Chapter 59: Nonchalance

October 8, 1984, Chicago, Illinois

"Jesus Christ, Kane!" Noel exclaimed when the opposing attorneys and the stenographer had left the conference room.

"I was annoyed with him and asked myself, 'What would Noel Spurgeon do?' and did that."

"He has a point," Kendall Roy observed with a smile.

"What do you think, Tim?"

"Jonathan gave them nothing, and the last thing they will want to do is have him testify before an arbitrator. He'll demolish their entire case. I believe they'll advise their clients to settle."

"What would you offer them, Kane?" Noel asked.

"25¢ on the dollar on the 2% management fee. I'd go as high as 30¢ to make it go away, but I wouldn't offer anything on the capital losses. If they balk, we win in arbitration. Fundamentally, and I am positive Kendall agrees with me, Taylor didn't violate his asset allocation rules, nor did he violate his risk profile.

"It's also the case that his prospectus conformed to our firm standard, which goes beyond SEC regs in terms of risk notices. Their case is dead in the water because losing money is insufficient to win their suits, even if we had used the minimal notices required by the SEC. The only possible line of attack is that Taylor made some kind of illegal representation."

"I do agree with Jonathan," Kendall said. "And because he is a licensed professional, he's not at risk for providing advice and analysis, even if it's bad, which, of course, it's not. As he's pointed out, his own trading is the most successful in the firm."

"Fuck BOTH of you!" Noel growled, causing everyone to laugh. "Tim, if they reach out to settle, try to get them to give you a number first, then counter with Kane's lower number; I can live with that."

"Will do. Do you want me to reach out to them if they don't contact me?"

"No. Let them sweat. If they move first, they're showing weakness. Kane? My office, please."

I followed him out of the conference room, down the hall, and into his office.

"How soon will you finish your degree?" he asked.

"December 1986," I replied. "I'm completing the final core course this semester. Then, I have two years of independent study to complete a BA in Business with a minor in Finance. If it weren't for the independent study, it would be 1988. Is there a problem?"

"No. I'm just thinking about the lawsuits and the attempt to impugn your research and analysis due to a lack of a degree. I simply don't care, but it is a potential weak point in an otherwise unassailable set of credentials. If I recall correctly, everyone on your team except Pérez has a degree, right?"

"Clemmons doesn't, but both she and Pérez are working on their degrees; Pérez in Computer Science and Clemmons in Business with an Accounting minor. Clinton doesn't have any college; the PM I intend to hire, French, will have a degree in business with a minor in computer science."

"Encourage Clinton to at least work on a degree," Noel said. "I won't require it, but I want to seal off any possible lines of attack if we ever have a situation like this in the future."

"Permission to speak freely?"

"You're about to tell me I made a mistake, aren't you?"

"That depends on whether you'll allow me to speak freely!"

Noel shook his head and smiled wryly, "I've created a monster. Go on."

"Taylor had his best runs from 1978 to 1981, when his returns doubled market returns. He struggled in '82 and '83, with returns of 9% and 11%, compared to S&P returns of around 22% each year. You and I were close to 40% last year. That should have told you everything you needed to know, and he should have been let go at the end of last year.

"Fletcher's numbers weren't nearly as bad, and he basically matched the S&P in '82 and '83, but why pay someone that kind of money we make to simply match the S&P? His track record prior to that was of eking out gains just above the market. Same comment. Had you canned them last December, we wouldn't be here."

"You have balls, Kane, that's for sure."

"You pay me to tell you the truth, even if it's not what you want to hear."

"What would you do with Mansfield and Blume?"

"Both of them had good years in '82 and '83, with returns around 28%, beating the S&P 500 by about five percentage points. This year, they're in the same situation, likely to beat the S&P by around two percentage points and the Dow by around eleven. Both run funds that have risk profiles and asset allocation guidelines different enough from other funds that you need them for fund diversity.

"If fund diversity didn't matter, you'd only need the Millennium Fund, and the rest of the fund managers would be expendable. You can't do that because not every investor is willing to accept the asset mix and risk of the Millennium Fund. In theory, you could dump all the others, assuming you were willing to give up a few billion in AUM to mitigate the risk of someone screwing the pooch.

"I know you won't do that because you like to wet your beak in the other funds to build your personal wealth, and you like having over $4 billion in firm AUM, and you like being the biggest swinging dick in the city, to use the London phrase Singh likes to throw around referring to brokers, traders, and fund managers. That desire means you have to take the associated risk, hence my hindsight analysis suggesting you should have moved more quickly on Taylor."

"What's the state of that portfolio analysis program Pérez and her team are developing?"

"It's not ready for Prime Time; we've been running it against my portfolio, and we're not happy with the results just yet. The scenario modeling portion is coming along nicely. The risk analysis piece is probably the most complex program we've ever attempted to write."

"Could you run it against every fund every week once it's ready?"

I shook my head, "No. We don't have enough computing power with the current system. We will when the new system is installed and running. I'd say everything will dovetail early in January, and we'll be able to run weekly reports on every fund by allowing the analysis program to run over the weekend. That was my plan when I asked Pérez and her team to develop the programs."

"You're in Cincinnati later this week, right?"

"Yes, and then Dallas the last week of the month to see Clark Becket. Are you still on for Austria in December?"

"Yes. Have you turned up anything more on Salem bin Laden or Emir Isa bin Salman Al Khalifa?"

"Neither has been in the news recently, and per your instructions, we're not calling anyone in the Gulf States."

"OK. Keep up the good work, Kane!"

I knew that meant I was dismissed, so I nodded and left his office to return to 29.

"How did it go?" Violet asked.

"They ran away with their tails between their legs!" I declared with a grin.

Violet smirked, "Because you showed them you actually are the biggest swinging dick in Chicago?"

"You are BAD, Miss Clemmons!"

"That aside, are you doing OK?"

I nodded, "Yes. I spent a few minutes in the Japanese room reminiscing before the Spirit Shelf."

"Your Shinto wedding was perhaps the most beautiful ceremony I've ever seen."

"I agree."

October 9, 1984, Chicago, Illinois

"I've never been to a Jewish wedding," Violet said when we left the office mid-afternoon on Tuesday.

"Me, either," I replied. "But Beth said we should come prepared to eat, drink, dance, and otherwise party hard!"

"Do you know what happens?"

"Well, I'm pretty sure I know what happens after the wedding!"

Violet laughed, "You and every other person on the planet!"

"True. Beth said it starts with a split reception — the bride and women in one room and the groom and men in another, and they serve hors d'oeuvres at both. That's followed by the groom veiling the bride, and that's followed by the actual wedding ceremony. Beth said that's not quite like the usual Christian ones, and includes a number of things like betrothal, a marriage contract, and blessings.

"Once all that is completed, they sip wine from a crystal glass, after which it's wrapped in cloth, and the groom stomps on it. That has significance, but Beth didn't explain everything. After breaking the glass, the bride and groom go to a private room to relax for a bit, then the reception begins with a bunch of traditional ceremonies, and a ton of partying."

"I find it odd you have to wear a yarmulke," Violet said. "You aren't Jewish."

"No, I'm not, but I view it as a sign of respect for Beth and Joshua."

"I remember seeing something about dancing with the bride and groom on chairs in a movie."

I nodded, "Beth told me about that. They'll sing a Jewish folk song — Hava Nagila — and everyone dances around the couple in a circle. She said we can just dance and nobody will give us a hard time. We won't be the only Gentiles at the service."