Money to Burn (8 page)

14

I
CAME TO MY SENSES IN THE ELEVATOR
. O
F COURSE
I
WANTED TO
take my case to the airwaves and give
everybody
hell, not just Chuck Bell. But I also still wanted to have a job at the end of the day.

Keep your cool, Cantella.

It was the Kent Frost effect. The guy just had a way of setting me off.

Fortunately, our paths didn’t often cross. The subprime alchemists worked in their own building, three modified apartments on Manhattan’s Upper East Side. The official name was the Structured Products Division, but everyone called it the CDO factory—collateralized debt obligations. I’d gone there only once, last October, just to check things out. Luckily, Frost had been out when I arrived. I got thirty minutes alone with his financial engineer—a Twinkie-eating, twentysomething geek named Wayne who spent every waking hour staring at trading screens. It positively thrilled Wayne to find someone willing to listen to him talk about what he did all day long. We went straight to the latest data, and Wayne gave me a primer on the sixteen million subprime mortgages in Frost’s CDO factory.

Frost had his suppliers all over the country: banks and mortgage companies that loaned money to people like that Bahamian taxi driver Ivy and I had met in Miami—borrowers with credit scores under 500 and no money for a down payment, no income to make their mortgage payment, and no business having a credit card, let alone a half-million dollars or more in subprime mortgages. The lenders didn’t worry about it because they immediately sold those toxic mortgages to Frost and others who pooled all of them together into mortgage-backed securities. Frost didn’t worry about it because the theory was that not
all
the mortgages would fail, and Frost spread the risk even wider, taking little slices from lots of different mortgage-backed securities to create CDOs, which he sold to really smart investors like insurance companies and pension-fund managers. The smart investors didn’t worry about it because they controlled the global pool of money—about seventy trillion dollars—and they were earning 10 percent returns instead of the measly 1 percent that the Fed was offering on T-bills and other safe investments. If the really smart investors wouldn’t buy them, Frost still didn’t worry, because little towns in places like Norway or Iceland would. They were always looking for “safe” investments, and Frost had no trouble getting the Triple-A stamp of approval from the rating agencies, who based their ratings on mathematical formulas that assumed home values would continue to rise 8 percent annually in perpetuity. That was like an insurance company writing life insurance policies based on actuarial tables that assumed the insured would never get sick, never get old, never die. All I could figure was that those rating geniuses had been under the influence of triple shots of tequila.

“I’m getting a little nervous,” Wayne had told me, “because we’re starting to see something we’ve never seen before. Borrowers defaulting on their very first payment. It’s weird.”

It wasn’t weird. It was the burst of the housing bubble. Taxi drivers in Miami who counted on flippin’ one flippin’ condo to pay the flippin’ mortgage on their next flippin’ condo suddenly couldn’t flip a flippin’ thing. I started to explain this to Wayne, but that was the moment Frost returned to the CDO factory, physically pushed me aside, and chewed out Wayne for showing me the data.

“Get the fuck out of here!” Frost had told me.

The “conversation” had gotten much uglier than that, ending with me charging out of the factory and swearing on my mother’s grave that I was “not going to stand by and watch one greedy son of a bitch fly the plane into the side of a mountain.”

It may not have been the perfect metaphor, but with Saxton Silvers stock in the tank this morning on the heels of yet another subprime write-down, it just about summed things up.

“Forty…two,” said the mechanical voice in the elevator.

That was my floor, but I decided to stay in the car and pushed nineteen. Sonya had pulled Cool Cash off the trail of my stolen money, but she’d put no restriction on my using the firm’s internal security force. This was a sensible application of the “Better to ask for forgiveness” rule.

“Going…down,” the elevator voice said.

As the doors were closing, I spotted a familiar old man in the reception area. I couldn’t believe my eyes, but I hit the Open button too late, and the elevator started downward. A flurry of button punching brought the car to a stop. I got off on forty and ran up two flights of stairs, but the reception area was now empty. I hurried down the hall to my office and found him standing at the window, taking in the view of Midtown.

“Papa?”

He turned. “Surprise!”

I went and gave him a hug. “What are you doing here?”

