Authors: Jay McInerney
Later that night she talked to Casey, who had just gotten back to the city from her house in Millbrook. "Tom is absolutely frantic about the market, he says we've probably lost half a million." Casey's tone indicated that, in fact, this sum was hardly worth a
giant
fuss.
"Did you
see
the
Post?
Russell is such a pig," said Casey, who had never liked him, feeling that Corrine deserved someone rather better and correctly suspecting that Russell despised her. With very little prompting she read Corrine the gossip-column sighting of Russell in the company of an unidentified blonde at a low-rent nightclub.
44
On Tuesday, October 20, 1987, a gray stretch Mercedes rolled slowly down Fifth Avenue, sliding past the mist-shrouded foliage of the park, followed by a smaller version of itself. The cars turned left, away from the park, and stopped in front of a limestone townhouse. Men in dark suits leaped out to reconnoiter the street. Two of them took up stations on either side of the front steps, their vigil slightly more tense than usual, both wondering if their jobs were secure. Although none of the men was intimate with the financial markets, it was nearly impossible not to be aware of the previous day's catastrophe. Half a trillion dollars had allegedly vanished in a day, leaving behind neither smoke nor rubble. So far as one could see, the buildings of the metropolis were still standing, and as the sun moved westward one imagined that the postmen would find the factories and farms outside the city in their usual locations, about to resume business. And yet this morning's headlines were funereal. The mysterious event was referred to as a "meltdown," a term evoking in many viewers disturbing associations of nuclear disaster.
As if in anticipation, Bernard Melman had become increasingly glum and testy through the early part of the fall, a phenomenon that longer-tenured members of his staff had seen before; he had retreated to Southampton for several weeks with doctors in tow, and had remained in his room while his security force lingered on the porches. Just a few days before now, Melman had returned to Manhattan, more subdued than usual.
At precisely six-thirty, the heavy front door of the townhouse opened and Melman appeared. He walked out to the edge of the steps wearing a severe frown above his customary double-breasted suit.
"Well, boys..." Pausing for effect, he suddenly produced a stagy smile, with the air of an amateur magician pulling a dove out of a hat. "Let's go to the office."
The men laughed with relief, and not only because they were paid to do so.
"Are we walking or riding," he asked no one in particular, cocking his head in a broad imitation of a quizzical pose. "I think we'll walk."
The bodyguards nodded eagerly, imbibing the boss's good humor. Apparently the world hadn't ended.
Halfway up the street he stopped abruptly. "Boys," he said. "I want you to be extra vigilant today." He pointed up to the sky. "Watch out for falling stockbrokers."
As they strolled down Madison, Bernie Melman's step was sprightly, his pace aerobic. Like a sports fan who is happiest when players try to kill one another with hockey sticks or when stock cars kiss the wall and burst into flames, he seemed invigorated by catastrophe. He believed he had the common touch, which indeed he had with everyone in his employ, and when he was in an especially good mood he liked to share his views on life.
"This is a great day for shopping," he announced, halting to look in the window of Sherry-Lehmann, the wine merchants. "The smart shoppers wait for prices to fall. America's having a fire sale today. Whoa, let 'em pass," he said, gesturing for his men to make way for an elderly couple tottering up the avenue.
"What some people fail to realize," he resumed, back on the march, "is that wherever there are losers there are also winners, right?" He slowed his pace dramatically, nearly bringing the procession to a halt. "The trick," he concluded, "is to be among the fucking winners."
As expected, Carl Linder did not quite share his employer's optimism. Melman sometimes thought he kept Linder around only because his basset-hound mien always made him feel happier by contrast. "Why the long face, Carl," he asked when Linder limped into his office for their breakfast conference, though his expression was no gloomier than usual. "I'm fine," he muttered.
"You're not worried, are you?"
"Not especially, but I do think we should be careful. The economy's staggering. People are worried. Even if you came out okay yesterday, you don't operate outside of that context. We've got to be worried about the long-term prices of all those bonds you're holding."
