For the Love of Money (15 page)

CHAPTER
28

The Navy SEALs of Bond Trading

¤

I
n the spring of 2007, my star was rising on Wall Street. Alexei and I and one of our colleagues had invented a new type of
CDS
contract based on a complex subsidiary spin-off transaction, which put me at the vanguard of
CDS
market innovation. In the first few months of the year, a huge position I'd taken in the bonds and
CDS
s of Alltel Corporation suddenly doubled in value, and I was already up $8 million in profit.

My success at work wasn't just professional. It was social, too. I'd become close with the other traders. I felt like I belonged. Like a leader, even. A boxing class I organized had become a huge success. Every morning at 4:45 a.m. twenty traders met at a boxing gym. We'd wrap our hands, pound the heavy bag, and work one-on-one in the ring with private trainers. I loved it. It wasn't that I enjoyed the boxing, which I didn't, or waking up that early, which I certainly didn't. I loved that people showed up to something I spearheaded. I'd been waiting my whole life to have that kind of pull.

Ben and my five-year anniversary of getting sober was approaching. “Isn't it crazy how far we've come?” I asked
during one of our daily calls. Ben had been the first person in his class to be promoted at Bain and had recently been accepted into Harvard's John F. Kennedy School of Government. He'd realized he'd rather spend his life working to help the less fortunate than making money. When Ben got into Harvard, I felt happy for him. For the first time, I didn't feel jealous of his success.

“It's amazing how much can happen in five years,” he said.

Katie and I had moved into a giant, $6,000-per-month loft apartment on Bond Street, with twenty-foot ceilings and floor-to-ceiling windows. To get a better deal, I paid the entire year's rent—$72,000—up front. I didn't think twice about writing a check that size, because a month earlier, Alexei and Marshall had pulled me into a room and told me my bonus for the prior year was $500,000.

A few weeks later, I received a phone call that made even that $500,000 look like chump change. The head of corporate trading at Citibank called and offered me a guaranteed $1.75 million per year for two years to trade telecom for Citibank.

That would permanently establish me in a higher compensation bracket. Wall Street traders like to say their jobs are risky; they aren't. Once you are paid a certain amount, you rarely drop far below that, even in a down year. When I was offered $1.75 million for two years after just three and a half years on Wall Street, I knew I was going to become a rich man.

But I didn't just want to be very rich. I wanted to be
super
rich. While the Citibank job would make me a millionaire, it wouldn't make me a billionaire.

In bond and
CD
S
trading, there is a strict hierarchy. At the bottom are investment-grade traders (which is what I was), who traffic in the bonds and
CDS
s of the safest, least volatile companies. On the next rung up are high-yield traders, who trade the volatile bonds and
CDS
s of lower-rated corpora
tions. At the top of the pyramid is an elite class of traders, who traffic in the bonds and
CDS
s of companies in or near bankruptcy. They are called distressed traders.

Distressed traders are the Navy SEALs of bond trading. Their job requires deep intellect and balls of steel. They need the brainpower to interpret balance sheets and understand complex covenants in loan documents, and the fortitude to withstand volatility that exists nowhere else in the markets. Prices of distressed bonds can double or halve in a single day. Of all the traders at investment banks like Goldman Sachs or Morgan Stanley, distressed traders make the most money. Many leave to start hedge funds, and become billionaires.

By the time Citibank offered me a “1.75 by 2,” I'd already set my mind on bigger things. It was like the moment in
The Social Network
where Justin Timberlake says, “A million dollars isn't cool. You know what's cool? A billion dollars.”

I told Marshall about Citibank's offer and that I wanted to use the offer to negotiate a move to the distressed desk at B of A. Marshall said he would help. At first the head of the distressed desk wasn't interested, but Marshall not only convinced him that my
CDS
expertise would help them in the upcoming bankruptcy cycle, but also agreed to pay half of my bonus that year out of the investment-grade bonus pool. It was a stunningly generous move, especially by Wall Street standards. I may not have been born with a good father, but I had found one.

I became the youngest distressed trader at Bank of ­America.

I thought I'd finally made it. But in June, when I was invited by a
CDS
broker to Las Vegas with a bunch of other traders and our girlfriends to watch the Mayweather–De La Hoya fight, my worldview began to change.

I'd never been in a chopper before. A Lincoln Town Car picked Katie and me up from Bank of America and drove us to a helipad downtown, where we met the other traders and
boarded a helicopter to take us to the airport. As we lifted off, the helicopter swayed from side to side. When our flight arrived in Vegas, we took a limo to the Hard Rock. The
CDS
broker who had arranged the trip handed me keys to our room and told us to meet him at the restaurant in the basement of the hotel.

