Chapter 40: If You're Happy, I'm Happy

August 17, 1984, Chicago, Illinois

Everyone had been in bed when I'd arrived home on Thursday night, so when I woke up on Friday morning, I showered alone, then went down to make breakfast. Bianca was awake and was nursing Sofía, so I greeted them, then went to the kitchen. Bianca came to sit at the breakfast bar.

"Where's Nicole?" I asked.

"She stayed in bed when Sofía woke up to eat. Remember, you have the interview today."

"I remember."

"What's going to change at work on Monday?" Bianca asked.

"Not much, other than for Jack. I do need to have a conversation with you about Florida and something that happened yesterday, but it has to be totally private and can't be shared with anyone."

"Trouble?"

"Maybe."

"What happened?"

"Not unexpectedly, there were underage girls in Boca, and Noel was open about it. Not to mention the caretaker he hired let me know that the butler could, in effect, arrange for underage girls if I was interested, including virgins."

"Is he asking to be arrested?" Bianca asked.

"I'm thoroughly convinced that he believes what Jeri says is true — that there are different rules for people like him, and he'll be able to buy his way out of trouble."

"Do you think so?"

"I think it's possible, but given the way the laws are changing, I think his calculus is off. And if not yet, it soon will be. Not to mention the alleged videotapes."

"This is bad."

"It gets worse," I replied. "Think about Enderlee. Why didn't he rat out Spurgeon? What did he have to lose? Taylor and Fletcher were paid off and signed NDAs; Enderlee was straight-up fired."

"You think Noel Spurgeon has something on him," Bianca suggested.

"What else makes sense?" I asked. "That raised a very troubling question — what could Noel have on him that is so bad that Enderlee wouldn't spill the beans? If you think about it, if Noel were to go down, Enderlee would likely be able to get his money out. The even bigger question is what is so big that Enderlee couldn't even negotiate an exit?"

"You think he knew?"

"I can't see how he couldn't have," I replied. "All evidence suggests Noel's behavior in Florida was typical, and you've heard the rumors. Jeri says they're more than rumors. He is, in effect, living on borrowed time."

"I don't think that's a 'maybe', Bianca said. "I think that's a 'yes'."

"Unless Jeri is correct and Noel can still buy his way out. But in the end, that's a problem for down the road a bit. There is a more pressing concern — Noel and I had a somewhat tense, adversarial conversation yesterday about clients who want me to manage their money rather than him."

"Uh-oh."

"I may be reading too much into it, but he seemed ticked off that a former Wabash Street Fund client inquired, through one of the guys in the Arrow Fund, about moving their money to my fund."

"From the Spurgeon Select Fund? Wow!"

"Yeah. Noel was singularly unhappy. He made several statements that concerned me, though, in the end, he agreed to allow the transfers. I think his hands are tied because otherwise they'll pull their money, and he'll report two fund closures AND lower total AUM for the year, and that could be seriously problematic for new business he's trying to drum up."

"What are you going to do?"

"My job."

Chelsea entered, which meant the conversation had to stop. I finished eating breakfast, then headed to the office. After checking in with Rich and starting a pot of coffee, I went to the Research Department office to begin work. I worked quickly to complete my portion of the analyst report, as well as review the reports Tony had written on my behalf the previous few days. At 8:00am, Violet showed in Bo Yang, the lecturer in statistics from the University of Chicago.

I greeted him, we shook hands, and once Violet got his coffee, I began my interview. He was clearly intelligent, and from my layman's perspective, knew his stuff, though his being hired as a lecturer carried far more weight than my personal opinion. He was an ex-pat from Hong Kong and spoke with what I considered a typical British English accent, with only the barest hint from his voice that he was ethnic Chinese.

To me, that wasn't a concern, but given the lack of diversity at Spurgeon Capital, it was important. That said, I had also seen why diversity was a problem, at least with regard to data analysts — every résumé we'd received except Bo's was from a white male. As Bianca had pointed out, there were very few women in most engineering fields, including computer science, though that was slowly changing. Bianca was truly an outlier in that regard — a Latina in a technical field.

