Love In The Air

1

For its entire history, the firm of Beeche and Company, which could trace its origins to New Amsterdam, had engaged solely in one commercial activity: trading. At no time had it cultivated or mined or manufactured any good; it acted, rather, as merchant, factor, broker, financier. At its beginnings, it imported the axes that it traded for wampum, which it traded for beaver skins, which it sold for export. Later on, it bought corn and wheat from the farms of the north and sent its ships laden with them to the Caribbean, where they exchanged their cargo for sugar, rum, molasses, and indigo, which, on the ships’ return, Beeche re-exported to the east and west; sometimes, the eastbound ships, after first calling in Britain or France, traveled down to the African coast and then sailed back across the Atlantic with cargo that was human. Beeche was among the first in New York to trade commercial and government paper, and as the years passed it added the securities of banks, then of railroads, then of manufacturers, to its repertoire. By the turn of the last century the firm had grown into a large financial enterprise with thousands of employees, branches throughout the world, and a dozen divisions. Yet its basic business remained the same: trading for its own benefit and brokering the trades of others. No Beeche had touched a plow or a hammer for centuries, nor had he employed anyone who did.

Unlike its competitors, Beeche was still owned by its founding family; no partners had been invited in, nor had shares been sold to the public. Moreover, the Beeches had passed the company down roughly according to the right of primogeniture (although there had been times when women had run it—Dorothea Beeche famously made a killing in the Panic of 1819), so the ownership had remained concentrated. Since it was a private firm, no outsider could easily judge what Beeche and Company was worth, but it typically ranked at the top as an underwriter, and it was legendary for its ability to make huge bets and refuse to fold when the markets (temporarily) turned against it, so its capital must have been very substantial.

Apart from the firm, there were, of course, other sources of Beeche wealth, and their value was even harder to determine. The Beeches, for example, had acquired land continuously, and it was said that they had never sold an acre, but the extent of their holdings was unknown, as they had long since stopped using their own name in making a purchase. Then there were the collections of antiquities, paintings, sculpture, furniture, manuscripts, tapestries, books. Always patrons of American cabinetmakers and silversmiths, the Beeches also took shopping sprees in Europe that had preceded those of other Americans by a couple of generations. One of the Beeches had made a practice of providing liquidity to embarrassed maharajahs by buying their jewels; in the 1940s and 1950s, another had accepted paintings in lieu of rent from impoverished artists living in Beeche properties in lower Manhattan. Nor was it possible to say how much money the Beeches had given away. From the earliest Spastic Hospital through settlement houses on the Lower East Side to the newest program to eliminate malaria, they had exerted themselves philanthropically, usually with the right hand kept ignorant of what the left was doing.

Yet while precision might be elusive, it could be said with confidence, in a general way, that the Beeche fortune was vast.

The incumbent Beeche was named Arthur (as most of his predecessors had been). His legacy, with all its attendant powers and duties, had come to him at the age of forty. He was now fifty-three. One wet morning in June, Arthur Beeche was being driven from his house on Fifth Avenue to Beeche and Company’s headquarters on Gold Street. He had left at his usual time, four-fifteen, and at that hour the trip took ten minutes. Rory, the chauffeur, had minded Arthur since he was a little boy and, on account of his employer’s generosity and good advice, and his own shrewdness, he had acquired his own fortune. Right now he was making a big bet on volatility, as he told Arthur on the way downtown. They arrived at the Beeche Building, an enormous new edifice. The rain had made black patches and streaks on its slate cladding. Rory opened the car door for Arthur and scampered to open the door of the building. Although he was a large man, Arthur moved in a kind of shimmer, as if an invisible force were conveying him a finger’s width above the ground. “Good morning, Mr. Beeche,” said a security guard. Arthur smiled and said, “Good morning, Ignazio.” He shimmered over to his private elevator, and Ignazio pushed the button for him; the doors opened instantly. “How’s your little boy doing?” Arthur asked. “The first-grader.”

“Oh! Good, Mr. Beeche,” said Ignazio. “Very good.”

“Did he get glasses?”

“Yes, sir. It’s a big help.”

