The Prince of Risk (6 page)

T
he New York Stock Exchange stood at the corner of Wall Street and Broad in Lower Manhattan. Built in 1903, the building hearkened back to the Parthenon, with six Corinthian capitals (or columns) supporting a broad marble pediment. Since 9/11, it had been customary to drape an American flag over the breadth of the building’s façade. Astor’s father had worked here for six years. In that period Astor had visited the floor a dozen times, but never once had he thought to contact him. Setting eyes on the building, he considered how easy it would have been to give him a call, to say hello and suggest they meet for a drink around the corner at Bobby Van’s.

How very easy…

Astor slowed his pace, then stopped altogether. A rueful smile crossed his lips. No, he reminded himself, it wouldn’t have been easy at all. His father had never liked unannounced visits.

“Robert, is that you?”

Astor took another step into the room and tried to stand taller. The year was 1987, early October. He was fifteen and five feet, eight inches tall and prayed nightly that he would keep growing. His father’s birthday present was wrapped and tucked under his arm. He was dressed in his school uniform—blue blazer, gray trousers, white shirt, and striped tie—and it dawned on him that he had made a mistake in wearing it.

“Hey, Dad. Happy birthday.”

Fifty or so well-dressed, rosy-cheeked men and women crowded the three tables in 21’s private upstairs dining room. Though not acquainted with most of them, he recognized many of the faces. He saw the mayor and the chief of police and a famous newscaster. There were several prominent executives from Wall Street. He spotted the head of a big investment bank and, seated at a table across from him, the man he had replaced a year earlier. As one, the faces turned toward him. The women smiled. The men waited for their cue.

“I brought something for you,” said Astor, clutching the gift. “To help you celebrate.”

Edward Astor stood up laboriously, making no move to approach and welcome him. “Today is Thursday, is it not?”

“October fifteenth,” said Bobby Astor. “At least, I hope.” A few guests chuckled. He chuckled, too, pleased to have broken the ice, his eyes flitting nervously from face to face, marshaling support.

“Still at Deerfield, young man?” It was the mayor. Astor recalled hearing his father denounce him in terms that would make a marine blush. Yet here he was, seated at his father’s side and somehow aware that Astor had attended Deerfield Academy. Astor saw his father’s eyes flash. The mayor could not have asked a worse question.

“No, sir,” answered Astor. “I didn’t—”

“He was kicked out,” Edward Astor stated, in the same stentorian baritone. “My son the pyromaniac.”

Astor tried to grin. The effort was painful. “It was just a paper fire…in my trash can…bad grade on a test.”

“A paper fire that enveloped the curtains and severely burned one of your fellow students.”

“Just his hands. Only second-degree. He’s fine.”

A silence fell on the room. All the bonhomie and goodwill present when he’d entered had vanished as if sucked out through a pressure grate. The smiles vanished, too.

“My son attends the Kent School at present,” said Edward Astor.

Astor tucked the birthday gift back under his arm. It didn’t matter what he had brought. It wouldn’t be enough. “For the moment, at least,” he added sheepishly, hoping to win back the crowd. “I’m getting a math test back tomorrow.”

There was a guffaw and a few chuckles. His father cleared his voice and the laughter stopped. “Speaking of tomorrow, there is school?”

“Yes, sir.”

“Pray tell, Robert, how did you get leave to join us this Thursday at nine o’clock in the evening?”

Astor hadn’t expected the question. Or if he had, he’d expected it man-to-man, when he could make up a bullshit story about getting permission from the dean of students. He was a good liar, but he was punching above his weight with the chief of the New York City Police Department staring at him. He looked at his father, standing there like a statue in a three-piece suit, hands tucked into his waistband, eyes boring into him as if he’d been caught stealing someone’s wallet.

“I…uh…” Astor considered leaving. The door was right behind him. A rapid about-face and he could be gone before anyone could say a word. His pride might be tarnished, but he’d have time to stop at Trader Vic’s in the Plaza for a mai tai and still make the 11:04 to Westport.

“We are waiting,” declared his father, a judge demanding a confession.

It would be the truth, then.

“I bribed my proctor,” said Astor.

“Ex—excuse me?”

It was the closest to a stammer Astor had ever heard come out of his father’s mouth.

“My house proctor,” he went on. “I took him for fifty bucks playing poker before football practice. I knew he needed the money to take out his girlfriend this weekend. I told him I’d forget about the dough if he’d let me come into New York for the night.”

“And he agreed?”

“He wants to get laid, doesn’t he?”

