Nothing Personal: A Novel of Wall Street (18 page)

“I wondered why he wore them until I started sitting down there. It’s always freezing.” Warren stirred some milk into his coffee and pressed a lid onto it. He was always anxious to get away from Combes.

“You know, I wanted to ask you something. It’s sort of about Bill too. Got a sec?” They were paying for their coffee, and Warren shrugged his shoulders and told the cashier to cover Anson’s. Anson leaned against the wall in the wide corridor and sipped from the cup.

“You know, Bill covered Warner before you did. Never did too much business with them, though. Had one really big year a couple years back, but that’s it. Anyway, I was curious. It seems like his production’s been falling off the last year or two. Why do you think that might be?” Anson had a slight smile, almost a smirk, leaning against the wall in the red-carpeted hall by the kiosk, his legs crossed in front of him. He looked totally at ease.

“I don’t know. I mean, wasn’t he in the top two or three in the whole firm last year? I think he works pretty hard, considering.” Warren was tingling, all his radar screens lit up. Anson was looking for dirt on Dougherty. That could only mean Anson was trying to get him in his crosshairs.

“Considering what?” Anson’s tone was sharp all of a sudden.

“Seems to me he’s got more than enough money not to bother with this crap anymore. I’m surprised he even comes in half the time.” Warren figured Anson must know about Dougherty’s family.

“Aw, that’s all horseshit. Dougherty doesn’t have any money. He spends everything.”

“Anson, his apartment’s worth about ten times what I’ll make in my lifetime.”

“Maybe. But it belongs to his wife. I know he probably gave you that shit about his father. Don’t believe it. Bill Dougherty’s a typical Irish bond salesman. He’s in over his head.” Anson dismissed Dougherty with a wave of his hand.

“Well, assuming that’s so, what difference does it make? I mean, Bill’s carrying his weight. He may not be the smartest guy in the world, but he sells bonds.” Warren regretted it the moment he said it. He could almost see Anson filing away the comment: insulted senior salesman’s intelligence.

“Well, it just seemed to me that Bill had slowed down a bit, and I was curious if you’d noticed anything different, any change in his habits, or something. Maybe he just isn’t working as hard.”

“Hey, Anson, I can’t believe he works as hard as he does.” Warren didn’t want Combes to think Warren was an ally in any fight Combes might have with Dougherty. Bill had been at Weldon when Anson was in college, and in the jungles of Southeast Asia when Combes was hazing frat brothers. He didn’t seem like someone to bet against.

“Well, listen, just let me know if you notice anything different, if there’s anything I can do to help.” Combes gave a quick nod of his head as he spun on his heels toward the elevators.

“Uh, sure, Anson. I’ll do that.” Anson toasted Warren with his coffee cup, and turned away. Warren was flabbergasted.
If there’s anything I can do to help?
That was like a great white shark offering to help a wounded codfish to shore.

Warren went back to his desk and contemplated the conversation for a while. What on earth could Anson be up to? Was he trying to tell Warren that he would help him if he wanted to go after Bill’s account list? Was he intimating that Warren had something to do with it, and the whole thing was part of an attempt to blindside Warren? Besides, Dougherty’s production hadn’t slacked off at all. It had to be Anson looking through the trade tickets. But why? The whole thing didn’t make a lot of sense.

“Hey, Senator, what’s on your mind? You look kind of lost in the sauce.” Dougherty had rolled his chair back and was talking over his shoulder. Their chairs were back-to-back in the large, U-shaped enclosure made up of a sectional desk with two stacked rows of phone turrets, CRT monitors, and a Bloomberg machine that rose from their desktops and gave them what little privacy was ever available on the trading floor.

“Nothing much. Just thinking.” Warren had an urge to confide in the older man, to warn him that Combes might be circling, looking for a sign of weakness. Or, maybe Dougherty’s reaction to the news would tell him something.

“Well, try not to hurt yourself. It’s that mindless charm that your accounts love and I rely on.” Bill’s tone was jocular. Bill didn’t really do jocular.

“I suppose. I wonder what Anson wanted,” Warren said, taking a stab in the dark. Maybe Bill would give him some idea of what Anson was up to.

