Chapter 50: A Third Member of the Cadre

May 26, 1983, Chicago, Illinois

"Any market fallout from the earthquake and Tsunami in Japan?" I asked Rich when I arrived in the office just before 7:00am on Thursday.

"Just some minor selloffs in Asia that have mostly cleared. The tsunami hit the northwest side of Honshu, mostly the Aomori and Akita Prefectures, with a combined population of around 2.7 million out of around 120 million total in Japan. No reports of damage or casualties yet, and the tsunami also hit the eastern coast of Korea, and again, no reports of damage or casualties. London took it all in stride."

"How's the yen?"

"Still in the same range as it has been since it strengthened in January. Even the current account surplus isn't moving it. ¥237 to a buck today and ¥236 yesterday. Your analyst report is right on target that it's not going anywhere anytime soon."

"If an earthquake and tsunami can't move it, I'm not sure what would. That said, it will weaken over time. I haven't seen the signs yet, and Japanese government intervention is significant enough to prevent anyone except another central bank from attacking."

"At some point, there is no longer money to shovel," Rich said. "We just need to figure out when that's going to happen and be ahead of the curve."

"Agreed. Hey, how are you handling the interview this afternoon?"

"Same as I do the monthly trading meetings — go home and sleep, then come back right before the meeting. I'm going last, at 4:00pm, so I'll get seven hours of sleep. My condo is only three blocks from here."

"Convenient."

I made a fresh pot of coffee, then sat down at my desk to work on my daily analyst report. As Rich had noted, the earthquake hadn't really moved the markets to any significant degree, and the conditions in the rest of the world hadn't changed materially. When I finished my report, I reviewed the material I'd sent to Thomas Hart, as I had a note on my calendar to call him on Friday morning. If I could land that business, as well as the pension fund from the Overland Park police, I'd be able to leverage those deals to make others and be well on my way to a PM role before the end of 1984.

I spent the rest of the morning researching several potentially significant situations — Sri Lanka, the Philippines, and the Middle East — ultimately deciding to buy put options for the Philippine peso. I worked until lunch and decided it was nice enough to eat my lunch outside. I walked to the small, out-of-the-way park I'd found the previous Summer, which allowed me to avoid any people from Spurgeon, and had a quiet, relaxing lunch.

When I returned to the office, I had a message from Personnel saying that Bianca was in the Personnel office filling out her application. About fifteen minutes later, Trish, a new clerk in Personnel, brought Bianca to our conference room. I asked Bianca about a drink and got her a Coke, as she requested.

"So how does this work, given you know me so well?" Bianca asked.

"I don't have questions for you, but I'm happy to answer questions from you."

"Who are the team members?"

"The head of the Foreign Exchange Desk, or FX Desk, is Murray Matheson, who is a Senior Vice President, actually the only Senior Vice President here. There are two senior traders, Harry Foulkes and Norman Monroe, and two overnight traders, Rich Chamberlain and Mark Sampson. They're responsible for the Asian markets, as well as the opening markets in Europe. There are three assistant brokers: Kent Vandenberg, Lee Warren, and Larry Howell, and two Portfolio Managers, Walter Dawson and Charlie Duncan. There are currently three analysts: Tony Kirov, Joel Stein, and me. And two secretaries, Anna Bergdahl and Mia Nesmith.

"The FX team manages about $1.2 billion in assets, mixed between global currencies, precious metals, mining stocks, and domestic and foreign corporate and public bonds. That's just under a third of the total assets managed by Spurgeon Capital. The rest is split between several funds, the largest of which is Spurgeon Select, with about $1.8 billion in assets, all stocks. The other funds include various mixes of assets and are usually managed on behalf of specific clients."

"So, like yours?"

"Mine is a general fund, similar to the Spurgeon Select fund, but with a fraction of the assets. I have a limited number of 'friends and family' spots, but I can add as many 'two and twenty' clients as are willing to sign up."

"Could I invest in your fund?"

"Yes, and there are no fees for Spurgeon employees. Some of your bonus has to go into the Spurgeon Select fund, and that's where the employee 401(k) is invested. The point is that we all need to have skin in the game, which is why Mr. Spurgeon has his money in the Spurgeon Select fund to the tune of $350,000,000. And $5,000,000 in my fund."

"In your fund? Why?"

"To ensure I have enough money in the fund to execute my strategy. It's his way of giving me an opportunity to prove myself. You know I've made some good calls."

"What's the workflow?"

"The three, soon to be four, analysts develop information on their asset classes and anything going on in the world which might affect them. Tony handles equities, that is, stocks; Joel handles fixed income, that is, bonds; I handle currencies, precious metals, and commodities. We each write a report every morning that details how events are likely to impact various assets and identify trading opportunities.

"The Portfolio Managers, or PMs, execute trades on behalf of their customers, usually according to very specific strategies. The traders and brokers use the information the analysts provide, as well as information they develop for themselves from their contacts and make trades. Those trades can be anything from arbitrage to hedges to long-term holds."

"Thanks. I have a much better idea of what I'm walking into now. So, besides the coke and hookers, what's the work environment like?"

