Death Benefit

eyes for a second, and took a deep breath. Why did it have to be Gloria Croft? “You’d better tell me everything.”

Russell sat down on a low padded stool by the fire. Edmund stayed standing.

“I made some calls. It only took two, actually. I called the guy who told Teddy Hill he heard about the shorting and the guy gave up his source. It was someone I’d met before, at some mortgage convention in Vegas. He runs this bullshit financial newsletter. He got it from the horse’s mouth.”

“The horse’s ass, more like. Did he say why she’s doing it?”

“Didn’t say much. I think once he’d told me he thought better of it and got off the phone pretty quick. He got nervous. She’s a big player. BigSkies has a lot of money.”

Edmund was experiencing a less-than-pleasant sense of deja vu. Through her hedge fund, BigSkies, Gloria Croft had taken huge positions betting on the failure of the CDOs issued by, among others, Edmund and Russell’s desk. She’d taken the positions early, in 2006, when no one else was doing it and when it was cheap to do. Hundreds of thousands of dollars could turn into tens of millions. What she was indicating was that she thought the AAA-rated mortgage-backed bonds would fail and jeopardize the futures of Wall Street giants like Bear Stearns and Lehman Brothers. Almost no one agreed at the time: There was no chance their stock could go so low. But it did, and it went lower.

Russell and Edmund were quiet, Russell staring into the bottom of his glass, Edmund at the fire hissing and spitting in the grate. He held back the fire guard and popped another log into the flames.

“She’s got some balls,” Russell said finally.

“She does.”

“This is different, though.”

“You’re right about that.”

Russell and Edmund’s thinking was following the same track. Subprime mortgages were a disaster; as assets, they were just terrible. In their “Life Settlement” paradigm, the debtors were the nation’s largest insurance companies, some of the richest institutions in the country. The bottom line was solid, encapsulated in one of Edmund’s favorite sayings of recent months: What are the insurance policy holders going to do, not die?

“So what is she doing?” Edmund said after another long pause. “It doesn’t make sense. We know the numbers, right? We’re solid all round. Actuarially, we did the worst case-people living a little longer for God knows what reason-and we’ve taken those tolerances into account. Unless she’s shorting you and me personally. But she’s too smart for that. Way too smart. There’s gotta be something she sees in the numbers.”

“If there was anything in the numbers, I’d have seen it,” Russell said a little testily.

“I know that, Russell. She’s seeing something that isn’t there. It really doesn’t matter why she’s doing it, she’s doing it and we might be left standing in the rain with our dicks in our hands. God damn it.”

“So what do we do?”

“We have to talk to her, find out what she knows,” Edmund said. “Try to talk some sense into her. When she understands what the upside is, perhaps we can help her out.”

Edmund was talking about offering Gloria an inside track to invest in the company and share in the enormous windfall they were confident was coming.

“Maybe that’s what she wants,” Russell said. “She’s sending up a smoke signal.”

“She could call us on the telephone and ask,” Edmund said. He thought for a second. “Let’s call her right now.”

“Now? It’s after nine o’clock at night.”

“Call her anyway. She’s always working. I’m not sure I’ll be able to get to sleep tonight unless we talk to her. Do you have her cell?”

“Yes, but why me?”

“You did business with her. And she’s not going to take my call. Pure and simple.”

Years back, Gloria had worked for Edmund as a humble analyst two jobs before she went out on her own. Edmund’s desk was a boys’ club and women had to be very thick-skinned to work there. This much Russell knew. There was more he didn’t know, but the bottom line was that it hadn’t ended well. Russell happened to have been present the last time Edmund had seen Gloria, when she walked out of a bar full of about-to-be-former traders where she’d gone to commiserate with one of her friends who had been fired. She was walking out because Edmund, who was very drunk, was yelling at her.

“You’re the reason these people are out of work,” Edmund had shouted. Many people would contend that it was the products Edmund sold that ruined the firms and caused people to be fired rather than the shortsellers who saw an opportunity. But from Edmund’s perspective, his own participation was purely short-term expedient. Gloria’s role was more causative.

Russell scrolled through his BlackBerry for Gloria Croft’s number. He dialed, and Gloria picked up after a couple of rings.

“Gloria, it’s Russell Lefevre.”

“Russell, how are you?” Gloria’s voice was level and deliberate. She didn’t act surprised in the slightest to hear Russell’s voice despite the hour.

“Good, thank you. I trust you are too. Where are you? I hope you’re not still in the office at this hour.” Russell could hear background sounds that suggested she was.

“Just watching Asia open. I’ve been expecting your call. Is Edmund there with you? You can put me on speaker if you like.”

“Hang on a second, Gloria.”

As Edmund rolled his eyes, Russell fiddled with the buttons on his phone, then propped it up against the bottle of Talisker.

“Okay, Gloria,” Russell said.

“Hello, Edmund. How are you?”

“Okay, Gloria,” Edmund said, trying to sound carefree. He looked imploringly at Russell. This was his call, couldn’t he just get on with it?

“Gloria, we’d like to get together with you,” Russell interjected. “We have some things we’d like to discuss.”

“What types of things, Russell?” Her voice was carefree, as if she were enjoying herself.

“Stop screwing around, Gloria,” Edmund said, all lightness gone from his voice. “LifeDeals, as you know perfectly well.”

“Ah, the same charming Edmund Mathews I remember so well. If you want to talk, you’re welcome to come and see me at my office.”

This was a power move, and Edmund was making a vigorous throat-slashing gesture with his right hand. He didn’t want to go to her office and cede her the offensive.

“How about we meet for lunch?” Russell suggested. “You like Terrasini, I remember. And I haven’t been there in a while. Would that work for you?” He was suggesting the excellent midtown Italian restaurant, long a financiers’ favorite.

“Russell, I’m sorry, I’m booked solid. And I’m going out of town. It’s here or it’s nothing until next week.”

“Hold on, Gloria.”

Russell picked up the phone and quickly muted it, just in time.

“Jesus, who does she think she is?” The veins in Edmund’s neck were bulging. It was as if Gloria were still working for him, and she were talking back to him.

“Edmund, she’s got us over a barrel and she knows it. We need to know what she’s looking at. I’ll go, if you can’t stand it.”

“No, I’ll go. Like some damned supplicant. She’s going to pay for this. Somewhere down the road. And big- time.”

For once, Edmund’s curiosity had trumped his vanity. Russell got back on the line.

“Gloria, sorry about that. Any chance we can see you tomorrow?”

“How about nine o’clock?”