Dear Money (6 page)

"You'll let us, won't you?" Emma asked, and I smiled my assent. Will popped open the champagne and soon we were all talking and drinking, and the chill of the Maine afternoon gave over to the warming sensation of the champagne.

We were standing at the edge of the Atlantic, the sun beginning its slow descent, the tide closing in on the castles. Will engaged Win in business talk. Emma chimed in—derivatives, yield curves, investment opportunities, bets involving the mortgage market, company scandals, the stuff of their world that meant nothing to Theodor and me. Their conversation sounded like another language.

"More socioanthropology," Theodor whispered under his breath. This was not where we belonged. But isn't this how it happens? It is said that there are only two real plots: someone leaves town or someone arrives. Win arrived like the stranger in the fiction I love so well, to take me, our lives, in a direction that, as clever as I can be, I could never have designed. A stranger had arrived, Win had arrived, fresh, new, sudden, in a biplane like the
deus
in the
machina.

H
IS NAME, BELIEVE IT
or not, was Wayne Johns. (His parents had met at a drive-in screening of
Stagecoach
and fell in love over their mutual admiration for the actor.) First-born. Mathematical wizard. Father was a math teacher in Akron, Ohio. His mother taught home economics. Republicans. Financially sound if not wealthy. They owned their home, owed no debt, taught their children to be precise with numbers. When I met him in Maine on that July day he was thirty-four years old, four years younger than I was. He had three younger sisters. The baby's name was Betsy, and as a toddler Betsy had the hardest time pronouncing Wayne's name, so gave up altogether and called him Win. He became Win, adopted a John Wayne swagger and a half-cocked smile and learned not to bother with apologies.

Win went to Yale and then to Columbia, from where he was taken in by Bond & Bond Brothers because he'd met the wife of a senior partner (her name was Pretty) at a party on the terrace of a Park Avenue penthouse with a 360-degree view of the city. Pretty liked Win's smile and approached him as he admired the view. She also liked the fact that he had gone to Yale (like her husband) and that he was finishing his MBA—his career trajectory unfolding over sips of citrus martinis. Her husband had not gone beyond a bachelor's degree, but when he started out a good fifteen years earlier, higher degrees were all but unheard of, especially in the field of mortgage bonds.

Pretty's husband, Ralph Radalpieno, had been at the forefront of the mortgage bond market, instrumental in the mid-1980s in the dissemination of the collateralized mortgage obligation (CMO)—an invention that made home mortgage bonds look more like other bonds, which greatly increased their appeal, turning them into viable bank and insurance company investments. (For a long time this would mean nothing to me, but back at the beginning of it all, I tried to pretend, at the very least, that I cared.) Radalpieno made money, lots of money, and that money, as it will, translated to power, not only his own but also his wife's. Pretty was a power broker and got Win a job because she liked him, his name, his smile, his sparkling brown eyes. Win followed Radalpieno to Bond & Bond Brothers, apprenticed with him after completing a required training program meant to weed out people who really belonged elsewhere—down in the world below, where you and I live with our quaint, picayune cares—began trading mortgages after six months and within a year was raking in millions of dollars for the company. Win had brains and stamina and an unending supply of clever ideas. He could work eighteen-hour days and schmooze until dawn. He had market savvy and a knack for predicting trends and habits on the big scale and the small. He found himself launched into an Olympian milieu, and as luck would have it, he soared.

Every now and then he would look back on it all—say, when his personal driver had somehow gotten derailed and he couldn't catch a cab uptown, a cold rain blowing sideways, and a shudder would go up his neck—how easily it could have been otherwise. But no. He was resourceful, with resources—a clip of hundred-dollar bills to feed to a pedicab driver who would wrap him in a snug blanket and wheel him uptown for all he was worth, and Win would make better time than he would have in a taxi. Clever Win. Smart Win. The little brown-eyed, pudgy boy from Akron grew into his name, embraced the bravado, bought a few too many sailboats and planes, as might anyone who received $10 million bonuses (the biplane, by the way, was only an amusing toy; for serious travel he was flown in a G-IV). He eased his way into conversations, into beautiful women, into fast cars and quick thinkers in Davos and Cupertino, and he rose—how else to put it?—to the level of kings.