Brokers are at the bottom of the Wall Street power structure. They earn money by facilitating trades between traders at investment banks. Traders at investment banks earn money by facilitating trades between “clients” (insurance companies, hedge funds, money managers). Brokers' livelihoods depend on keeping traders happy, so you can say anything to them. If you told a broker that you'd just slept with his mother, he'd probably respond, “Nice one!”

Entertaining is such a huge part of Wall Street—traders take out clients, and brokers take out traders—because if a dinner, strip club, or all-expenses-paid vacation might result in a trade, then nothing is too expensive. A broker might earn $10,000 on a single trade, so unless the night costs more than $10,000, it's worth it. And if the night costs more, well, there are many trades to be done.

I remember how powerful I felt when I realized I could go to any restaurant in Manhattan—Per Se, Le Bernardin—just by picking up the phone. I could go to whatever ball game I wanted—Yankees/Red Sox, Knicks/Lakers, the World ­Series—just by hinting to a broker that I might be interested. If I accepted an invitation, it was as if I were doing
them
a favor. One broker gave me their car-service account number. When I flew in from out of town, a sleek, black Lincoln Town Car waited for me at the airport.

It wasn't about the money. I could have afforded all of this myself. It was about the power. Because of how smart and successful I was, it was someone else's
job
to make me happy. I didn't even like going out with brokers. Wall Street dinners
usually consisted of talking about which traders were losing money, talking about the waitress's ass, and making fun of each other's clothes—
Nice shirt, douche
bag!
But I liked that I could.

The restaurant in the bottom of the hotel was the new Las Vegas branch of the famed New York sushi restaurant Nobu. I knew the signature Nobu meal by heart—yellowtail jalapeño sashimi, rock shrimp tempura, Kobe beef medallions you could cut with the edge of your fork, a huge plate of delicate sushi and sashimi, followed by a light dessert of mochi-wrapped ice cream. Dinner at Nobu could cost $500 a person.

After dinner our group of traders and their girlfriends took a limo to Marquee. Marquee was a club with three different velvet-rope lines; you had to be an A-list actor or arrive with a throng of models to get in. When we stepped out of the limo, our
CDS
broker walked up to a ponytailed Persian man dressed head to toe in white. The Persian man led us to the front of each of the three lines and whispered to the bouncer, who let us pass with a smile. When we got into the club, we were ushered to a private table in the center of the floor. Cocktail waitresses in tight black dresses started bringing out bottles of champagne and vodka.

My eyes left Katie's hips and roamed across the flashing lights and dancing bodies until they finally landed on a six-foot-four, two hundred–pound trader, dancing like a gorilla fifteen feet from me. I knew Jeff—we worked together—and he was obviously drunk. He seemed to be chanting something over and over again. I leaned in closer to see if I could make out the words.

“Thirty-five sticks! I'm up thirty-five sticks!”

Son of a bitch
. In trader lingo, a stick equals a million dollars. Jeff was a high-yield trader. He was already up $35 million on the year, compared with my $8 million, and he was
pounding his chest and bragging about it. Cold liquid jealousy seeped into my stomach. If the year ended like this, Jeff would get paid more than me.

I had to remind myself that I was on the distressed desk. Ultimately I was in a better position.
Thirty-five million bucks is nothing compared to where I'm going, Jeff
. He didn't realize yet that compared to me, he was already a second-class citizen. I was the only distressed trader on the trip—I had a better shot of making a billion dollars than any of them.

But a memory tugged at me. I remembered the moment when I came across that compensation document that showed how much more money
CDS
traders earn than bond traders. I'd thought that if only I could become a
CDS
trader, I'd feel successful. Well, I'd done it. I'd become a
CDS
trader. And yet, it still wasn't enough. For just a moment, I wondered if becoming a distressed trader would be enough, either.

I called Katie over. She was dancing, and I had to shout to get her attention. When she saw me, she smiled and seductively danced over.

“Are you okay?” she asked. “Having a good time?”

“Yes, yes,” I said. “Great time.”

“Are you sure?”

“Yeah.”

Just then another bottle of Dom Pérignon arrived. I poured myself some club soda. Katie started dancing next to me, and I sat quietly with my thoughts. I wanted to like this more than I did. I wanted to be the kind of person who did stuff like this and enjoyed it. But I was sober, and no matter how cool of a place I was in, I was still sober. The problem with being in a bar when you aren't drunk is that everyone else is.

But it was more than that. There was something hollow about the satisfaction of realizing your life finally matches your fantasy. Instead of feeling complete, I felt sad.