“We’ve come to celebrate your happy birthday, of course.”

Papa never celebrated just birthdays; it was always “happy birthdays,” as if the two words were a single, inseparable noun.

“Got here for free, too,” he said. “Remember those frequent-flier passes you gave us?”

“You were supposed to use those for a trip to Europe.”

“Been there once before. Ended up having a pretty miserable time at a beach called Omaha.”

I heard the toilet flush in my private bathroom, and Nana stepped out. It was her first stop wherever she went: big heart, small bladder.

I gave her a kiss, and the three of us shared a group hug. It had been three months since I’d last visited them in Florida, the longest stretch in years. They never seemed to change, which was what I loved about them. The bruise on Papa’s forehead, however, was definitely new.

“What happened there?”

“Ah, nothin’.”

Nana busted him. “Your grandfather isn’t seeing so well at night lately. Refuses to get his eyes checked. Walked straight into a lamppost.”

“Ouch. That had to hurt.”

He leaned closer, as if to let me in on a secret. “It’s all about attitude, dummy.”

We shared a smile. He truly lived by that creed. When throat cancer left him with just one-quarter of a single vocal cord, he had to train himself to speak in a voice that no longer sounded like his own. Naturally, Papa had been the first to joke about sounding like Marlon Brando in
The Godfather
.

“So cancel your noon appointments,” he said. “It’s your happy birthday, and we’re taking you to dinner.”

“You mean lunch?”

“No, I mean dinner. When you get to be my age, dinner is at noon.”

My heart sank. For the first time in my life they had pulled off a surprise like this—and they couldn’t have picked a worse day.

“Papa, I’m really sorry, but—”

“No excuses. Your grandmother and I are taking you to the finest Italian restaurant in New York City.”

In my book, that meant Il Molino, but Papa was the kind of guy who could win the lottery and still agonize over buying a new pair of shoes every two years. On a day like today, it made me realize why they called his the greatest generation.

“We’re doing Sal’s Place,” he said. “Marie, give Michael his happy birthday gift.”

Nana pulled a teddy bear from the shopping bag on her arm. S
AL’S
P
AL
was stitched on its big belly, and when Papa poked it, the bear sang out like a mechanical Dean Martin:
“When the moon hits your eye like a big pizza pie—”

“That’s amore!”
sang Papa.

It was suddenly impossible to breathe a word to him about my identity theft. “Papa, I promise we’ll do lunch together, even if we have to order in from Sal’s and eat here in the office. But the next two hours are crazy for me.”

“You do what you gotta do,” he said—one of those expressions that really did make him sound like the Godfather.

My phone chimed with an e-mail from one of my analysts. “Check out FNN,” it read. A sense of dread came over me as I switched on the television in my office.

“Wonderful,” said Nana, “I can watch my soaps.”

“Uh…exactly,” I said, handing her the remote. I promised to return as soon as possible, then bolted down the hall to the nearest conference room. FNN was playing for a handful of staff who looked seriously worried.

“Is that Chuck Bell on the trading floor?” one of the secretaries asked.

It was. Chuck Bell had taken his show from the studio and was broadcasting live from the floor in the New York Stock Exchange. The commotion behind him naturally lent an air of excitement to “this special edition of
Bell Ringer
.”

Another signature FNN banner scrolled across the bottom of the screen, the knife-to-the-heart update once again punctuated with the cover-your-ass question mark: “R
EPO LENDERS NOT RENEWING OVERNIGHT LOANS TO
S
AXTON
S
ILVERS?”

“As I first reported in October,” said Bell, “the internal crisis at Saxton Silvers is personified by two of the president’s protégés, Michael Cantella and Kent Frost. It seems Cantella was talking in Volke’s right ear while Frost had his left ear. It all came to a head early in November when a blast e-mail went out from the residential mortgage desk to the banking industry, announcing that Saxton Silvers was getting out of the subprime business. Sources tell me that Michael Cantella was a major force behind that announcement, even though he had no direct role in the subprime business.”

Bell was dead-on accurate—and I was beginning to get a little nervous about his “sources.”

