Full Measure

Chapter ten

Evelyn got to Anders Wealth Management early the next day and checked the S&P 500, up two points after yesterday’s eight-point skid. The domestic tech sector was holding its own. The munis and state bonds looked as good as bonds could look, given that soon-to-be-bankrupt cities and states were, in her opinion, the dirtiest little secrets that financial professionals were trying to keep.

She saw that the foreign stock markets were all down except Brazil’s. Almost all of Asia was a wreck, looking much like the U.S. markets had looked in ’08. The roller-coaster lines of the Morningstar graphs taunted her from the screen, crazed and unpredictable. The Thomson-Reuters year-to-dates on three of her favorite large cap funds were depressing. Evelyn ate some of her low-fat scone and sipped a nonfat latte from Caffe Primo, knowing that those zigzagging fortunes on the graphs belonged to actual people, some of whom were trusting her to steer their ships between the clashing rocks of the great recession.

She checked mortgage interest rates and saw that they were still near all-time lows, though few of her clients could get these loans. What was left of the housing market was still constipated. The buyers — institutional investors and the lucky few individuals who had managed to dodge the crash — were paying cash. It was bottom-feeding and there was nothing wrong with that, from an investor’s point of view. But bottom-feeding was such a privileged and sorry substitute for the once-great, wealth-producing home industry that had vanished: the architects, builders, contractors, tradesmen, mortgage originators and lenders, appraisers, inspectors, realtors, and, of course, the secretaries, office managers, clerical and support staff who kept all the wheels turning. Some were friends and acquaintances of Evelyn’s and now they were gone from the business — their numbers no longer in service; their offices now for rent. She knew a full dozen Fallbrook real estate agents who’d folded over the last few years because homeowners couldn’t afford to sell and buyers couldn’t get credit to buy. And she knew there was more to come.

She drank down the latte and brought up the Norris Brothers file on one of her computers. She’d bumped into Caroline Norris just yesterday and had spent two whole hours very early this morning, unable to sleep, wondering how she could help. There had to be something more than selling off their real estate trusts at a loss on the secondary market, and cashing out Archie’s and Caroline’s retirement funds with taxes due and penalties for Caroline. Wasn’t the whole idea of America geared to keeping this from happening? She just couldn’t get Norris Brothers Growers out of her mind.

Then the whole thing with Ted. An unhealthy boy turned into an unbalanced young man, thought Evelyn. Somehow damaged. Evelyn wondered what she’d done to incur his disdain. When his behavior toward her became strange — say, five years ago — she’d sensed he had a crush on her. She’d tried to see it as flattering and harmless. Now she was almost afraid of him, though this shamed her.

She’d been seeing him around Fallbrook since he was born and she was all of fourteen years old. Caroline used to push him around in a shaded blue stroller, shopping and meeting friends for lunch, and to events such as the Christmas Parade, the Independence Day fireworks show, the Classic Car Show. To Evelyn, Ted had looked like any baby — cute. And Caroline was striking. She was never casual but always well dressed and well groomed. Correct posture, expensive dresses that draped beautifully, tasteful jewelry. Even at twenty years old, she struck Evelyn as stately, more formal and cultured than most of the other Fallbrook women. Archie Norris was quite a bit older, and severe. He’d lost a young wife many years ago and was starting over. All of which made young Evelyn wonder if there was something wild in Caroline, something she needed to restrain. At age fifteen, Evelyn had begun to imitate Caroline’s carriage and mannerisms, and to aspire to Caroline’s presence and — someday, maybe — wardrobe.

Now, twenty-five years later, well-dressed Mayor Evelyn Anders picked at her scone and remembered that little Teddy was often sick, in and out of the hospital for tests. None had been conclusive, that she could recall. He limped.

Then he grew up, kind of. She felt bad for his aimlessness — still a live-at-home college student at age twenty-six — and for his faulty feet and pained locomotion. But the cartoon he’d drawn and posted online was mean and insulting and she would not dignify it or him by posting or returning his e-mails of apology. She wasn’t happy that Cal State San Marcos had expelled him and she privately thought that the school had abridged Ted Norris’s First Amendment right to freedom of speech. She had toyed with the idea of talking with the CSUSM chancellor about having Ted reinstated but it seemed ill-advised, given his general state of weirdness. It was easy to imagine herself stepping into something she’d have trouble stepping back out of.

So, what could she do for the ailing Norris Brothers Growers? She reviewed Archie and Caroline’s investment portfolio. They had diversified, just as she had advised them. But the diversification had failed to fend off 40 percent losses in the crash, which, added to drought, frost, fire, and bad investments, were bringing the Norrises to their knees. She called up their history at AWM and confirmed that Archie and Caroline, as advised by her and Brian, were risk-tolerant investors in ’08. Which, of course, had backfired magnificently.

