It was another raised middle finger as far as Edmund was concerned. Nine o’clock meant driving into Manhattan and battling all the commuters. Edmund had an aversion to public transportation so taking the train was out of the question. Edmund was making the throat-slashing motion again.
“Sorry, Gloria, I’ve got an appointment early on that I can’t break. How about ten-thirty?”
“Okay, Russell,” Gloria said with amusement. She could imagine how her request had been greeted by Edmund.
“See you tomorrow,” Russell said, ending the call. Edmund sighed, grateful for the one small concession.
9.
406 PARK AVENUE NEW YORK CITY MARCH 2, 2011, 10:37 A.M.
Edmund and Russell entered the midsize high-rise along Park Avenue in midtown Manhattan. Predictably, Edmund had been in a sour mood on the Town Car ride down from Greenwich. Russell had insisted on sharing the ride-he wanted to see if he could soften his partner’s mood before they met Gloria Croft. Edmund had been a bully all his life, and he felt uncomfortable in any situation where he wasn’t in charge. Not only was he not controlling events here, it seemed like he was being played, and by a woman, and by a woman who used to work for him. Russell doubted whether his calming words had had any effect.
When they arrived, Gloria used a script she had learned from Edmund, and Edmund knew it. The two men were buzzed into the suite and shown into a glass-walled conference room, where they were left to stew for fifteen minutes. The receptionist was very polite, and they were offered coffee or water. Outside the room, the office seemed calm and peaceful, with only the hum of the air-conditioning system breaking the silence. The image exuded was of quiet authority.
Then Gloria emerged. She’d changed her look since Edmund had last seen her. There was now a slight wave to her mid-length, lustrous brown hair. She wore a well-tailored business suit with a lavender blouse and black heels. There was just the right hint of decolletage. She looked like ten million dollars.
“Gentlemen, I’m very sorry, something going on in Singapore.” Russell and Edmund had stood up when Gloria entered, and she walked over to each man and shook his hand. There was a slight, almost imperceptible smile on her face. She was clearly enjoying herself.
“Follow me!” She walked out of the conference room quickly, and Edmund and Russell gathered up their coats and briefcases and hustled after her.
“She’s got us trotting along like a couple of poodles,” Edmund muttered under his breath.
Gloria was already sitting at her desk when the men entered her office. Some giant, abstract, and presumably very expensive painting hung on the wall behind her. The desk itself was bare save for several large telephones; carrels behind Gloria were strewn with prospectuses and various files. One entire mahogany wall was inset with the mandatory array of televisions carrying the financial channels. Gloria pressed a button on the underside of her desk, and the office door soundlessly closed. When she spoke, she sounded coy even if Edmund knew that was something she was incapable of.
“I feel like I’m twenty-five again. Back then I was like a suckerfish hanging around the great predators, looking for the little scraps of food they missed when they fed. The ocean was full of blood. It was a lot more fun then than it is now, don’t you agree?”
Edmund didn’t like the way this had started out. Even he wouldn’t have been this bold. Now she was the shark, and they were the suckerfish, and it was their blood she smelled in the water. He bit his tongue until Gloria started talking about the “opportunities” she had lucked into in the subprime field, opportunities she was grateful that the market (meaning Edmund and Russell) had made available to her.
“Well, Gloria,” Edmund said, trying to control himself, “you’re just not as smart as you think you are. That subprime stuff was never designed to succeed. We knew it was going to fail. We were shorting each other. We were shorting ourselves.”
“Maybe you were, but not till the very end. I was buying swaps five years before you”-Edmund snorted-“and you guys were still leveraging your position selling the worthless bonds right up until Lehman went down. Tell me you weren’t.”
Gloria had at least one of her gloves off now. She felt she held a winning hand against LifeDeals. It might make for a longer game if she held her cards, but she had Edmund and Russell right where she wanted them, and she could enjoy witnessing their reaction if she played her hand now. She’d probably make just as much money in the long run if LifeDeals wasn’t a public company. It depended on how far Edmund was going to push his luck. That morning before they arrived she’d looked at herself in the bathroom mirror and said, “Payback time.”
Gloria cleared her throat and went on: “The traders who sold those CDOs should have gone to jail. The whole of Wall Street was tarred with that brush. Immoral, greedy, selfish . . . it was
“Nonsense,” Edmund said. “You said it yourself: it was an
Edmund was exerting as much self-control as he could, speaking slowly and evenly. Russell knew the plug on the volcano was shaking, the whole thing was threatening to blow. Robotically Edmund continued.
“We have the utmost confidence that LifeDeals is a winner and is going to prove to be so in the very near future.”
“Oh really,” Gloria said. “Well, I have half a million in credit default swaps on the line that says it won’t. And I’m going to buy more. And you know what, I’ll be glad when it fails, because I think you’re stealing again, only this time you’re stealing vulnerable people’s life insurance, and you’re paying them pennies. These are old people who are desperate for money because they need an operation and don’t want to go bankrupt because our health system has written them off.”
Edmund was massaging his temples. They were bankers, they made money, end of story.
“The Supreme Court has ruled that life insurance policies are equity that people can buy and sell,” Edmund said.
“You’re paying fifteen percent of face value. Ten if you can.”
“We are offering a legitimate financial service to older Americans who need cash for whatever reason. We haven’t created the need, we’re merely filling it. It’s of no concern to me whether an individual is paying for a new hip or a cruise to Alaska. Perhaps they just don’t want their ungrateful children to get the money. There’s nothing immoral or unethical about it. We’re helping put money back into the economy. You should thank us.”
“Oh, spare me, Edmund. Now that the mortgage market has dried up, some clever analyst zeroed in on life insurance. It’s another gold mine and damn the consequences for the people involved.”
Russell could see this was going nowhere fast. He moved forward in his seat. “Gloria, with all due respect, Edmund and I didn’t drive down here to debate the ethics of life settlements, although I have to say they have been around for years with little protest. We’ll have to agree to disagree. We’d like to know why you’re so sure we’re wrong. I brought along some research as backup.”
Russell placed financial statements in front of Gloria along with complicated graphs that showed bell curves for the life expectancy of people whose policies LifeDeals had purchased, separating them by the diseases the holders suffered. He gave Gloria the whole picture, letting her see her more information than was normally presented to prospective hedge fund managers. He then described the plan, how they would securitize the policies into bonds, resulting in vastly increased income that was then used to buy up more policies to make into more bonds. The bonds were weighted, the largest segment based on diabetes, the second largest on cardiovascular disease, and the third on kidney disease. While Russell talked, Gloria glanced at the financial statements and the bell curves. It didn’t take her long. When she was finished, she tossed them aside as if she didn’t believe any of it.
