The Road Narrows As You Go (25 page)

On top of the pile was a
New York Times
article from September seventy-seven, about the emerging financial market in debt. A picture of Frank answering the phone was surrounded by a gloss of high-yield bonds. An innovative financial instrument underwritten by a bank in
Manhattan called Hexen Diamond Mistral, a retail brokerage institution old as the hills that, until these new special kinds of bonds, was considered by its banking peers to be a backwater of corporate finance. When Hexen opened its doors on 42 Wall Street back in the eighties—the 1880s—it was known as the bank that treated Jews and blacks like respectable businesspeople. Backing that same old principle of equality a hundred years later, the cuddly
Times
reporter went on to write, Hexen was able to use Frank's high-yield bonds to leverage small businesses in major takeovers of goliath companies—the first banking instrument in history that was actually able to give the lower middle class a leg up to compete against the goliaths of American capitalism. She flipped open a copy of
Time
from February of the year before to an article devoted to comparing the success of things like
The Cosby Show
and Reagan's philosophies of America to the boom in high-yield bonds. Frank Fleecen's work in American finance helped regular people's businesses grow franchisally, buy up competitors, expand their real estate, rise beyond the regional, and so on. There was a slim clipping of a book review from the
San Jose Spectator
for a nonfiction title,
Jack in the Black
, by a local business student and former Vegas casino card counter named Jerome F. Fleecen.

Three years after the
Times
article about Fleecen's rise in the ranks of Hexen, the
San Francisco Chronicle
covered his move to San Jose in an article headlined
The Prodigal Junk Bond King Returns
and a lead that heralded his arrival:
Welcome to Wall Street West
. Apparently the banker in charge of the high-yield bond division at Hexen Diamond Mistral had swapped the bank's Seven World Trade Center offices for new digs in sunny California.
The new center of gravity in the financial universe is an unlikely building in a lowrise neighborhood of San Jose. There's no flashy name on the side to tell you Frank Fleecen, the master of the universe, has come home.
The reason for the move? Frank wanted to be close to where his parents lived and where he and his wife, Sue, grew up. Joel Diamond, Michael Hexen, and James Mistral all agreed Frank could move his office
to Canada if that's what he demanded, according to a clipping she came across from the
Wall Street Journal
, dated August of eighty-two. More than nine-tenths of the entire bank's profits came from the high-yield division out in California, one clipping claimed. From San Jose, where Frank reportedly sat at the very centre of an all-glass office at a giant table in the shape of an X, with traders and salesmen around the wings in a big-budget version of Hick's longtable. So, it was true, all Frank's boasts—he ruled the
Wall Street Journal
reporter's idea of the world. He was lauded by his colleagues and clients as a young prodigy of investment-grade corporate financing, capable of turning a Brooklyn kid's favourite summer treat, for example, a sugar water called Snapple, into a national competitor with Coke. Without the sale of high-yield bonds, the inventors of Rubik's Cube would never have been able to raise the money to build their prototypes to take to market.

Then she came to the articles related to her part in this story. Most of these clippings were from newspapers she'd never read, not the kind of press her syndicate picked up and forwarded to her. These were business stories that mentioned her as part of a piece on new finance. She read about the unparalleled licensing bonanza of her comic strip. One Duke University professor of business called
Strays
a junk bond—branded confection, and said her series of toys and wide line of merchandise were intended to convince bond investors and corporate shareholders that debt-financed restructuring can work. In the view of the experts and professionals interviewed by business journalists across the country, Wendy's cast of comic characters was endemic to the funny pages, they acted funny on the page but their ulterior motive was as door-to-door solicitors.
Strays
came in a broad range of new products for old revamped companies, and they introduced a fledgling business to customers using a familiar face. As mascots they improved traffic to a few privatized social services. One American automobile and a European airline used them in advertising. Here was
an article from
Life
magazine that estimated Frank Fleecen made Hexen close to half a billion dollars through contracts for
Strays
negotiated using high-yield bonds. Wendy Ashbubble saw a few dimes, too, according to the reports she read of herself, her heart pounding behind her ears as each word burst in her ears. Of the hundreds of small businesses that hitched themselves to the popularity of
Strays
manufactured by the Svengali Frank Fleecen simply by slapping one of her drawings on the side of a package, the one to benefit the most was Lupercal. In a
Washington Post
piece, a former Hexen bonds salesman who asked not to be named said Frank called the
Strays
deal with Lupercal the single biggest boondoggle he'd ever conceived. The same source also said Frank wore a miner's lamp on the morning commute to work in the back of his limo so he could read K-1 financial statements before he got to the office.