“Hey, let's go,” I said to Katie. “I'm tired.”

She looked like a kid whose toy had been taken away. “Now?” she asked. “But it's so early!” It was midnight.

“Okay,” I said. “Half an hour more?”

“Great!” she said, and kissed me on the cheek. Then she stood up, wobbling, and started dancing next to the table. I steeled myself for another thirty minutes. My nights often ended like this, at dinners or bars, waiting until it was okay for me to go home.

My eyes fastened again on Katie's hips. They were exquisite, but as I watched her I realized they were just hips. I didn't even know who she was. I mean, I could describe her personality—she was smart, fun, had a great sense of humor, and was a huge gossip—but I didn't know what lay beneath. I didn't know what terrified her, what she loved with abandon. Even at home, when we were alone, we never ventured far below the surface.

With ten minutes to go in my self-imposed prison sentence, I took a sweeping look over the grand surroundings: the thumping, flashing club; the successful traders; the beautiful women. I was twenty-seven years old, on the verge of becoming a multimillionaire. I'd made it. I'd
achieved
. My life looked exactly like I'd wanted it to look.

And with a sinking feeling of horror, a question that had been sitting on the periphery of my consciousness stepped forward into the light.

So why am I so miserable?

CHAPTER
29

The Anniversary Presents

¤

O
n the morning of Inauguration Day at the White House, the president and the president elect have coffee together and then leave for the inauguration ceremony. Then, all hell breaks loose. The White House staff has six hours to pack the old president's furniture and belongings, clean, then move in the new president. For privacy reasons, no outside staffers are hired. There are only two elevators. For six hours the White House is in chaos, a flurry of frantic activity. It's a changing of the guard.

Sometimes, the same thing can happen inside a person.

Two months after Vegas, my five-year sober anniversary and my two-year anniversary with Katie fell on the same weekend. I was concerned that Katie wouldn't like her anniversary present.

I had set the bar high. Over the years I had bought her $700 Christian Louboutin high heels, a thousand-dollar ring from Bulgari, and spent tens of thousands on restaurants and vacations.

But for our two-year anniversary, I wanted to do something special. The first thing I bought was a bag she had admired in Bergdorf Goodman that cost $3,000. I didn't like the idea of a $3,000 bag, but she liked it, so I figured,
What the hell?

When I got home, I took the bag out of the box and wondered,
Is this enough?
I played through a scenario in my head where I handed her the bag, and she said thank you, but inside she thought,
Is this it?
I remembered she once mentioned her friend raving about a five-star French restaurant called Daniel. I made a reservation.

But something still gnawed at me. I wanted her to be blown away. I remembered hearing a friend of Katie's talk about an anniversary where she and her husband had spent the weekend at the Mandarin Oriental on Central Park. It was only a few blocks from their apartment, but she said it had felt like a minivacation. They had stayed in and ordered room service and gotten massages all weekend.

“It was like we were hiding from our real lives,” she said.

I booked a room at a similarly expensive hotel, the Palace.

The night of our anniversary, when we walked into the room at the Palace, I knew immediately that I had made a mistake. Katie was trendy; the room was old and frilly, like it was designed for grandparents or British people. She smiled when I told her we had dinner reservations at Daniel. But when I brought out the gift-wrapped box from Bergdorf's, her face fell. I knew suddenly that instead of too little, it was all too much.

“But I didn't get you a present,” she protested.

“Don't worry,” I said. “Just open this.”

She opened it and smiled and kissed me. Her lips were trembling. I smiled, trying to show her it didn't bother me that she hadn't gotten me anything.

We went to Daniel. The dining room reminded me of Versailles. Intimidated by the career waiter in a tuxedo, I stumbled through my order. Six waiters hovered near our table; I found myself whispering to Katie so they wouldn't hear our conversation. When we came back to the room, we had sex, because it seemed like we were supposed to. In the morning, we checked out early.

As we walked outside, I asked what her plans were for the day.

“I'm going to brunch with the girls,” she said. It was her turn to see my face fall.

“What's wrong?” she asked.

I paused, realizing that she didn't know.

“Today is my five-year anniversary,” I said. “Five years sober.”

“Oh no,” she said. “You never told me. Do you want me to cancel?”

I put my hands up. “No, no, no,” I said. I kissed her, put her in a cab, and then walked down Fifth Avenue.

If you'd seen me walking down the street that day, you might have thought I was crazy. My face contorted, I kept running my right hand through my hair, and I was carrying on a running conversation with myself.

At first I thought I was pissed at Katie.