“Anson? What do you mean?” Dougherty swiveled his chair now, facing Warren, blocking the aisle.

“I don’t know. I think he was looking through your trade tickets the other night. In the folder.”

“Why would Anson be looking through my trade tickets? They’ve got nothing to do with him.” Dougherty’s voice had slipped up a half octave.

Warren shrugged his shoulders. “I dunno. Anyway, I’m not even sure it was him. Just a hunch. And he was asking about you. He seemed concerned.” Warren knew he was stepping over a line here, but he wasn’t sure what the line meant or exactly where it was.

Bill sat still for a moment, then let out a derisive grunt and waved his hand. “The day Anson Combes is concerned about anything except his own hide is the day I go to bond heaven. That guy…” Dougherty trailed off.

“Yeah. I know. Anyway, it was probably nothing.” Warren got up, having another idea he wanted to act on. Maybe he could get some information elsewhere. He gave Bill a slap on the shoulder and wandered over to the corner office that Combes used. It was empty, as he hoped, and Warren spent ten minutes chatting amiably with Ann Lois, his assistant, whose desk was in front of the glass door to Anson’s office. She handled everything for Combes, who was one of the few managers on the floor who had his own assistant. As the senior finance manager, Anson bridged the world between the mortgage finance group and trading. Warren had only spoken to her a few times before, but she always seemed embarrassingly grateful for human contact and asked personal questions to keep the conversation going. Anson seemed never to speak to her except to bark an order or ask for something.

Warren listened to a story about her son, who was getting ready to graduate from college. He knew she had lost her husband and didn’t get along too well with her son, but her cubicle was plastered with dozens of pictures showing him at every stage from infant to postadolescent. He had grown into an insolent-looking, beady-eyed kid. Warren offered to help him get interviews with some friends at other firms, and she thanked him profusely. He told her he had to get back to his desk and waved as he walked away. He had a feeling that she might have some idea what Anson was up to, or at least he might be able to get some idea by chatting with her from time to time. Malloran’s advice rang in his ears—he said to avoid Combes and Warren had tried to. But if something was going on, Warren decided he’d be better off knowing about it before it was too late.

eighteen

The Franklin Delano Roosevelt Drive runs down the East Side of Manhattan from the 125th Street Bridge to the South Ferry. It is the city equivalent of a superhighway, three slim lanes in each direction, no traffic lights or intersections, and virtually no recognition of any laws—natural, physical, societal, or, occasionally, even gravitational. In many ways, it was a road that was not unlike its namesake’s political party—wild, disorganized, never in good repair, but paved with the best of intentions, if not an even passable grade of asphalt. It was down that impacted artery Warren Hament, somewhat dazedly, rode every day—into the whirling tornado of paper and money that roared day and night at the tip of the island, seeming to pull all the light, air, and life from the narrow streets of the Financial District, and making anyone caught inside yearn for the open water and glinting sun of the harbor and the flats of Brooklyn beyond.

As you leave the broken highway and turn westward from the waterfront, the walls of office towers quickly close in, creating windblown canyons that tunnel across lower Manhattan at the odd angles of its seventeenth-century streets. From overhead, the buildings seem packed so tightly that all that delineates them is their differing heights and colors. Within the thousands of floors in the hundreds of buildings are the offices of virtually every major trading house in America. Hundreds of thousands of phone lines run to countless desks and computers, generating millions of phone calls, blinking lights, and moving cursors.

On one particular day, the single most important lightbulb in this electronic cosmopolis was the third from the top in the far left row of Warren Hament’s telephone turret. The phone had 128 lines, each represented by a small plastic push button that flashed when ringing and stayed lit when in use. The key button was a direct line to the Investments Office at the State of Wisconsin Employees Retirement Fund. At the other end of the line was the desk of Barbara Hayes, chief investment officer for the fund. She managed an investment portfolio of approximately $18 billion, which backed the pension obligations of the state to some seventy-five thousand present and former state employees. Bill Dougherty was her salesman at Weldon, and as his backup, Warren had responsibility for the state when Bill was out. The state was Bill Dougherty’s number-one account—in fact, it was one of the top three for the entire firm.