I had zero interest in quotas or anything like that, but somewhere there had to be qualified women and minorities who could be hired by Spurgeon Capital. As I'd pointed out to Noel Spurgeon, there had to exist, somewhere, a female portfolio manager or trader who was better than Enderlee, and now I'd include Taylor and Fletcher in that same question.

By the time the interview was concluded, I was happy with Bo and had Violet call Bianca, as there was a bit of time before Bo's interview with Murray Matheson, and I had a bit of work to finish before I left to meet Marlena Volkmer at First Chicago.

When it was time to leave, I let Violet know, then headed downstairs to catch a cab to the First Chicago building, where Marlena Volkmer was waiting. She greeted me with a 'society kiss', and then we went into the bank to meet with her Private Banker, Mike Kennedy.

"This is Jonathan Kane, my financial advisor," Marlena said after Mr. Kennedy greeted us.

"Good morning, Mr. Kane. Do you have a card?"

I handed him one of my 'broker' cards.

"Series 3, Series 7, AND Series 30?" he asked with an arched eyebrow.

"Yes."

"You must be a lot older than you look."

"I turn twenty-two in November."

"Early college grad?"

"I haven't finished college," I replied.

He gave me a strange look and looked at the card again, but didn't pursue the line of questioning.

"Ms. Volkmer says you have an investment strategy for her," he said.

"I do. I'd like you to purchase, on her behalf, $3,000,000 in US Treasury Notes. We're OK with a fund, and we'd like the proceeds from coupon redemptions paid into Ms. Volkmer's money management account, with the principal rolled over at maturity. I'd also like you to issue a dozen CDs, each with a $100,000 face value and staggered terms, so they come due once per month. The principal should be rolled over, and the interest paid into Ms. Volkmer's money management account."

"I can do all of that for you, but it will take some time to set up. Ms. Volkmer can fill out the forms, and I'll call when everything is completed, rather than have you wait. May I ask where you'd like to invest the balance?"

"$25 million will be transferred to the Cincinnatus Fund at Spurgeon Capital once her account is established."

Mr. Kennedy frowned, but there wasn't much he could do about the transfer to my fund. Technically, I could have advised Marlena to spread the CDs to twelve banks to guard against failure, but I felt the risks were infinitesimal. I'd absolutely see signs First Chicago was in trouble with more than enough time to cash out the CDs and move her accounts so she was under the FDIC insurance limit. The Treasuries were, for all intents and purposes, guaranteed, as they were US government debt, and if there were a default by the US government, collecting that money would be the least of our problems.

He made notes on his pad, confirmed that he had everything correct, then pulled three forms from his drawer and handed them to Marlena. She filled them out, then had me verify them before she signed. Once she'd signed all three forms, she handed them to Mr. Kennedy.

"It should take no more than three business days to have everything set up," he said. "I'll submit the forms and orders today, and call you once the transactions are complete."

"Thank you," Marlena said.

I shook hands with Mr. Kennedy, then Marlena and I left the bank. Once we were outside, she handed me an envelope.

"The application and transfer orders, both notarized, as you requested," she said. "Ten business days, right?"

"That's the norm. I'll call you as soon as everything is set up."

"I know it's a bit early, but do you have time for lunch?"

"Today is very tight because I have a closing on a building this afternoon. I'm going to New York on business early next week, so I could do Thursday or Friday."

"How about Thursday at 11:45am at The Pump Room?"

The Pump Room at the Ambassador East Hotel was one of the classiest restaurants in Chicago, though its heyday had been in the 50s and 60s. Reservations were tough, but I suspected Marlena could make them.

"11:45 next Thursday at the Pump Room," I agreed.

"Then I'll see you there!"

She gave me the usual 'society kiss', and I hailed a cab, which I paid for before I got out at the Hancock Center. Five minutes later, I was at Violet's desk.