The Gods of Greenwich (4 page)

The immediate issue was how soon. Nobody on Wall Street was hiring. Nobody. The Dow had fallen 9.7 percent in the fourteen trading days since the beginning of the year. Market jitters were death-sucking the psyche of every man and woman in the money business.

Jimmy scanned his office. He could almost smell the despair wafting over low-rise cubicles like somebody had emptied an aerosol can of blues. His employees locked on their computer screens, their eyes riveted in Svengali mind stares, every man and woman praying for Bloomberg news that would cure their worlds.

They pretended to deal with their day-to-day responsibilities. But every one of them had circulated their résumés. One by one employees would leave, and Cusack Capital would die the unglamorous, unnoticed, unimportant death of so many hedge funds that disappear silently in the night—obscurity the sole dignity of collapse.

Even Sydney, red hair and wall-to-wall smile, looked glum. She was Cusack’s personal assistant, the rock who worked hard, stayed late, and never complained. She had followed him from Goldman, loyal to the end, loyal to now.

Last week she had asked, “I know things are tough. And I promise never, ever, to leave you in the lurch. But do you mind if I talk with Credit Suisse about a job?”

Cusack needed some luck. Or he would be interviewing, too. He smiled crookedly, forcing his mood to brighten. His thoughts trailed to the single most important person in his life. She had never known financial uncertainty, though she faced hurdles he could only imagine.

Do I tell my wife or shield her from all this?

Cusack never answered the question. He picked up his phone and began dialing. Mortgage payments were one problem. He had others.

THURSDAY
,
FEBRUARY
7

Siggi Stefansson shifted on his stool inside Gaukur á Stöng, Reykjavik’s oldest pub. He was sipping Brennivín, the local hooch, brewed from potato pulp and caraway seeds. He thought it tasted like horse piss.

Svarti dauði,
Iceland’s term of endearment for the liquor, means “black death.” The nickname refers as much to the bottle’s black label as to the lethal alcohol content of 37.5 percent. But Siggi’s second cousin had insisted on Brennivín that evening. “I need to drown my troubles.”

Ólafur, gone for the last ten minutes, returned from the men’s room and bellied up to the bar. He looked much like Siggi; blue eyes, wavy blond hair, a few hints of white at the temples. No glasses, he was heavier, and solid through the middle. There was none of the adult-onset gut that springs from the blocks once men hit thirty-five.

Rubbing his stomach, Ólafur grimaced and said, “I’m a wreck.”

“What’s the problem?”

“My portfolio.” At thirty-eight Ólafur was a rising star, a managing director at Iceland’s most venerable bank. He believed in Hafnarbanki and bought shares whenever possible, sometimes with borrowed money. He bet big and yearned for the glory of being right.

“Hafnarbanki’s shares,” Siggi protested, “are trading over a thousand kronur.”

“We’re already down fifteen percent this year.” Ólafur balled his right hand and rubbed it with the left, as though wringing out the cold.

“Ouch.”

“‘Ouch’ doesn’t cut it. How about we go with ‘I’m fucked.’” The banker drained his shot glass and signaled for another round of
svarti dauði.

“What’s wrong with Hafnarbanki?”

“Business is fine,” bristled Ólafur. “But the damn hedge funds are bad-mouthing our stock and spooking everybody.”

“Really?” Siggi considered next week’s installation in Connecticut, remembering the first time he met Cyrus Leeser. “Do you have any proof?”

“A research analyst told me. Somebody asked him to hammer our stock. Offered him big money.”

“Did he take it?”

“No.”

“So what’s the big deal?”

“Somebody always takes the bribe,” asserted Ólafur, growing impatient with his cousin, who knew so little about finance. “It’s just a matter of finding the right whore.”

“I have an American client,” Siggi began, “who runs a hedge fund.”

“There are eight thousand hedge funds.”

“My client was drinking with two other guys,” continued Siggi, undeterred by his second cousin’s self-importance. “They were talking about Hafnarbanki at the bar.”

“What did they say?”

“Something about shorting.”

Ólafur leaned closer, all ears now, no longer annoyed with his second cousin. “Who’s your client?”