“That’s swell,” said Arthur. “But the other children don’t tease him?”

“Oh no. Maybe a little, but not so bad.”

“I’m glad to hear such a positive report,” Arthur said, entering the elevator. “See you tomorrow, Ignazio. Take care of yourself.”

“Yes, sir. You too, sir,” said Ignazio. “Don’t fight the tape!”

Arthur laughed. This was a little joke of theirs. “I’ll try not to!” he replied.

When Arthur got off on the seventy-seventh floor, a beautifully groomed woman, Miss Harrison, was there to meet him. She carried a folder full of correspondence. As they walked toward his office, he and Miss Harrison talked quietly about how Asia had closed. They passed by some empty desks, through a well-furnished anteroom, and then into Arthur’s office proper. It was large and decorated in the expensive but reserved style of a masculine upstairs sitting room in one of Arthur’s houses. There were three large paintings and several smaller ones. Arthur changed these regularly, enjoying the chance to study his pictures during his long hours at work.

He sat at his desk, which was bare of any papers. Miss Harrison placed the folder in front of him. She brought his attention to several matters. “Thank you, Miss Harrison,” he said, and she withdrew.

Arthur Beeche was six feet three inches tall and was powerfully built. He had a large head with a flat brow; his black hair had always been rather thin and, combed straight back, enough of it now remained only to cover his skull. The most striking thing about Arthur’s appearance may have been his mouth, which was incongruously sensitive-looking for the thick superstructure of his jaw and cheekbones. Today he wore a gray suit with a thin, faint red check, cut in the English style.

Arthur was thinking about something that he had not been able to get out of his mind since he first put the suit on that morning: his tailor had died. This event saddened and preoccupied Arthur. He was, naturally, concerned about finding someone who would make his clothes as skillfully. But he wasn’t thinking about that. The news was taking an emotional toll on Arthur, for his tailor had been a particular friend.

Sam Harrison (someone at Ellis Island had given his father, a Russian Jew, the same name as Arthur’s aide, who was a Harrison of Virginia) had become a Communist in the 1930s and had remained one. The greatest tragedy of the twentieth century, to his mind, had been the Normandy invasion. By the time the Allies had finally opened the second front, Sam always insisted, even Stalin had come to think that the Soviets could defeat Hitler alone, which would have secured all of Western Europe for the dictatorship of the proletariat. The very rich men of affairs among Sam’s clients took pleasure in it when he ranted against capitalism: the irony and humor of being abused by your incredibly expensive Communist tailor was delectable. Meanwhile, the idle men of fashion who patronized Sam all more or less agreed with him.

While Arthur’s fellow plutocrats treated Sam with amused, condescending patience, Arthur talked with him frankly and seriously. He didn’t relish the incongruity of paying someone to make his suits who, theoretically, would just as soon have seen him guillotined; his mind didn’t work that way. He disagreed with Sam and said so forthrightly, taking Sam’s opinions at face value, and Sam treated Arthur’s with the same respect, and as a result, as they argued over the years, they became better and better friends. What especially bound them together, though, were their discussions on a topic that was dearer to Sam even than politics: his wife, Miriam. He had married when he was twenty and his bride was seventeen, and he thought then, as he thought now, that Miriam was the most beautiful woman in the world (and he was not deluded in this). He had three sons and two daughters and many grandchildren and even a couple of great-grandchildren: he had loved them all and they had all made him proud (well, one of his daughters had married that pisher, but they got rid of him). But most of all, there was Miriam, a tall woman with long auburn hair and a sweet voice and even sweeter disposition. Sam loved her.

Now, Arthur had also loved his wife. They had fallen in love when he was twenty and she was seventeen, but, unlike the Harrisons, they were not married until several years later (and for that occasion, Sam had made Arthur a new morning coat for free). Without question, that had been the happiest day of Arthur’s life. As he said his vows, his voice cracked and he wept. He and Maria (pronounced with a long “i”) had been married for sixteen years, and he loved her throughout all that time and he loved her now. But she had died of cancer at age forty (at her most beautiful, Arthur and others believed). As he had been purely happy on his wedding day, so he was in pure despair on the day that Maria died. If the sun had burnt out and the seas dried up, Arthur might have been mildly troubled. Maria’s death made him distraught.

