Nothing Personal: A Novel of Wall Street

by Offit, Mike

  “Thanks for carrying me, partner,” Warren said as they toweled down. Metcalf had evidently forgotten the conversation from the previous night—in fact, he didn’t even seem to recognize Warren at all.

  “No problem. Just be ready tomorrow,” Chas replied, smacking Warren on the back. They showered and changed, then drove back to the house. Drinks were on the patio, then Eliza and Larisa got into the Volkswagen with them for a drive into Palm Beach for dinner. They met up with a group of six others, all friends of Chas’s with family homes up in Hobe Sound or in Palm Beach, including two of the Swedish neighbors Chas had mentioned in New York. Everybody drank with gusto, and they made a big game out of cracking the stone-crab claws and sucking out the meat. It was a fun, sticky, and briny meal. Larisa sat next to Warren at dinner, and he kept leaning over, being sure to make as much contact with her leg as possible. By the time they climbed back into the car, slightly inebriated, he was holding her around the waist. Eliza had paired off with Austin Karr again, and Chas seemed to have hit it off with the older blond Swede, a model in Paris, and all of them decided to go back to the Harpers’ for a swim. To make room in the small car, Eliza sat on Austin’s lap, and Larisa sat on Warren’s. With her long hair spilling over his face, and the bouncy suspension of the car, she kept adjusting her bottom, and he was pretty sure she was doing it on purpose.

  Everyone piled out at the cottage and headed toward the living room and screened porch. Warren grabbed Larisa and slowed her down, letting the rest get inside. He then led her around the side of the house on the path to the rose garden, which was softly lit in the moonlight.

  “Are you kidnapping me?” She laughed at him.

  “Maybe. At least leading you down the garden path. Literally. C’mon, I’m a little tired of all the company.” They came to a small grassy area surrounded by tall arbors overgrown by mature climbing roses. A wood bench was thoughtfully placed beneath the central arbor, and they sat there.

  “What’s wrong with the—” she started to ask, but he cut her off with a kiss. The kiss intensified, and soon she had half climbed on him and had her hands inside his shirt, stroking his chest. His own hands ran down her short dress, then up over her haunches. After a few minutes, they eased back.

  Warren couldn’t help saying exactly what he felt. “I know we just met each other, but I want you to spend the night with me.”

  “You sure say what’s on your mind.”

  “It’s an affliction sometimes. But, we’re not kids. I think you’re great. I think you’re beautiful and I want to spend a lot of time around you.”

  She snuggled back down into his arms and kissed him lightly. “I think you’re pretty great yourself. To be honest, I was happy when I saw you here last night.”

  “God, I can’t believe I never noticed you around. Have you been dating anyone?”

  “Nope. Saving myself for you.”

  “I do appreciate that.” A kiss.

  “Think nothing of it. How about you?” Another kiss.

  “Not lately. Not for a long time as a matter of fact. My last girlfriend dumped me and moved three thousand miles away. Before that, in high school…”

  “Okay. I don’t need to hear about your first date. I like you just fine.” She ran her hands through his hair. “But you need a haircut.”

  “Was it my looks or my charm that got you?” Another kiss.

  “I think you’re sweet.” Another, interrupted.

  “Sweet? Guys aren’t supposed to be sweet.”

  “Well, I think you are. Cute too. Don’t complain. Work with me here. If I like sweet, go with it, okay?”

  He laughed and hugged her close. “Let’s get out of here.” He helped her up, and they picked their way through the garden back to his room. At the door, she hesitated.

  “Work with me here, okay?” He opened the door. She paused, then a wicked smile creased her lips before she grabbed him and wrestled him inside, kicking the door closed behind them. She didn’t seem to even notice the other bed.

  They fell back, and she kissed him hungrily. She was on top of him and straddled him, bringing her knees up under her. She ran her hands down his arms, and he tensed slightly.

  “Umm, strong, huh?” she said, twisting her lips away from his, and pressing her weight down on his wrists.

  “Strong enough.” He let his hands stay pinned as he strained his neck upward to meet her lips.

