Union Atlantic (7 page)

“What about our own trades?” Holland asked. “Where do we stand?”

For all his bluster about cash flow, this was why he had asked Doug to his office: to hear news of profit.

“Hong Kong netted thirty-five million last week. Next week, it’ll be forty.”

Holland glanced up, raised his eyebrows, and smiled. Then he strolled to the opposite side of the office to gaze from the window. Beneath a cloudless sky, the water of the harbor shimmered, a white ferry churned slowly from the pier, planes in the distance glided onto the peninsula of runways at Logan, the whole brilliant vista softened by the tint of the glass.

“That guy from
Time
called again,” he said. “He’s coming next week. They’ve decided to go ahead with the profile after all.”

“Congratulations,” Doug said.

“Thanks. So what’s the news with you? Are we neighbors yet? Have you moved out to Finden?”

“Yeah. Which reminds me. You know a woman named Charlotte Graves?”

“Never heard of her. What the hell are you going to do with all that space, anyway?”

“I don’t know,” Doug said. “Make a killing maybe?”

Holland laughed. “My wife loathes people like you,” he said. “Probably because she used to be one.”

Chapter 4

From inside the blooming lilac, Charlotte whispers,
Come. You’re missing it. Come and see
. The pleasure, somehow, always hers. Mother and father with their drinks on the veranda in wicker chairs watching; traffic whirring in the distance on the post road.
You’re missing it
, his sister whispers. The air is soft in the first spring heat. Henry tries to walk toward his sister but his legs are fixed to the ground. Her whispers fill his ears from behind those coned purple flowers, the sunlight on the arced branches a brilliant diffusion.
Here, what you’ve been looking for, here it is
, she says, as the siren begins to sound.

Swallowing dryly, turning his head on the pillow, Henry half opened his eyes. The room was pitch-dark, only one edge of it discernible from a strip of light under the door. A hotel, certainly: the familiar hush of conditioned air falling into the padded gloom of rug and curtains and armchair, the tiny red signals of the television and the motion detector. But where? What city? For a moment, the yearning for a world saturated with meaning pulled him back toward sleep, but
he caught himself and reached for the bleating phone, the grid of the present regaining administration of his mind, leveling in an instant the fading kingdom of dreams.

He was in a suite on the Atlantic coast of Florida and it was one fifteen in the morning.

“Mr. Graves? Is this Mr. Henry Graves?”

“Yes. Who is this?”

“Sir, my name is Vincent Cannistro. I’m vice president of market operations at Taconic Bank.”

“Hold on a moment.”

He reached up to switch on the light.

“This better be serious,” he said. “In which case, why am I talking to you?”

“That’s a perfectly fair question, sir. Fred Premley, our CEO, is currently in Idaho and we have been trying to reach him by cell phone for a number of hours now. I have a car headed to his location at this time and we expect to be in contact with him shortly.”

“And your chairman?”

“Our chairman, sir, he’s in that same location.”

Henry sat upright and reached for his glasses, bringing the room into focus. Briefing books for the conference were piled on the desk opposite.

“So you’re in a bind and your management’s gone fishing. Have I got it right so far?”

“Sir, I would have to say that is more or less correct, yes.”

“All right, then, Mr. Cannistro. What’s your situation?”

There was a pause on the line. Even in his groggy state, Henry could sense the fellow’s unease. He’d heard men’s voices like this before, taut as a drum, overly formal, restraining with effort the profanity
they’d been hurling at their subordinates for hours or even days. This man was making a call well above his pay grade. If things didn’t turn out right, he could lose his job.

“We’ve got a liquidity problem,” he said.

“Well, you don’t call at this hour if you’re unhappy with the examiners. What’s your position?”

“We’re on the short end of an interest-rate swap. We owe a hundred and seventy million. Payment was due nine hours ago.”

“A hundred and seventy? Whose rates were you betting?”

“Venezuelan to rise.”

“Jesus. That was stupid. I assume you hedged it. You covered it with something, right?”

“Sir, that’s the problem. The model had us covering the position with oil futures. They were supposed to drop if Chávez trimmed his rates. They didn’t drop.”

Henry rested his head back against the wall. For a moment he’d thought maybe his caller had jumped the gun and done nothing more than further damage his bank’s reputation with the Federal Reserve, in which case he could go back to sleep. Pulling the covers aside, he rose, took a pad of paper and pen from the coffee table, and settled himself into an armchair.

