by Offit, Mike
“Hey, the devil you know is better than the one you don’t. And, sure, Solly, First Boston, and Morgan have good sales forces, but they pay traders the same way as here. My advice is go into sales or get a percentage deal to trade while you’re young, single, and have no overhead. Me, I’ve got a wife, two kids, and a couple of mortgages. I can’t afford to take any risks with my career.”
Alex broke off the conversation at that point to argue on the phone with Bill Dougherty, a senior salesman, over the value of a $75 million block of FNMA-guaranteed mortgage bonds with a coupon of 10 percent. His customer, Metropolitan Life Insurance, wanted to buy them an eighth of a percent cheaper than Alex was offering them, a difference of about a hundred thousand dollars.
“Hey, Dougherty, tell the Met to get fucked, okay? I’m sick of those guys bidding me back an eighth on everything. Just for once, let them lift me. These bonds are at least a half point cheap to where they should be, and these assholes can’t get this size anywhere else.” Alex disconnected the phone and turned to Warren. “You see? These fucking guys, they know I’ve got cheap bonds, that I made a good call when I bought them last week. If they want my bonds, they gotta come to me. I’ll drop the price one thirty-second of a point, but that’s it. Fucking Dougherty is just the errand boy. Bet they buy ’em.” Alex had gotten a little flushed.
“Sounds smart,” Warren said, then resumed their conversation. “But is it really Weldon’s franchise that makes the position profitable, or is it you?” Warren had been inundated over and over with the notion of Weldon’s franchise in the training classes, until the concept had taken on a life if its own. Everything they saw or heard clearly implied that it was Weldon Brothers that made the business happen, that salesmen and traders were just a part of a continuum of bodies filling the precious seats and taking phone calls like clerks.
“Ah, who knows? Look, I made this place thirty-seven million bucks last year. Let’s say I’d gone to Drexel or Pru-Bache and gotten fifteen or twenty percent. I’d only have had to make ten million there to get paid maybe twice as much.” Alex stopped and studied the broker screens in front of him. Every line was a bond being offered to sell or buy. “Ah, I see the Met went to someone to try to buy the bonds cheaper.” He pointed at some numbers that Warren deciphered as a bid. Alex picked up the phone to the broker.
“Bid seven for twenty tens,” he said, and hung up. “When the Met hears they’re seven bid in the Street, I bet they’ll buy my bonds … ah, I don’t have to bet. That’s gotta be Dougherty calling me now.” He punched another line, for the New York sales desk. The traders and salesmen in New York did business on the phone, even though they sat only fifty or sixty feet apart. “Yeah?… Billy? How’d I know?… They wanna pay six? Yeah, me too. I wanna pay six for more bonds, too. Six bid for a hundred million, okay? I’m at seven.… Yup. Seventy-five million to go at seven.… I’ll wait.” He smiled at Warren. “Okay?… Yeah, seventy-five done at seven. Take two dollars, priority one, and call me in the morning. Thanks.”
“They bought ’em?”
“Yup. At seven. Now, get this. I paid Dougherty two dollars per thousand commission. He sold seventy-five million bonds. That’s three hundred grand in gross commission. Priority one means he gets the top percentage payout on commission—fifteen percent. That’s about forty-five grand net pay for four minutes’ work. And, he’s got no positions to worry about, no losses to eat. If I’m lucky and don’t blow the four hundred grand profit I just made by doing something stupid, I might see five or ten grand off this trade at the end of the year. Once he prints a ticket, nothing can make him give that money back. Sweet, huh?” Alex shook his head, evidently finding it a little hard to believe himself.
“Well, that’s why we’re here, right? For the glory of Weldon, and a private plane.” Warren smiled.
Alex shrugged. “Yeah. Whatever. All I know is, if I wasn’t doing this, I’d probably be one of those homeless guys washing windshields. I really don’t have a clue what else I could do for a living.” Something defeated in Alex’s voice depressed Warren. That Alex had an undergraduate degree in engineering from Princeton, an MBA from Harvard Business School, and had had nothing but success as a trader didn’t seem to have helped his confidence in his abilities at all.
