Dear Money

by Martha McPhee

  "No wonder you love it here," Theodor said.

  On the beach the next day, the sun warming me, the spray of the sea, I thought of the yellow plane swooping down from the sky. A light wind rippled across the water and an enormous fish jumped, then another, taut and silver. The girls ran over to us, clamoring about the seals they'd seen, twenty lazing in the sun on the rocks of Fox Island. Ruby's fists were filled with sand dollars and Gwyneth told Ruby they weren't really dollars, causing her to whine and complain. Elisabeth and Catherine kissed their mother and ran to the water, diving easily into the cold Gulf of Maine. My girls followed, diving too.

  They loved it here. They were free to roam and explore. Not far from the girls a giant tree trunk rolled in the waves. The tide would bring it to shore, and Emma would rally all of us and some neighbors to haul it to the dunes, where it would become part of the gate she was building, an elaborate stand in driftwood that marked the entrance to her house. She'd told me it was a futile effort, one they'd need to repeat the following year because the winter storms would wash it away. But she loved the exercise—it would become an annual ritual, the repetition that would define the beginning of summer, that seemingly never-ending span of time across weeks and months and years.

  "After you win your bet," Emma asked, "do you think you'll stay on at B and B?"

  "Who says I'll win?"

  "Oh, you'll win."

  "I haven't been tested yet," I said. I thought back to last night's dinner and the talk of exotic mortgages, and I looked at Emma now, wondering if I could see a fissure there, knowing that as with marriages, we never know the truth of people's financial lives no matter what they try to project. Watching her, trying to read beneath the surface of her, I felt a kinship to all the people who had studied me before when I was an artist, trying to make sense of Theodor and me, of how we afforded our lives.

  "Do you miss writing?" Emma asked. She knew she was repeating the conversation of last night, pushing deeper. This wasn't about the writing, though, or about me. There was something sweet and naive in her that I hadn't noticed before.

  "Honestly, I don't have time to miss it. I love that—that there isn't enough time anymore for all the worries I could drum up."

  Emma looked at me quizzically, a look that indicated that Will didn't fill his writing time with worry—or, if he did, he didn't share much of it with her. The look also seemed to indicate a new understanding of me, a sympathy, another layer revealed, that she hadn't realized how comprehensively unglamorous the "writing life" was. Perhaps I had seemed composed to her, perhaps it had seemed that my system had worked—the mechanics that had made an artistic life possible. But in this light, like shantung silk, the hue exposed another hidden shade.

  "Did you go to Win because you were concerned ... about money?" she asked.

  I tried to laugh the question off, but she persisted, with her eyes on me. For the first time in our relationship I saw worry's fragile lines appear softly on her face. Or did I? Emma always seemed to have exactly what she wanted, even with her husband's huge career change. Behind her stood her regal Victorian cottage, a backdrop against which her petite figure, curled in her terry beach robe, reigned. House of cards or not, exotic mortgage or not, it was hers. She'd spent a springtime making this home into what she wanted it to be. I could see it then, as I would see it clearly later, that she was the sort of person, even in loss and challenge, who would come out ahead, with dignity—the knowledge that she was always doing right by herself and her family.

  "I liked the challenge," I answered. Radalpieno came to mind, his interview, his demand that I state how much I wanted—how much I loved—money.

  "I think you were incredibly brave. I can imagine the pressure you were under," she said. Then suddenly and matter-of-factly, "I spent too much redoing the cottage. Will was furious, in his way, for a few days. But it will work out. It always seems to." Then she pointed to the island floating just offshore, leaving me no space to comment on what she just offered. She said that back in the 1960s, the island had been for sale for $3,000. The land had a beach at low tide and a tall stand of spruce that protected it from the ocean. It was going for $2 million now.

  "When you make your gobs I want you to buy that island," Emma said. "I want our houses to face each other. I want our girls to paddle canoes back and forth." The jump in value—of the island that would be mine so that we could be here together—was her way of explaining how it would all work: the undeniable fact that, renovated now, her house would be worth more.