Warren had spent the bulk of his first full year working hard on his own accounts. Anson had kept nosing around Dougherty for a while, but then stopped. At the end of 1985, his first full calendar year at Weldon, Warren’s bonus had been almost exactly 15 percent of his commissions, not a penny more. He had grossed $3.2 million, and been paid $500,000 in total in mid-January 1986. Malcolm told him it was a record for a new salesman, and he was in line for more opportunity this year, and that he would have been paid extra for his work with Dougherty, but there was a cap. Warren had started to ask why no one had mentioned any cap, but caught himself. His wildest hope had been to make $100,000 in 1985 when he started at Weldon. His father had congratulated him for keeping his mouth shut. “People get killed for a lot less money than a half a mil, kiddo,” Ken had said. “You’re pretty lucky they gave you the shot.” Larisa had been ecstatic for him, pointing out that most of his classmates were lucky if they were making $50,000 or $75,000 wherever they worked. He couldn’t help feeling that he’d been screwed.

Barbara Hayes, by comparison, had started to work as an actuarial for the retirement system in 1978. Her job was to calculate and update the benefit schedule for all the pension liabilities of the employees’ retirement system, and to generate a cash-flow model. It was extremely tedious work and paid poorly, but like so many other state government jobs, it offered security, and a healthy pension from the same plan later on in life. With her accounting degree from the State University at Madison, she thought that being around the capitol might make for an interesting life, and the chance to meet some handsome young state senator or lawyer and to settle down. The five years of sitting at a computer console and working on spreadsheets, though, had led her to put on a good deal of weight, and her eyes had gotten worse, so that her modest looks had degenerated to a plainness that mirrored the tone of her job. The dashing young man had not materialized, and frustration and bitterness had begun to develop.

The previous fall, newly promoted to associate director in the Investments Office, she had been asked to attend a meeting with some investment bankers from Weldon Brothers in New York. The assistant to the chief investment officer, John Conklin, had invited her along because the “rocket scientists” from Wall Street wanted to discuss some fancy new technology that they said would solve a lot of the Investments Office’s problems in matching up their investments to meet their projected cash-flow needs over the next forty years. Nobody in the small group in the office understood that cash flow better than Barbara Hayes.

So Warren and Dougherty had stepped out of a taxi at the steps to the state building, in their crisp white shirts and expensive suits, standing out in the drab crowd on a cold, late-fall afternoon like a beacon. They’d brought Pete Giambi, from the Mortgage Research Department, since his Midwestern twang and polished, comprehensible presentation would make their suggestions totally credible. They had come to explain something called Portfolio Immunization and Optimization—essentially a computer program into which was fed the cash-flow payment characteristics of virtually every government, corporate, and mortgage bond in existence, and the cash-flow requirements of the client’s pension liabilities. After several hours of computer time, out would come the optimal portfolio—the magic combination of bonds that would meet the retirement system’s projected cash-flow obligations for the lowest possible cost. Warren and Pete did almost all the talking, while Conklin struggled even to pay attention.

As they spoke and moved through the charts and graphs, Barbara felt herself floating into a state of almost euphoric bliss. She suddenly became aware that this was her opportunity to become the fulcrum around which the entire Investments Office turned. Her boss had never paid much attention to the liability schedule. He’d just bought whatever bonds seemed cheap and what the salesmen pushed the hardest. All the technical jargon had passed him by. Her CIO, Bob Mosely, was constantly jabbering about cash being king and liked to spend long lunches with his pals in the statehouse. Only Barbara saw what these Wall Streeters were after. If they were allowed to run this program for the state, their firm would get to buy and sell every single security in the entire portfolio, a huge and probably unbelievably profitable piece of business. This would happen not only once, but potentially several times a year, as the system “re-optimized” the portfolio. Barbara Hayes, if she played her cards right, could suddenly become one of Wall Street’s most important customers.

“Tell me, Pete, if I were to send you a disk that contained our entire liability profile, do you think you would be able to tell us how much we are over- or underfunded at today’s rates?” Barbara had interrupted Giambi as he was answering an irrelevant question from Conklin about how the system had been set up.