At that, the entire room burst out laughing. The chief of police covered his mouth and looked away, but he was smiling. So was the mayor. Astor waited long enough to see his father’s eyes narrow, his jaw set, then added, “I explained that it was your birthday, of course.”

Edward Astor waited until the room quieted. “Very amusing, Robert, as always. I’m sure we’ll all be equally amused when you are expelled for leaving campus without permission.”

“Don’t worry, Dad, I’m going now. I just wanted to bring you this.” Astor made his way between the tables and handed his father his present. It was slim and the size of a sheet of paper.

Edward Astor dropped it on the table.

“Don’t you want to open it?”

“The only present I want from you is a decent report card,” said his father. “Hopefully without an F.”

Astor came closer so that they were face-to-face and could speak without the entire room overhearing them. “It’s a paper I wrote for school. It’s about the stock market. You see, I think that something’s going to happen—”

“Do you? I’m glad. Something always happens in the market.”

“I mean, I think there’s a bubble. Prices are too high, given earnings.”

“And what would you know about any of this?”

“I’ve been doing some trading. Not real, just on paper…you know, at school.”

“Trading or gambling? There is a difference.”

“Yes, sir. I know that.”

“You can’t bullshit the market, Robert.”

“I’ve been doing well. Trading. Like you taught me.”

“A rising tide lifts all boats.”

“I don’t think it’s going to continue. In fact, I think something bad is going to happen. Like a crash. And soon.”

Edward Astor turned from him and spread his arms to the guests. “My son the fortune-teller. Not content to play hooky from school and embarrass me in front of my dearest friends, he’s now giving me advice on the market.”

“Dad, just let me finish…”

“You just did.”

Astor stared into his father’s eyes, wondering how he could have come from this man, how he could share any part of him. Without another word, he made his way from the room and continued downstairs to the cloakroom. He looked at his watch and saw that the time was coming up on ten. He knew the doorman at the Limelight. He forgot all about the 11:04 and school tomorrow and the consequences that his absence would unleash.

“Young man, wait a moment.”

Astor turned. It was the head of the famous investment bank. “Yes, sir?”

“What was your hand?”

“Excuse me?”

“When you were playing poker this afternoon and you beat your proctor, what were you holding?”

Astor put on his overcoat. “Me? Nothing. I was bluffing.”

T
he sound of a truck grinding to a halt nearby returned Astor to the present. Fifty yards away, a large van with NYPD markings stopped at the entry to Exchange Place, the pedestrians-only square fronting the Exchange. A dozen men clad in black assault gear—helmets, vests, boots
—
jumped from the van, machine guns cradled to their chests. He recognized them as members of the NYPD’s elite Hercules detachment. The Stock Exchange building was one of the city’s prime “hard targets.” Nothing better represented all that was good and bad about America’s brand of capitalism. Living in Manhattan made everyone at least a little bit of an expert in counterterrorism.

Astor presented himself to the uniformed guard at the 2 Broad checkpoint. A blond, ruddy-cheeked man dressed in a blue suit stood a few steps away. Hearing Astor’s name, he came forward. “Sloan Thomasson,” he said, extending a hand. “My condolences. I handled security for your father. Come with me.”

Thomasson led the way into the building. Astor cleared the metal detector, and the two continued to a bank of elevators. “Have you visited before?” asked Thomasson.

“Only the floor.”

“Your father’s office is in 11 Wall. The Exchange complex comprises eight buildings that take up the entire block. It’s a real labyrinth.”

The elevator arrived and Thomasson pressed the button for the seventeenth floor.

Astor waited for the doors to close, then asked, “Did you know my father was planning on going to D.C. this weekend?”

“No, sir, I did not. I’m only required to provide security here at the Exchange and for official trips. I spoke with your father Friday morning as he was leaving the office. He told me he was spending the weekend at his home in Oyster Bay.”

“Taking off on a Friday morning? That doesn’t sound like him. Did he seem preoccupied with anything? In any way out of sorts?”

“It’s not my place to say, but as far as I could see, no. We had a trip planned to Atlanta early in the week. Your father didn’t much like dealing with the new owners. Nothing special about that. But preoccupied? No.”

In December 2012, the New York Stock Exchange had been purchased by Interconti
nentalExchange, or ICE, a giant multinational concern active in the trading of futures and derivatives. Astor didn’t think the new owners were the problem. It was his father’s arrogance. Edward Astor didn’t like reporting to anyone but himself.

The elevator slowed. The doors opened. Thomasson zigged and zagged down a series of corridors. Astor stayed at his shoulder. It was his first time in the executive quarters of the Exchange and he was feeling like a rat navigating a maze. Thomasson was right to refer to it as a labyrinth. The corridor emptied into a large, high-ceilinged anteroom with blue carpeting and photographs depicting the Exchange’s history.