I chuckled, "It's actually professional, other than the totally inappropriate relationships."

"Jonathan Kane, moral police!" Bianca teased.

"My approval, or lack thereof, is totally and completely irrelevant, so long as what's going on is truly consensual, which I'd say is not the case with the secretaries."

"I obviously agree."

"Fundamentally, if you prove your value to Spurgeon, you'll be treated very well and compensated extremely well. The benefits are awesome, too."

"I take it we don't reveal the extent of our relationship?" Bianca inquired.

"That would be best. There are no rules against it and no policy that says we have to report it, so I think it's best to keep things on the QT for now."

"That makes perfect sense to me. Speaking of that, Keiko asked if she could spend the night with you tonight, and I obviously agreed. Well, assuming you're OK with that."

"Of course. She's my top priority at the moment."

"As she should be. What's up with her parents? She deflected the question."

"Then I can't really say," I replied. "Any other questions about Spurgeon?"

"Will they spend the money necessary on computers and software?"

"Mr. Matheson can spend from his own budget, at least to a point, and he'll spend the money if you can support the request. If it goes over his budget, he'll ask me to defend it before Noel Spurgeon, which I'll do. I've done it before. I should point out that you'll do a LOT of writing here, in addition to programming. Spreadsheets and numbers only go so far; prose is very important."

"Isn't it always down to the numbers?"

"Yes, but for trades that either lead the market or are contrary to it, you need backup to keep the SEC at bay. Spurgeon makes money either by being faster or smarter than everyone else, and that attracts Imperial scrutiny!"

Bianca laughed, "The SEC as Darth Vader?"

"Fitting, given we're seeing Return of the Jedi with the gang tomorrow night. Did you see the reports on the insane line at the theatre for the premiere last night?"

"I like Star Wars, but not enough to get in line a week in advance! So how do you avoid that scrutiny?"

"You don't. I've already had an SEC inquiry, but I had all the necessary backup reports to show I didn't cheat. I've written what are called 'Analyst Notes', which are different from my morning Analyst Report and are meant to defend against charges of insider trading or other violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended. What I do is a combination of prognostication and defense in depth."

"What happened with the inquiry about you?"

"Spurgeon provided them with copies of my reports and notes. Per Compliance, it'll simply go away. We're under a bit of scrutiny because of a guy who was canned and then arrested for front-running his clients. The stupid part is, Spurgeon turned him in, but in the SEC's mind, one dirty guy means a firm full of dirty guys. I'd say they think Spurgeon gave them a sacrificial lamb."

"Did he?"

I shook my head, "Not from anything I've seen. Mr. Matheson made it clear I should go right up to the line but not a hair over. Rules violations are punished severely internally, and there are all sorts of controls in place to catch or prevent them. The guy who was canned was using accounts owned by family members to front-run, and the IRS asked questions of the family member. They had some sort of explanation ready for that, but the family member panicked and spilled the beans. As soon as Mr. Spurgeon was aware, he fired the guy and turned him into the SEC."

"But if the IRS knew..."

"They only care about tax fraud. At some point between when the inquiry started and they completed their investigation, Mr. Spurgeon became aware. The IRS would only refer it to the SEC once they'd extracted their pound of flesh. I've heard it called the equivalent of sibling rivalry between the agencies. Anything else?"

"No. I think I can have a reasonable conversation with your boss now. You've explained some of the trading strategies you use and some of the language."

"Fundamentally, they're going to see if they think you'll fit in, have the right personality, and won't cause any trouble."

"You mean like the female analyst who was canned?"

"Yes."

"I'm not jealous of you; I'm jealous of Keiko! Wait! That just sounds wrong given the circumstances, but I think you know what I mean — the girl who was fired."

"I do. And while I haven't ruled out the multiparty relationship you proposed, I think my modified version is best for me."

"Which is what matters," Bianca replied.

"Let me turn you over to Mr. Matheson, and then you'll see Tony and finally Rich. Do you need another drink or the ladies'?"

"No, I'm good."

I left the conference room and went to Anna to let her know that Bianca was ready to see Mr. Matheson, then went back to my desk. Just under three hours later, the interviews were completed, and Bianca left the office. I wasn't surprised when Mr. Matheson called a quick meeting with Rich, Tony, and me to discuss Bianca.

"This is Kane's hire," Mr. Matheson said. "So unless there are objections, I'll sign the hiring form."

"None here," Rich said. "If she's as good at computers as Jonathan said, she's going to make a significant contribution."

"I concur," Tony said. "She's no Paige Jennings, either."

"And FAR easier on the eyes!" Mr. Matheson said. "It also won't hurt to have what amounts to a native Spanish speaker on the team to go along with German, French, and Japanese."

Harry Foulks spoke German, Charlie Duncan spoke French, and Rich, the overnight trader, spoke Japanese. The only major language we were missing was Chinese, but basically everyone in Hong Kong spoke excellent English, and Red China was not part of the global financial markets any more than the Soviet Union was.

"I'll sign the paperwork," Mr. Matheson continued. "Do you know when she can start, Jonathan?"

