Chapter 43: I'm Scared

May 2, 1983, Chicago, Illinois

"Can we just sleep tonight?" Keiko asked when she climbed into bed with me on Monday night.

I knew it wasn't her 'time of the month', so it wasn't that.

"Not feeling well?"

"I'm just tired."

"Were you up late last night?"

"No, and I think I slept OK."

"I'm sorry I have to be up about thirty minutes early tomorrow, but you can just stay in bed."

"Maybe I'll just sleep in my bed," she said.

"You're welcome to sleep with me and stay in bed when I shower."

"OK," she said.

I reached over, turned off the light, Keiko snuggled close, and we fell asleep.

May 3, 1983, Chicago, Illinois

On Tuesday morning, Keiko stirred when my alarm went off but went back to sleep. I showered, dressed in the bathroom, then quietly left the room. I'd decided I'd have breakfast at the diner, and Jack had decided to go in early and take a longer lunch.

"I didn't want to ask in front of the girls," Jack said after we got into the car. "But what's up with Haley?"

"She called to have coffee, not a date, though I plan to eat breakfast, even if it's just coffee and a Danish. It actually fits with how our last conversation went, in that, most likely, she's checking in to see if anything has changed. She was ready to settle down, and I wasn't and I'm still not. But that doesn't mean I shouldn't keep in touch with her."

"Contacts?"

"They're always good, and she's Assistant Director of Personnel at Allen & Baker, a prestigious law firm. I can't say what or when, but it's likely that in the future, there will be something she can do for me or I can do for her."

"Besides the obvious?" he asked with a grin.

"For business contacts, that would be a generally bad idea because if that part of the relationship soured, it could mess up the rest. Remember our shared goal."

"Hot chicks and big bucks!" Jack declared.

"Something like that," I chuckled.

When we arrived at the Hancock Center, I parked, Jack headed to the office, and I headed to the diner to meet Haley. When I arrived, she greeted me with a quick hug and a 'society kiss' where our cheeks touched for the briefest instant. After we greeted each other, we were seated, and I ordered coffee and a cheese Danish while Haley ordered coffee.

"How have you been?" she asked.

"Good. I moved into the new house, and things at work are going OK. How are things at Allen & Baker?"

"Great! First off, there are no shenanigans, or at least if there are, they are isolated incidents. Second, there are options for advancement, and I'm going to take paralegal courses so I understand more about what the attorneys do. And I really like the attorneys."

"That's good to hear. How are things otherwise?"

Haley smiled, "Is that a question about dating?"

I shrugged, "Life in general. I'll go first. Other than moving, I've had some very successful trades; I'm dealing with an SEC letter inquiry; and my friend Bev is in Chicago and is attempting to reconcile with her baby's father."

"So she's out of the picture?"

"She'll always be a friend, and I'll always do my utmost to help her, but the chances that we'll ever be a couple are effectively zero."

"Does that change anything?"

"You mean, does that imply I'm ready to begin a long-term, committed relationship? My timeframe is still a few years from now. Could that change? Sure, but right now, today, I'm not ready."

The waitress brought my Danish and refilled our coffee.

"To answer your question," Haley said, "not much has changed. I hang out with my friends, and I've gone on a few dates. I take it from your comment you're still playing the field."

"That would be accurate."

"Hypothetically speaking, what would change your mind?" Haley asked.

"Hypothetically speaking, I don't know. I think the usual answer would be 'falling in love', but we had that discussion, which is what led to you asking me to take you home."

"And not the way you had hoped."

"Nor the way you had expected," I countered. "We both were interested, but we're at different points in our lives. As strange as it might seem to others, the slight three-year gap in our ages matters. Not in the sense that I'm too young or that you're too old, but as you pointed out, I'm the same age as someone finishing their Sophomore year of college while you're almost two years past when someone would have graduated with a four-year degree. You've been working for nearly four years, while I haven't even completed my second year. In other words, you're at a stage of life where you're ready to settle down, while I'm not there yet."

"That is a reasonable summary of what I said," Haley agreed.

"But that's not your biggest concern, is it? Your biggest concern is that you don't feel I have the capacity to fall in love, and you don't think what amounts to a commitment to love my spouse is sufficient."

"It feels as if you're treating it as a contract."

"Because that's how I see it. You each make promises to the other, including a promise to 'love and cherish', and offer consideration in exchange for those promises. The one thing you cannot promise is to stay 'in love' with someone because that's about how you feel."

"You are coldly logical and analytical."

"And you take that to mean I can't love, but I can. In fact, you'd be hard-pressed to show the difference between the way I would act in a marriage and the way someone who said they were 'in love' would act in a marriage. Fundamentally, at least as I see it, what matters is keeping your commitments and caring for your family. If I had simply followed social norms or customs, how would you know the difference if I didn't tell you? In other words, I'd act the same way as someone who says they are 'in love'."