“He wasn’t the one talking.” Siggi spoke faster and faster, withering under his cousin’s scrutiny. He cursed himself for blabbing. There was something foreign in Ólafur’s eyes, something feral. “Cy wasn’t the loud one.”

“Cy who?”

“He’s not a bad guy,” the art dealer replied, annoyed he could not control his nerves. “Cy just bought the second most expensive painting I ever sold. His friends were the ones talking.”

“Shorting what, Siggi?”

“Hafnarbanki,” he answered. “What’s the big deal?”

“When did this happen?”

“December.”

Ólafur blinked. His blue eyes turned black, his glare sharper than a fish hook. The stare pierced Siggi’s skull and came out the other side. “Why didn’t you tell me before?”

“You don’t discuss your clients with me, Ólafur.”

“My clients don’t spread false rumors.”

“I had no idea—”

“Is your client,” Ólafur interrupted, “Cyrus Leeser, by any chance?”

“How do you know?”

Ólafur’s eyes cut through the haze of fermented potato pulp and caraway seeds. “We hear his name all the time.”

“Cy’s not the kind to spread rumors,” Siggi stammered, defending a client through his cousin’s scowl.

“His name surfaces everywhere.”

“We had a few drinks. I showed Cy my gallery. There’s nothing else.”

“You should have told me, Siggi.”

“Remember that when my clients need art loans.”

Ólafur signaled the bartender for another round.

“Hanna’s expecting me,” the art dealer protested, rising from his stool, not too steady on his feet.

With his left palm flat, Ólafur reached over to Siggi and pushed down on his cousin’s shoulder. He handed Siggi a cell phone and said, “Tell your girlfriend you’ll be late.” With that the inquisition began:

“What did Leeser say about Hafnarbanki?”

“Do you remember the names of Leeser’s friends?”

“Did Leeser describe his fund?”

“How often do you speak with him?”

“Did Leeser discuss his portfolio?”

Ólafur signaled for one drink after another, waterboarding Siggi with
svarti dauði.
The banker’s questions never stopped.

SUNDAY
,
MARCH
9

Rachel sat in her apartment on East Eighty-third, alone and surrounded by the absence of color. White curtains. White furniture. White area rug. She kept things simple and crisp.

Maybe too simple. Rachel was annoyed with her savings. They were not growing fast enough. For a while she toyed with the idea of finding a partner, somebody to source new business and figure out whether prospects were serious or just kicking the tires. A partner could land clients. A partner could negotiate contracts and get the $25,000 down payment up front. A partner could ferret out the Feds.

Or bring problems. A partner kept 20 percent of every contract, which meant $10,000 minimum. Rachel doubted the deal made sense. Ten grand was serious coin. And finding somebody reliable, somebody who would keep their mouth shut, was risky business.

Cops were always patrolling undercover. They could disguise themselves as willing accomplices and nab her. Or they could masquerade as prospects and grab the partner, who would cough her up like a hairball when threatened. Advertising through
Soldier of Fortune,
she decided, was the only way to prospect—equal risk and so much cheaper.

Rachel’s existing employer was reliable. She had to give him that. His business was steady, which more than compensated for his occasional bouts of ill temper. He paid well and promised her the moon. But his assurances were talk. Empty talk. Rachel would not be satisfied until she was sifting through Parisian nightclubs for guys or chumming for adventure at the bottom of three highballs on the Rue de Martyrs. She needed to diversify.

The cell phone interrupted Rachel’s reverie. She recognized the number and let it ring just to mess with the caller’s head. Sipping from her glass of red wine, she punched the Talk button and greeted her employer, “I was just thinking about you, Kemosabe.”

“I’ve got something for you. I want you to take your time and do this woman right.”

The comment annoyed Rachel, who prided herself on doing everyone right. She checked her temper and said, “It almost sounds personal.”

“In my business, Rachel, everything is personal.”

“How old is she?”

“Does it make a difference?”

“No. But I’m curious if she’s like the others.”

“She’s seventy-six.”

“The Dead Sea wasn’t on the critical list when that gal was born.”

CHAPTER FIVE

WEDNESDAY
,
APRIL
16

Cusack was standing in line at the post office. His crooked smile curled to the right. His blue eyes twinkled. His sandy brows arched high, resembling the outer edges of half-moons. He was in good shape, 175 pounds stretched tight across a six-foot frame. He wore slim blue jeans, a white shirt, and a tweed jacket. He radiated the easy manner of success.