“Here we are,” said Thomasson. “Your father’s office is inside. Mrs. Kennedy, his secretary, is expecting you.”

“Thank you.” Astor shook hands. “Tell me something, what did you do before taking this job?”

“Twenty-five years in the Secret Service. My last post was heading up the PPD—the presidential protective detail.”

“Still have friends in the service?”

“Lots.”

“You know what went down last night. What happened?”

“Word is that the driver lost control of the vehicle.”

“The car was making a run across the South Lawn. That’s a little more than jumping a curb and running into a tree.”

“Yes, sir, it is.”

Astor thought Thomasson knew more than he was letting on. “Well?”

Thomasson leaned in closer, as if vouchsafing a secret. “When I said ‘lost control,’ I didn’t mean that he was driving too fast or that it was in any way his mistake. I meant that the driver was no longer able to control the vehicle in any way, shape, or fashion.”

“Then who was?”

Astor waited for an explanation, but Thomasson said nothing more. Before Astor was able to press him, a petite, birdlike woman emerged from her office, walked directly to him, and hugged him. “I’m so sorry for your loss,” she said.

Astor returned the hug gently. He could feel her sobbing and he held her until she stopped.

“Please, excuse me,” she said, stepping back and wiping her eyes. “I’m Dolores Kennedy. I worked with your father for the past five years.”

Kennedy was a kindly-looking brunette with short hair and a schoolmarm’s inquisitive gaze.

“I’m afraid we weren’t close,” said Astor.

“Oh, I know,” she said, as if the estrangement pained her. “But he talked about you.”

Astor didn’t comment. He didn’t think he’d like to learn what his father had had to say. He thanked Thomasson, then followed Dolores Kennedy into a large suite of offices. “May I look around?”

“The FBI phoned first thing. They requested that none of his belongings be disturbed until their team arrives.”

“I won’t touch anything.”

The secretary shot a glance over his shoulder. Thomasson nodded. “Very well,” she said. “Right in here.”

The office was palatial, with high molded ceilings, dark carpeting, and a desk that would have done a robber baron proud. Photographs of his father ringing the opening bell with various businessmen, entertainers, athletes, and political figures crowded the credenza, vying for space with Lucite blocks announcing the latest companies to list their shares.

The New York Stock Exchange was a business like any other, and its first priority was to turn a profit. It made money in several ways. First, and most important, it charged a fee on every share of stock bought and sold. The amount had plummeted over the years, from dimes to nickels and then lower. These days the Exchange charged fractions of a penny per share traded. It wasn’t a high-margin business. On the other hand, the volume of shares traded had skyrocketed. A normal day saw well over a billion shares change hands.

The Exchange charged a far larger amount to companies that wanted their shares listed, or available for trading. The four thousand listed companies paid annual fees as high as $250,000, earning the Exchange more than $800 million a year. IBM, Caterpillar, Alcoa: they all had to pony up. The NYSE was a very large enterprise indeed.

“If I might be so bold,” said Mrs. Kennedy, “I’m a little surprised to see you.”

Astor responded earnestly but not altogether honestly. “I’m surprised to be here. My father sent me a note last night shortly before the accident occurred. It was the first time in years he tried to contact me. I think he had an idea something bad was going to happen. I wanted to ask you some questions to see if you could shed a little light on what he’d been doing lately.”

“He was a busy man. When he wasn’t traveling, he was hosting guests here at the Exchange or going to meetings.”

“No doubt he was,” agreed Astor. “Can you tell me if he ever mentioned something called Palantir?”

Mrs. Kennedy pursed her lips. Behind her rimless glasses, her eyes were alert and perceptive. “Never heard that word.”

“Never?”

The woman shook her head emphatically.

Astor walked behind his father’s desk. The surface was neat and uncluttered. In and out trays set side by side were empty. He wondered if his father had straightened up, knowing that he might not be back.

“Was he working on anything out of the ordinary?” asked Astor.

“He was seeing Miss Evans quite a bit,” replied Mrs. Kennedy. “She’s his executive assistant. She handles many of his day-to-day assignments—correspondence with our partners, issues with the listed companies and those wishing to list, just about everything.”

“Sharp gal,” added Thomasson, still standing in the doorway. “English. She worked for one of the big banks for a few years. She’s been with us fourteen months.”

“May I speak with her?”

“She’s not in yet,” said Dolores Kennedy.

Astor checked his wristwatch and saw that it was nearly eleven o’clock. “Is she sick?”

