Greenspan was still smarting from the bad press and the lack of public love from the last time he’d exercised some modest monetary discipline back in 1994, and decided Y2K with its slick three letter acronym was as good a reason as any to jimmy the accelerator pedal to the floor of the Monetary Machine and then jump out of the rapidly accelerating car on autopilot as it headed straight for the cliff. Fortunately for everyone else, the man who destroyed the car would be waiting at the bottom of the cliff with unprecedentedly low interest rates, eager to inflate an even bigger bubble and goose the market with some extra cash once again. Just as a precaution, of course.
Faced with such an absurd world, I knew, then and there, at that moment, staring into Wu’s face, that it was time for me to hit the eject button. The very next day, I answered the call of a persistent headhunter who cold-called me every other week.
“Get me in front of the Goldman or Bear Stearns risk arbitration people or stop calling,” I told him and hung up.
It worked.
Less than a week later, I banged a successful first interview with one of the Managing Directors on the Bear Arb desk. They said they liked me from a personality and pedigree standpoint, but needed to know whether I was good, or really good, before committing to hire. Their suggestion: Go see a trial going on right now for the next two days and provide them with realtime updates and a memo on how I thought it would get adjudicated. It was a legitimate request, and a real-life test I might have demanded had our roles been reversed. (Later on at Incremental, when I was hiring traders, I pined for a beta test that would have allowed me to match a trader’s purported background and skills with the market of today. Too many of the prospective candidates were superstars on paper, and never made a dime once they got behind a keyboard for me. The Bear request was at least a glorified paper trade. You say you know M&A and you know trading? Great, what do I do in this situation? And tell me quicker and more accurately than anyone else. This was just my cup of tea.)
There was only one problem. It was nearly impossible to work a hundred-hour work week at Sullivan & Cromwell and disappear for a day, or even a half day, sans cellphone, into the caverns of 500 Pearl Street. My waking day contained a constant undercurrent of mortal fear that my cellphone would miss a call, or that I would forget to check voicemail and find some senior associate breathing fire and demanding retribution in flesh. Being without my albatross in a downtown federal court for a solid block of time was the quickest, most surefire way I could imagine to get myself fired, or to have partners asking questions that I didn’t want to answer. And even while I had made up my mind to do something else with my career, I was still, at heart, a cautious guy, and not even remotely capable of quitting or risk losing a job until I had another one, if not two, in my pocket. I thought seriously about a sick day. However, requests for sick days at S&C were typically greeted with condescension. For my employer, the sick days were an embarrassing artifact mandated by government regulation. After all, sickness was for those weak of body and mind. They were also a quick way to get weeded out from the partnership track.
Instead of claiming to have the flu, I approached a respected senior associate I was friendly with and put the scenario before him. His response was that doing something like that for Bear Stearns violated pretty much every Sullivan & Cromwell rule on conducting outside business while working for the firm and probably violated about seventeen different New York State Bar Association rules of ethics and conflicts as well.
“So that’s a ‘No’?” I asked, just to double check.
“Nope. That’s a go ahead, but if anyone finds out, you’ll be fired on the spot and possibly brought up before the Bar on disciplinary charges.”
The senior associate’s response was enough to cool me out on the live interview and let my Bear courters know that they would have to find another route to test my competency. Disappointed, they wanted me to come in the following week for another round of interviews. We would have to do with a one hour set of hypotheticals instead of the real thing.
It was all for naught, however, because that Friday, I paid a fateful visit to one of my closest friends from college, Randy Oser. It was a testament to the overlords of the Sullivan & Cromwell salt mines that I hadn’t met Randy for lunch or drinks even once since I had started working there almost two years before. Randy was at 50 Broad and I was at 125 Broad—so close, I could probably drop a Titleist into his lobby with my 8 iron. Yet still we had never met up. It wasn’t all on me, though. Randy may have had it even worse. I had asked Randy to lunch once or twice, but he’d always demurred.