“Mr. Graves, are you there?”

“I’m here. That’s the most inane hedge I’ve ever heard of. And you’re telling me you can’t raise the money for the payment?”

“As of this hour, no.”

“I see,” Henry said, nodding to himself. Under normal circumstances even a small retail operation like Taconic would have credit enough with the market to cover such incompetent trading. But they had been carrying a lot of bad tech loans for a year or more now and
their retail base was being squeezed on one end by Chase and on the other by the national discounters. In the last few weeks they’d begun borrowing heavily to cover their own trading positions.

As president of the Federal Reserve Bank of New York, Henry Graves had oversight responsibility for all the banks in his district, including Taconic. He also regulated the large bank holding companies that had come to dominate the industry. But the New York Fed, unlike the other regional Federal Reserve banks, was more than simply a supervisory institution. It was the operational hub of the whole Fed System. It acted as the Treasury’s agent in the market, buying and selling T-bills. Nearly every country in the world held some portion of their sovereign assets in accounts at the New York Fed. The wire service the bank ran cleared a trillion dollars in transactions each day. Simply put, Henry Graves was in charge of the biggest pumping station in the plumbing of global finance. His most vital function was to keep money moving. To do it quickly. And, above all, to do it quietly.

Which meant making sure a situation didn’t become a crisis. Taconic’s problems, small as they were in the scheme of things, couldn’t be allowed to spread. The bank’s ultimate failure, if that’s what it came to, would pose little systemic risk. In receivership, it would be broken up and sold. But in the short run, a nonpayment of this size could cause trouble for Taconic’s creditors. A resolution, however temporary, was needed before the morning bell.

“Who do you owe the money to? Who’s your counterparty?”

“Union Atlantic.”

Henry’s thought was one of relief. At least they were dealing with a known quantity, and a bank under his supervision. Union Atlantic meant Jeffrey Holland. A bit glib, a bit of a showman. In it for the sport of the deal. Not Henry’s favorite banker, but he could be reasoned with. He and his wife, Glenda, had showed up at the same hotel in
Bermuda where Henry had taken Betsy just after she’d gotten sick. The four of them had eaten dinner together out on the terrace one evening. They’d sent a huge arrangement of flowers to the funeral.

The other line started to ring and he told Cannistro to hold.

“Did that jackass get a hold of you yet? What an idiot, huh? An upstate strip-mall bank betting on Chávez! Did you get a load of that? What a goddamn mess.”

Sid Brenner, head of payment systems. The master plumber, as they called him, the man with his fingers on the dials. You could count on two hands the number of people capable of programming the network that wired that trillion a day through the market. Most of them worked at IBM. Sid had been with the Fed thirty-five years, starting just a few months before Henry. Born in Crown Heights, he lived there still—three kids, one an officer in the Israeli army, the other two professors. Any day of the week he could have walked down the Street and made five times what the Fed paid him, but he never had.

“We’ve got time,” Henry said, a half-truth they would let pass between them. “I’ll get on the phone. We’ll work it through.”

“None of my business, but if you give these jerks a free ride, I’ll wring your neck. They should be lucky to get a loan at eight percent.”

“I’ll talk to Holland. Did everything else settle?”

“Yeah, just a gaping hole in Taconic’s reserve account.”

“What’s your sense of who else knows at this point?”

“About the swap in particular? Not so many. That they’ve been scrambling for money for eight hours? Not exactly a secret.”

Henry woke his secretary, Helen, at home and asked her to set up the calls with Holland and Taconic’s management, as soon as the car reached them.

As they were about to hang up, she asked, “Are you all right?”

He crossed the room and pulled the curtains aside. Through the
glass he could see down to the beach, where the lights from the hotel reached the tranquil water’s edge. He slid the door open and stepped onto the balcony, the night air heavy with moisture.

Like Sid, Helen had been at the Fed for decades, starting out as Henry’s assistant in the counsel’s office and moving with him to the presidency. When they were together, priorities sorted themselves in the space between them with little more than a glance or nod. She could interpret the nuance of a bank officer’s evasions as readily as the nervous chatter of some freshman analyst. He disliked involving her in personal matters but ever since Betsy had died four years ago, he’d found it impossible to meet his own standard of segregating entirely work and private life.

“Did my sister call?”

“No. There’s been no word.”