“You know what? I think I’m going to go sit with Dougherty for a while. At least he’s probably enjoying his big trade. Jesus, you just printed four hundred grand. Shouldn’t you feel good about that?” Warren said, amazed.
“Sure. I feel great. Look at me. I could just bust into song or something. So Met Life bought my fucking tens. Now what? Now I gotta think of something else. Maybe we could do a strip deal. I don’t know. The month’s almost over, and if I don’t hit one point two mil, I’ll be behind last year. You know, last year was a record year. And we’re budgeted to be up twenty percent this year. Isn’t trading fun? I hate this fucking job. They’re going to carry me out of here in a goddamn box, but I’ll be all dried out, like a fucking prune, so it’ll be a small, light box. Am I cheering you up yet?” Alex wasn’t kidding. His shoulders were slumped, and he was staring tensely at the screens. He had been inactive for no more than two or three minutes, and you could see he was already nervous, bored, anxious. He punched an autodial button on the turret, then hung up before it rang. He scribbled a few notes, then picked up the handset to make a call, paused to look at the screens, then slammed the phone down on the desk. Warren got up and grunted a good-bye. At twenty-nine, Alex looked about forty, and Warren noticed as he got up that Alex was going gray at the temples, too.
Warren no longer had any doubts. Despite what Bill Pike had said in that terrible interview, he hoped that Weldon would let him make his own choice. He wanted no part of the trader’s life. Selling seemed a far better lifestyle, and deep down, Warren had to admit he wasn’t sure he could do trading or stand that kind of pressure. As Dirty Harry said, “A man’s got to know his limitations.”
eleven
Fortunately, Carl Dressler had been supportive of Warren’s decision to go into sales. He told Warren that he thought Warren would make a terrific trader, but agreed that with his “interpersonal skills” he would probably be more valuable to Weldon in sales. Plus, everyone was impressed with how well Warren understood all the mortgage-backed securities structures, which would be useful in sales. The only issue was one trader on the government desk who, for some reason, hated him. Sean O’Hara was known to be unstable, though, and a little anti-Semitic, and he suspected Warren might be Jewish. Jillene told him to forget about it. Frank Malloran agreed and had said, “If O’Hara would quit stuffing half a pound of coke up half his nose in the bathroom half the day, maybe that half-wit would be half-sane half the time.” Warren vowed to try to win O’Hara over.
The first attempt had started unpleasantly. Dan Goodman, a junior salesman, had asked O’Hara the same idiotic question three times about a trade O’Hara had suggested. Even Warren understood the trade—it was nothing more than a purchase and sale to take advantage of a spike in repo rates on a bond that was temporarily in short supply. Goodman’s client could earn an effective 10 percent annualized return just to lend another client some bonds for a week. The normal rate was about 4 percent.
“Jesus Christ, Goodman, what the fuck is wrong with you?” O’Hara had said. “You got shit for brains or something?”
Goodman told O’Hara to screw off, that the trader had the whole concept wrong. Everyone was a little stunned to realize that Goodman didn’t understand it.
Warren was listening to the conversation with the intermediate trader, and he jumped in good-naturedly, saying, “Hey, Dan, come on! You have to get it! This is embarrassing! Jews are supposed to be smart!” The traders all snickered—only another Jewish guy could get away with a joke like that.
Goodman looked confused for a second, then blurted out, “What? Oh, no, no. You don’t understand, I’m not Jewish!”
The sheer stupidity of his reply convulsed the entire desk, an
d O’Hara slapped Warren on the back, laughing so hard tears ran out of his eyes. From then on, every time Warren passed the desk, O’Hara would whine, “Oh, no, no. I’m not Jewish!”—and they’d share a laugh. O’Hara was no longer an obstacle to Warren—in fact he became a big supporter.
Jillene called Warren upstairs in early November and told him he’d been placed in institutional fixed-income sales. He’d be reporting to Malcolm Conover, his salary was raised immediately to $100,000, and he could expect a 50 percent bonus, or better, at year’s end if he acquitted himself well over his first eight weeks. He would likely become a commission salesman next year. They talked briefly about Serena Marchand, who had never come out of her coma and was not expected to live. Warren was surprised by the emotion in the older woman’s voice—she had only met Serena once for a short interview. Maybe Jillene wasn’t so tough after all.