Another of Frank's colleagues told the
Houston Daily Derrick
he once saw him, years after he'd made his millions for Hexen, busking at a subway stop in Keyport, New Jersey, playing classical guitar for spare change. The
Derrick
quoted Fleecen's own wife saying,
Success is not about the money for Frank. Most of his personal earnings go to charities
. A 1980 article in the
San Jose Sentinel
welcoming home their new venture capitalist asked why fewer American banks weren't brave enough to take the risks that made Frank a success—
You know what most banks are like, an old boys' club, so finally here's a man on Wall Street fighting for the little guy
, a Las Vegas casino entrepreneur told the reporter. Never drinks. Doesn't smoke. Married the girl he asked to high school graduation prom. Sue told the reporter,
We don't live extravagantly, we were not brought up to value materialism over friends and family
. Wendy tried to picture Sue: she might have a ponytail and wear pink golf shirts and worn-in jeans; she wrote short stories. Fleecen was scooped straight out of college after his graduate thesis in martingale theory for the Wharton School of Finance and Commerce in Pennsylvania made it onto the
desk of Joel Diamond, the grandson of the founding partner of Hexen Diamond Mistral.

The articles Wendy read that day in the library made it sound like Frank's whole ethos was unlike other financiers'. Most Wharton alumni fought hard to keep their desks at blue-chip respectable firms like Goldman Sachs or Merrill Lynch. Firms like J.P. Morgan were the offices they competed to work for. They wanted to fight point for point on the stock market against a briar patch of Ivy League freshmen and world-class traders buying and selling bits of this pork commodity and that barrel business. But bonds? Bonds were different. Bonds weren't the jerks in penny stocks, but the market didn't have any cachet. Bonds were Frank Fleecen's secret weapon, off the Dow Jones, off the NYSE, bonds were a back door to gain access to any business, Frank saw it that way. The mirror image of a stock was a bond. In the right economy, debt was more powerful than capital. Bonds were an unregulated ocean of potential capital, in Frank's own words to the
Derrick
reporter.

Wendy went to thank the librarian again for helping her, but it was a new librarian, so she left the public library, it was around nine in the evening, and, overcome with emotion, she sat down on the bench outside. She was approached by the man in the corduroy suit who'd taken a seat at a carrel near hers and begun reading a novel by Stefan Zweig. And she remembered finding it strange that it was not a library copy but his own. As she unlocked her bicycle from a fence and wiped the tears from her eyes, he put a hand on her shoulder and startled her. Excuse me, miss, may I speak to you for a moment, please?

She straightened up and stared at him crossly. Spooked the daylights out of me, holy crap, man. Who are you? He took his hand off her and averted his eyes. She almost recognized him. He was not at all handsome up close, a chinless, mousy face with sleek, narrow features, dark eyelids like batwings pulled over his big bloodshot eyes, nostrils brimming with hair, and a smile straight out of a Munch painting. Right away she picked
up the sly, practised friendliness of a cynic. Making a play. She saw a lot of that at No Manors and didn't much care for the style.

I … I saw you in the library, the headlines of your … and well, I just wondered why you were reading all those articles about Lupercal and Frank Fleecen … You don't dress for business. Are you a student?

What business is it of yours what I'm reading? She tipped her head over one shoulder and blinked at him.

He blurted out, Never mind, forget it. I … I know who you are. You're Wendy Ashbubble. I tailed you here, to the library. I'm an investigator for the Securities and Exchange Commission.

What's your commission?