  She stayed just out of his reach, and her tongue darted out and ran across his lips. “I’ll be the judge of that.” She suddenly moved across his body, sliding her left arm under his armpit, and snaking her hand behind his head. Her right knee pushed underneath him, and he found himself gripped in a tight wrestling hold, unable to move, as she pulled his right arm back and underneath him, her weight on him. He could not get any leverage, but he didn’t struggle too hard.

  “Don’t tell me you’re giving up already,” she said, her lips at his ear. She nipped the lobe with her teeth.

  “I never give up.”

  She eased off the pressure a little and slid her left foot up his leg, until she reached his crotch and used her heel to press against his bulging erection. “Hmmm, what are we going to do with that?” she whispered.

  He tried to turn, but she tensed again, freezing him. He relaxed, and her foot moved again. The sensation made him groan, and she tightened the grip of her arms, stretching his joints to the point of discomfort.

  “Easy, girl, easy. I’m gonna need that shoulder tomorrow.” He didn’t mind the game. Instead, he was intensely aroused.

  “Earn it.”

  He did, surprised that he had to use almost all his strength to break her hold. When he did, she was at him like an animal, tearing his clothes off, biting him, her breath short. He rolled on top of her, and she writhed under him, making him pin her to the bed with one arm while he jammed his right arm between her legs to hold her still long enough to slide inside her. He found a stamina he had not expected, and their instincts led to an almost desperate, violent coupling. When he finally lost control, she pushed him away, and his body arched, then collapsed, and he lay panting and sweating on the bed, the sheets a tangled mess, their clothes everywhere. He tried to think of something to say, but he could barely make a sound.

  Larisa stretched alongside him, their breathing slowing at the same pace. Eventually, he reached for his shirt, to use as a towel, and she pulled him back and kissed him hard, then softened.

  “You have a lot to learn, Warren Hament. But I’m a patient teacher.”

  He kissed her back and said nothing, letting the endorphins and fatigue carry him away. Whatever she wanted to teach him, he was willing to learn.

  five

  The trip back from Florida at the end of the week had been full of anticipation. He had an amazing new girlfriend, and school was drawing to a close. The eighteen months had been a small part academic jawboning with the likes of Corelli, a fair amount of drudgery in accounting and math, and a bit of useful discussion, mostly in Sol Fisher’s finance class.

  Fisher had been a senior investment banker and a partner at Goldman Sachs and retired to a full professorship at the Business School, his millions tucked away. His lectures lingered only briefly on the actual mechanics of finance and usually wound up in discussions that revealed the engine that drove Wall Street.

  “It’s actually pretty simple,” Fisher had said in his first presentation. “A real investment bank simply acts as a conduit between big companies looking to raise capital and big institutions looking to invest it. Let’s say Ford Motor needs a couple hundred million bucks to build a plant in Wisconsin to make pickup trucks. In the old days, they’d go to Morgan Bank or Chase Manhattan for a loan. And the banks would make a big spread, since they were the only game in town, and their source of money was cheap deposits by their customers. Then, investment banks stepped in. We’d tell Ford we could get them the money a couple of percent cheaper, by selling bonds. Or virtually free, by selling stock. So, we’d g
o to the big pension funds and insurance companies and peddle Ford bonds, or Ford stock, and they’d save a mint versus borrowing from the banks. The investors were happy because they got the bonds of a topflight company and got to earn more interest than they could get from US treasuries or by depositing it. We’d earn a big fee. Then, we’d excite the investors even more by being willing to trade those bonds. That made it possible for them to sell the bonds if they didn’t want to keep them, or to buy more, or swap them for something else they liked better. Suddenly, investment bank traders were buying and selling Ford, Chrysler, AT and T, you name it. Our bankers, who advised the borrowers, got paid big fees. Our traders made money. The investors got choices and liquidity.”

  “But isn’t that too simple?” One of the front-row students had raised his hand. “Wouldn’t all the investment banks compete for the same business, and wouldn’t that competition take the profits out of it?”

  “Good question. That’s the force that makes it more difficult to be an investment banker today than ten years ago. Competition. Brutal, backstabbing competition. The only way to win is to be smarter, come up with trickier ways to raise the money and shave a few hundredths of a percent off the cost of borrowing that money. Structured finance, it’s called. Bonds with warrants to buy stock, stock that pays interest like bonds, stock that isn’t equity, bonds that aren’t really debt, bonds that pay interest with more bonds—whatever!