  I could picture the dream, our houses facing each other. A seal bobbed his head not far from shore, a fish leaped. The deep sapphire of the sea shimmered and foamed, the waves rolling in, crashing over the girls, who laughed and raced with buckets of sand to shore up their castles, startling in that clear afternoon light.

  Fifteen

  THE MORTGAGE UNIVERSE is divided into three areas: Agencies, Securitized and Unsecuritized. Mortgages are part of Fixed Income, which, with Equities and Prime Services, make up the division of Capital Markets. My area was Agency MBS, the most basic kinds of mortgage bonds, all agency-securitized mortgages, backed by pools of home loans acquired by regular, hard-working people. Nothing exceptional, nothing too risky.

  These were not the mortgages that bought the fancy New York apartments and the million-dollar summer cottages in Maine. These mortgages had limits. In 2004, they couldn't go higher than $417,000. My desk of six traders dealt in fifteen-year and thirty-year fixed-rate Fannie, Freddie and Ginnie Mae bonds. On my desk we were both market makers and proprietary traders, but our first function was as market makers, to provide liquidity to the firm's institutional client base. But there was also a certain amount of balance sheet and risk capital committed to my business, with which I tried to make money in my sector and with the products I used to hedge (Treasuries, futures, swaps, options, Fed fund futures, Eurodollars). Among the six of us in three books, we made anywhere from three hundred to eight hundred trades a day.

  Starting out, I traded things with less "lossability" so I could get the feel of things. Even so, you could lose a lot by making a simple mistake or, worse, by hurting a customer relationship. To have a basic sense of all this took about six months. I learned the language, and mostly I observed. Eventually I'd come to understand that none of the most important parts of the business could be learned. Just as great writing can't be taught. It was more elusive than, say, learning to be a bookkeeper. So much had to do with subtlety, with understanding what people were willing to pay for bonds at a range of interest rates, synthesizing recent transactions in order to establish value, feeling the dynamics of the market and, of course, getting to know the players, developing relationships. Relationships took longer.

  In Win's scheme, through his connections and the fast brain he was betting I had, what he wanted to see was a remarkable ramp. He wanted me to go from $150,000 to $1 million a year. He knew I'd have some obstacles: first the learning curve, then the people who would be against me because I was an anomaly. I didn't belong there. I hadn't worked my way up the ladder for it. I was the novelist, the game, the ultimate bet, and perhaps not everyone wanted to see Win win. The challenge was to turn me into a solid trader in eighteen months. What I hadn't understood was that the bet would keep on going; he'd continue to up the ante if I performed as he predicted in the first year.

  By eight months, I was just where he wanted me to be, on the desk, above the analyst but the lowest of the associates, and he was well on his way to winning the bet. I was stepping in when things got crazy, pricing and trading, working my way ever higher on the trading scale. To begin with, my trading limit was modest, but by October I'd reached the $250,000 mark, meaning I could handle trades with that much lossability. Even for an institution that could write down billions and have just as much in profits, $250,000 would be a significant loss.

  In order for me to fit in, in the beginning Win instructed me to "play young." He didn't want me carrying on about the
daughters or the husband, no pictures of the family on my desk, no chat of the weekend soccer games and lacrosse tailgates, ballet lessons, report cards, nanny woes. So at home April was instructed to take over. She already ran our life, but now it was official, along with a raise. She was in charge of all lessons, playdates, homework, food shopping, doctors' appointments, etc., etc. I was generous with her, one of the new perks of the job that I thoroughly enjoyed. "I prayed for you," April told me, happy with the changes. "Every night I prayed, and I taught your daughters to pray too." It is astonishing how fast we can adapt. I had thought I'd miss the girls and that it would be unbearable to spend so much time away from them. But my absence allowed for Theodor's presence, and we all settled into our new circumstances.