He couldn’t wait to tell Larisa all the good news. The downside was that selling would probably involve more travel, but he hoped he might get some accounts in fun places to visit, not just New York. A lot of younger salesmen were given accounts in the Midwest or the South because the branch offices of Weldon were not tremendously strong in fixed-income sales.
“It’s really not that difficult to figure out,” he told Larisa as they ate their appetizers—green salads in a perfect mustard vinaigrette—at La Goulue, an intimate French bistro on Seventieth Street off Madison Avenue. The room was paneled in a rich brown mahogany with large mirrors and framed pictures lining the walls, the lighting warm and flattering. Crisp white tablecloths and an all-French staff lent the place a true Parisian feel made tactile by the mellow glint of the well-worn silverware that filled the air with the welcoming chatter of fork and knife against china plates. “Basically, the accounts are guys who get paid to buy bonds, and you get paid to sell them. We’ve got some pretty decent traders, especially in mortgages, and all the accounts have a lot of respect for Weldon. With some of the guys I’ve been watching, most of their business is just picking up the phone and taking orders, or repeating what a trader says is a good trade to a customer. And they make a ton of money just being parrots. But few of the guys really sell. I mean, they could sell anything—cars, real estate, shoes. There’s a guy in LA who’s amazing, and a few in New York and Chicago. It just doesn’t seem like it takes a lot of brains to do this. Being smart can help, but it sure isn’t a requirement.”
“You really think it’s so easy? Seems to me you can’t even keep your notes straight.” Larisa had made fun of the notebooks Warren was trying to keep. No matter how diligent he was, his organizational skills stank. He kept forgetting to take notes, or losing the whole book. “But what an amazing opportunity!”
“I don’t know about easy,” Warren said, taking a sip of his glass of Domaines Ott rosé. “But these senior guys literally make millions a year, and it seems like their most stressful decision is whether to order the Lafite or the Petrus at a client dinner. Plus, management doesn’t ride them like traders or finance geeks.”
“Now that’s the kind of sex talk a woman like me wants to hear,” Larisa said, leaning over the table and stroking his thigh. “Maybe tonight I can teach you a little lesson about dealing with management the right way.”
Warren felt himself respond immediately. Her hair tumbled around her face in the soft lighting, which set her hair ablaze, caught her high cheekbones and emphasized her full lips. She had gotten even wilder in the bedroom after that first night in Florida. She liked to be physical, in control, and when he was with her, the rest of the world just disappeared. Every encounter was an amazing, exhausting workout, and she wasn’t embarrassed or ashamed to do anything.
“In your case, I don’t mind being … well, you know … managed,” he said, leaning over to her and kissing her.
“Mmmmm. Do you think there’s something wrong with me? Some guys can’t handle that kind of thing.” Her hand was under the table now, working its way higher.
“Some guys? You do this a lot?” Warren was only half joking. He didn’t know a lot about Larisa’s past.
The hand suddenly disappeared from his thigh and reappeared on the table.
“What’s that supposed to mean?” She tossed her hair and sat up straighter.
“Umm … come on! Nothing! I mean the way you said that. It’s like…” Warren was fumbling for words, realizing there was no way to avoid digging an even deeper hole for himself. So he stopped talking.
“It’s like what? Like I’m a slut or something? Like I fuck every guy who looks at me? You know a lot of guys do look at me.” She was flushed red, and her eyes were tearing.
“No, no. God, no! I was just kidding! I mean, you said, ‘Some guys can’t handle that kind of thing.’ I wasn’t thinking. I didn’t mean anything like that!”
It didn’t matter, she was crying now.
“Please, please, Larisa, forget it! It was just banter. It must be because I spend my day with a bunch of crude assholes. God, I didn’t mean to upset you. Please, come on! I know how lucky I am. I’m in love with you. You know that.” He was getting upset now too. He could not stand to see her crying, angry, hurt.
Her hand went from her face and took his, interlacing fingers. She tried to start speaking, but had to stop and take a sip of water.
“I’m in love with you too,” she said. “But this is not easy for me. You need to understand that.”
He didn’t. But he was willing to try. “I want to make it easy. What do I need to do? You are an amazing girl, and I want to make everything easy for you.”
