The Prince of Risk

46

The madness began minutes after Astor ended his call with Magnus Lee.

“Bobby, it’s Jay Cantrell.”

Jay Cantrell ran the prime direct division at another of Comstock’s lenders. He was Texas royalty, scion of an oil baron who owned half of Houston. Cantrell had lived in New York for thirty years, but his twang was still as strong as the day he arrived.

“I’m guessing this isn’t a social call.”

“Wish it was. Just wanted to give you a heads-up that if the rates hold, we’re looking at a margin call of one hundred fifty million this afternoon.”

“I’m aware of that.”

“I know you are,” said Cantrell. “And I know we don’t have to worry about Comstock one little bit.”

“You don’t, Jay. The dollar’s going to rally versus the yuan.”

Cantrell cleared his throat, and when he spoke his twang had lost some of that down-home sweetness. “That’s not what I meant.”

“I know what you meant, Jay.”

“And?”

“I’ll talk to you after the close.”

“Now hold on a sec there, Bobby,” said Cantrell, one good ole boy to another. “A buck fifty’s a nice pile of change. I’d like to be able to give my boys a heads-up that everything’s hunky-dory down your way.”

“Couldn’t be better, Jay. And I thank you for asking.”

“So I can tell ’em-”

“You can tell ’em that I’ll speak with you after the close.”

Astor hung up. His eyes had been glued to the monitor for the length of the conversation, checking the slightest fluctuations in the position. Every tick up or down of a hundredth of a cent translated into a gain or loss of millions of dollars. With every tick, he felt a vein in his temple throb.

A second later his phone rang again. “Sam Bloch on line one,” said his assistant.

Bloch was another lender, one of the two people at the clambake on Sunday night whom Astor had counted as a friend. Bloch was old-school. They had always kept one rule between them: no bullshit.

“Yeah, Sam.”

“You fucked up, Bobby.”

“Give me some time.”

“You’ve got six hours till the close. And twenty-four after that to make good.”

“What are we out to you?”

“Couple hundred. You got it?”

“Let me check my pockets.”

“No one’s in the mood to laugh today, buddy. This is real. No sign the rates are softening. I saw that press conference last night, too. You’re not the only one sweating this. What the hell were you thinking?”

Astor grimaced. Win big or lose big, it was the same question. Only the tone differed. Admiration or condemnation. Right now, he was damned if he had an answer. “I’ll talk to you after the close, Sam.”

“I can’t be your rabbi on this one. Rules are rules. Lots of people are watching. You know how it is.”

“Yeah, I know how it is. And Sam…thanks.” Astor hung up.

The pain in his temple increased.

The phone rang again. “Who is it now?” he asked his assistant.

“Adam Weinstein from the Times.”

Weinstein wrote the “Deal of the Day” column for the paper. He was Wall Street’s Hedda Hopper, and just about as warm and fuzzy, with a reputation for breaking the big story. Astor couldn’t trust himself to dish out the requisite bullshit this morning. Telling a newspaper the truth was like handing the hangman a rope. Astor had no illusions. Weinstein was an executioner. Astor knew just the person to shut him down. “Give him to Marv.”

Another light was blinking. Astor ignored it. Instead, he called Sully and asked him to bring the car around to the front of the building. He placed one last call. “Get me Septimus Reventlow.”

“One second.”

The call went through a moment later. “Hello, Bobby. Why aren’t you calling on your private number?”

“Phone issues. Hello, Septimus. Have a minute?”

“I should ask you the same question after the reception I received yesterday. I don’t have to ask why you’re calling.”

“Markets move up and down.”

“Should I feel reassured, or should I be demanding to withdraw my family’s money from your fund?”

“Time will tell. We’re standing behind the position.”

“And the Chinese announcement?”

“Posturing ahead of the election this Friday.”

“Can one election change so much?”

“Absolutely. The new members elected to the Standing Committee will signal which direction the country is heading in.”

“And you think they will backtrack on their promises to your government?”

“They don’t have a choice. It’s hard enough to govern a country of a billion and a half people when the economy is booming. Right now the economy’s in the tank. The Chinese prize stability above all else. You do the math.”