  Play young; that is, stay focused, hungry. Only objects that would make me race belonged on my desk: hot chili sauce from Belize, for example—brought back by Kathy Park from her vacation there—to remind me that the rush was what it was all about; a jaguar figurine; a picture of the Rolling Stones from the Sticky Fingers days; a racecar; a pair of stilettos. Snake had his mother's curry powder in a little glass jar; Maxi had a framed pencil sketch of his favorite racehorse (before Maxi was sent back to the paddock and I assumed his seat); Tiger had a picture of his girlfriend in a bikini, staring right at him with a pleading little twinkle. Josh had his movie stars, the lassoed Clint and Winona the thief, because he liked the exhilaration of escape and the beauty of second chances. Sam had a miniature silver lacrosse stick, given to him by his dad before he'd dropped dead of a heart attack; he'd been second in command to the New York police commissioner in the 1970s. Sam also had his father's badge, which he flashed when a cop pulled him over for speeding. Gus, the Korean, had figures and equations, written in his neat hand, taped to the edges of his monitors: prepayment models, simulation-based pricing of MBS, OAS adjustment, convexity of MSR portfolios—sexy. Gus was the analyst, earnestly doing his job. Of the lot, he spent the longest hours at the desk on weekends. On my desk I also had a few Monopoly houses and hotels.

  Win asked what I really wanted and how badly I wanted it. "There's no other way to put this, so I'll give it to you straight. What's going to make you hard?" he asked. "Or its equivalent."

  "Wet?" I smiled, giving it right back to him. ("That's what he likes about you," Snake had said, "that you'll tell him to fuck off right to his face.")

  "No. Hard. And fast. Welcome to the man's world."

  It was like some weird tantric position involving money and risk and exhilaration and the ever-present moment of the bet. For what was a trading floor if not an organized (and legitimate) institutionalized casino, a context for transforming amorphous desire into the fungible, into substance, into certificates, into coupons, into commodities, into cold hard profit? TODAY COULD BE THE DAY. That's what all the trains in Penn Station say. And I was not immune. I wanted a mansion like Isabella Power's. I wanted to complain about my mirror not fitting through the door—or at least be able to if I chose to. I wanted to be a part of the conversation that had embraced New York, America: "If you own something," our President once said, "you have a vital stake in the future of our country." Weren't we all, or at least 70 percent of us, caught up in this myth? So I felt the change from the optative to the indicative. I also wanted to show—prove—that I was capable of working hard, long hours at an office like all those other people and pull in the means to afford whatever it was I wanted.

  It was no longer a matter of if, just when. And this was the force of Win's question. One needed a mantra or talisman of some sort. The when, the mystery of When. The arrival of the drive and the force and the motivation and the perpetuation. The momentum. The Mo. It's what made the trading floor go—getting it right. Profits and losses recorded in black and white, and successes measured objectively.

  By mid-fall 2004, as Win's protégée, I shined—even if I was still untested. I flushed with the desire. I wanted to be here. I had learned how to get hard. And this, this surprising inflection, in all seriousness, was why I began to dream that I'd be making the big trades, that Paramount (a client) would be calling on me, asking me to do the deal. This was why I got out of bed every day at 5 A.M. This was why I had no regrets telling the university that I wasn't coming back. "I'm sorry, but I'm hard," I wanted to tell the dean, the bespectacled 4 P.M. cochair of the breakout session of the Interim Committee on Curriculum Development. I was J. P. Morgan. I was Davy Crockett. I'm sorry, I'm going to make the sun rise. I would find the secret lever that made the world turn. I would, as they say, amass wealth. And that accumulation would generate its own gravitational pull, the way winning breeds more winning, bringing with it more money. I could smell it. It smelled of rain-washed streets and gun metal and sounded like the tumblers of a safe clicking into place for me.

  What I didn't know yet was that the drive has to be tempered. Yes, it was good to be hard, but you shouldn't get crazy hard. You had to see, to perceive. It's a system of checks and balances, like the writer who has to constantly balance ego with self-doubt to write well. Self-doubt, however, is not a term used on the floor. On the floor we called it "mastery of emotion," and we understood, by what was not said, what we meant by that phrase. The hardest challenge is the split-second judgment you have to make, the decision that comes from some subliminal input you don't recognize. That's what makes the difference. The more centered you are, the more capable you will be of making those decisions.

