Nothing But Money (4 page)
Authors: Greg B. Smith
Sophistication. Prestige. Sometimes it seemed these were more important than even the money. It was important to him that he be seen as sophisticated, a man of wit and worth. He never really spent much time acquiring the cultural education necessary to be truly sophisticated, because that would have taken away from the time he spent making money. And he had discovered that on Wall Street, you really didn’t have to know a Mondrian from a Monet; you could pay someone to know the difference for you. What was important was the effect the Monet had on people who didn’t know any better. It was Manhattan name-dropping. It was being part of something you could never really be a part of, simply by writing a check.
To be more precise, lots of checks. The need to improve the net was all-consuming. It was just as John D. Rockefeller had said when he was asked how much money is enough: “Just a little more.” The hunting and gathering never ended. The young man was motivated by a desire to acquire, but once he’d begun acquiring, he learned a distressing fact: there was only one direction—up. You could never sell off property and you had to have more. Once you attained a certain lifestyle, you were obligated to maintain it and improve upon it as soon as possible.
“I was making very good money, and I was constantly broke. I never had a penny in the bank. I rented what I couldn’t buy.”
Whatever money he got, he spent. If he wanted more, he borrowed. He would never recommend a company that did business the way he lived. If he saw something he liked, he bought it. If he drank wine with his dinner, he’d never look at the price. That was something only ordinary people had to do. Cost was meaningless when you believed the supply of cash would never stop. And if he came up short, that was no problem. There was credit. American Express and MasterCard and Visa were delighted to help out, sending off friendly solicitations with zero-percent financing for the first six months. After that, you switch to another card. There was no reason to save. Saving was for fools. Sink some of your paycheck back into stock and get rid of the rest as fast as you can. The art hanging on his walls was worth a fraction of what he told people it was worth, but still he could use it as collateral to borrow more. Collection agencies hammered at the door, looking to seize first his Mercedes convertible and then his sister’s. When he jumped over to Oppenheimer, most of the up-front payout went immediately to cover debts, some of which had been festering for quite a while. If Wall Street collapsed, that could be a problem. The revenue stream would have to be replaced immediately. Bankruptcy was not an option.
Which was why he was growing increasingly concerned as he watched the ticker on this Monday morning after Black Friday.
From the opening bell the Dow began to drop and didn’t stop. It looked odd, the trading volume numbers he was seeing. He was used to seeing the same numbers every day.
A dip like this hadn’t been seen since the worst day of all time, October 29, 1929. The idea that something like that could happen again was too much to think about. But here it was, and it wasn’t slowing.
At 11 a.m., the Dow was down to 2,100.
The young man and all the other brokers and analysts and managers and clerks and receptionists at Oppenheimer sat transfixed, the numbers on their computer screens gliding by like tracer bullets.
For a while, there was hope. The drop stopped shortly after eleven and the Dow began to rise again, until noon, when it began to hold steady. Nobody went out on the street for lunch. The hot dog and knish guys on Broad Street outside the Exchange stood around scratching themselves, victims of slide. The shoeshine guys outside Trinity Church smoked cigarettes and talked Yankees and Mets. The usually bustling lunchtime crowd evaporated.
After lunch the drop started again. The execution of trades was beginning to get clogged in the machine. Trades were behind by two hours. Nobody knew what the hell was going on, so naturally everybody started to guess. Was it James Baker talking negative about the U.S. dollar? Was it the U.S. Navy choosing today of all days to blow up one of Iran’s offshore oil platforms in the Persian Gulf? Was it millions of small-time investors spooked by Black Friday and fleeing the stock market altogether like lemmings into the abyss? Was it the dreaded program trading gone wild? Who knew? The Dow hit 2,000 at 2 p.m., then 1,900 by 3 p.m.
That was when the rumor started. The Securities and Exchange Commission was ordering the Exchange to halt trading. It could happen at any time. They had never done that before, and to do so now was surely a sign that the end of days was at hand for American capitalism. The fact that the rumor wasn’t true didn’t really matter. Rumor itself could easily have the same the effect as lightning hitting a pond. The panic began in earnest at 3 p.m. Investors began unloading as fast as they could. In one hour the Dow dropped from 1,900 to 1,800 and screeched toward 1,700.
At the closing bell of 4 p.m. the bloodletting stopped at 1738.74, and that was just an estimate because the trades were so far behind. They even shut down the Pacific Exchange a half hour before its usual 4:30 p.m. closing bell to stop further carnage.
