But Lloyd was not going to be disconcerted by a young wimp of a Brit and recovered himself in a moment. 'Have you seen a Wall Street trading floor before?' he asked.
I shook my head.
'Well, come and see ours then.'
I followed him through some grey double doors. Bloomfield Weiss's trading floor was not quite the largest on Wall Street and certainly not the most modern, but it was the most active. Stretching out on all sides were hundreds of dealing desks. Large electronic boards proclaimed the latest news, stock prices and the time all round the world. Milling around the desks were an army of men in regulation Brooks Brothers white shirts, interspersed with a few women, mostly wearing tight dresses, lots of make-up and elaborate hair-dos. Trading floors are still male-dominated, the women were nearly all assistants and secretaries.
The floor was alive with the urgent buzz of voices, passing information, arguing, abusing, ordering. Standing on the edge of that room, I found myself in the throbbing heart of capitalist America, the place from where all the money was pumped around the system.
'Here, come over to my desk, and I will show you our operation,' Lloyd said.
I followed him through the trading room, picking my way through the jumble of wayward chairs, papers and rubbish bins. Lloyd's desk was in the middle of a close-knit group of men in white shirts. I felt conspicuous as the only man in the room wearing a jacket, and so took it off. I still felt conspicuous as the only man in the room with a striped shirt, but there was nothing I could do about that.
Lloyd pointed out the two groups of people involved in trading junk bonds, the salesmen and the traders. It was the salesmen's job to talk to clients and try to persuade them to buy or sell bonds. It was the traders' job to determine at what price these bonds would be bought or sold. The traders were responsible for managing the bond positions owned by the firm. Traders bought and sold either from clients or from other traders at other brokers, collectively known as 'the Street'. It was generally much more profitable to trade with clients, and it was only by talking to clients that the traders could get the information on what was going on in the market, which was so important to running a profitable position. Thus the salesmen needed the traders and the traders needed the salesmen. However, this symbiotic relationship had its rough side.
An argument was in progress right then.
'Look, Chris, you can bid higher than 88. My client has to sell. He's been told by his management to sell today. We put him into this bond, we've got to take him out.' The speaker was a blond, youngish man, well groomed with a friendly face. His voice was reasonable but firm. A salesman.
He was talking to a short hyperactive man, who was almost frothing at the mouth. 'Hey, this is the asshole who took me short the Krogers last week, and then went round and lifted the rest of the Street,' he shouted. 'I still haven't been able to buy them back. Let him suffer. It's about time we made some money out of him for a change.'
The salesman turned to Lloyd, 'Do something with this jerk, will you,' he said quietly.
Lloyd walked up to the trader, who was bristling for a fight. 'Where did you make those bonds this morning?' he asked him.
'Ninety to 92, but the market's down.'
'Fine, we will bid the customer 89.'
Howls of protest from the trader, and a disappointed shake of the head from the salesman. Lloyd's voice rose in volume just a touch. 'I said we will pay 89. Now get on with it.'
They got on with it.
Lloyd came back to his desk. We talked for a few minutes as Lloyd explained how his group worked. He then introduced me to the traders. There were five of them, all on edge. Although they were all polite, they couldn't keep their attention on me for long. After thirty seconds of conversation, their eyes would wander back to their screens or their price sheets. There followed a few painful minutes of small-talk at which all the traders said they loved to do business with clients, especially those based in London. Lloyd pulled me over to another desk.
'Why don't you spend a few moments with Tommy here. Tommy Masterson, this is Paul Murray from De Jong.'
Tommy Masterson was the salesman I had seen arguing earlier. Despite that, he had a much more relaxed demeanour than those around him.
'Take a seat,' he said. 'So you are from London?'
I nodded.
'Not many people buy junk bonds over there, I bet.'
'Not many,' I agreed. 'In fact we are just starting. Your traders seemed very anxious to help us get into the market.'
Tommy laughed. 'You bet they are. They can't wait. They will take advantage of you so bad, you'll forget how many fingers you were born with.'
'How will they do that?' I asked.
'Oh, quoting low prices when you are a seller and high prices when you are a buyer. Trying to offload their worst bonds on to you with stories about how great they are. It's difficult for them to get away with that sort of thing with the large US accounts. But a small foreigner? Lamb to the slaughter.'
'Well, thank you for the warning.' I had known I was going to have to be careful dealing in the junk market, but I didn't realise I had to be that careful.
'If you have a good salesman, you should be protected,' said Tommy. 'Who is your salesman?'
'Cash Callaghan,' I said.
'Oh dear. Now, there is a slippery customer. But I'm sure I don't need to tell you that.'
'I have seen him in action,' I said. 'But you tell me what he was like in New York. We hear he was the top salesman in the firm.'
'He was. But that doesn't mean he was the straightest salesman. He was like a good card shark. He would let the punters have some successful trades, make a bit of money, get the hang of trusting him. Then he would persuade them to do very large trades which generated Cash a fortune in sales commissions. The customers lost their shirts. He could fool even the smartest customers. Usually they didn't even realise they were being taken and would come back for more.'
I thought of Hamilton. Cash had even managed to hoodwink him.
'Was any of this illegal?' I asked.
'Not that I know of. Unethical? Yes. Illegal? No.'
'Would you be surprised if Cash did something illegal?'
'Yes, I would. Cash is too smart for that.' Tommy sat up in his chair and smiled. 'Have you got anything specific in mind?'
'No,' I said, although I could see Tommy was not convinced. I changed the subject. 'Cash still does a lot of business with one American customer. It's an Arizona savings and loan.'
'That would be Phoenix Prosperity,' Tommy said. I was thankful for his frankness.
'Oh would it? Does he con them too?'
'I don't know. I don't think so. They have always done a ton of business with him. In fact it's amazing how much business they do for such a small institution. They are pretty aggressive. They used to be covered by a fellow called Dick Waigel. He developed them into his biggest account, and then Cash took over when Dick moved to Corporate Finance.'
'I've heard of this chap Dick Waigel,' I said. 'What's he like?'
'He's a real jerk,' said Tommy emphatically. 'He thinks he is the smartest thing on earth. To hear him talk, you would think he was personally responsible for half this firm's income. But he and Cash are good buddies. Go back a long way. Lloyd thought the sun shone out of his ass.'
'Did he? I wouldn't have thought Lloyd suffered bullshit gladly,' I said.
'He sure doesn't. He's not very smart though, so he doesn't always recognise it. But he's tough. He can be a real asshole. He is going places in this firm, and that's because anyone who stands in his way gets mowed down. It's not talent. Management by fear is his style. Every now and then he'll fire someone, just to encourage the others.'
'But not you.'
'No, not me,' Tommy smiled. 'He'd love to. He doesn't like my attitude. Too Californian. Not gung-ho enough.