I learned these details from Win's unofficial biographer, Emma. He was with us in Maine for exactly twelve hours, and as we walked across that afternoon and night, whenever the chance arose Emma took me aside to fill me in on Win and his life, speaking with that same intense enthusiasm of hers, revealing for me a new shade of Emma, a deference I had not observed before. She hung on Win's words, smiled up to him solicitously when he spoke to her, asked him about his plans for the summer, and you could read an inner calculus, a way of measuring whether she'd planned her summer with enough savoir-faire. Later, in August, they were headed for Paris, an apartment in Saint-Germain-des-Pres. Win approved. "Rue Christine?" he asked. "Well, yes," Emma answered with a bright smile—rewarded by his approval.

Money had that power too, and I felt a further warmth for Emma, knowing she was not immune to the consuming fire that sometimes raced through me. Her family, after all, were not New England blue bloods; they were from Indiana. Her mother, a professor of nineteenth-century English literature at Bloomington, had the annoying habit of asking me if my books sold well. The few times I'd met her it was her first question, and she'd ask, "How can you possibly make a living?" An attractive woman with striking white hair and silver eyes. For the most part, Emma's family stayed in the Midwest, leaving Emma to be absorbed by Will and all his sisters. He had five of them—lovely, opinionated women, all with serious careers, who would chide Will for how he cultivated his girls. "Gstaad," one of them once said. "The girls don't need Gstaad. That's entirely unnecessary and a waste of money. They'll have Gstaad when they grow up."

We were taking a walk on the beach and Win strode in front of us with an annoying bounce of the heel, as if, even when it came to putting one foot in front of the other, he were somehow more ready to ambulate than we common bipeds. Theodor and Will, kicking a soccer ball, kicked it to Win. The four girls collected sand dollars at the water's edge. Each find caught them by surprise, as if each sand dollar were a sterling coin. Emma whispered, though the wind would have hidden her words: "Will says he's the best mortgage trader on the Street. He's untouchable, a seer." Watching Win run after the ball, he seemed more like a guy who never made the varsity team, but the way Emma spoke about him, the way she held him up and turned him around for me, telling me about his G-IV and his sailboat and his apartment on Park Avenue and his ski lodge in Cervinia—the care with which she told his story, it was as if she were telling the tale not of a friend but of a mythic figure.

He turned and kicked the ball to me, a little too hard to be just play, and I, who did make the varsity team, sent it whistling past his ear, which got him racing with Gwen down the beach, her hands clutching sand dollars. The stiff shore breeze caught the ball and carried it very far, and soon everyone was running to save the ball.

"Where's Casanova's girlfriend?" I asked.

"Which one?" Emma said.

"Oh, right. Of course," I said.

They were all showered in the late-afternoon light that painters love so well, racing along the water, splashing it up around their ankles. Win had the easy manner of one who wanted for nothing. Will made plenty, sure, but he was not pursuing his dream in order to keep Emma's wants at bay. He wanted to be a writer; already he had written hundreds of pages in the wee hours of the morning. She wanted a house, and I wondered if she would continue to want it had she all the money in the world. But Win was something else again. Win had the heel bounce. He was doing exactly as he pleased.

I had no idea what a mortgage trader did or what a mortgage bond was or why and how so much money could be made off of other people's puny debts, if indeed that was the case. For a while yet I would not understand that these puny debts were packaged and put together and compiled, which in turn created not just a revenue stream of batched, bundled and tranched mortgage payments but a colossal revenue river—a Mississippi, an Orinoco megaflow. I had no idea that homeowners as a consolidated group of borrowers accounted for $8 trillion of debt, exceeding by a long shot the combined United States stock markets as the largest capital market in the world. I did not appreciate, because I had not contemplated before, that these traders moved massive quantities of this debt between borrowers and investors and back again with the press of a button, with all the ease of a gambler rolling a pair of dice at a Las Vegas casino—luck mixed with savvy and not a little appreciation for the sentiment of the market.