  You can't be trained to do that. You just have to be exposed. You develop an abstract sense of how the market reacts, an art that cannot be specified in detail, cannot be transmitted by prescription, since none exists. It can be passed on only by example, from master to apprentice. Since Win wasn't actively trading, my master was Snake. He was poised, elegant, with his sleeves always buttoned, never breaking a sweat, quiet. Sometimes in the middle of a big trade he looked so at peace you'd think he'd just finished a yoga class, had an extra-long shavasina, index finger and thumb pressed together—"dialed in," we called it, to the gods of Pythagoras and the gods of Las Vegas. It didn't matter that chaos swirled around him, that Tiger (second in command of our seat), who was riddled with impatience, kept his nervous leg pounding into the dull carpet like an outboard motor, propelling his vessel. (No wonder he didn't drink. Drink would have ignited his already boundless energy and sent him off the reservation.)

  Not all traders were like Snake, in fact very few. But the really good ones were. The higher the stakes, the calmer they seemed to become, as if listening to music playing from the bottom of a well. The stories of the trader who throws chairs, screams at people to fuck off, who slams phones and kicks in walls—sure, they existed too, in larger numbers. Indeed, they weren't relegated to the past, those stereotypical 1980s traders. But Snake was one of the really good ones. The calm was his edge, his advantage, his secret, his trademark. Generally star traders don't reveal their secrets, but even if they did, it would mean little because it's a gift. Watching and listening as the trader connects disparate facts is the only possible way to learn, like the writer who studies the books she reads to understand how they are made so she can steal various tricks for her own work, applied with her own innate talent. At a certain point, therefore, the novice has to be thrown into the fray and start trading for herself to learn what her style and secrets are.

  Which brings us back to used cars: Toyotas and Hondas and Fords. No Mercedes-Benzes, no BMWs, no Bentleys—those belonged to securitized traders, the higher-value realm of the mortgage universe, the terrain of mansions and penthouses and their requisite jumbo mortgages. Toyotas—I was consumed by them. I cared about pricing Toyotas, and I was good at it. I trusted my gut, and for a streak I was correct. So I'd have a lot of Toyotas to unload. I'd know the client who wanted to sell them and the fund that wanted to buy them. I'd be asked to price the trade (say, offer 100mm FN 5s June [Toyotas]). I'd put my level on it (97–04). There'd be the dance with the client, the sweet tones and chirping, trying to get me to lower
my level, wheeling me with flirtatious banter and male bravado, trying to convince me the better price was 97–02.

  For example, Robert Shane, with a potbelly so big he could balance pens on it (which he did). Three kids. A wife. I'd seen him throw back one too many, many times. He was a simple guy, liked Jack Daniel's. And through his loose tongue I came to know that the petite wife with tight curls and a skinny, chiseled face found meaning in her life by running the Parents' Association at the kids' school. He had two daughters with severe crushes on Ashton Kutcher (Shane wanted me to speak to his girls, come over for a family dinner, tell them what it was like to be a woman on the Street); his boy was a toddler, already wielding toy guns and sabers, a talent that the dad perceived as a sign of his son's intelligence, how far he'd go. I sat there over cocktails and stoked the stories, asking for more details, laughing when he did, envisioning his boy, trying to make Shane feel singular, unique. My interest was genuine. I liked these people. They were good people, all out for the same end—good, hard-working souls who'd been taught the most direct route to American happiness, and here we were in a bar, stoking it with commentary on and admiration for little Bobby Shane Junior's deftness with a light-saber. I was soft and kind, so in the beginning people thought I'd be easy to push around, but it was simply my armor.

  "Sold to you," I say now on the phone, which actually means "I don't buy that price." "Firm?" Shane asks in a husky tone. He's on the wire, on speaker. Everyone around me who wants (and needs) to can hear that husky tone. They all know it's Shane. Of course Snake's listening, because the ante on this trade isn't small. "I'm axed to sell," I say. "You hit the bid," he responds.