Why hadn't she remembered? Why hadn't she gotten me anything?
But then, as I thought about it, I realized I wasn't angry at her.

I was angry at myself.

I hadn't even told Katie it was my five-year anniversary. Sobriety was one of the things I was most proud of in my life. It was at the core of who I'd become. It was the glue that reconnected Ben and me. So why hadn't I told my live-in girlfriend about it? Why was I hiding myself from her?

And why had I gone so over-the-top with my presents?
Is it enough?
I'd wondered. I had to make sure the presents were enough. Had to make sure that
the presents
would impress her.

I stopped walking.
Is it enough?
What I'd really been asking was,
Am I enough?
And the answer? No. I am not enough. My core belief. That's what the presents were about. That's why I'd hid myself from Katie. That's why I always needed more money, a bigger job, a better-looking girl on my arm.
I was compensating, because at heart I didn't believe I was enough.

I thought about our apartment. It was enormous. We had needed to buy a second living room set, because just one couch looked too small in the massive space. Now we had two sitting areas. Why would two people need two separate sitting areas?

I stood on Fifth Avenue, across from Rockefeller Plaza, and felt something emerge from beneath the confines of my mind. From beneath the ego and the arrogance. It looked around at the pretty frivolity of my life, and it said, I want
more
. And I knew it was talking about something completely different than the
more
I had tried to buy, to earn.

I walked all the way home from the Palace in Midtown to my Bond Street apartment in the Village. By the time I arrived, I'd reached a decision. The apartment seemed cavernous as I sat on the couch and called Linda.

“What's going on?” she asked.

I told her about Katie and the presents. “I want a different kind of life,” I said.

“Ah,” she said. “You found your heart.” Years later she told me she'd been waiting a long time for that call, for me to start owning who I was becoming.

That night, I lay next to Katie in our big bed. She had come home, we had made up, and she had fallen asleep an hour ago. But I was a thousand miles from sleep.

I was thinking about what happened eight years earlier, when I'd gone over the top with Sloane's presents on Valentine's day—two dozen roses, Broadway tickets, fresh lobster. I'd thought I'd done that because I was so in love. But now I saw that the presents for Sloane were exactly the same as the presents for Katie. What I'd thought was love was just using someone to make me feel important.

I would never have called myself a misogynist, but that night, lying in bed, I saw that I'd mistreated women my whole
life. In some way, I was doing the same thing to Katie that Dad had done to Mom. I was staying with her even though I didn't love her. I was wasting her time, because I didn't have the backbone to tell her the truth.

Just like Dad.

I called my mom that weekend, just to say hi. As I listened to her talk, my heart filled with sadness. Not just about what her life was like now—she was old, lonely, and overweight from years of stuffing down her pain with secret bowls of vanilla ice cream—but about what her life had been.

She had been abused her whole life. Her alcoholic father and crazy-eyed mother had waged emotional warfare on her and her sisters, and Mom, as the oldest, bore the brunt of it.

She ran away from home at seventeen and fell in love, but her fiancé hung himself in the trailer they shared. After that she lost any hope for a different life and went back to what she knew. She married my dad, who hit her in the beginning, then commenced an even more insidious attack, enlisting her children as enemy soldiers.

I had become one of those enemy soldiers. I'd watched Dad fling poisonous darts at my mom since I was a kid. Soon I was hurling my own darts at my mother. My brothers and sister all followed. Mom was a scapegoat in the family she'd been born into, and a scapegoat in the one she built herself.

All the good memories came rushing back. How she taught me to swim in a hotel pool by promising me a banana split if I reached the other side. The times she, Ben, and I danced in the gardens on the Navajo reservation we'd lived on when I was four, praying for rain. How, at Six Flags Magic Mountain, she'd leave us in line for one roller coaster to save our place in the next line. The time I pointed with five-year-old fingers to the mountain range in the distance and told her I was going to walk there, and she smiled and walked with me until I tired.

It wasn't that I forgot the damaging things she had done.
But in that moment I forgave her. I knew that she'd loved me as best she could.

Then I thought about how I'd mistreated Sloane and Katie. I saw that a whole lifetime of watching my father treat my mother with disdain had taught me to view
all
women with disdain. I became aware of all of the wonderful women who had come into my life. Elyn Walker, who'd shown me how to get sober. Sloane Taylor, who'd brought me into counseling and shown me that even cool people get help. And, of course, Linda. They were real-life refutations to the story my father put in my head.

The dam broke. Seeing the destruction my dad had caused my mom, I started to face the damage I'd caused the women in my life. I decided to begin repairs.