The person who best understood what had happened to Arthur was Sam Harrison. “It’s a tough break, kid,” Sam had said. Arthur had trembled.

“You know, Sam,” he had said hoarsely, “I have to travel a lot. The worst thing about it was always leaving her. But it was almost worth it because of how wonderful it was to see her again.” Arthur had been unable to speak for a moment. “Now I won’t see her again.” He had looked at Sam and saw the loose skin under his chin quiver and his eyes, each studded with a mole at the lower lid, begin to water. Sam held Arthur’s arm. “Yeetgadal v’yeetkadash sh’mey rabbah,” he had whispered. “B’olmo d’vero keerutey.” Arthur had not understood the words, nor had he fully grasped the significance of an atheistic Marxist’s uttering a prayer, but he appreciated the sentiment.

Sam and Arthur had always talked about Miriam and Maria, and they continued to long after Maria’s death. Years later, Arthur would ask Sam about Miriam, and Sam would grin and say, “Well, the other day …” But he would pause and look at Arthur, who would look back at him in the three-way mirror. Then Sam would say, “You’re still thinking about her.” And Arthur would say yes, and he would tell Sam some memory he had recently had about Maria—the soup in Madrid, her salamander brooch.

Maria was dead. They had had no children; Arthur himself had been an only child. His father was dead and now old Sam Harrison was dead. Arthur rose and looked out the window. The rising sun gave the rain clouds a dull glow. More cars had appeared. In a typical office building, even on a floor at this height, you could hear traffic, especially the slithering sound of tires on wet asphalt; typically, on a stormy day on a floor this high, the wind created spooky sonic reverberations and the building actually swayed. Arthur’s office was different. He heard no traffic or wuthering wind, and he felt no swaying. In his office, all was quiet, still. From his vantage he could see a dozen other buildings, and he thought about all the people who would soon be arriving for work. They constituted a lot of energy, activity money. A lot of life. Arthur did not wonder what it was all for. It seemed obvious to him what it was all for. His own life was busy and full. He had good friends; his mother was still alive and he was close to her. But he felt heavyhearted and alone.

A few hours later on that same June morning, a meeting was taking place on the fifty-ninth floor of the Beeche Building. It was in the small conference room, the one with no windows. One of the participants in the meeting, indeed its central figure, was a young man named Peter Russell. Peter was thirty-two years old; he had been working for Beeche and Company since his graduation from college, and he had advanced nicely. Despite the doubts he sometimes entertained about the value of his work, he had enjoyed it, he had enjoyed his success, and he had enjoyed his high pay.

On this morning, though, Peter was quite unhappy. In fact, he was at this moment the unhappiest he had ever been during his entire time at Beeche. The meeting, which he had gone into with enthusiasm, had become a savage, grotesque spectacle in which he was the victim. His tormentors had poured hot lead down his throat, cut off his private parts and stuck them in his mouth, and now, while he was still alive, they were tying each of his limbs to four different horses before sending the horses galloping off in four directions. Peter had fixed his face with an interested, wry expression while he listened to his colleagues, but he knew he was blushing bright red and that he was fooling no one. He felt sweat trickling down from his armpits.

It had all come about like this. A few weeks earlier, after a couple of his patrons had been shifted to different offices around the world, Peter had found himself working for a boss whom he didn’t know well. The things he’d heard about Gregg Thropp were not encouraging. Thropp was a short, stocky fellow, and he displayed all the Napoleonic traits so common among those of his physical type. He was driven, ambitious, self-important. When he walked, he moved his stubby legs so fast that even the long-legged had to work to keep up. Peter could see for himself that Thropp was insulting and rude to those below him. Others had warned him that Thropp was a devious, lying, backstabbing worm.