My cell rang. It was Eric from his office. He had me on speaker.

“You watching FNN?” he asked.

“Yes.”

“I need you there.”

“What?”

“That bastard Bell will try to corner one of our traders and get him to say something live and on the air that’ll make this worse than it already is. I need somebody I can trust to make sure that doesn’t happen.”

I needed to meet with Saxton Silvers’ director of security and—now that I didn’t have a lawyer—do my own follow-up with the FBI.

“Bell’s not allowed to interfere with the floor traders,” I said, knowing immediately how lame that sounded.

“Well then, he’ll fucking follow them to lunch. Damn it, Michael. All I need is someone I can count on to go downtown and stop Bell from pulling off an ambush.”

“I’ll do it,” I heard Kent Frost say over the speaker. I didn’t even know he was still there.

“No,
I’ll
do it,” I said.

“Good, keep me posted,” said Eric.

He hung up, and as I hurried to the elevator, my cell rang again. It was Papa.

“Michael, you know I never pressure you, but Nana just noticed that these ten-percent-off coupons I got for Sal’s are good for in-restaurant dining only.”

“Papa, something’s come up. I can’t do lunch.”

“Oh. Well, all right,” said the Godfather. “You do what you gotta do.”

The disappointment in his voice was far worse than my financial worries. “How about dinner?” I said.

“Sure. Sal’s Place?”

The elevator doors opened, and as I entered the car I knew I was about to lose my signal. “No, not Sal’s,” I said.

“But—”

“Let me pick. It’s my birthday, right?”

“Your
happy
birthday,” he said. “Sure, you pick.”

The elevator doors closed, and I lost the call. As I rode down, I probably should have been thinking about identity theft, burning envelopes, the firm in crisis, and Chuck Bell. Instead, I was thinking about Sal’s Place.

Sal’s had once been one of my favorite restaurants—mainly because of Papa. After my last visit, however, I had vowed never to return. I blamed my bad experience at the time on an unsettling exchange with a stranger. Now, given today’s events, I was starting to wonder if anything was random.

It was the first week of November—coincidentally, two days after Saxton Silvers announced the end of its subprime business, the controversial blast e-mail that Chuck Bell had just resurrected on FNN. I was seated alone at a small table for two, waiting on an order of linguine with clam sauce, when the stranger sat down in the wooden chair across from me. I was pretty sure I had never seen him before, but I was certain of this:

I would never forget him.

“Another beautiful day in paradise,” the man said.

It was a warm day for early November, and I was seated near the open French doors at the front of the restaurant. I looked up from the newspaper I’d been reading. A quick glance around the restaurant confirmed that there were plenty of open booths and tables—no apparent need to share with a stranger. That was strange enough, but it was his words that had taken me aback.
Another beautiful day in paradise.
That was what Papa always said as he headed out of the house for his morning walk.

“Do I know you?”

“You tell me,” he said.

I looked at him carefully. He had piercing ebony eyes, and the dark complexion fit the hint of an accent I detected. It sounded Indian, though I knew from my business travels that it was difficult to generalize about a country that had twenty-nine different languages that counted more than a million native speakers. In any event, it was his appearance more than his voice that defined him. His build was that of a weight-lifting fanatic—someone who worked out not for the health benefits, but because he liked to intimidate. His hair was hidden beneath a black knit beanie, but the sideburn on the left side of his face was longer and thicker than the one on the right. A broad scar or some other deformity started at the right earlobe, continued under his jawbone, and disappeared somewhere beneath his black turtleneck sweater.

“I’ve never seen you before,” I said.

He reached inside his coat pocket, pulled out his wallet, and removed a hundred-dollar bill. He flattened it out on the table, rather ceremoniously removing every last wrinkle. Then he held it over the glass votive on the table, not actually putting it in the candle’s flame, but it was dangerously close.

“Watch,” he said.

My gaze fixed on the crisp bill resting atop the glowing votive. A black circle emerged beside the image of Benjamin Franklin as the candle scorched the underside. A wisp of smoke appeared, and suddenly the yellow flame poked through the watermark. In another second, the bill was burning like dry tinder.