  “Some of the companies stress trading—willingness to commit a lot of their own money. Others focus on making customers happy—a relationship backed up with lots of greenbacks. Whatever gets you over. Lots of drinks and dinners, ball games, and golf outings. But it pays. There are twenty-eight-year-olds at Morgan Stanley or Weldon Brothers making a million dollars a year, for God’s sake. And the irony is, every single one of them thinks he’s underpaid!”

  That kind of talk was incendiary in a room full of students of the higher forms of capitalism. Many who hadn’t thought about a career at an investment bank realized they could have a shot at making much more money there than in the industries they were working in before business school, and much more quickly. Of the graduates in that year’s class, 60 percent would apply to Goldman Sachs, and only two or three would be offered a spot.

  “Of course, nowadays, there’s a lot more to it than just raising money for big industrial companies,” Fisher continued. “There’s junk bonds, which are used to raise money for dicier companies. There’s foreign-currency bonds, derivatives. And then there’s the whole mortgage-backed securities markets.”

  “Isn’t that the Ginnie Mae market?” a front row voice piped in.

  “Yes. That’s one part of it. Ginnie Mae is one government agency that guarantees mortgages against default, so investors can buy them with no credit risk. Mortgages are a lot more difficult to figure out than most bonds, though. When a company sells a bond, they agree to pay interest on it for ten or twenty years and not pay it off, or ‘call’ it, for most of that time. A call is when the bond can be repaid by the company that sold it after a certain amount of time, but before its maturity. That way, if the company can borrow less expensively, they pay off the higher-interest-rate bonds and sell new, lower-interest-rate bonds.

  “But, unlike most corporate or treasury bonds, which can’t be called for a long time, most mortgages can be prepaid at any time, if the borrowers refinance, or the houses are sold or burn down, or even if the borrower defaults and the government or insurance companies step in and pay back the lender. So the securities can be called away. This has a big effect on their value because the investors who bought the mortgages can get their money back when interest rates are much lower, and that’s bad, or even when rates are much higher, which is really good. So, people trade them around a lot, always trying to stay a step ahead of prepayment risk. The firms that have good research and analytics on prepayments get a lot of business from the biggest investors—pension funds and big-money managers. Someday soon, you’re going to see Wall Street invent ways to make big bucks off that risk. But that’s another course altogether.”

  After class, Warren met Larisa for lunch. It was a warm day, and they sat on the steps of Uris Hall. She had brought a sandwich with her, and Warren grabbed a cup of clam chowder from the student snack bar across the green.

  “Fisher’s class this morning was really good,” he said, slurping a little.

  “Wait. What? Who are you? You actually enjoyed a class? Where is my boyfriend, and what have you done with him?” Her upper lip curled under when she smiled, and Warren couldn’t resist bending over and giving her a kiss.

  “Umm. Onions in the tuna. Yummy!… Yeah, he was talking about mortgage-backed securities trading at the Wall Street firms, and it sounds like something I might really like. I didn’t know that kind of thing even existed.” He was serious, his eyebrows even a little furrowed.

  “Yeah, we learned about that in my capital-markets class last month. Sounds really complicated.” She had finished half her sandwich and took a big chug on a can of Coke.

  “That’s what I like … complicated! So much of the stuff we’ve learned about seems so dull. None of this finance math or statistics seems particularly hard. Hell, most of it is just division and multiplication.” He had finished the soup. “Plus, commodities trading was pretty much just guessing where the market was going to go, or wasting time with charts and stuff. It seems like trading mortgages would actually require using your brains and getting paid for it.”

  “And you have such a cute brain. So big, and so fast, and so modest.” Larisa poked him in the ribs.

  “Hey, Fisher said you can make a million a year in a job like that. And that you can get to that kind of level fast. I wouldn’t mind that kind of pay.” He remembered Ned Johnstone had said the same thing.

  “I wouldn’t mind that kind of money myself,” Alicia said, “but I had no idea you were such a greedy little devil.”

  “I didn’t know you were such a greedy little devil.”