The SEC. The SEC is an independent … we're a kind of police squad who oversee the stock market and the bond market. My name is Quiltain. I mean Chris Quiltain. I'm investigating the financial activities of Hexen Diamond Mistral's high-yield bonds department for evidence of insider trading. You know, gaming the pension funds, overreaching lines of credit, bullying the S&Ls, cheating the system for personal gain and whatnot. I hope we might be able to talk, Wendy.

A spy! Wendy was at a loss for breath. A spy. Watching
me
. Tailing me? I remember his face. Christ, maybe our phone is tapped. Maybe there's bugs all over the manor. She massaged her jaw and thought for a second.

So what did you
do
? we asked her. Did you talk to him?

Hell no, I freaked out. I lost my voice. Instinct kicked in, pure instinct. Flashback to my last day of high school. I got on my bike and pedalled away as fast as my legs could push until I was sure the spy wasn't chasing me any longer. He ran after me, though, begging me to stop, and he was pretty fast for a guy in loafers and corduroy pants. He threw a business card at me but I lost him in the tourist shuffle on Market Street. Chris Quiltain, from the SEC.

My idea, said Jonjay and blew out a cloud of smoke as thick as a San Francisco fog.

Tell me, please, what is it? Wendy's fingers trembled as she reached for the joint in his mouth. What do you think is going on?

No, my math, my algo-
rhythm
. The SEC guy is investigating Frank because Frank is getting rich off
my formula
.

18

Dear Dr. Pazder
,

I wish I could tell you all my secrets in these letters … Life is going OK, I guess, except there's a man who keeps following me around saying he's with the government …

A fog of amnesia, a fog of secrets, a cold fog, a creeping fog, a laughing fog enveloped No Manors. A cold fog rolled in that pranked tourists dressed for a warm one. Locals got used to wearing layers on sunny days to protect from surprise fogs. One minute you're sucking on a perspiring upper lip, soles of your shoes sticking to the sidewalk, and the next you're clenched up, every muscle from your toes to your nostrils is seized with shivers. You're blanketed in a fog of Alaskan winter. The fog concealed the city from itself. Fog came in waves, droves, like gangs of kids. Meanwhile steady outpourings of steam rose through vents in the potholes and from the sewer drains, from all the city's underground saunas. Hiding below the cold bright fog, the secret city socialized in the high-temperature steamrooms that were everywhere, our version of corner stores. They were hot
antidotes to the cold fog outside. Under the neon signs. Some steams came as cheap as fifty cents for a public bath, or a dollar for your own room. At the front desk, staff served you stiff white towels that smelled of Clorox and then you went down, down, down, lower and lower into the humid basements beneath the city where dimly lit hallways led to numbered rooms like in a hotel, where no bed other than a cedar bench, just private baths and showers were installed. A secret network of tunnels below the city streets opened into underground pool parties, with club lighting and brand-new music pumped in through speakers embedded in the walls. Dark disco caves for naked fornicators in squalid pools of piping-hot chlorinated water churning with what looked like strands of eggwhite. Down the hall and a flight of stairs you came to the second pool, in complete darkness. Here it was easy to get a blowjob or give. With a nod of acceptance, someone penetrated you. Mostly men. Men of all shapes and sizes. Steamrooms of all shade of sanitary. Usually we could afford squalid conditions. Graffiti on the walls of our private room depicted scenes from the Marquis de Sade or the latter pages of the Kama Sutra. Grime as thick as chocolate cake gathered in every corner and coated the grout on the tiles beneath our bare feet. Filth catering to luridness and happy depravity—the squeamish need not apply. Deep down where it counted the most, San Francisco was perverse, everyone from the policeman who arrested drunk drivers every Friday night to the philosopher Michel Foucault and the cartoonists at No Manors, we all went to the steamrooms. Here was the real San Francisco, or at least the side of the city you never saw anywhere else, where a side of its true self expressed uninhibited sensuality. The steamrooms were a social network in the dark.

Jonjay was dismissive. You know what Frank's going to tell you to do if you ask him. Don't talk to anybody from the SEC. He's going to tell you to keep quiet about everything. Every detail is kept secret. That's modern corporate business. Hide and seek. When the enemy strikes, every shield must go up or the whole army may fall.