But he felt like a severed artery. A registered letter from Litton Loan Servicing was waiting for him at the counter. He knew all about the Houston-based company. Litton administered loan portfolios and chased deadbeats who missed their mortgage payments.

Cusack had missed the last three. With $20,000 in his checking account last January, the decision was simple. He could make one mortgage payment or parcel out the remaining cash on food, electricity, cell phone, gas, and other essentials until he found a job.

*   *   *

Cusack Capital was gone. The fund folded during March, not in the spectacular fashion of Amaranth Advisors, which lost $6 billion two years earlier. Jimmy never managed more than $200 million in total assets. But his company perished all the same, and like so many other would-be titans of finance, Cusack closed his doors in silent obscurity.

He had been so careful setting up his company. In order to convey financial strength, Cusack leased space on the sixty-first floor of the world’s most iconic office building. To show moderation, he bought secondhand furniture at a liquidation sale and avoided the bird’s-eye maple and Italian leather favored by his hedge fund brethren. Antiques were a nonstarter. He would have replaced the furnace in his mother’s three-family house before spending a few hundred thousand on period pieces.

Cusack’s frugal decisions no longer mattered. The Bloomberg terminals, lobby furniture, and conference table for eight were all gone. So were the Cisco phones and state-of-the-art computers, not to mention the fifty-two-inch flat-screen television. Like the legions of hedgies who crashed before him, Cusack was looking for a job. Only he was interviewing in a market where employers treated every applicant like a case of hives.

Financial organizations were spooked. The Dow’s modest decline, 2 percent during the first quarter, belied the market’s growing angst. In February of 2008 General Motors announced a $38.7 billion loss for the previous year. Bear Stearns self-detonated, and many hedge funds lost their shirts in the fallout from subprime mortgages and other toxic assets. There was little to cheer, except perhaps for the resignation of New York’s governor, which appealed to Wall Street’s cult of schadenfreude.

From Cusack’s perspective there had been one bright spot, one ray of good news since December. Sydney and his former employees all found jobs, thanks to a kick-save deal he negotiated with another hedge fund. Their financial security meant that he had one less reason to flog himself for past mistakes.

Too bad he was never offered a job.

*   *   *

Earlier that Wednesday morning, Cusack’s lawyer told him what to expect from Litton. “Most likely, it’s a demand notice, Jimmy, what we call a ‘forty-five-day letter.’ That’s how long you have to pay principal, interest, and late charges.”

“What about penalties, Smitty?” Cusack knew the answer without asking his attorney.

“The bank has the right to defend its financial interests.”

“Meaning I pay their legal fees?”

“Somebody does.” Smitty almost sounded sheepish. “Does your lender escrow for taxes and insurance?”

“Yes.”

“You need to pay those costs, too,” the lawyer advised.

“What if I can’t bring the loan current?”

“What about your wife?” suggested Smitty.

“Emi is a scientist at a zoo. She can’t afford a three-million mortgage.”

“That’s not what I mean. And you know it.”

“Don’t go there,” Cusack growled. “Just tell me what happens if I don’t make payments.”

“Litton takes your condo.”

“I know that.” Cusack’s mood was growing darker by the minute. “What’s the process?”

“At the start, there’s backing and forthing. The lender files a lis pendens with the court and serves you a summons. You answer. They respond. We go to discovery, and they file for summary judgment. Later an order of reference. Eventually, the court signs a judgment of foreclosure and sale. That’s when things get ugly.”

“What could be worse?”

“A public auction and ads in the newspaper. Given your three-million-dollar mortgage, Litton will make sure everybody in New York City knows your condo is on the block.”

“Great.”

“Sorry, Jimmy.”

“Forget it. There’s actually a silver lining here.”

“Which is what?” Smitty asked.

“I have forty-five days to figure it out.”

*   *   *

Standing in the post office line, Cusack lacked his earlier confidence. He felt queasy. His stomach was rumbling, not from hunger, but from intestinal half gainers where the dives were all scored “deadbeat.”

He was three people back when his cell phone rang and a woman asked, “Can you be in Greenwich this afternoon? Say three o’clock in our office?”