“I don’t leave my desk for lunch.”
“They don’t let you leave for lunch?”
“Oh, they let me leave. I can leave whenever the hell I want. I choose not to.”
“So … you spend all day at your desk staring at a computer screen.”
“All day,” he quipped.
“I guess it’s not that bad. You go home at 5 p.m. I’m just pouring my third cup of coffee by then, because my day is only half over.”
“I’m sure the Pharaoh appreciates your sacrifice.”
“Rand, I’m sick and tired of being sick and tired. This place sticks a Dirt Devil vacuum in my ear every morning and sucks out my soul. It’s pure torture.”
“Hmmm,” Randy grunted. I could tell the twenty seconds he’d allotted me had elapsed and he was already busy elsewhere. Calling Randy during market hours was like talking to an Alzheimer’s patient; they heard the sound of your voice, they just didn’t listen.
“All right, how about I come by tomorrow and bring you lunch?” I offered. “My treat.”
“Huh? Sure, whatever. 11:30. 50 Broad. Eighth floor. Ask for me.”
“Sounds good, I’ll …” and click, he had hung up.
What kind of a horrid job doesn’t let you leave for lunch, ever? Even more terrifying, what kind of a job makes an employee not want to leave for lunch? My first instinct was to flee my desk whenever possible. Sunlight and people-watching, even of the highly stressed, degraded quality found in the bowels of the downtown financial district, were a respite and the holy rite of us overworked drones everywhere. Was there really a job that people enjoyed so much that they didn’t want to go out for lunch?
“Sounds like a cult,” I said to Wu, who acknowledged me with an emphatic grunt.
The following morning—it was the first of February, 1999—I told Linda, my secretary, that I was going out to lunch with Conly Chi. Conly was a fellow associate who was also stuck on a hideous long-term project, a project finance deal.
“I’ll have my cellphone,” I said, “but try to cover for me for an hour if you can. Do you want me to bring you anything back?”
She did not.
I walked from 125 Broad Street to 50 Broad Street with no inkling that this was the beginning of the end of everything I had worked for—and the first step toward what I was born to do. A quick pit stop at a crowded, innocuous deli for a couple of sandwiches, a turkey and avocado that should have done the honorable thing and committed hara-kiri to end its dullness, and a decidedly more tasty chicken parmesan. I would give Randy first pick, and surely get stuck with the healthy one. I strolled by the Dark Tower of Goldman Sachs at 85 Broad, with its giant eye of Sauron up top, and looked through the window of the Goldman-centric Starbucks next to the lobby, where male pattern baldness–infected alpha men and perfectly coiffed, intimidatingly intense females were stopping in for their caffeine jolts before being summoned back up to the mothership.
While Goldman’s lobby at 85 Broad was marbled and immense, staffed with security burned out by years with Blackwater and giant potted palms flown in from the Amazon Delta, the lobby at 50 Broad had all the charm of the back of a Chevy Astro van. The overweight guard with an Errol Flynn mustache barely looked up from his New York Post as I entered and walked to the elevators. I pressed 8 and was soon outside of two glass doors that read Datek Securities, A NASD Co. The logo looked like it was written
by some free Logo Maker software, and the glass itself—good God!—it was smeared and streaked, just begging for Windex. My already slumping spirits sank even further as a four-foot-eleven, 200-pound receptionist buzzed me in without a smile and stared at me for a few seconds before barking, “YES???”
“Uh, sorry. I’m here to see Randy Oser?”
She popped her gum in acknowledgement and whispered something into the phone.
“He’ll be right out,” she said, neither inviting nor instructing me to sit down.
After an awkward minute, Randy came bounding in.
“What’s up?” he said, giving me a handshake and wrapping me up. “Come with me.”
Randy led me through a frosted glass door and into the inner sanctum. Of absolute and utter crap.