"You really don't get it, do you?" Haley asked.

I shrugged, "Maybe not, but then again, you put more weight on emotions than you do on actions, which doesn't make any sense to me. How someone feels is FAR less important than what they actually do. Let me propose a thought experiment. In the first case, you marry someone who is in love with you and with whom you're in love, and in ten years, one of you decides you're no longer in love, and you have an acrimonious divorce and fight over money, kids, and so on. In the second case, you decide someone is a good fit as a partner, marry, and stay married for life, caring for each other, raising a family, and so on. Which of those two is better?"

"You want me to say the second one, of course."

"I want you to tell me which has the better outcome, and then explain why the other choice is actually better."

"You know I can't because you set it up in a way that makes it impossible for you to lose the argument."

"OK, fine. What's the practical difference between two marriages, one that began with being 'in love' and one that didn't, which resulted in a happy, prosperous lifelong relationship?"

"How I feel."

"Which is not practical, but emotional," I countered. "And here's the truly challenging part — how would you know if I really was 'in love' with you versus simply saying so and going through the romantic motions? The only reason you know is because I told you. If I hadn't, and did the whole Valentine's Day and anniversary things, and occasionally brought you flowers, and so on, and told you that I loved you, how would you know what I was actually feeling?"

"I think it would be obvious."

"Would it, really? All you have to go on is what you observe, and I absolutely guarantee I could decide, logically, to do all those things if I wanted to and if I felt it would achieve my goal. And I don't see how you could tell the difference."

"Making love versus having sex," Haley countered.

"You don't believe I could 'make love'? That I could only 'screw'?"

"Yes."

"Well, I could say that requires you to allow me to prove otherwise, but you'd say I was faking it. But here's the problem — if I tailored my actions to what you needed and did so for life, how the heck could you tell the difference?"

"You can't fake it!"

"Again, how would you know unless you're a mind reader? All you have to go on is what I do or say. One responsibility a spouse has is to meet the needs of their partner, and not just in bed. If I was doing the right things and saying the right things because I deduced that's what you needed, how would you ever know the difference unless I told you?"

"A woman would know."

"Seriously? That's your answer? Woman's intuition?"

"Yes."

"Unfortunately, there's no way for me to prove my point, given I've revealed my thinking about 'love' and 'in love'. I believe, based on that, that your mind is made up. But I maintain that had I not explained my thinking, you would never have known because you didn't know until we had the conversation. You were ready to go to bed with me and start a committed relationship before that conversation because you didn't, and more importantly couldn't, know."

"I disagree," Haley replied.

I shrugged, "There is no way I can prove my point, nor any way you can prove yours, so all we can do is agree to disagree."

"I think you're going to have serious problems with relationships," Haley observed.

"That same argument would apply to you. I say we compare notes in five, ten, twenty-five, and fifty years and see if you're correct. I think my approach will hold up better in the long run."

"As a confirmed bachelor."

"As a family man with one wife, one or more kids, and in fifty years, one or more grandkids and hopefully great-grandkids."

I finished my Danish, we both finished our coffee, and I paid the bill. We left the diner, and I was reasonably certain that Haley wouldn't contact me, and I saw no reason to call her, as she was convinced that her intuition trumped everything. I couldn't abide by that because it ignored facts in evidence, something I could never, ever do.

I headed to the office, went through my usual morning routine, and once my morning report was completed, I updated my spreadsheets with the latest gold and silver prices, along with the contract spreads. We were very close to what I considered the peak, and I had to be very careful not to miss it, as the drop would be fairly significant.

I decided to move my target date from May 19th to May 10th, but I was prepared to pull the trigger sooner if I saw signs of selling. The goal was to be first, even if I was a bit early and left some money on the table, as being second or third would leave even more money on the table, and being two or three days late could give up most of the potential profit as the spread between the probable highs and lows would narrow quickly.

"Mr. Matheson would like to see you," Mia, the second secretary, said over the intercom feature of the phone.

I acknowledged her and went to Mr. Matheson's office.

"Kane, I want you to look over some materials from a capital management firm in New York that's offering payment for order flow."

"Legal kickbacks," I said with a smile.

"The key word there is legal!" Mr. Matheson declared.

"Yes, though 'commissions for routing orders through the firm' would be a better term than 'payment for order flow'. Which one?"

"Madoff Investment Securities," he replied. "I don't see a downside to routing orders through his firm, given Bernie Madoff basically is NASDAQ and has about 15% of all trading volume on the NYSE."

"I remember reading about him. He was instrumental in the National Association of Securities Dealers and computerized the 'Pink Sheets' and OTC trading into the National Association of Securities Dealers Automated Quotation system, which we call NASDAQ. I recall a quote from him in our training manuals — 'Never break your word', a policy I follow scrupulously. I can't imagine what I could possibly find that would be wrong."