She called her old friend Larry Williams over at the Fallbrook Farm Credit Bank and he told her that he couldn’t lend to just anybody this soon after the fire. They’d all have to wait to see how bad the damage really is. Evelyn argued that Archie Norris wasn’t just anybody, but one of the most respected growers in the whole industry. And that Archie would need to replace his ruined trees by late winter — whether it was ten or ten thousand of them — and the time to order them from the nursery is right now. Isn’t that what the Farm Credit Bank was set up to do?

“Evelyn, can you imagine how many times I’ve had this conversation over the last four days? And with how many growers?”

“Well, I happen to know some of those same growers myself, Larry, and your Farm Credit Bank is there with bells on for them.”

“Each situation is different, Evelyn. I can’t talk about specific clients. You know that.”

“What I don’t know is how to help Norris Brothers,” she said.

“They should consider selling, and I hear there’s an offer on the table — post-fire — for a million three. Archie and Caroline play things close to the vest, but I’d have to guess that they could sell and live well. But I also know Archie, and my bet is he won’t even listen to that offer.”

“The ranch is what he is.”

“Yes.”

“What’s it worth?”

“A four bedroom built in the sixties on eighty acres of ag land zoned twenty to one? Barn and some outbuildings? Two million seven, tops. And don’t forget there’s going to be other groves and houses for sale after everything that’s happened. So maybe two million five is closer. Yes.”

“Hell, Larry. It was appraised at five million dollars six years ago.”

“So did Ryan Damon’s spread out in Bonsall. He closed on it last week, two days before the fire broke out, for two point seven and it’s no secret he was happy to get it.”

“God.”

“I wish I had his number for you.”

Evelyn thanked him, rang off and brought up a summary of Norris accounts and holdings. She consulted the last few Fallbrook real estate MLS bulletins. She valued the ranch and house at $2.5 million, then added their three investment condos, which were worth a rough total of $650,000 in today’s market. Then she added in their modest retirement money and all investments with Anders Wealth Management. She included a hundred grand for holdings and investments that Archie and Caroline likely kept outside of AWM. The Norrises’ gross worth was $3.3 million.

However, Archie and Caroline were badly upside down in all three rental units, having paid dearly for them, just before the crash. So even though the condos were bringing in modest rents, they were also unsellable at anything close to a break-even. The condos had been financed at a punishing 6.4 percent interest and no bank would refinance them with that kind of negative equity. Negative equity, thought Evelyn, what pathetic words. So, the Norrises had taken on debt of $1.2 million dollars for three condos now worth $650,000, and secured the expensive subprime loans, of course, with their home and business — Norris Brothers Growers.

Evelyn looked out her second-floor window and watched the Main Street traffic go by. It was rush hour in Fallbrook now, which meant an orderly line of commuters headed out of town in each direction, and plenty of moms and dads, Brian among them, taking their children to school. Pendleton Marines and employees were stacked up westbound for the base. Main Street would be quiet again by nine o’clock. Back when she was a girl there was maybe one-fifth of this traffic on Main at rush hour, which meant almost none. But she liked the way that her little town had grown to a whopping 30,000 citizens. In her opinion, it was every bit as good a place to live as it had ever been. A real Main Street kind of town. And she knew that without such growth she might not have been able to begin her professional career here. It was a vibrant little city and it had let her stay and become a part of it. She saw one of her campaign posters, wondered if she should have just skipped the picture and used text and colors instead. Not far away was a poster for Walt Rood and she had to admit he had an open and likable face.

She turned back to her notepad and calculator, backing out the debt on the Norrises’ condos from the value of their home and property, projecting income tax on pension disbursements, coming up with an estimated net worth of $1.3 million. At sixty-six years of age, Archie was drawing social security, but not much. Caroline was only forty-six. They were both healthy so far as Evelyn knew. There were two universal variable life insurance policies in place but they had borrowed against them, gutting the cash-surrender values, and the death benefits were about to lapse.

If by “living well,” Larry Williams had meant selling at market value, paying off their debts and buying a small home for $300,000 — and drawing down the remaining $1 million over, say, the next ten years of Archie’s life, and the next twenty-five of Caroline’s — then yes, they could do it. But if you figured inflation at even 1 percent a year, plus medical costs, and basic necessities, it was a pretty thin lifeline. A million dollars over twenty years was fifty grand a year. Out of that they’d have to pay taxes and utilities, supplemental health insurance, food, clothes, and cars. They might want to go see their sons and grandkids. Maybe take a vacation. Fifty grand a year was not much money to do all of that, after a lifetime of work, she thought. Hard, hard work. Sell it all and live out your days, frugal and limited, looking over your shoulder? Things could be worse, and in fact they were worse for many. No wonder Caroline Norris had looked so intensely worried yesterday, Evelyn thought. No doubt she’d run these same figures herself since the fire. The latest purchase offer from the Newport Beach doctor really was low — ironically, bitterly low — $1,300,000. Just enough for the Norrises to pay their debts, walk away, and begin their third act in life with a few pennies of the many dollars they’d earned.