Kennedy shot the security agent, Thomasson, a worried glance before returning her attention to him. “She isn’t answering her phone.”

“Do you mind if I try to contact her?”

“I’m not permitted to give you that information.”

“Please, Dolores. It would mean the world.”

She looked back at Thomasson, who nodded. “All right, then,” she said. “Stay right here. I’ll print up her phone and address.”

Kennedy left the room and Thomasson stepped away to answer a call. Suddenly alone, Astor spotted his chance. Moving quickly, he made a reconnaissance of his father’s desk. He opened the top drawer. A leather-bound agenda with the current year stenciled in gold print lay inside. He reached for it, his fingers brushing the cover. The agenda would be considered evidence. Taking it would constitute obstruction of justice, an offense that he knew from his ex-wife counted as a felony. The doorway remained clear. This was hardly the time to worry about the law. Astor snatched the agenda and tucked it into the rear of his trousers, taking care to arrange his jacket over it.

Hardly a second later, Dolores Kennedy returned. “She lives at 1133 Elm Street, Greenwich,” she said, waving a flap of paper. “I’ll give you both her numbers, too.”

Astor stepped away from the desk. The drawer remained open an inch. There was nothing he could do about it now. He crossed the room to the doorway and took the paper with Penelope Evans’s information. “Thank you, Dolores.”

“No, thank you,” the secretary replied. “It would make your father happy to know that you cared.”

“How did you—” Astor cut himself off. “Thanks again.”

“How did you know?”

November 1987. One month after Black Monday, the crash that had seen the Dow Jones Industrial Average lose more than 20 percent of its value in a single day, Bobby Astor sat at a table in the Grill Room of the Four Seasons at 52nd and Park. He had not left school surreptitiously this time. He had come by invitation. A lunch in the city between father and son. The head of school was happy to sign his day pass.

“So you read my paper?” asked Bobby.

“Of course I read it. So did all of my partners. We’re impressed. In fact, we’re more than that. Half of them want you to quit school and come to work for us right now.”

Bobby smiled, his cheeks flushing with pride.

Edward Astor leaned closer. “The other half want to know who you copied your work from.”

The waiter arrived. Edward Astor ordered an old-fashioned. “And give the boy a beer. He thinks he’s an adult anyway.”

The waiter nodded and left the table. The Four Seasons existed in a parallel universe where mortals’ laws held no sway.

“I wrote it,” said Bobby.

“Then tell me. How’d you know?”

“Like I said in the paper. Prices were too high, given earnings. Not just that, they’d risen too fast. Not just in the States but everywhere. It was all in the numbers. Something had to give.”

“Everyone reads the same numbers. Everyone knew P/Es were too high. Your timing was specific. ‘Sell everything now.’”

“The market felt frothy. It just seemed like it was about to give.”

“You’re fifteen,” Edward Astor said. “How do you know what frothy means?”

“Things were out of kilter, that’s all.”

“And this is how you spend your spare time? Studying the market?”

“Pretty much. And playing poker.”

“You’re still not answering my question. How did you know the crash was imminent?”

Bobby looked into his lap, then lifted his chin and met his father’s gaze. “It’s like this, Dad. When I study the numbers and the charts, I get lost in all that data. It’s like I’m swimming in it. All that information becomes part of me. Like in Star Wars. The numbers create some kind of force and I can feel it.”

“You can feel the force?”

“Yeah, I can.” Bobby shrugged. “So how did I know the crash was going to happen soon? I just knew.”

Anger flashed behind Edward Astor’s eyes. His mouth tightened and he rose in his seat. Bobby knew that intuition went against everything his father stood for as an investor. As quickly, his father sat down again. A look of understanding brightened his features. Before he could reply, a diminutive, curly-haired man slid into the booth next to him. The two men spoke quietly for a few minutes. As the man stood to leave, Edward Astor motioned toward Bobby. “Henry,” he said. “This is my son, Robert. Robert, meet Henry Kravis.”

Bobby shook hands and smiled uncertainly.

Edward Astor looked into his son’s eyes. “You’ll want to remember him, Henry. The boy’s a genius. One day he’s either going to be richer than any of us or broke and in the poorhouse.”

Sloan Thomasson was waiting in the antechamber. “Leaving already?”

“I’ve got what I needed,” said Astor. “Can you help me find my way out of here? I’ll never get back to the elevator. You’re right. It’s like a maze.”

“No need to go back. There’s an express elevator that goes down to the ground floor. Normally it’s just for the CEO and his guests. If you don’t mind exiting on Broadway, we can take that.”