I knew nothing of that. I was ignorant in a very basic way, because the subject had never meant a thing to me. My world, down here among the masses, had never collided with the intricacies of high finance. I didn't own my own home, so a mortgage was an abstraction, something that other people had. More adult people. Not artists, for instance. Owning a home was something I longed for. A home mortgage was the vehicle by which one lifted oneself by the bootstraps into the realm of adulthood, into commerce, into seriousness, into the general franchise. But debt, so assembled and gathered as I would come to see it, was a bracing chasm. Across it we walked even if we had no idea of the depths of this dream, how it was becoming the blood of our economy. So, naturally, I knew nothing then about CMOs and Fannie Maes and the LIBOR rate and tranches and thrifts and prepayments and interest rate swaps and amortization and negative convexity. I did not appreciate or understand the influence of a change in interest rates, the ups and downs of consumer spending, company forecasts, the price of oil and natural gas, fluctuations in currencies, the weather (mudslides and hurricanes and tornadoes and extreme heat waves and blizzards) and personality types (the ability to herd people like sheep) on the value of debt. Subprime loans and ARM loans and hybrid adjustable-rate mortgages and balloons and Alt-A's and prepay penalties meant nothing to me either.

But I did know that Win made money, lots of it, so very, very much of it. The kind of money he made had nothing to do with the kind of money Will made, that was clear. I hadn't understood that there was a hierarchy on Wall Street, that hedge fund guys and traders ranked at the top, that people like Will, who brokered financial deals for enormous corporations and who made more money, by a long shot, in a month than we made in a good year, were lower on the totem pole. Making little, in comparison, had made me curious about a person's ability to earn so very much. Who were they and what were they and where were they and how did they think and what drove them? There was something of the romance of the cowboy, of John Wayne, out there riding the range alone. The fearlessness, the cool confidence, needed to risk so much. Most of all the idea of pooling people, of trying to understand how they operated psychologically (all the yous and all the mes with our various styles of spending and saving, our susceptibility to trends, our ridiculous hopes that place all our bets on tomorrow, thus making us so foolish today) as a collective lot, reading them and translating their likely actions into the amassing of money on a colossal scale, a scale bigger than the entire combined U.S. stock markets—this was better than the plot of any story I'd read in a while. This was a story line on an Olympian scale. This was imagination at work, imagination with consequences—nothing less.

We were seated at the picnic table, alone on the deck, Win and I. He was before me, not one bit handsome but attractive all the same. Between us flamed a candle casting shadows on his face, highlighting his thin hair. He had shaved for dinner, and the illuminated portions of his face shined like the surface of fine china. He made no concessions to L. L. Bean. He wore a pink shirt with silver cuff links that splashed the candle's light whenever he raised his hands to gesticulate about one thing or another. The others were inside: Theodor putting the girls to bed, Will steaming lobsters, Emma preparing drinks.

From the kitchen we could hear lids banging against pots. Will was in charge of the dinner and had forbidden Emma and me from helping. He wanted none of our fancy recipes. The clams and lobsters would be steamed simply in sea water, with the seaweed he'd collected from the ocean, carrying the big pot to the water's edge wearing his flip-flops and khakis. Studying him as he went, I understood that simplicity was a vacation for him, a connection to what he quested for: the plain expanses that described the life of a writer. If he only knew.

Emma had instructed Win and me to watch for the moon, which was to rise, full, in a few minutes from behind the northernmost of the small islands. It was low tide and you could see the sandbars reaching to the islands floating just offshore. The sun had set and it was getting dark, but paths of fuchsia spilled across the sky. Lobster boats puttered toward the harbor and a few sailboats drifted on the horizon. The house might be nothing much, but Emma sure had the view right. It was gorgeous, and Win agreed and started talking about how the present owners would probably have to sell someday soon.

"That little girl—what was her name? Sacagawea? Really?"
Win shook his head and smiled. "That little girl with the ridiculous name's parents will inherit the house from the childless Hovs, but little Sacagawea's parents have three other children and no money. But they love the place and will want to try to scheme and hang on." A nice sum dangled before them, he explained, would certainly outweigh sentimentality if dangled at the right time. "The trick for Emma," Win said, "will be the timing of her offer. Too soon, and she'll alienate them; too late, and she'll lose it to someone else. If she can gauge just when they'll be desperate enough but without taking umbrage at an offer, she could do very well."