This said, Linder was still happy to see that Melman had risen out of his colossal psychochemical funk. He was also pleased that Melman, in his depression, had anticipated every form of doom and disaster for himself and the planet and had ordered a big selloff of assets.
"This isn't 'twenty-nine," Bernie said. "Everybody's bank accounts are guaranteed by the FDIC, basic indicators are sound. This should scare some sense into those boneheads in Washington about the fucking deficit. And we shorted the market two weeks ago. So smile."
"What about Corbin, Dern?"
"I'm about to take care of that." He asked his secretary to get the banker responsible for the bridge loan on the phone.
The credit officer sounded extremely nervous and harassed. "Jesus, Bernie, this is one hell of a mess. How do you stand?"
"Not a care in the world, pal. You sound a little frantic, though."
"I'm about to go into a meeting," the banker said, adding significantly, "We're going to have to reevaluate some of our loan commitments in light of what's happened. "
"That's exactly what I wanted to talk to you about."
"I'm afraid we may have to reconsider the Corbin, Dern."
"I agree one hundred percent."
"You do?"
"I want you to withdraw the financing."
"You
do
?"
"No, I'm joking, what do you think? Of course I do, and I want a letter from you to that effect this afternoon."
"Sure. You got it," the banker said happily. "Can I ask why?"
"Just get me that letter. And I'm sure you can understand why we never actually had this conversation."
"Let's just say I want to renegotiate," Bernie explained to Linder after he'd hung up. "The tender offer is subject to financing. No financing, no deal." He had decided to submit a new, bargain-basement offer once the bank pulled out of the old deal, then presell the textbook and children's divisions, trim half of the staff away and possibly tap Harold Stone to run the new, leaner operation.
"Very brassy," Linder observed.
"Just reacting to the new business conditions, Carl."
Pacing her office in Rockefeller Center, Trina Cox was not nearly so sanguine. She hadn't been hit directly—working in M&A, she had scrupulously shunned the market in order to avoid conflicts of interest—but it was the aftershocks she was worried about. Whether the market recovered or continued to plunge, it was a hell of a time to be opening a business. And she also worried about her new rabbi, Bernie Melman, who suddenly had become unavailable to take her calls. Up to this moment, her timing had been impeccable. If she'd remained at Silverman she would at least have been a little less exposed. On the other hand, if Bernie stayed behind her she was as secure as anyone on the street.
Trina's secretary arrived at seven with coffee and doughnuts looking hung over and frightened. "Do I still get paid to be your slave," he asked.
She shrugged.
He scooped up the phone as it rang. "Bernie Melman calling for Trina Cox," he squawked, deftly imitating the accent of Melman's secretary.
"You'll know in a few minutes," she said, taking the phone.
"The thing is, Trina, whenever there are losers there are also winners. I backed you because you strike me as a fucking winner."
After the chitchat Trina sensed they were coming to the point.
"I like to think I'm a winner, Bernie."
"I want us to continue our business relationship. Let me just lay out a hypothetical situation for you. Given the stock market situation, I think it's quite possible that our lenders may not want to back the current offer for Corbin, Dern. They may not think the company is worth what we offered for it, and they may be right. Which could give us a clean slate to go in and make a lower bid."
"Sounds good."
Bernie cleared his throat. "When I say clean slate, I mean clean, right? I'm afraid I've lost confidence in our management team. Calloway's a bright kid, but I don't need a fucking literary Eagle Scout to run this company. We need a fucking grown-up. Do you have a problem with that?"
With a slight, quickly suppressed pang, Trina said, "Nope."
On Wednesday, Russell took three calls before attending the memorial service for Victor Propp—whose official cause of death, he'd learned the day before, was "massive coronary." The first was from Trina Cox, who informed him that the financing on the Corbin, Dern deal had fallen through in light of Monday's events and that therefore, effectively, the deal was off, although it was possible that certain parties might make another offer, subject to the new financial conditions and possibly with new personnel arrangements.
"Any possibility I'd be part of the new deal," he asked.
"Just between you and me, Russell, not a fucking chance."
"It was fun," he said, trying for a conclusion.