“Warren, I am not as amazing as you think I am. I’m just me. I’m not that smart, and I’m not that special. You’re doing so great with everything. I have a long way to go.” She was wiping her eyes.
“What the hell are you talking about? You get straight A’s at Columbia, you’re gorgeous, you’re funny, you’re generous—did I mention gorgeous? Oh, and you’re gorgeous too.” He pulled her hand toward him and reached out with his other to smooth her hair. “And I love you. If I love you, you have to be pretty goddamn amazing.”
She laughed a little, then wiped her eyes and nose with her napkin. “You are so good to me. I don’t deserve it.”
“Stop saying that. Why would you say that?” Warren was mystified. So many of the world’s most spectacular women seemed to think so little of themselves.
“If you really knew my family, maybe you would understand more.”
Warren didn’t say anything. He only knew her family from pictures in her apartment—her stunning older sister who lived in South Africa, but would be coming back to New York soon; her father, who looked like a German movie star; and her mother, who could have been Garbo’s sister. There was also a boy in one picture of the whole family, but he had no idea who he might be, and she had never mentioned him..
“Why do you say that? I know your parents are incredibly proud of you. I hear you on the phone with them.”
“Yeah. Great. They’re proud of me. I’ll be rich someday, maybe. Or marry a rich guy who can take care of me,” she said derisively. “My fucking family.”
Warren was more than a little stunned. This was totally new ground. As if on cue, the waiter deposited their entrées and, with an innate Gallic sense of privacy, somehow picked up on the moment and retreated immediately, without even asking if they wanted fresh pepper.
Warren pushed his plate of duck aside and leaned in closer. “What’s going on? I don’t understand. I know they’re divorced, but you seem to get along great.”
She looked as if she had turned to crystal, all the color gone from her face. It was as if at any moment she could break—shatter—into fine, glistening shards. “Have I ever told you about my brother?” she asked almost defiantly.
“Your brother? No. You never told me you had a brother. I know about your sister.…”
“Yeah, my sister. She got to take off to Le Rosey in Switzerland in ninth grade. I got to stay home and deal with the jocks and Jamie. Jam
ie Mueller,” Larisa said, spitting out her brother’s name as if it were sour milk.
“What do you mean? Was he younger or older?” Warren asked.
“He was two years older than me. But he was out of control. Lazy, arrogant … impossible. And my parents just left it to me to deal with him. I was little Miss Perfect. Straight A’s, sports, yearbook editor … he smoked dope and liked to shoot squirrels and birds with his stupid, fucking pellet gun. He was kept back twice and kicked out of all three private schools in Charlottesville.” She had put down her silverware and was trembling a little.
“Wow. How could they leave it up to you? You were his younger sister, not his mother.” Warren tried to imagine a teenaged girl attempting to control a difficult boy her own age.
“They were too busy with their own careers. And my dad was always screwing around with a TA or someone. JJ looked just like my dad, too. I think that just pissed Mom off even more.” Warren was about to ask why she used the past tense, but Larisa kept on. “So, I tried to keep him from getting drunk, or driving and getting arrested, or breaking into people’s houses for fun. I swear, boys are the most pathetic little animals on the planet. So we had this big argument in senior year. He was in the same year as me, for God’s sake. He wasn’t going to get into any decent college anywhere, and even UVA told my dad Charlottesville was out because of his arrest record, not to mention his academic issues. Even though my mom was in their HR department! I told Jamie he was lazy and stupid and had no ambition, and that Mom and Dad were ashamed of him.”
“Sounds like you told him the truth,” Warren added, trying to be supportive.
“Yeah, I told him the truth.” Larisa shook her head. “He went in and had a huge fight with my dad, who called him a loser. So he proved I was wrong. Guess what that moron did?”
“I don’t know. Rob a bank?” Warren shrugged.
“Hah! If only. No, he went and enlisted in the army the next day. My dad tried to get them to release him, but Jamie told him to butt out. It was 1974. The fucking war was over! But old JJ wouldn’t have made it to Vietnam, anyway. My dad’s panic was for nothing. He got drunk the night before parachute training and somehow screwed up his equipment and died in a field somewhere in Kentucky.”