Yet toward Peter, Thropp hadn’t acted badly at all. To the contrary! Thropp had treated Peter with courtesy. He’d shown Peter respect in meetings. He’d given Peter credit when it was due him and encouraged and praised him, calling him “Champ.” Oh, sure, sometimes he could be pretty blunt, but it was hard to see what was so bad about Gregg Thropp. Peter had come to trust Thropp so much that he even went into Thropp’s office one day to show him something that had made Peter especially proud. He had played an important part in a couple of notably profitable transactions that had come to fruition when he was working for Thropp but that had been initiated previously. On this day Peter had discovered a small square envelope in his interoffice mail; inside, there was a handwritten note from Arthur Beeche himself! The note read as follows:

Dear Mr. Russell,

Please accept my congratulations on your fine work in the reinsurance and Italian bond matters. Well done!

Yours very truly,

Arthur Beeche

P.S. I hope you will join us soon for one of our entertainments.

Well, as one might imagine, Peter had been bowled over. A personal note from Arthur Beeche! What was more, it looked as if Peter was in line to receive an invitation to dinner at Beeche’s house. Arthur entertained often, and his dinners were legendary for the quality of the food and drink and for the glamour of the guests. A few people from the firm were usually included, and to receive your first invitation was an important honor. You were supposed to act nonchalant about it, but Peter had been so amazed and pleased that he’d taken the note into Thropp’s office and showed it to him.

“Well, well, well!” Thropp had said. “The Champ scores!” He had stood up and begun to lift and lower his arms in front of him, an absurd-looking motion for one so short. “Come on! The wave! The wave!” Thropp did this a few times before he started laughing too hard to continue. When he had recovered, he had looked at Peter earnestly.

“I’m proud of you, Peter,” Thropp had said. “I really am. One thing you can sure say about Arthur Beeche is that he has his eye out for talent. You’ve done good work and you deserve to be noticed. Congratulations.”

Thropp had held out his hand and Peter shook it.

“When I’m working for you,” Thropp had continued, “and it looks like that’ll be any day now, you won’t screw me, will you?”

They had both laughed.

Thropp wasn’t such a bad guy!

A few days later, Thropp had wandered into Peter’s office, looking thoughtful. “Say, Peter,” he had said, “you know your idea about securitizing home equity? I’d like to have a meeting on it.”

“Really?” said Peter. “But, God, it’s such a big thing, and it was just something I was fooling around with. I don’t think it’s anywhere near ready for a meeting.”

“Oh, it wouldn’t be a big deal. Just Huang, Kelly, Matt, you know, people like that.”

“But—”

“I’ve been thinking about it. There are a lot of possibilities. Let’s kick it around. Be a good thing for the team. Get some juices going.”

So it had been agreed that in a few days a meeting would be held at which Peter would give a presentation on his idea. This was the aforementioned meeting, which had descended into a bloodthirsty dance of death.

Peter had gotten a jolt as soon as he had entered the conference room. First of all, the place was already full, which was suspicious. Then he noticed that he didn’t see Huang, Kelly, Matt, or any of his other friends. Where was T.J.? T.J. should have been there! Peter barely knew some of the attendees. More troubling still, a man and woman from Upstairs were sitting in a corner of the room, away from the table. The man, a trim, fortyish black guy, was wearing his jacket even though everyone else was in shirtsleeves. The woman, in her fifties, sat there with an imperious, pre-bored expression. Peter had never met them, but he knew who they must be. He set up his computer and its connections; he noticed that his hands were shaking.

Thropp had begun the meeting. “Welcome, everyone.” He nodded toward the man and woman. “Rich, Andrea, thanks for taking the time to come down.” He rubbed his hands together. “Well, now, we’re all here to listen to Peter tell us about his new idea. Peter has been quite mysterious about it, playing it close to the vest, so I can’t tell you much about what he’s cooked up. He tells me it has the potential to be something very big. I’d usually want to spend some time going over a presentation like this myself, but Peter was so insistent on having a meeting that I said okay just to get him off my back!” Mild chuckles.

Thropp turned to Peter with a smile and gestured to him. “Go ahead, Peter,” he said. “It’s your meeting.”

This isn’t right, Peter thought. His heart began to pound. “Thank you, Gregg,” he said with a quaver.