"The Monday following Exams — June 13."

"Let her know. She'll receive a formal offer letter in the mail."

"Will do."

"Now, go find a way to make some fucking money, please! Jonathan, hang back for a second."

They left and returned to their desks, and Mr. Matheson motioned for me to shut the door, which I did.

"Starting analyst salary is $30K, plus $15K bonus potential. It's OK to let her know that, too."

"Thanks."

"Now, go make some money to pay for her and the toys she'll need!"

"Will do!"

I left his office and worked until 5:00pm, then left to have dinner with Violet. When I arrived, after a quick hug and kiss on the cheek, I asked to borrow the phone to call home.

"You're in!" I said to Bianca when she answered the phone.

"That was fast!" she exclaimed.

"I hope to never, ever hear those words from you again!" I chuckled.

Bianca laughed, "Don't worry! When do I start?"

"June 13th. You'll receive a letter in the mail."

"Salary?"

"$30,000 plus $15,000 in bonus potential. According to Mr. Matheson, that's starting pay for an analyst."

"And more than the starting compensation for most college grads in Chicago! I accept!"

"I was sure that would be the case. See you tonight."

We said 'goodbye', and I hung up.

"What words don't you want to hear ever again?" Violet asked.

I hadn't realized she could hear me from the other room, even though I hadn't been loud. Before the trip to Kansas, I'd have demurred and avoided answering, but things had changed.

"She said, 'That was fast'," I replied.

"I'm missing something."

"A guy doesn't want to have a girl say that when they're fooling around."

Violet blushed slightly and laughed softly.

"Er, uhm, how long does it take? My health class was very, very vague."

"Mine, too. I think the answer is that it depends on, uhm, how energetic you are, the position you're in, and what exactly you're doing."

"Is this where you offer to demonstrate?" Violet said, clearly teasing.

"In the right circumstances, yes, but you and I both know the situation, so, no."

"You think I'd have a panic attack?"

"I suspect you would; I'm positive YOU think you will."

Violet nodded, "As I said, I want to, but as soon as I think about it, I start to lose it. But the techniques Nancy has taught me help control the panic attacks."

"I'd also be concerned about how you'd feel afterwards."

"Reports indicate that it feels so good I'd want to do it again!" Violet smirked. "But I know you mean emotionally and mentally."

"It's a good sign you can talk about it," I said. "Did you ask Nancy about a counselor?"

"Yes, and she had two recommendations. One is a woman who specializes in rape and incest, which fits, even though those never actually happened to me. The other is a counselor who helps couples who struggle with intimacy in their relationship. I don't think that would work."

"Probably not, given what I infer from what you said. Seeing the first one is probably a good idea."

"I thought so, too, and I have an appointment next month after school is finished."

"Good."

"Let's eat!"

We went to the kitchen, ate, cleaned up, then headed to class. I let Teri know I likely wouldn't be available for at least two weeks, and she said she understood. After class, Violet and I had our usual coffee and pie while we did homework, then I walked her to the house. Once she was inside, I drove home, and when I went upstairs, I found Keiko waiting in my room.

"How do you feel?" I asked.

"Pretty good," Keiko replied, "though the tubes in my chest are uncomfortable."

"Painful?"

"No. Just uncomfortable."

"Did you take Advil?"

"Yes."

"Good," I said. "Did you want me to come to bed now?"

"Yes, please. I finished studying."

I undressed, emptied my bladder, brushed my teeth, and climbed into bed with Keiko, who snuggled close. I put my arm around her, and she sighed deeply. She was quiet for a few minutes, then sat up.

"This might be the last time for a long time," she said. "But I think I have to be on top because of the tubes."

"It's up to you," I said. "I'm fine with just cuddling and sleeping together, but you know how much I enjoy being with you, so tell me what you need, please."

"Just me on top, slow and gentle, with soft kisses."

"Perfect," I replied.

Keiko kissed me, slid down to get me hard with her mouth, then mounted me and began rocking gently back and forth. I always marveled at how small she was compared to me and very much enjoyed the time we spent together, both doing what we were now doing and otherwise. Over the next ten minutes, Keiko had several small orgasms, then squeezed her internal muscles and began slowly sliding up and down my shaft until I groaned and had my own release. She kissed me a final time, moved next to me, snuggled close, and fell asleep.

May 27, 1983, Chicago, Illinois

When I woke up on Friday morning, Keiko woke up as well, kissed me, then went to her bed to go back to sleep while I showered and dressed. After breakfast with Jack, we walked out to my car for the drive to the Hancock Center.

"Do you need me to do anything for you?" Jack asked as I pulled out of the alley.

"Not that I can think of. Bianca and Deanna will do the shopping tomorrow and will take my suits to the dry cleaners and pick up the ones we dropped off last Saturday. Because Keiko will be in the hospital for a month or so, there's nothing pressing at home. That said, I guarantee things will come up, and I promise I'll ask."

"Good. Bianca said she got the job. A third member of the cadre?"

"If and when the time comes, I'd certainly want her to come along with us, but that's years in the future, if ever."