"With that? Nothing. We'll very likely sign with him because it gives us a slightly better margin on every trade. What I want you to look at is a private advisory and management company he runs that isn't part of Madoff Investment Securities. He's promising to beat the S&P every month and without 'two and twenty'."

"How the heck does he make money?" I asked.

"That's what raised Spurgeon's eyebrows," Mr. Matheson said. "Madoff offered to run some of our money and ostensibly make money from the order flow."

I shook my head, "I don't see it. For that to work, he'd need to churn."

"That's my take as well. He's using 'split-strike' conversion and claims to be able to beat the S&P month-in, month-out forever."

"So a hedge, similar to what I've done with precious metals."

"Yes, but he's claiming to do that for Blue Chip stocks, and the market in general, on a regular basis, not for a situation where John Q. Public is idiotically propping up a market in gold or silver. Can you execute your strategy at all times across all asset classes?"

"Hell no! Last month proved that. My currency and precious metals strategies are good for quick strikes at opportune moments, but the bills are paid by your currency management services, at least with regard to the FX Desk."

"So, is he that much smarter than everyone?"

"Well, his firm is highly regarded, but I have to ask why Noel Spurgeon would even consider allowing an outsider, even someone like Bernie Madoff, to run any of his money."

"He's not. He's more concerned about the competition. He'll play the blushing debutante being asked to the dance long enough to find out what's really going on but keep his knees pressed firmly together to avoid getting fucked."

"That makes sense. I'd need to see a sample trading ledger for his hedge funds."

"Yeah, I'll get right on that!" Mr. Matheson said with a laugh. "Do you think Noel Spurgeon would open the kimono that way?"

"Of course not, but you basically have a hedge fund manager saying he can do better, and we're one of the leading firms. What do we have to analyze?"

"Last year, he began using that strategy against the S&P 500 index. Could you build a spreadsheet model that, with perfect timing, replicated his claims, taking into account fees, commissions, and taxes?"

"It would be rough because I could only estimate the fees, commissions, and taxes."

"Is it possible to build a model that allows us to run it with variations of those numbers?"

"I'm sure there is. Is it OK to get help from a friend who's a computer science student?"

"If you can trust that person to not reveal anything to anyone."

"Absolutely. I'll get started on that. I can pull the historical S&P data from Bloomberg."

"Keep this on the QT, please. Report only to me or Noel."

"Will do. Give me a week or so to create and test the model."

"That's fine. We'll sign the order flow agreement and say we're discussing the investment advisory offer internally. By the way, he made a pitch to Margaret Lundgren."

"I'd ask how you know, but nobody is going to admit who the informant is!"

"You have that right!"

"I'll get to work. Oh, tomorrow you'll see I moved the target date for the precious metals play up a week."

"Decided not to play chicken?"

"I'm absolutely positive gold will hit $440 per ounce and silver $12.80. They could both go higher, of course, but at those prices, I'm confident we'll make money when the prices correct, likely sometime in early July."

"Sounds good. What's your target correction?"

"Only about 10% this time. It's not nearly as good as the earlier one. If we took longer options, perhaps 15%. I don't think it's worth the risk with the unrest after the bombing in Beirut and with the Reagan administration beating the drums of war, even if they don't intend to actually go to war."

"I'll take 10% in a month, and so will Noel. That'll make May much better than April. Keep me posted."

"Will do."

I left his office, returned to my desk, and started mapping out what I'd need to complete the analysis, and made notes about what I needed to discuss with Bianca. As I did so, I wondered if I might be able to get some compensation for her from Spurgeon for the work, but I'd worry about that when I delivered, and if I couldn't convince Spurgeon and Matheson, I could pay her myself.

I spent the day trying to balance my usual work and the new assignment, prioritizing my usual work. At the end of the day, I left the office and headed to University Village for my dinner with Lily, which went exactly as expected. We'd fooled around, had dinner, then I'd had 'chocolate-covered Lily' for dessert. After she'd had her similar dessert, we went to her shower to rinse off the sticky remnants of chocolate fudge and our 'natural flavors'.

"Would you be upset if I started dating someone regularly?" Lily asked as I lathered her sexy body.

"By 'regularly', you mean 'exclusively', right?"

"Yes."

"Why would I be upset if that's what you want?"

"You wouldn't. I think I asked the wrong question, or maybe it's not even a question."

"Just say what you're thinking, please."

"Unlike most people, you just want blunt answers. I want to have a regular boyfriend, and if you aren't interested, a guy I've been seeing off and on is. I'd rather be your girlfriend, but I don't think you're ready to do that, and you have other considerations."