’s about as much as I would have expected from that performance.”

Wounded, Andrew felt his mouth gape open. He stood up, knowing that he had to say something,
something,
but not sure what would come out. It turned out to be this: “You’ve been so insane this whole class, and that’s why? Because you lost a little bit of money? You said your salary is almost nothing, so how much could you have saved? I mean, I thought that those Beanie Babies were like little minigrenades or something and you were about to Columbine this whole place! You’re supposed to be a professor! It’s not our fault you lost the money! Why are you getting mad at us?”

“You seem to be very concerned about attributions of blame, Mr. Wang.”

Everyone was looking at him now. Again.

“Because you’re throwing blame around all over the place! And it doesn’t need to be! You’re acting like it’s everyone else’s fault and no one else lost anything. But you—I mean, I don’t know how big AIG is, or how many people had accounts with them—but you said the bailout was, like, $85 billion, so I’m sure it’s a lot, and they all lost something, too. It wasn’t just you!”

Andrew stopped, even though he could have kept going, because Kalchefsky’s eyebrows raised up and together like a guilty dog’s.

“In a sense, you’re right and I’m sorry. None of you can really know what it’s like to lose the result of years of effort because you haven’t had years to put in. I can’t blame you for failing to grasp a concept that is beyond your scope.”

Condescension. That’s all it was. As if everything mattered more just because he was a few years older.

Andrew wasn’t planning on telling anybody about what was happening, he hadn’t even really said goodbye to anyone besides Emma, but now, without warning, it all upended out of him.

“
You
don’t know what it’s like!
You
don’t know anything that’s going on!” No crying. There’s no crying in econ class. “
I
know
that it’s a recession because my family’s pretty much totally bankrupt now. I have no house to go back to and I’m dropping out. Some guy out of, like, a Spike TV show repossessed my
car!
”

Kalchefsky’s eyebrows went up even more. The girl on his right reached out and touched his arm, her eyes wide. The class was a wall of sympathetic faces. Andrew’s heart slammed against his insides, and he looked down at his phone to make sure that he hadn’t accidentally dialed his father sometime in the middle of that speech. He had to go. That was all he could do. He had to leave class right now, and then he had to leave the state of Arizona altogether. Things started to move again. More hands reached out to him. Professor Kalchefsky started to put his face back in order.