What he had to say was very preliminary, he explained, and he had only a few slides to show. Then he had gone through it all: What is the greatest source of wealth in the country? The equity people have in their houses. Over the past twenty years, the debt on people’s houses had been securitized, providing a great benefit to borrowers and investors—and the firms in the middle. In Peter’s view, the mortgage market looked shaky. Would there be a way of securitizing home equity? Say a homeowner could sell some of the equity in his house. There could be individual transactions (after all, each mortgage is individual), and you could bundle up those equity stakes just as in the mortgage-backed market. Think of the advantages: home buyers would have an alternative to debt; homeowners could pay down debt and benefit from a rise in prices without selling their houses or borrowing more; they could diversify, buying equity in houses in different markets from their own. With the home equity securities would come hedging opportunities: people could short their own houses if they were in a bubble, and there would be any number of derivative plays. It would spread risk around, make the market more efficient. Then imagine the money you could make if you were the first to come up with such a product.

Peter liked his idea even though it was at only the fantasy stage, and as he spoke he couldn’t help but become more enthusiastic about it; this excitement combined with his anxiety made for a great agitation within him, as he allowed himself to think that he might possibly have carried others along.

He hadn’t. After he finished, saying, “Well, that’s about it. As I mentioned, it’s all very preliminary,” there was silence. A cough. A rustle of papers. Some taps of a pencil. Another cough.

Thropp spread out his hands. “Reactions? Rajandran?”

Rajandran was one of Thropp’s liege men, and Peter didn’t know him well; he spoke with great precision, polishing every phoneme. “Well, I am sure we all agree that Peter has some interesting ideas.” He smiled. It was amazing how white his teeth were. “But it seems to me that he’s missed the boat on this one.” Rajandran rattled on for several minutes, enumerating all the reasons everything Peter had said was absurd. The basic premise was nonsensical. The problems with execution would be horrendous. Peter completely misunderstood the market, the simplest model would show that. And on and on. Someone—some mysterious person—had obviously briefed Rajandran on what Peter was going to say and then instructed him to prepare an informed rebuttal. Peter glanced at Thropp, who was rocking in his chair and trying to suppress a smirk. Peter thought he could hear him humming.

As soon as Rajandran finished, before Peter could even begin to respond, someone else piped up. “You know, of course, Peter, that a futures market for housing prices was tried in London and was a complete disaster.” Another case of advance research!

“Yes,” Peter said, “but, really, there was a marketing problem—”

“Marketing problem!” his antagonist said sarcastically. “You want the firm to spend billions of dollars to redo the economics of housing—and you think a few ads will make the difference?” A snicker traveled the room.

A third henchman joined in. “What about the owner’s balance sheet?”

And then each member of the trio simply began to fire away: “Look at the piss-poor reaction to the Chicago Merc product.” “Wouldn’t insurance make more sense?” “Is it stochastic?”

Peter tried to answer (“… preliminary, something that would need to be looked at, I can’t be sure, um, uh …”). And then he just sat there listening, trying to look unfazed despite his red face and the sweat trickling down from his armpits. Finally, the bloodlust of his tormentors seemed to have been sated.

“Anyone else?” Thropp asked. When no one spoke, he turned to Peter. “Well, Champ, I guess you’re a few bricks shy of a load.”

The man and woman from Upstairs had whispered to each other and gotten out of their seats and were now leaving. They gave a nod to Thropp, who said, “Rich, Andrea, we’ll try to give you a better show next time.”

Peter’s head throbbed. He felt rage and shame. He knew that he was putrefying before everyone’s eyes. A nauseous odor was beginning to arise from him, the putrescent stench of failure. From this moment on, people would slip by him quickly in the halls; they would respond to his phone messages and e-mails in the most perfunctory way; they would edge toward the walls when they found themselves in the same room with him. Even if some of them knew that Peter had been set up, they would treat him as one infected with the plague; it was enough that somebody very senior had wanted to lay a trap for him and that he had fallen into it.

“Okay, everybody,” Thropp was saying. “That’s it.” Then he turned to Peter with hooded, menacing eyes. “My office. Five minutes.”

When Peter presented himself at Thropp’s office, he found Thropp rocking in his chair with his folded hands on his stomach; he wore gold cuff links the size of quarters.