It was over. There was nothing more to say. The Wall Street buccaneers sat back and looked at numbers.
This was history. This was big. They had witnessed the Dow skid like a kid on a sled headed for the interstate. You could almost hear the collective gasp. The money that everyone had made in the bullish eighties had swirled down the drain, all gone in six hours. Fortunes had evaporated between coffee break and lunch. The Dow had dropped 508 points—a 22.6 percent hit. That was well over the 12.6 percent of 1929, especially when you considered the scope of trading. In one day’s activity, a stunning 604.3 million shares had been traded. That was nearly twice Black Friday’s 338 million, which itself was a record. Who even remembered Black Friday? This was, by all accounts, a disaster. At close there were 52 stocks up, 1,973 down. The estimate was that the American stock market had just suffered a loss worth $500 billion in equity—more than the gross national product of India.
Nobody moved from his or her desk. Everyone knew what had happened, and no one could have done a damn thing to stop it—certainly not the young man who had much to lose, formerly “the kid,” the guy who’d gotten quite used to making high six figures. The clients had panicked. Sell orders hit the desk like a tsunami. The buccaneers were overwhelmed. They watched the spectacle, absorbed the moment, put off all deep reflection. They sat in a catatonic trance. The market they all believed in, the good times that would never end, had collapsed right there in front of them in a handful of autumn hours. The weekend seemed far away. This was sea change. This was a turning point. This was the decline and fall, the end of the Temple of Boom. Clearly the young man had not seen it coming.
He was, allegedly, as prepared as anyone else making a fortune through his acquired knowledge of how money and people interact. He had taken macroeconomics, microeconomics, accounting, calculus. He knew about the Laffer curve, the multiplier effect, the nuances of supply and demand. He understood how it was supposed to work. He understood that at times it was difficult to anticipate arbitrary human emotion. He understood that voodoo superstition could sometimes play havoc with a system allegedly based on reason, but usually reason prevailed. Self-interest produced complex equations, but usually the answer was more or less equal to the sum of the parts. And it always worked out in the end. A bear was always followed by a bull. It had been that way since Alexander Hamilton established the first Federal Reserve. How had it come to this? Why hadn’t he been on top of this?
For some of the young man’s colleagues, the morning produced headaches, a deficit in the bank account, some heated arguments with demanding spouses or girlfriends or both. There might be some belt-tightening for a short bit, but they would weather the storm, wait until the seas had calmed, then wade back in and pull down the big bucks once again. Most had accumulated plenty of net and socked it away for events such as this. This would be a temporary setback, a speed bump. The money tree would sprout anew in no time at all.
For the young man, it was a different story. Surprise comes to those who seek the ends without heeding the ways and means. He knew where he stood.
If he thought about it, he knew it wasn’t really his fault. It was the fault of unfortunate timing and, of course, his employer, Oppenheimer. In his opinion the firm had long been poorly managed and vulnerable to downturns like that day’s implosion in ways it didn’t need to be. If the company had not been so heavily leveraged, they would not now be facing the probability of severe cutbacks, which he knew were coming. He called it a “double whammy”: making a “mistake” by leaving Bear Stearns (actually he would have been fired if he hadn’t left) and then working for a company that was “grossly undercapitalized.” Within days, he got the news.
It was just a job, of course, but work was his life. And when the market that would never end decided to self-immolate and bring half the economy down with it, “the kid” was quite aware that getting a new job as soon as possible was not just important—it was crucial. Oppenheimer had been comfortable, a serendipitous burst of good fortune. The Monday Massacre or whatever the
Wall Street Journal
was going to call it, meant good fortune was at an end.
Wall Street Journal
was going to call it, meant good fortune was at an end.
His name was Cary Cimino. He was twenty-seven years old, and he knew it was time to start all over again.
CHAPTER THREE
Midwood, Brooklyn, in the late 1980s was Robert Lino’s world. He grew up on East 13th Street near Avenue P, miles from Manhattan, south of the Hasidim of Borough Park, east of Italian Bensonhurst and north of Italian Gravesend. This was a neighborhood where strangers were immediately recognized and questioned. People shopped at stores owned by families. In the late 1980s, it was still almost entirely Italian, with a handful of Irish and Jews mixed in and almost no black or brown people. If they wandered in here, they’d be hounded out. The Hassidim were encroaching from nearby Borough Park, some Russians had moved in, but for the most part it was an Italian neighborhood.