As a lawyer, I had done work for nearly every major investment bank, and had spent a considerable amount of time near the Goldman trading floor. With its banks of monitors, high ceilings, lush expensive carpeting, understated artwork, dozens of Bloomberg terminals, Herman Miller Aeron chairs, and high tech turret phone—it was a vast football field of technology.
This, here, Datek?
It was not even on the same planet.
Datek’s trading floor was so cheap-looking it literally made me wince. It had ripped industrial blue carpets, plain wood desks that should have had liquidation stickers on them, flimsy fold-out catering tables, and self-assembled polyester overstock chairs from Staples. There was a mish-mash of randomly placed monitors from different manufacturers, chipped light blue walls in desperate need of a paint job and devoid of any art or attempt at decoration, and low ceilings with lighting connected by exposed wires. An unsettling, insect-like humming permeated the entire space. Two columns of desks created a path for foot traffic through the middle of the room, with six rows of traders on both sides of the aisle stuffed five to a row, each inhabiting perhaps thirty-six inches of living space. The trading floor at Goldman had a subdued but energetic buzz. Here, the buzz was like someone had stuffed a microphone in a wasp’s nest. Randy grabbed a dented plastic folding chair and sidled me up to his desk.
“Kind of loud in here, huh?” I asked.
“Loud?” Randy was genuinely surprised. “It’s lunchtime. You should hear it at the Open and the Close. Multiply what you hear now by a factor of three.”
I glanced around while Randy pulled the sandwiches and Diet Cokes out of the paper bag. I took in the other people around me. Mixed in were a few adults, or at least guys my age, but most of the traders were kids, right out of college or maybe with a couple of years under their belts. Jeans, T-shirts, sneakers, and baseball caps were the uniform of choice. Some guys opted for golf visors, and a select few wore homemade visors that were about the silliest looking damn things I’d ever seen: cardboard half circles duct-taped to a normal golf or volleyball visor, so that the six-inch bill was now sixteen inches or bigger, with the sides tempered down to block out any ambient light.
“Who’s that maniac?” I asked, unable to suppress the urge to gesture toward a tall, skeletally thin geek wearing green-tinted John Lennon sunglasses and a visor the size of a tanning reflector.
“That’s Brad Masters. He may not look like much, but he averages about $500K per month—his end,” Randy said driving a verbal elbow into my Adam’s apple.
“How much of that does he keep?” I asked, trying to keep my voice from cracking with envy.
“His end … meaning all of it. That’s his net, Mike. His gross was at least double that.”
Randy was doing his best to suppress a “who’s laughing now, fuckface” smile.
My mind was spinning, craving oxygen as my blood flow headed south. This Brad character was a kid who would have gotten beaten up at my high school during lunch. In fact, I had an incomprehensible urge to pummel him right then and there for wearing that absurd mega-visor. Yet he was making multiples of what I and most lawyers were being paid annually … each month! Greed is like a leech, a silent, unseen deer tick that hooks its claws into you in a flash and never willingly lets go.
Maybe Brad was an aberration, a statistical freak.
“You’re gonna catch a fly in that mouth, Mike,” Randy sniped. He was right: my mouth was actually agape, my jaw had dropped, and I was almost drooling.
“But Brad’s one of the best,” he continued. “Those aren’t typical numbers.”
I was relieved. If those numbers had been the norm, I probably would have walked back to my office, resigned on the spot, and come back over to pledge my undying loyalty to whomever or whatever I had to.
“So how’s work?” Randy asked.
“Work?” I recovered. “Oh, work is GREAT.”
I oozed sarcasm.
“But forget about me; what’ve you got here?” I asked, pointing to the dizzying array of red, green, and blue numbers blinking across his twin screens.
For the next five minutes, Randy gave me an accelerated tutorial of his trading monitor. The three Level II boxes at the bottom of the screen gave an in-depth bid-ask of a stock. The Level II quotes showed every market maker and ECN lined up on the left (the bid side) at the price they were willing to buy stock, and their mirror quote on the right (the ask side) at the price they’d be willing to sell stock. Some stocks, like Dell or Microsoft, had a nice tight spread of no more than 1/8 of a dollar, while faster or thinner stocks like Inktomi or CMGI might be separated by as much as 1/2 dollar.