He rested his forearms on the railing, feeling in the thickness of his head the pitched forward slowness of jet lag. The flight from Frankfurt had been ten hours, the drive up from Miami all stop-and-go traffic owing to a jackknifed truck that had torn the roof off one of those Volkswagen bugs, the whole scene bright as day under halogen floods.

A few weeks ago, after listening to one of Charlotte’s tirades about the house next door, he’d raised the question of whether it might be time for her to move. She’d practically hung up on him and had replied to none of his phone calls since.

“I’m sorry you’ve had to deal with this,” he said to Helen. “It’s unprofessional of me.”

“Don’t be silly,” she replied. “Do you need anything else? It could take awhile to get Holland at this hour.”

“No. Just the account positions. And I suppose you better call down to D.C. and find out where the chairman is, just in case. I don’t think we’ll need him.”

“By the way,” she said. “Did you speak to the plumber about the leak at the house?” He had happened upon it the other evening in the back hall, a rust-colored sagging in the wallpaper over the side table. “It’s not the kind of thing you can just forget about. You could get a burst pipe.”

In which case, what? he thought. Water in the living room? A lake beneath the piano? He barely used the downstairs anymore, getting home after ten most nights and heading straight to bed. Even upstairs he’d withdrawn into one of the guest rooms, where he found it easier to sleep surrounded by fewer of Betsy’s things. His wife’s death had hit him with startling force for a month or two, during which his body ached from the moment he woke to the moment he went to sleep. But his job’s demands didn’t cease. And soon there were days when he thought of her less often; half a year later there were days he didn’t think of her at all. This seemed wrong, inhuman even, that forty years of marriage could fade so easily through a slip in time. Did it mean he was a callous person? Unfeeling? Who was to judge? As for his private life now, the person he thought of, whom in a sense he’d always thought of, was his older sister, Charlotte. A woman Betsy had done little more than tolerate.

“If you give me the plumber’s number,” Helen said, “I’ll call him myself.”

“No,” Henry replied. “It’s all right. I’ll see to it when I get back.”

D
OWNSTAIRS, THE COCKTAIL
lounge was deserted save for an elderly Latino man in a vest and bow tie reading a newspaper behind the bar. Basketball from the West Coast played in silence on the television mounted above his head. Henry ordered a ginger ale and walked out onto the terrace, taking a seat at a table by the steps to the lawn.
Between the hotel and the ocean stood a row of shaded palms lit from beneath, their fronds perfectly still. Waves barely lapped at the shore. The big investment houses had made a killing on resorts like this, consolidating the industry, securitizing the mortgages, first in line to get paid when a chain went bankrupt, first in line to finance the entity when it reemerged.

The ginger ale had too much sweetener and not enough fizz. Another penny for Archer Daniels Midland and the corn-syrup giants.

Stop, he thought to himself. Enough.

He could never tell if exhaustion bred the automatic thought of production and consequence or whether the habit itself did the tiring. Either way, it had become incessant. As an undergraduate, studying philosophy, his first challenge had been skepticism, how the mind could know with certainty that objects existed. By the time he went to law school, he’d settled happily on a social, pragmatic answer: that to believe otherwise led to absurd results. These days much of the world seemed drained of presence to him, not by his doubt of anything’s existence but because objects, even people sometimes, seemed to dissipate into their causes, their own being crowded out by what had made them so.

Over the gentle surf, he heard the hum from the air-conditioning vents high on the roof of the hotel, and his brain, once more, ran the stimulus to ground: the steel smelted from ore mined on some island of the Indonesian archipelago; forged into sheets on the hydraulic presses of a foundry outside Seoul; shipped across the Pacific to sit in a warehouse in Long Beach where it showed up in the Commerce Department’s numbers on inventory; ordered, packaged, trucked over the plains to an Atlanta wholesaler; bought by a contractor in Miami, who stood with a foreman directing workers riveting the vents together, operating the crane that raised into place the engine, itself assembled
with parts from ten countries or more at a Maytag plant out in Iowa or perhaps Mexico, calibrated to the precise wattage required to pump cooled air into the hundreds of sleeping chambers, where its faintly medicinal scent blanketed the slumbering travelers. And allowing each step from the miner’s lowly wage to the construction buy: loans, lines of credit, borrowed money—the vast creationary incentive of compound interest, blind artificer of the modern world.