Most of Midwood’s residents had worked their way here from the tenements of Lower Manhattan and viewed this world as their own version of paradise. Robert’s father, Bobby, was a gangster, but he also was partners in a popular neighborhood restaurant called Pizza Park that everybody in the neighborhood knew. In Midwood, if you were from the neighborhood and not from anywhere else, people knew all about you and who you were related to. They remembered whose brothers were star baseball players at Lafayette, who got drunk at his sister’s confirmation party, and who was connected to organized criminals and who was not. This was a specific kind of America, where people from faraway places lived right next to each other and became not Italian or Russian or Chinese—they were just Brooklyn.
By the 1980s, the Brooklyn Robert Lino lived in was no
Tree Grows in Brooklyn
paradise of immigration and assimilation. Drugs were killing the tree at its roots. While crack cocaine was just beginning to chainsaw its way through black neighborhoods, the sons and daughters of Italy still preferred powder cocaine, quaaludes and heroin. There was plenty for all, and there was plenty in Robert Lino’s family. Bobby Senior, after all, sold the stuff, although not formally, of course. The Bonanno crime group was very much opposed to selling drugs, if it was done officially. If it was done unofficially, the money to be made would have made Donald Trump blush. Of course, there was a downside to all of this. Robert Lino knew all about it.
Tree Grows in Brooklyn
paradise of immigration and assimilation. Drugs were killing the tree at its roots. While crack cocaine was just beginning to chainsaw its way through black neighborhoods, the sons and daughters of Italy still preferred powder cocaine, quaaludes and heroin. There was plenty for all, and there was plenty in Robert Lino’s family. Bobby Senior, after all, sold the stuff, although not formally, of course. The Bonanno crime group was very much opposed to selling drugs, if it was done officially. If it was done unofficially, the money to be made would have made Donald Trump blush. Of course, there was a downside to all of this. Robert Lino knew all about it.
For starters, his older brother, Vincent, had died at age twenty-three of a drug overdose. He took too much heroin and that was that. This was like a slap in the back of Robert’s head. Vincent was a lot of things, but he would always be Robert’s brother. Now the drugs were ripping apart the rest of the family. Robert’s sister, Grace Ann, had addiction problems. Grace Ann was scoring from gangsters, informally. She would disappear for days at a time, sliding further and further away from the rest of the family. Only Robert had managed to stay away from it. It was a depressing time for him. He viewed the area and the era as dangerous to his family. He believed both drugs and the neighborhood itself had killed his brother Vincent. He was aware that his father would spend weeks at a time in Italy arranging drug deals. His father could only see all the money he was making and nothing else.
That was Midwood in the late 1980s. It was the Wild West. At one point there was a young couple from the neighborhood who’d come to the conclusion that robbing Mafia social clubs was a great idea. They would put on disguises and bust in waving revolvers and take as much cash as they could, then bolt out of there faster than red-blooded American shoppers the day after Thanksgiving. When word leaked out that this was going on, they became known in the press as Bonnie and Clyde of Brooklyn. This iconic tag was probably somewhat romantic, but the truth of such matters is messy and difficult to understand. To the reading public, the couple became a pair of antiheroes, criminals who robbed only criminals.
There was something appealing about this, but there was also a foreboding sense that Bonnie and Clyde—just like their namesakes—were headed for a nasty end. In Midwood, you certainly couldn’t have found anybody who’d bet Bonnie and Clyde of Brooklyn were long for this world. People didn’t really debate their motives. Who knew why they chose such a self-destructive career? It was clearly a deliberate act of suicide, and almost nobody thought the New York City Police Department should even bother with them. The criminals would catch the criminals, administer their own version of justice, and that would be that. The taxpayers shouldn’t have to foot the cost of a trial.
Other books
Urban Outlaws by Peter Jay Black
Brazofuerte by Alberto Vázquez-Figueroa
Poltergeists by Hans Holzer
The Hidden Twin by Adi Rule
Obsessed by Angela Ford
Morrighan by Mary E. Pearson
BloodlustandMetal by Lisa Carlisle
Kristmas Collins by Derek Ciccone
The Scarlet Letter Scandal by Mary T. McCarthy
California's Calling (Hunt Family Book 3) by Brooke St. James