“And what’s that?” I asked, as I pointed at a bolded green number on the right edge of an inversely highlighted horizontal bar down the middle of the screen.
“That’s my P&L.”
I knew enough about trading to know that P&L meant “Profit and Loss”—essentially the amount you were up or down for the day. The number on the screen read P&L 11696.
“Almost $117. Ok, not too shabby for what, two hours of work so far?”
Randy rotated my way, with the hint of a grin.
“Yeah, 117,” he said, the grin starting to grow.
“Wait, come on. $11 … thousand?”
I turned back to the screen, to double-check if my eyes were playing tricks on me.
“Nice day,” I said, my emotions pinging between disbelief and pure spite. Just prior to saying anything, I had run the numbers in my head. I doubled $117 plus some for an end of day $300 gain. Multiplied by five days equals $1500 for the week, with fifty weeks getting him to $75,000. Nice, for sure, but nothing special. Still, a better deal than my gig, based on his forty-hour work week and the ability to sport flip flops and shorts to the office.
But $11,000, however, was a whole different ballgame. Now we were talking $55,000 for the week, which, multiplied by fifty, gets him to … $2,750,000 for the year.
What the fuck am I doing working one hundred hours a week and sleeping under my desk for $100,000?
This was suddenly a huge practical joke. I felt an intense anger brewing toward Randy, for not having opened my eyes sooner. A real friend would have grabbed me Neanderthal-style by the hair and dragged me from one end of Broad Street to the other.
“Is this an average day?” I asked, almost choking. “Great day? Lousy day? Give me some perspective.”
He pulled out a busted-up blue spiral notebook with his “runs” for the previous three months. His daily averages were between $3 and $20 thousand. Monthlies were pivoting around $200,000. Holy shit. This was real. It was really real. I looked at Randy like he had just confessed to banging my fiancé, and I genuinely stammered while motioning to the rest of the room. “Ev-ev-everyone here?”
“No,” Randy scoffed.
Whew. I didn’t think so. Randy was a superb card player, a good golfer, and an engineer—sharp all around and disciplined. I didn’t know if he would be tops in here—it sounded like that Brad Masters guy already was—but I knew he would be at least a top 20 percent type guy, and likely much higher.
“Probably a quarter of these guys make no money,” Randy explained. “Then the top quarter, anywh
ere from $1 to $5 million. The middle 50 percent, anywhere from $100 to $500K, I’d say. That’s all ballpark,” he said, punching a few buttons and taking a bite of his chicken parmesan sandwich, as I saw his P&L change to 12014.
I sat there, gawking at the screen, but my brain was humming with possibilities.
“Who runs this place?”
“The boss is Erik Maschler. He’s, uh … he’s a special kind of animal.”
“Introduce me to him. Can you get me a job here?”
Fuck the foreplay. I didn’t want to beat around the bush. I was love-struck.
“Slow down,” Randy said. “You’ve been here five minutes and you’re ready to throw away three years of law school and a job at the best law firm in the world—just to sit here and play video games with a bunch of maniacs?”
“When you phrase it like that, Randy, I start feeling like maybe I should think about it,” I said with a smile. “But also, my gut’s saying ‘What the fuck is there to think about?’ If those numbers are real, then there’s nothing to think about. I could make partner at S&C, putting in six more years of one hundred- hour work weeks, then I could earn $1 million or more a year and still work eighty to ninety-hour weeks, and never see my wife or kids.”
“Wait? You’ve got kids? When did you even get married?”
“Not yet, but I’d like to. And I dig this girl I’m hanging with. Lisa.”
“Jay’s old girl?”
Confessions of a Wall Street Insider Page 7