"Could've been a lot more fun, if you'd really gone with it."
"Probably."
"Let me tell you a secret, Russell. It's them against us."
"Them?"
"The short, unattractive men who run the world."
"That's the secret?"
"Absolutely. Winning is never going to matter to you as much as it does to them. So—you lose."
"Thanks for the insight."
"Do you mind if I ask you a question? When we were in Frankfurt that night—I'm just curious—I asked you what I consider to be a nice question, a very selfless proposition, as it were. Do you remember your answer? You said, Taint my house.' And you laughed like it was the funniest thing you ever said. What the hell was that supposed to mean, anyway?"
The second call was a margin call from Duane Peters, his elusive broker, asking Russell to cover losses on his stock holdings, in particular the massive hit he'd taken on his leveraged block of Corbin, Dern.
"Where were you for the last two days, you bastard?"
"I was on the phone."
"Not my phone, you weren't. "
"Do you have any cash?"
"Of course not."
"We'll have to sell off stock. I'm trying to get a quotation on Corbin, Dern. I'll call you back." When Duane did call back, Russell learned that CD had lost forty percent, leaving him, after the margin call, with an eighty-percent loss on borrowed money.
The third call was from a lawyer, a Weston Strickley, informing Mr. Calloway that he represented Mrs. Calloway, who wished to have copies of the records of all of his financial transactions for the year 1987, with particular reference to securities transactions in the past month, as well as the names and numbers of any and all offshore accounts. If Mr. Calloway failed to provide these, a court order would be forthcoming.
An hour later a scrofulous, red-faced man handed Russell a smudged subpoena that barred him from liquidating, transferring or in any other way disposing of marital assets, including securities.
45
Born in the Midwest, an adoptive easterner, Russell harbored the traditional suspicions about southern California. He imagined it to be the headquarters of cult religions, health fads and Babylonian decadence—the last being the substantial attraction. He didn't see how you could really be serious about anything when the sun was always shining idiotically. Nevertheless he hoped the West Coast might represent an evolutionary step up from the bad faith, bad conscience and smug sophistication of New York—the outer edge of the whole migration away from history, culture, Europe.
Stepping out of the terminal at LAX two days after Thanksgiving, he felt a charge of erotic potential in the hot, smoky air. It was a radical transition from Michigan, where he had just spent a gloomy bachelor Thanksgiving with his father and recently engaged brother. From the limo, courtesy of his new partner, Zac Solomon, he spotted a sign that said nude cocktails over a squat bunker on the edge of a field rhythmic with oil wells—a flock of prehistoric birds pecking the earth blindly.
La Cienega ran in a straight line to the Hollywood Hills, although the landscape faded and blanched out after a mile or so and they drove fifteen minutes before Russell saw the dark line of the hills emerging through the smog directly in front of them. Parched and sharp against the sprawling, populous flats—like the backbone of a starving hound—this long ridge did not look particularly hospitable, but up along the switchbacks the world below disappeared; brilliant gardens and blue-green pools flourished in the rock crevices. Russell's hotel stood on the edge of the hills, just off Sunset—a literal translation of a Loire Valley castle towering above the palm trees, a fantasy realized, Russell was told, in 1929.
In the midst of all the sunshine and newness, he was happy to find his hotel comfortably tattered, run-down and full of cool, stale shadows. Increasingly, the residential suite—with its mismatched veneer furniture, ancient kitchen appliances and atrociously orange, perpetually damp carpet on which grew an as yet unclassified strain of moss or lichen—was a refuge from the dazzling brilliance outside. Years before, he'd moved to New York believing himself to be penetrating to the center of the world, and all of the time he lived there the illusion of a center had held: the sense of there always being a door behind which further mysteries were available, a ballroom at the top of the sky from which the irresistible music wafted, a secret power source from which the mad energy of the metropolis emanated. But Los Angeles had no discernible center and was also without edges and corners. Russell didn't get it—this riotously overgrown suburb of his unmourned Midwest, plunked down on Cap d'An-tibes. He was grateful to be lodged up against a hill, even if only his back was resting against something solid.