“Tell me, Bobby, are they still building too many motorcycles?”

Astor chuckled. During their first meeting, three months earlier, he’d told Reventlow a story that illustrated the economic quandary the Chinese found themselves in. There was a government-owned motorcycle factory in Dalian that turned out two hundred beautiful bikes a day. The motorcycles were picture-perfect knockoffs of Harley-Davidsons but at half the price, and for years they’d sold like hotcakes to countries such as Malaysia, Mexico, and Brazil. But as the yuan grew stronger and the wages of the skilled Chinese workers who assembled them also increased, the motorcycles grew more and more expensive. Clients in expanding nations were price-sensitive. Sales faltered. Soon the factory was turning out two hundred bikes a day but selling only one hundred fifty. The unsold bikes quickly piled up in the freight yard. The government was faced with a dilemma. It could either cut production and fire 30 percent of the workers or continue manufacturing motorcycles that no one wanted to buy. The first alternative would result in the layoff of a thousand workers, a steep decline in the local economy, and certain unrest. The second alternative would result in contented employees, growing losses for the company, and eventual bankruptcy. The Chinese, being ever nimble and ever frightened at calling a spade a spade, chose a third course. It continued making the motorcycles, then created a new company to purchase the motorcycles, take them apart, and sell the metal as scrap. Problem solved. Or at least put off to another day.

To Astor’s mind, that day was today.

“Yes, Septimus,” he replied. “I believe they are.”

“Then there is hope,” said Septimus Reventlow. “What can I do for you?”

“Show your faith.”

“Let’s see how the market closes. I need to talk to my family members before I make a decision. Shall we continue this discussion tomorrow?”

Astor knew better than to push. A commitment from Reventlow to invest the $300 million he’d promised would go a long way toward meeting a margin call and restoring the marketplace’s faith in the firm. “That will be fine.”

Astor hung up and started toward the door, only to walk into Marv Shank.

“You’re not leaving, Bobby. Not today.”

“Marv, please.”

“I know that your dad is important to you, but Comstock is more important.”

“There’s nothing I can do to fix the position,” said Astor. “Unless you want me to start liquidating the fund right now.”

“Our guys need to know you’re here. A captain doesn’t abandon a sinking ship.”

“This isn’t the Titanic.”

“Right now it feels like it.” Shank shut the door. “Here’s how it is, Bobby. I’m forty-one. Everything I’ve earned is in that fund. I don’t have a cattle ranch in Wyoming or an apartment building in Chelsea or a freakin’ French masterpiece, and if I did I wouldn’t cart the thing around Manhattan as if I were carrying a six-pack of Bud Light. I’ve got fifteen years of blood, sweat, and tears with you. Fifteen years working seven to seven inside this glass tower. I know it’s my fault that I forgot to grab a wife on the way up. It’s always just been about work for me. You’re my friend, Bobby. Pretty much my only one. I’m asking you. Stay.”

Astor put his hands on Shank’s shoulders. “Here’s how it is, Marv. You’re my friend, too. But you’re not my father. And about all the other stuff-the ranch, the apartment-pretty much everything I have is pledged to the firm. We go under, I go under. You can write your ticket at any other firm on the street. Me, I’m fish food.”

Shank didn’t budge. “That isn’t good enough. There are people you can call. Chips you can cash in.”

“I’ll see what I can do if and when the time comes. Now come on, out of the way.”

Still Shank didn’t move. “What about your father’s estate?”

The pounding in Astor’s head intensified. “Excuse me?”

“Your old man was loaded. He sold his company for a billion ten years back, and that’s not counting how much he earned before. You’re his only heir, right? I mean, your mom’s dead. You don’t have any brothers or sisters. Who else was he going to leave it to? Call his attorneys. Ask them to read the will immediately. They can pledge something. I know a banker who’ll front you the dough.”

Calm down, Astor told himself. He’s just scared. He has no idea what he’s saying. “You do?”

“Yeah.”

Astor looked away, hoping his anger would recede. When he spoke, it was in a whisper. “Don’t ever tell me what I can or can’t do. I’m leaving now. And Marv…don’t ever bring up my father again.”