  “Neither did I, really. I mean, when we would go visit my dad’s clients, the way some of them lived was mind-boggling. I gotta admit, maybe I even resented it. My dad worked so hard, and we couldn’t dream of ever living like that. But maybe I could actually succeed at this. Whatever the hell ‘this’ really is!”

  “Well, from what I’ve seen, you usually figure out a way to get what you want. After all…” She spread her arms wide and glanced down at herself.

  “Ummm, I seem to recall you jumping me.” Warren moved in for a hug.

  “Cutie, I always get what I want!” Larisa squeezed him hard in her arms. “You never had a chance.”

  * * *

  In early spring, dozens of firms scheduled on-campus recruiting meetings for jobs that started in August 1984. In addition to the general meetings, most included a formal interview schedule. Warren spent a lot of time talking with Claire Tompkins in the Career Counseling Office, and the two of them had decided that investment banking, on the sales and trading side, was for him. He was outgoing, smart, and personable and had some experience with the markets. She was confident that he would get a place at one of the top firms.

  “Listen, if you get shut out of the bulge-bracket firms, it’s not like the second tier don’t pay as well—some pay more. Just go for the best first.” She’d recommended Weldon and Goldman as the two best places to work from the reports of graduates. First Boston was in the middle, powerful but somewhat disorganized. A classmate told a story about interviewing with Goldman that gave Warren some doubts. The guy had been set up by his uncle, a powerful banker at Lazard Frères, to meet with Robert Rubin, the head of equities. Rubin had kept the kid waiting over four hours in his office, only to then blow him off. “I got sick of looking at that picture of him and Jimmy Carter, and he never even so much as apologized after having told his secretary at least five times he’d be down in five minutes!” Goldman sounded like a place that didn’t treat junior people well.

  Warren got hold
of annual reports and went into the library to check periodicals. He learned about Salomon’s economist Henry Kaufman, called Dr. Doom, whose interest-rate forecasts moved the markets, and John Gutfreund, the round, cigar-chomping head of the firm, who made billion-dollar bets in the bond markets without blinking an eye. Weldon was famous for its mortgage department, the only one able to compete with First Boston’s, run by Larry Fink, and Salomon’s, headed up by Lew Ranieri and Mike Mortara. Warren tried to memorize the names, and to get a sense of the culture of each firm. Goldman pushed itself as an ethical company, which seemed oxymoronic to the nature of the business, but intriguing despite the stories he’d heard from Austin Karr in Florida. He agreed with Claire’s hierarchy and decided to make Weldon his first priority and First Boston number two. Though he doubted he had a shot with Goldman Sachs and Morgan Stanley because of his college grades, he signed up to meet with them during their on-campus interviews.

  Austin Karr, who had kept in touch since Florida, sent Warren’s résumé to a friend at Weldon, and they had given him an appointment for a full day of interviews at their offices, which allowed him to avoid the on-campus interviews altogether. He’d also talked to Ned Johnstone about Merrill, but Warren had decided afterward that the firm was too huge a bureaucracy for him.

  Generally, he felt the prospects were fairly promising. After all, the Street was starting to do well again after a long lull. The stock markets had picked up a little steam, and interest rates had been volatile, making trading houses profitable. Salomon had made record profits two years in a row. There’d be plenty of jobs—he hoped. Warren’s grades were excellent—he made dean’s list, and only Serena Marchand had a higher GPA among the top students interested in a trading career.

  Larisa had been very much in favor of the career choice. She had met some of the people at the investment banks on campus, even though she wouldn’t graduate until a full semester after Warren, and was extremely impressed at the amount of money they made. It wasn’t unusual, she learned, for a new hire to be making a mid-six-figure income after only two or three years. That sounded great to Warren—his savings would pay his rent for the year cover his final tuition, and carry him maybe another couple months, but things were beginning to feel a little tight. He just hoped he’d make it through the first round of interviews and get at least a couple callbacks. He felt that Ned had given him some great advice. It was almost impossible to get a job at one of these prestigious firms without an MBA. Though he had never imagined himself capable of working in a regular nine-to-five, or in this case maybe seven-to-seven, job, the prospect of making as much money as people who had spent a decade at a law firm or building a medical career made it seem like a great investment.